Document:

Exhibit 10.6

 

Execution
Copy

 

U.S. $60,000,000

 

LOAN AGREEMENT,

 

dated as of March 17, 2010,

 

among

 

TROPICANA LAS VEGAS, INC.,

as the Borrower,

 

VARIOUS FINANCIAL INSTITUTIONS,

as the Lenders,

 

THE FOOTHILL GROUP, INC.,
 as Lead Arranger and Administrative Agent,

 

and

 

WELLS
FARGO BANK, N.A.,

as
the Issuer.

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS
  AND ACCOUNTING TERMS

  	
   

  
	
  SECTION 1.1

  	
  Defined
  Terms

  	
  2

  
	
  ARTICLE
  II

  	
  LOAN
  COMMITMENTS, NOTES AND EXTENSION OPTIONS

  	
   

  
	
  SECTION 2.1

  	
  Loan
  Commitment

  	
  35

  
	
  SECTION 2.1.1

  	
  Revolving
  Loan Commitments

  	
  36

  
	
  SECTION 2.1.2

  	
  Letter
  of Credit Commitments

  	
  36

  
	
  SECTION 2.1.3

  	
  Delayed
  Draw Term Loan Commitment

  	
  36

  
	
  SECTION 2.1.4

  	
  Lenders
  Not Required to Make Loans

  	
  37

  
	
  SECTION 2.1.5

  	
  Issuer
  Not Required to Issue Letters of Credit

  	
  38

  
	
  SECTION 2.2

  	
  Reduction
  of the Loan Commitment Amount

  	
  38

  
	
  SECTION 2.3

  	
  Borrowing
  Procedure

  	
  38

  
	
  SECTION 2.3.1

  	
  Borrowing
  Procedure

  	
  38

  
	
  SECTION 2.3.2

  	
  Revolving
  Loans

  	
  38

  
	
  SECTION 2.3.3

  	
  Delayed
  Draw Term Loans

  	
  38

  
	
  SECTION 2.4

  	
  Letter
  of Credit Issuance Procedures

  	
  39

  
	
  SECTION 2.4.1

  	
  Other
  Lenders’ Participation

  	
  39

  
	
  SECTION 2.4.2

  	
  Letter
  of Credit Disbursements

  	
  40

  
	
  SECTION 2.4.3

  	
  Reimbursement

  	
  40

  
	
  SECTION 2.4.4

  	
  Deemed
  Letter of Credit Disbursements

  	
  41

  
	
  SECTION 2.4.5

  	
  Nature
  of Letter of Credit Reimbursement Obligations

  	
  41

  
	
  SECTION 2.5

  	
  Notes

  	
  42

  
	
  SECTION 2.6

  	
  Register

  	
  42

  
	
  ARTICLE
  III

  	
  REPAYMENTS,
  PREPAYMENTS, INTEREST AND FEES

  	
   

  
	
  SECTION 3.1

  	
  Repayments
  and Prepayments; Application

  	
  43

  
	
  SECTION 3.1.1

  	
  Repayments
  and Prepayments

  	
  43

  
	
  SECTION 3.1.2

  	
  Application

  	
  44

  
	
  SECTION 3.2

  	
  Interest
  Provisions

  	
  45

  
	
  SECTION 3.2.1

  	
  Interest
  Rates

  	
  45

  
	
  SECTION 3.2.2

  	
  Post-Default
  Rates

  	
  45

  
	
  SECTION 3.2.3

  	
  Payment
  Dates

  	
  45

  

 

i

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 3.3

  	
  Fees

  	
  46

  
	
  SECTION 3.3.1

  	
  Revolving
  Loan Commitment Fee

  	
  46

  
	
  SECTION 3.3.2

  	
  Delayed
  Draw Term Loan Commitment Fee

  	
  46

  
	
  SECTION 3.3.3

  	
  Undrawn
  Letter of Credit Fee

  	
  46

  
	
  SECTION 3.3.4

  	
  Letter
  of Credit Issuance Fee

  	
  47

  
	
  SECTION 3.4

  	
  Payments
  from Interest Reserve Account

  	
  47

  
	
  ARTICLE
  IV

  	
  CAPITAL
  COSTS, LENDER’S TAX AND CERTAIN OTHER PROVISIONS

  	
   

  
	
  SECTION 4.1

  	
  Increased
  Capital Costs

  	
  47

  
	
  SECTION 4.2

  	
  Lender’s
  Tax

  	
  47

  
	
  SECTION 4.3

  	
  Payments,
  Computations, etc

  	
  49

  
	
  SECTION 4.4

  	
  Sharing
  of Payments

  	
  50

  
	
  SECTION 4.5

  	
  Setoff

  	
  50

  
	
  SECTION 4.6

  	
  Mitigation

  	
  51

  
	
  SECTION 4.7

  	
  Replacement
  of Lenders

  	
  51

  
	
  ARTICLE
  V

  	
  CONDITIONS
  PRECEDENT TO EFFECTIVENESS AND LOANS

  	
   

  
	
  SECTION 5.1

  	
  Conditions
  Precedent to Loan Commitments and Effectiveness of this Agreement

  	
  53

  
	
  SECTION 5.1.1

  	
  Authority
  of the Borrower and the Guarantors

  	
  53

  
	
  SECTION 5.1.2

  	
  Incumbency
  of the Borrower and the Guarantors

  	
  53

  
	
  SECTION 5.1.3

  	
  Corporate
  Proceedings

  	
  53

  
	
  SECTION 5.1.4

  	
  Financial
  Information, etc

  	
  54

  
	
  SECTION 5.1.5

  	
  Permits

  	
  54

  
	
  SECTION 5.1.6

  	
  Insurance

  	
  54

  
	
  SECTION 5.1.7

  	
  Capital
  Improvement Project Budget

  	
  54

  
	
  SECTION 5.1.8

  	
  Environmental
  Reports

  	
  55

  
	
  SECTION 5.1.9

  	
  Searches

  	
  55

  
	
  SECTION 5.1.10

  	
  Real
  Estate Appraisal

  	
  55

  
	
  SECTION 5.1.11

  	
  Fees

  	
  55

  
	
  SECTION 5.1.12

  	
  Opinions
  of Counsel

  	
  56

  
	
  SECTION 5.1.13

  	
  Information
  pursuant to Anti-Terrorism Laws

  	
  56

  

 

ii

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.1.14

  	
  No Material Adverse Effect

  	
  56

  
	
  SECTION 5.1.15

  	
  No Defaults

  	
  56

  
	
  SECTION 5.1.16

  	
  No Restrictions

  	
  56

  
	
  SECTION 5.1.17

  	
  No Violation of Certain Regulations

  	
  56

  
	
  SECTION 5.1.18

  	
  Service of Process

  	
  57

  
	
  SECTION 5.1.19

  	
  Representations and Warranties

  	
  57

  
	
  SECTION 5.1.20

  	
  Other Documents

  	
  57

  
	
  SECTION 5.1.21

  	
  Satisfactory Form and Substance

  	
  57

  
	
  SECTION 5.2

  	
  Conditions Precedent to the Initial Borrowing of
  the Revolving Loans and the Issuance of Letters of Credit

  	
  57

  
	
  SECTION 5.2.1

  	
  Commitment Conditions

  	
  57

  
	
  SECTION 5.2.2

  	
  Loan Documents

  	
  57

  
	
  SECTION 5.2.3

  	
  Required Preferred Rights Offering

  	
  57

  
	
  SECTION 5.2.4

  	
  Interest Reserve

  	
  57

  
	
  SECTION 5.2.5

  	
  Side Letter

  	
  58

  
	
  SECTION 5.2.6

  	
  Key Person Management Agreement

  	
  58

  
	
  SECTION 5.2.7

  	
  Gaming Lease

  	
  58

  
	
  SECTION 5.2.8

  	
  Title Policy; Title Documents

  	
  58

  
	
  SECTION 5.2.9

  	
  A.L.T.A. Survey

  	
  59

  
	
  SECTION 5.2.10

  	
  Zoning Information

  	
  59

  
	
  SECTION 5.2.11

  	
  Payment of Outstanding Indebtedness, etc

  	
  59

  
	
  SECTION 5.2.12

  	
  Fees

  	
  59

  
	
  SECTION 5.2.13

  	
  Loan Documents

  	
  60

  
	
  SECTION 5.2.14

  	
  Opinions of Counsel

  	
  61

  
	
  SECTION 5.2.15

  	
  Other Documents

  	
  62

  
	
  SECTION 5.2.16

  	
  Satisfactory Form and Substance

  	
  62

  
	
  SECTION 5.3

  	
  Conditions Precedent to all Loans and the Issuance
  of Letters of Credit

  	
  62

  
	
  SECTION 5.3.1

  	
  Commitment Conditions

  	
  62

  
	
  SECTION 5.3.2

  	
  Compliance with Warranties, No Default, etc

  	
  62

  
	
  SECTION 5.3.3

  	
  No Events of Default

  	
  63

  

 

iii

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 5.3.4

  	
  Borrowing
  Request

  	
  63

  
	
  SECTION 5.3.5

  	
  Additional
  Documents

  	
  63

  
	
  SECTION 5.3.6

  	
  Title
  Insurance Policy Endorsements

  	
  63

  
	
  SECTION 5.3.7

  	
  No
  Restriction

  	
  63

  
	
  SECTION 5.3.8

  	
  Fees,
  Expenses, etc

  	
  64

  
	
  SECTION 5.3.9

  	
  Loan
  Documents

  	
  64

  
	
  SECTION 5.3.10

  	
  Security
  Interests

  	
  64

  
	
  SECTION 5.3.11

  	
  No
  Restrictions

  	
  64

  
	
  SECTION 5.3.12

  	
  Required
  Documents

  	
  65

  
	
  SECTION 5.3.13

  	
  Satisfactory
  Legal Form

  	
  65

  
	
  SECTION 5.4

  	
  Conditions
  Precedent to Delayed Draw Term Loans

  	
  65

  
	
  SECTION 5.4.1

  	
  Phase
  II Club Operator

  	
  65

  
	
  SECTION 5.4.2

  	
  Phase
  II Project Plans and Specifications

  	
  65

  
	
  SECTION 5.4.3

  	
  Phase
  II Project Budget

  	
  65

  
	
  SECTION 5.4.4

  	
  Assignment
  and Subordination of Phase II Club Management Agreement

  	
  65

  
	
  SECTION 5.4.5

  	
  Interest
  Reserve

  	
  66

  
	
  SECTION 5.4.6

  	
  Miscellaneous

  	
  66

  
	
  ARTICLE
  VI

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
  SECTION 6.1

  	
  Organization,
  etc

  	
  66

  
	
  SECTION 6.2

  	
  Due
  Authorization, Non-Contravention, etc

  	
  66

  
	
  SECTION 6.3

  	
  Governmental
  Approval, Regulation, etc

  	
  67

  
	
  SECTION 6.4

  	
  Validity,
  etc

  	
  67

  
	
  SECTION 6.5

  	
  No
  Material Misstatement

  	
  67

  
	
  SECTION 6.6

  	
  No
  Material Adverse Effect

  	
  67

  
	
  SECTION 6.7

  	
  Litigation,
  Labor Controversies, etc

  	
  67

  
	
  SECTION 6.8

  	
  Taxes

  	
  67

  
	
  SECTION 6.9

  	
  Pension
  and Welfare Plans

  	
  68

  
	
  SECTION 6.10

  	
  Permits

  	
  68

  
	
  SECTION 6.11

  	
  Representations
  and Warranties

  	
  68

  

 

iv

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 6.12

  	
  Environmental
  Warranties

  	
  68

  
	
  SECTION 6.13

  	
  Intellectual
  Property

  	
  69

  
	
  SECTION 6.14

  	
  Regulations
  U and X

  	
  69

  
	
  SECTION 6.15

  	
  Security
  Interests

  	
  70

  
	
  SECTION 6.16

  	
  Existing
  Defaults

  	
  71

  
	
  SECTION 6.17

  	
  Contingent
  Liabilities

  	
  71

  
	
  SECTION 6.18

  	
  Business,
  Debt, Contracts, etc

  	
  71

  
	
  SECTION 6.19

  	
  Utilities

  	
  71

  
	
  SECTION 6.20

  	
  Sufficiency
  of Interests

  	
  71

  
	
  SECTION 6.21

  	
  Foreign
  Person

  	
  71

  
	
  SECTION 6.22

  	
  Building
  Code Violations

  	
  71

  
	
  SECTION 6.23

  	
  Fees
  and Enforcement

  	
  71

  
	
  SECTION 6.24

  	
  ERISA
  Compliance

  	
  71

  
	
  SECTION 6.25

  	
  Labor
  Disputes; Acts of God; Casualty and Condemnation

  	
  72

  
	
  SECTION 6.26

  	
  Liens

  	
  72

  
	
  SECTION 6.27

  	
  Offices;
  Location of Collateral

  	
  72

  
	
  SECTION 6.28

  	
  Government
  Regulation

  	
  72

  
	
  SECTION 6.29

  	
  Brokers

  	
  73

  
	
  SECTION 6.30

  	
  Subsidiaries

  	
  73

  
	
  SECTION 6.31

  	
  Capital
  Improvement Project Budget

  	
  73

  
	
  SECTION 6.32

  	
  Anti-Terrorism
  Laws

  	
  73

  
	
  SECTION 6.32.1

  	
  Anti-Terrorism
  Laws

  	
  73

  
	
  SECTION 6.32.2

  	
  Executive
  Order No. 13224

  	
  73

  
	
  SECTION 6.32.3

  	
  OFAC

  	
  74

  
	
  SECTION 6.33

  	
  Gaming
  Lease

  	
  74

  
	
  SECTION 6.34

  	
  Key
  Person Management Agreement

  	
  74

  
	
  ARTICLE
  VII

  	
  COVENANTS

  	
   

  
	
  SECTION 7.1

  	
  Affirmative
  Covenants

  	
  75

  
	
  SECTION 7.1.1

  	
  Financial
  Information, Reports, Notices, etc

  	
  75

  
	
  SECTION 7.1.2

  	
  Compliance
  with Laws, etc

  	
  77

  

 

v

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1.3

  	
  Maintenance
  of Property; Operation; Reserves

  	
  77

  
	
  SECTION 7.1.4

  	
  Insurance

  	
  78

  
	
  SECTION 7.1.5

  	
  Books
  and Records

  	
  78

  
	
  SECTION 7.1.6

  	
  Environmental

  	
  78

  
	
  SECTION 7.1.7

  	
  Additional
  Collateral

  	
  79

  
	
  SECTION 7.1.8

  	
  Use
  of Proceeds

  	
  79

  
	
  SECTION 7.1.9

  	
  Repayment
  of Indebtedness

  	
  79

  
	
  SECTION 7.1.10

  	
  Compliance
  with Legal Requirements

  	
  80

  
	
  SECTION 7.1.11

  	
  Security
  Interest in Newly Acquired Property

  	
  80

  
	
  SECTION 7.1.12

  	
  Proper
  Legal Forms

  	
  80

  
	
  SECTION 7.1.13

  	
  Preserving
  the Security

  	
  80

  
	
  SECTION 7.1.14

  	
  Event
  of Loss

  	
  81

  
	
  SECTION 7.1.15

  	
  Application
  of Loss Proceeds

  	
  81

  
	
  SECTION 7.1.16

  	
  Interest
  Reserve Account

  	
  84

  
	
  SECTION 7.1.17

  	
  Compliance
  with Capital Improvement Project Documents and Other Agreements

  	
  85

  
	
  SECTION 7.1.18

  	
  ERISA
  Compliance

  	
  85

  
	
  SECTION 7.1.19

  	
  Licenses
  and Permits

  	
  85

  
	
  SECTION 7.1.20

  	
  Diligent
  Construction of the Capital Improvement Project

  	
  85

  
	
  SECTION 7.1.21

  	
  Leases

  	
  86

  
	
  SECTION 7.1.22

  	
  Gaming
  Lease

  	
  86

  
	
  SECTION 7.1.23

  	
  Key
  Person Management Agreement

  	
  86

  
	
  SECTION 7.1.24

  	
  Property
  Management Agreement

  	
  86

  
	
  SECTION 7.1.25

  	
  Property
  Management Assignment and Subordination Agreement

  	
  86

  
	
  SECTION 7.1.26

  	
  Security
  Interest in Trademark

  	
  87

  
	
  SECTION 7.2

  	
  Negative
  Covenants

  	
  87

  
	
  SECTION 7.2.1

  	
  Business
  Activities

  	
  87

  
	
  SECTION 7.2.2

  	
  Indebtedness

  	
  87

  
	
  SECTION 7.2.3

  	
  Liens

  	
  87

  

 

vi

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 7.2.4

  	
  Investments

  	
  88

  
	
  SECTION 7.2.5

  	
  Restricted
  Payments, etc

  	
  88

  
	
  SECTION 7.2.6

  	
  Rental
  Obligations

  	
  89

  
	
  SECTION 7.2.7

  	
  Take
  or Pay Contracts

  	
  89

  
	
  SECTION 7.2.8

  	
  Consolidation,
  Merger, etc

  	
  89

  
	
  SECTION 7.2.9

  	
  Restrictions
  on Dispositions

  	
  89

  
	
  SECTION 7.2.10

  	
  Modification
  of Certain Agreements

  	
  90

  
	
  SECTION 7.2.11

  	
  Transactions
  with Affiliates

  	
  90

  
	
  SECTION 7.2.12

  	
  Negative
  Pledges, Restrictive Agreements, etc

  	
  91

  
	
  SECTION 7.2.13

  	
  Sale
  and Leaseback

  	
  91

  
	
  SECTION 7.2.14

  	
  Hazardous
  Substances

  	
  91

  
	
  SECTION 7.2.15

  	
  No
  Other Powers of Attorney

  	
  91

  
	
  SECTION 7.2.16

  	
  Agent
  for Service of Process

  	
  91

  
	
  SECTION 7.2.17

  	
  Anti-Terrorism
  Laws

  	
  91

  
	
  SECTION 7.2.18

  	
  Financial
  Covenants

  	
  92

  
	
  SECTION 7.2.19

  	
  Management
  Agreement and Management Services Agreement

  	
  93

  
	
  SECTION 7.3

  	
  Post-Licensing
  Covenants

  	
  93

  
	
  SECTION 7.3.1

  	
  Gaming
  Licenses

  	
  94

  
	
  SECTION 7.3.2

  	
  Property
  Management Agreement

  	
  94

  
	
  SECTION 7.3.3

  	
  Property
  Manager’s Organizational Documents

  	
  94

  
	
  SECTION 7.3.4

  	
  Opinion
  from Borrower’s Gaming Counsel

  	
  94

  
	
  ARTICLE
  VIII

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
  SECTION 8.1

  	
  Listing
  of Events of Default

  	
  94

  
	
  SECTION 8.1.1

  	
  Non-Payment
  of Obligations

  	
  95

  
	
  SECTION 8.1.2

  	
  Breach
  of Warranty

  	
  95

  
	
  SECTION 8.1.3

  	
  Non-Performance
  of Certain Covenants and Obligations

  	
  95

  
	
  SECTION 8.1.4

  	
  Non-Performance
  of Other Covenants and Obligations

  	
  95

  
	
  SECTION 8.1.5

  	
  Default
  on Other Indebtedness

  	
  95

  
	
  SECTION 8.1.6

  	
  Judgments

  	
  96

  

 

vii

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1.7

  	
  Pension
  Plans

  	
  96

  
	
  SECTION 8.1.8

  	
  Change
  of Control

  	
  96

  
	
  SECTION 8.1.9

  	
  Bankruptcy,
  Insolvency, etc

  	
  96

  
	
  SECTION 8.1.10

  	
  Impairment
  of Security, etc

  	
  97

  
	
  SECTION 8.1.11

  	
  Abandonment
  of the Capital Improvement Project

  	
  97

  
	
  SECTION 8.1.12

  	
  Government
  Authorizations

  	
  97

  
	
  SECTION 8.1.13

  	
  Gaming
  Tenant’s Licenses

  	
  98

  
	
  SECTION 8.1.14

  	
  Gaming
  Lease

  	
  98

  
	
  SECTION 8.1.15

  	
  Borrower’s
  Gaming Licenses

  	
  98

  
	
  SECTION 8.1.16

  	
  Key
  Person Management Agreement

  	
  98

  
	
  SECTION 8.1.17

  	
  Property
  Management Agreement

  	
  98

  
	
  SECTION 8.1.18

  	
  Material
  Adverse Effect

  	
  98

  
	
  SECTION 8.2

  	
  Action
  if Bankruptcy

  	
  98

  
	
  SECTION 8.3

  	
  Action
  if Other Event of Default

  	
  98

  
	
  ARTICLE
  IX

  	
  THE
  ADMINISTRATIVE AGENT

  	
   

  
	
  SECTION 9.1

  	
  Designation
  of the Administrative Agent

  	
  101

  
	
  SECTION 9.2

  	
  Funding
  Reliance, etc

  	
  102

  
	
  SECTION 9.3

  	
  Exculpation

  	
  103

  
	
  SECTION 9.4

  	
  Successors

  	
  103

  
	
  SECTION 9.5

  	
  Loans
  by the Administrative Agent

  	
  104

  
	
  SECTION 9.6

  	
  Credit
  Decisions

  	
  104

  
	
  SECTION 9.7

  	
  Copies,
  etc

  	
  104

  
	
  SECTION 9.8

  	
  Consultants
  and Reports

  	
  105

  
	
  ARTICLE
  X

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  
	
  SECTION 10.1

  	
  Waivers,
  Amendments, etc

  	
  105

  
	
  SECTION 10.2

  	
  Notices

  	
  106

  
	
  SECTION 10.3

  	
  Payment
  of Costs and Expenses

  	
  107

  
	
  SECTION 10.4

  	
  Indemnification

  	
  108

  
	
  SECTION 10.5

  	
  Survival

  	
  109

  
	
  SECTION 10.6

  	
  Severability

  	
  109

  

 

viii

 

TABLE OF
CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 10.7

  	
  Headings

  	
  109

  
	
  SECTION 10.8

  	
  Execution
  in Counterparts, Effectiveness, etc

  	
  109

  
	
  SECTION 10.9

  	
  Governing
  Law; Entire Agreement

  	
  109

  
	
  SECTION 10.10

  	
  Successors
  and Assigns

  	
  110

  
	
  SECTION 10.11

  	
  Sale
  and Transfer of Loans and Notes; Participations in Loans and Notes

  	
  110

  
	
  SECTION 10.11.1

  	
  Assignments

  	
  110

  
	
  SECTION 10.11.2

  	
  Participations

  	
  112

  
	
  SECTION 10.12

  	
  Cooperation
  by the Borrower and the Guarantors; Acknowledgment and Agreement by Borrower
  of Syndication

  	
  113

  
	
  SECTION 10.13

  	
  Other
  Transactions; Publicity

  	
  113

  
	
  SECTION 10.14

  	
  Execution
  by Authorized Representative

  	
  114

  
	
  SECTION 10.15

  	
  Forum
  Selection and Consent to Jurisdiction

  	
  114

  
	
  SECTION 10.16

  	
  Waiver
  of Jury Trial; Judicial Reference

  	
  115

  
	
  SECTION 10.17

  	
  Maximum
  Rate of Interest

  	
  115

  
	
  SECTION 10.18

  	
  Time
  of Essence

  	
  116

  
	
  SECTION 10.19

  	
  Consent
  or Approval of the Administrative Agent, the Issuer and the Lenders

  	
  116

  
	
  SECTION 10.20

  	
  No
  Third Party Beneficiary

  	
  116

  
	
  SECTION 10.21

  	
  Cumulative
  Remedies

  	
  117

  
	
  SECTION 10.22

  	
  Estoppel
  Certificates

  	
  117

  

 

ix

 

	
  SCHEDULE I

  	
  -

  	
  Disclosure
  Schedule

  
	
  SCHEDULE II

  	
  -

  	
  Permits

  
	
  SCHEDULE III

  	
  -

  	
  Insurance

  
	
  SCHEDULE IV

  	
  -

  	
  Schedule
  of Security Filings

  
	
  SCHEDULE V

  	
  -

  	
  Phase
  I Project Budget

  
	
  SCHEDULE VI

  	
  -

  	
  Phase
  II Project Budget

  
	
  SCHEDULE VII

  	
  -

  	
  Capital
  Improvement Project Documents

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  -

  	
  Description
  of Land

  
	
  EXHIBIT B-1

  	
  -

  	
  Form of
  Revolving Note

  
	
  EXHIBIT B-2

  	
  -

  	
  Form of
  Delayed Draw Term Loan Note

  
	
  EXHIBIT C

  	
  -

  	
  Form of
  Borrowing Request

  
	
  EXHIBIT D

  	
  -

  	
  Form of
  Letter of Credit Issuance Request

  
	
  EXHIBIT E

  	
  -

  	
  Form of
  Borrower’s Closing Certificate

  
	
  EXHIBIT F

  	
  -

  	
  Form of
  Perfection Certificate

  
	
  EXHIBIT G

  	
  -

  	
  Form of
  Solvency Certificate

  
	
  EXHIBIT H

  	
  -

  	
  Form of
  Compliance Certificate

  
	
  EXHIBIT I

  	
  -

  	
  Form of
  Lender Assignment Agreement

  
	
  EXHIBIT J

  	
  -

  	
  Form of
  Tax Certificate

  
	
  EXHIBIT K

  	
  -

  	
  Form of
  Insurance Consultant’s Closing Certificate

  
	
  EXHIBIT
  L

  	
  -

  	
  Form of Know Your Customer Letter Certification

  

 

x

 

LOAN AGREEMENT

 

LOAN AGREEMENT (this “Agreement”),
dated as of March 17, 2010, among TROPICANA LAS VEGAS, INC.,
a Nevada corporation (the
“Borrower”), the various lenders that are or
may become a party to this Agreement (referred to individually as a “Lender” and collectively as the “Lenders”) and THE FOOTHILL
GROUP, INC., a Delaware corporation (“Foothill”), in its capacity as administrative agent for the
Lenders (in such capacity, the “Administrative
Agent”) and the lead arranger, WELLS FARGO BANK, N.A.,
a national banking association, in its capacity as the issuer of the Letters of
Credit (in such capacity, the “Issuer”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to such terms in Article I
hereof.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower is the owner of the real
property upon which is constructed a 1,772-room hotel, resort and casino
presently branded as the Tropicana Resort and Casino (the “Improvements”)
located at 3801 Las Vegas Boulevard South, Las Vegas, Clark County, Nevada
89109, as more particularly described on Exhibit A annexed hereto
and made a part hereof (the “Land”;
together with the Improvements, the “Property”); and

 

WHEREAS, the Borrower desires to obtain, on the terms
and conditions set forth below, (a) Revolving Loan Commitments from the
Revolving Lenders pursuant to which the Borrower may, from time to time on and
after the Effective Date and prior to the Revolving Loan Commitment Termination
Date, obtain Borrowings from the Revolving Lenders in an aggregate amount not
to exceed $50,000,000 of which an aggregate amount not to exceed $5,000,000
shall be in the form of Letters of Credit issued by the Issuer, the proceeds of
which will be used to finance the completion of the Capital Improvement Project
and to fund ongoing working capital and other general corporate purposes of the
Borrower, (b) Letter of Credit Commitments pursuant to which the Issuer
will issue Letters of Credit or extend the Letter of Credit Stated Expiry Date thereof
and each Revolving Lender will participate in the Letters of Credit and (c) Delayed
Draw Term Loan Commitments from the Delayed Draw Term Lenders pursuant to which
the Borrower may, from time to time on and after the Effective Date and prior
to the Delayed Draw Term Loan Commitment Termination Date, obtain Borrowings
from the Delayed Draw Term Lenders in an aggregate amount not to exceed
$10,000,000, the proceeds of which will be used to finance the completion of
the Phase II Project; and

 

WHEREAS, the Lenders are
willing, on the terms and subject to the conditions hereinafter set forth
(including Article VI), to enter into such Loan Commitments and to make such Loans to the Borrower and to
issue (or to participate in) such Letters of Credit for the account of the
Borrower.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

 

ARTICLE
I

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.1  Defined Terms.  The following terms (whether or not bolded)
when used in this Agreement, including its preamble and recitals, shall, except
where the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):

 

“Account Bank”
means The Foothill Group, Inc., or such other account administrator
reasonably acceptable to the Administrative Agent, as shall be party to a
tri-party reserve account agreement among the Borrower, the Administrative
Agent and such account administrator.

 

“Administrative Agent” is defined in the preamble
and includes each other Person as shall have subsequently been appointed as the
successor Administrative Agent pursuant to Section 9.4.

 

“Affected Lender”
is defined in clause (a) of Section 4.7.

 

“Affiliate” means, relative to any Person, any
other Person which, directly or indirectly, controls, is controlled by, or is
under common control with, such Person (excluding, however,
any trustee under, or any committee with responsibility for administering, any
Plan).  With respect to any Lender,
Approved Fund or the Issuer, a Person shall be deemed to be “controlled by”
another Person if such other Person possesses, directly or indirectly, power to
vote fifty-one percent (51%) or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors, managing
general partners or managers, as the case may be.  With respect to all other Persons, a Person
shall be deemed to be “controlled by” another Person if such other Person
possesses, directly or indirectly, power

 

(a)           to
vote ten percent (10%) or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors, managing general
partners or managers, as the case may be; or

 

(b)           to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

 

“Affiliate Transaction”
is defined in Section 7.2.11.

 

“Agreement” means, on any date, this Loan
Agreement as originally in effect on the Effective Date and as thereafter from
time to time amended, supplemented, amended and restated, or otherwise
modified.

 

“Anti-Terrorism Laws” means any
of the following:

 

(a)           Executive
Order No. 13224;

 

(b)           the
Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of
Federal Regulations);

 

(c)           the
Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the
U.S. Code of Federal Regulations);

 

2

 

(d)           the
Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597
of the U.S. Code of Federal Regulations);

 

(e)           the
USA Patriot Act;

 

(f)            all
other present and future Legal Requirements of any Governmental Instrumentality
addressing, relating to, or attempting to eliminate, terrorist acts and acts of
war; and

 

(g)           any
regulations promulgated pursuant thereto or pursuant to any Legal Requirement
governing terrorist acts and acts of war.

 

“Appraisal”
means the appraisal of the Property dated February 3, 2010 performed by
the Appraiser.

 

“Appraiser”
means Snyder Valuation or any other Person designated from time to time by the
Administrative Agent which is a MAI certified appraiser to serve as the
appraiser under this Agreement.

 

“Approved Fund” means, relative to any Lender that
is a fund that invests in bank loans, any other fund that invests in bank loans
and is advised or managed by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.

 

“Assignee Lender”
is defined in Section 10.11.1.

 

“Assignment of Leases and Rents” means, on any date, an Assignment of
Leases and Rents and Profits as originally in effect on the date on which each
such instrument is recorded, made by the Borrower, as the assignor, to the
Administrative Agent (for its benefit and the benefit of the Lenders), as the
assignee, and as thereafter from time to time amended, supplemented, amended
and restated or otherwise modified.

 

“Assignment of Permits, Contracts and Agreements” means, on
any date, the Assignment of Permits, Contracts and Agreements as originally in
effect on the Effective Date, made by the Borrower, in favor of the
Administrative Agent for the benefit of the Secured Parties (and including all
applicable, necessary or required third-party consents, releases or
subordinations), and as thereafter from time to time amended, supplemented, amended
and restated or otherwise modified.

 

“Authorized Representative” means, relative to any Person, those
of its officers, partners, managers or managing members (in the case of a
limited liability company) whose signatures and incumbency have been certified
to the Administrative Agent in a certificate of such Person delivered to the
Administrative Agent.

 

“Baseline Financial
Projections” is defined in Section 7.2.18(b).

 

“Blocked Person”
is defined in Section 6.32.2.

 

3

 

“Board
of Directors” means, relative to any Person, (x) for so long
such Person is a corporation, the Management Board or Board of Directors, as
the case may be (as such terms are defined in the Organizational Documents of
such Person) appointed pursuant to the Organizational Documents of such Person
or (y) on and after such time as such Person is no longer a corporation,
the substantially equivalent governing body of such Person.

 

“Board
of Managers” means, relative to any Person, (x) for so long
such Person is a limited liability company, the Management Board or Board of
Managers, as the case may be (as such terms are defined in the Organizational
Documents of such Person) appointed pursuant to the Organizational Documents of
such Person or (y) on and after such time as such Person is no longer a
limited liability company, the board of directors or substantially equivalent
governing body of such Person.

 

“Borrower” is defined in the preamble.

 

“Borrower’s Closing Certificate” means a closing certificate substantially in the form of Exhibit E hereto (or such
other form which has been reasonably approved by the Administrative Agent).

 

“Borrowing” means, as the context may require:

 

(a)  the
making of any Loans by a Lender required to make such Loans pursuant to a
Borrowing Request delivered in accordance with Section 2.3; or

 

(b)  the
issuance of any Letter of Credit, or the extension of any Letter of Credit
Stated Expiry Date of any existing Letter of Credit, by the Issuer.

 

“Borrowing
Request” means a Loan request and certificate duly executed by an
Authorized Representative of the Borrower substantially in the form of Exhibit C hereto.

 

“Business Day”
means any day which is neither a Saturday or Sunday nor a legal holiday on
which banks are authorized or required to be closed in New York,
New York.

 

“Capital
Improvement Project” means, collectively, the Phase I Project and
the Phase II Project.

 

“Capital Improvement Project Budget” means, collectively or individually, as the case may be, the Phase I
Project Budget and/or the Phase II Project Budget.

 

“Capital Improvement
Project Costs” means,
collectively, the Phase I Project Costs and the Phase II Project Costs.

 

“Capital Improvement Project Documents” means, collectively, the Phase I Project Documents
and the Phase II Project Documents as described on Schedule VII hereto.

 

“Capital Stock” means, relative to any Person, any and all
shares, interests (including Membership Interests), participations or other
equivalents (however designated, whether voting 

 

4

 

or non-voting) of such Person’s capital, whether now
outstanding or issued after the Effective Date.

 

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

 

“Cash
Contributions to Capital”
means optional contributions, including to cure or avoid a Default that would
otherwise exist under the Loan Documents, made by the Guarantors in cash to the
Borrower, which contributions were either (x) not made as a loan but made
in exchange for Borrower’s Preferred Stock, or (y) made as a shareholder
loan for tax purposes, which loan shall be unsecured and subordinated to the
Lien of the Secured Parties in a manner that is satisfactory to the Administrative
Agent, and, in either case, made on terms and conditions otherwise satisfactory
to the Administrative Agent as determined in good faith.

 

“Cash Equivalent Investment” means, at any time, (u) Dollars,
(v) securities issued or directly and fully guaranteed or insured by the
United States Government or any agency or instrumentality thereof (provided that
the full faith and credit of the United States is pledged in support thereof)
having maturities of not more than six (6) months from the date of acquisition,
(w) certificates of deposit and eurodollar time deposits with maturities
of six (6) months or less from the date of acquisition, bankers’
acceptances with maturities not exceeding six (6) months and overnight
bank deposits, in each case with any domestic commercial bank having capital
and surplus in excess of $500 million and a Thompson Bank Watch Rating of “B”
or better, (x) repurchase obligations with a term of not more than seven (7) days
for underlying securities of the types described in item (v) and (w) entered
into with any financial institution meeting the qualifications specified in item
(w), (y) commercial paper having the highest rating obtainable from
Moody’s or S&P and in each case maturing within six (6) months after
the date of acquisition and (z) money market funds at least ninety-five
percent (95%) of the assets of which constitute Cash Equivalents of the kinds
described in items (w)-(y) of this definition.

 

“CERCLA” is defined in clause (a) of the definition of “Environmental
Law”.

 

“CERCLIS” means the Comprehensive Environmental Response Compensation
Liability Information System List.

 

“Change of Control” shall have occurred if:

 

(a)           Trilliant
and any Person of which Trilliant possesses power to vote one hundred percent
(100%) of the securities (on a fully diluted basis) having ordinary voting
power shall fail, directly or indirectly, to own free and clear of all Liens at least thirty percent
(30%) of the Capital Stock of Holdings and to Control Holdings; or

 

5

 

(b)           Holdings
shall fail, directly or indirectly, to own free and clear of all Liens at least one hundred percent (100%) of the
Capital Stock of Holdings Intermediary and to Control Holdings Intermediary; or

 

(c)           Holdings
Intermediary shall fail, directly or indirectly, to own free and clear of all Liens at least one hundred
percent (100%) of the Capital Stock of the Borrower and to Control the
Borrower; or

 

(d)           the
Borrower at any time ceases to own, directly, the Property and, directly or
indirectly, the non-Real Property Security free and clear of all Liens (other
than Permitted Liens and Liens in favor of the Secured Parties).

 

“Claim” means, relative to any Person, any
and all present and future claims, expenses, obligations, liabilities, losses,
damages, injuries (to person, property, or natural resources), penalties, stamp
or other similar taxes, actions, suits, judgments, reasonable costs and
expenses (including reasonable attorney’s fees) of whatever kind or nature,
whether or not well founded, meritorious or unmeritorious, demanded, asserted
or claimed against such Person including any liability resulting from any delay
or omission to pay any such claims.

 

“Code” means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time
to time.

 

“Commitment Fee”
shall mean, as the case may be, the Revolving Loan Commitment Fee or the Delayed Draw Term Loan Commitment Fee.

 

“Compliance Certificate” means a certificate duly completed
and executed by an Authorized Representative of the Borrower substantially in
the form of Exhibit H hereto, together with such changes thereto as
the Administrative Agent may from time to time reasonably request for the
purpose of monitoring the Borrower’s compliance with its covenants contained
herein.

 

“Condemnation Proceeds”
means relative to any property or asset, all awards, amounts, damages,
compensation, payments and proceeds (including Instruments) received by any
Person in respect of any condemnation, seizure or taking by exercise of the
power of eminent domain or otherwise of all or a portion of such property or
asset, or confiscation of all or a portion of such property or asset, or the
requisition of the use of all or a portion of such property or asset, or any
settlement in lieu thereof.

 

“Construction Contracts”
means collectively, the contracts entered into, from time to time, between the
Borrower and any Contractor for performance of services, or sales of materials
or goods or otherwise entered into in connection with the design, engineering,
development, installation, management or construction of the Capital
Improvement Project together with all warranties and guarantees thereunder.

 

“Contingent Liability” means, relative to any Person, any
agreement, undertaking or arrangement by which such Person guarantees, endorses
or otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for 

 

6

 

payment, to supply funds to, or otherwise to invest
in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness
of any other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person.  The
amount of any Person’s obligation under any Contingent Liability shall (subject
to any limitation set forth therein) be deemed to be the outstanding principal
amount of the debt, obligation or other liability guaranteed thereby.

 

“Contract” means any contract entered into from time to time by the
Borrower with any Person for performance of services or sale of goods or
services in connection with the construction, development, operation or
maintenance of the Property or the Capital Improvement Project, including all
construction and project management agreements, architectural and engineering
agreements, and warranties and guarantees, as the same may from time to time be
amended, supplemented, amended and restated or otherwise modified in accordance
with the Loan Documents.

 

“Contractor” means any architect, consultant,
designer, contractor, supplier, laborer or any other Person engaged by the
Borrower in connection with the construction or development of the Capital
Improvement Project.

 

“Control” means,
relative to any Person, the possession of the power (directly or indirectly) to
direct or cause the direction of all decisions regarding the existence and operations
of such Person or the power to vote a sufficient percentage of Capital Stock so
as to select management and to control all decisions regarding such Person to
be made by the owners thereof.  “Controlling” and “Controlled”
have meanings correlative thereto.

 

“Controlled Group” means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or
414(c) of the Code or Section 4001 of ERISA.

 

“Debt Service” means the actual aggregate debt service
obligation (including, without limitation, all principal repayments or interest
and other amounts payable or accrued from time to time under any of the Loan
Documents of the Borrower) due from the Borrower under the Loan Documents for
the most recently ended Fiscal Quarter.

 

“Deed of Trust” means, on any date, the Deed of Trust,
Assignment of Leases and Rents and Profits, Security Agreement and Fixture
Filing as originally in effect on the date on which it is originally recorded,
made by the Borrower, as the trustor/grantor, to the trustee named therein for
the benefit of the Administrative Agent, on behalf of the Secured Parties, as
beneficiaries, covering the Property, and as thereafter from time to time
amended, supplemented, amended and restated or otherwise modified.

 

“Default” means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.

 

7

 

“Defaulting
Lender” means any Lender with respect to which a Lender Default is
in effect.

 

“Delayed Draw Term Loan
Interest Rate” means, on any date and relative to all Delayed Draw
Term Loans, the fixed rate of interest per annum equal to six percent (6.00%).

 

“Delayed Draw Term Lender”
means any Lender which has made a Delayed Draw Term Loan Commitment or holds a
Delayed Draw Term Loan.

 

“Delayed Draw Term Loan”
is defined in Section 2.1.3.

 

“Delayed Draw Term Loan
Commitment” means, on any date, relative to any Delayed Draw Term
Lender, such Delayed Draw Term Lender’s Percentage of the Delayed Draw Term
Loan Commitment Amount reduced by the principal amount of any Delayed Draw Term
Loans made by such Delayed Draw Term Lender as of such date.  The Delayed Draw Term Loan Commitment of each
Delayed Draw Term Lender is set forth below such Delayed Draw Term Lender’s
signature hereto or in a Lender Assignment Agreement.

 

“Delayed
Draw Term Loan Commitment Amount” means the aggregate principal
amount of Delayed Draw Term Loans that the Delayed Draw Term Lenders are
obligated to make pursuant to Section 2.1.3. 
The Delayed Draw Term Loan Commitment Amount shall not exceed Ten
Million Dollars ($10,000,000) of which all may be used by the Borrower for the
purposes permitted under Section 7.1.8.

 

“Delayed Draw Term Loan
Commitment Fee” is defined is defined in Section 3.3.2.

 

“Delayed Draw Term Loan
Commitment Termination Date” means the date on which any Delayed
Draw Term Loan Commitment Termination Event occurs.  Upon the occurrence of a Delayed Draw Term
Loan Commitment Termination Event, the Delayed Draw Term Loan Commitments shall
terminate automatically and without any further action.

 

“Delayed Draw Term Loan
Commitment Termination Event” means the earliest to occur of:

 

(a)  the failure of the Borrower to satisfy, or the Lenders to
waive in their sole and absolute discretion, all Conditions Precedent to Loan
Commitments set forth in Section 5.2 of this Agreement by May 15,
2010;

 

(b)  the Stated Maturity Date;

 

(c)  the date
on which the Delayed Draw Term Loan Commitments are reduced to zero;

 

(d)  the
occurrence of any Event of Default described in Section 8.1.9; or

 

(e)  the
occurrence and continuance of any other Event of Default and either (x) the
declaration of all or any portion of the Loans to be immediately due and
payable 

 

8

 

pursuant to Section 8.3
or (y) the giving of notice by the Administrative Agent, acting at the
direction of the Required Lenders, to the Borrower that the Loan Commitments
have been terminated.

 

Upon the occurrence of any event described above, the
Delayed Draw Term Loan Commitments shall terminate automatically and without
further action.

 

“Delayed
Draw Term Loan Note” means, on any date, a promissory note of the
Borrower payable to any Delayed Draw Term Lender, in the form of Exhibit B-2 hereto (as such
promissory note may thereafter from time to time be amended, supplemented,
amended and restated, endorsed or otherwise modified), evidencing the aggregate
Indebtedness of the Borrower to such Delayed Draw Term Lender resulting from
outstanding Delayed Draw Term Loans, and also means all other promissory notes
accepted from time to time in substitution or replacement therefor or renewal
thereof.

 

“Disclosure Schedule” means the Disclosure Schedule attached
hereto as Schedule I, as it may be amended, supplemented, amended
and restated or otherwise modified from time to time by the Borrower with the
written consent of the Administrative Agent.

 

“Dollar” and the symbol “$” mean lawful money of the United States.

 

“Easement” means any easement appurtenant, easement in gross, license
agreement or other right running for the benefit of the Borrower or appurtenant
to the Property, including those easements and licenses described in each
applicable Title Policy.

 

“EBITDA”
means for any applicable period, the sum (without duplication) of

 

(a)  Net Income for such period,

 

plus

 

(b)  the amount deducted by the Borrower, in
determining Net Income for such period, representing

 

(i)  Interest Expense of the Borrower;

 

plus

 

(ii)  the amount deducted, in determining Net
Income, of all federal, state and local income taxes (whether paid in cash or
deferred) of the Borrower or, if the Borrower is treated as a pass through
entity or is not treated as a separate entity for United States federal income
tax purposes, the amount of Restricted Payments made by the Borrower in
accordance with Section 7.2.5 hereof;

 

plus

 

(iii)  depreciation and amortization;

 

9

 

plus

 

(iv)  non-cash stock-based compensation
expense;

 

plus

 

(v)  the amount of Cash Contributions to Capital;

 

plus

 

(vi)  the amount of non-operating costs,
including one-time non-recurring expenses and management fees;

 

provided, however, that in computing EBITDA for any period ending as of
the close of any Fiscal Quarter after the Financial Covenant Commencement Date,
EBITDA for such period shall equal the product of (x) the sum of the
amounts determined pursuant to clauses (a) and (b) for
such period multiplied by
(y) a fraction, the numerator of which is equal to 365 and the denominator
of which is equal to the number of days that have elapsed in such period.

 

“EBITDA Shortfall”
is defined in 7.2.18.

 

“Effective Date” means the date this Agreement becomes
effective pursuant to Section 10.8 and upon the satisfaction of the
conditions precedent in Section 5.1 hereof.

 

“Eligible Assignee”
means (A) any of the following entities: (i) a commercial bank
organized under the laws of the United States or any state thereof; (ii) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof;  and (iii) a
commercial bank organized under the laws of any other country or a political
subdivision thereof (provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such
bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country); or (B) a Lender, an Affiliate of a Lender or
an Approved Fund.

 

“Environmental Claim” means any and all obligations,
liabilities, losses, administrative, regulatory or judicial actions, suits,
demands, decrees, Claims, Liens, judgments, warning notices, notices of
noncompliance or violation, investigations, proceedings, removal or remedial
actions or orders, or damages (foreseeable and unforeseeable, including
consequential and punitive damages), penalties, fees, out-of-pocket costs,
expenses, disbursements, attorneys’ or consultants’ fees, relating in any way
to any Environmental Law or any Permit issued under any such Environmental Law
including (x) any and all Claims by Governmental Instrumentalities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law and (y) any and all Claims by
any third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Substances or
arising from alleged injury or threat of injury to health, safety or the
environment.

 

10

 

“Environmental Consultant”
means TRC Solutions, or any other Person designated from time to time
by the Administrative Agent to serve as the Environmental Consultant under this
Agreement.

 

“Environmental
Indemnity” means, on any date, the Environmental Indemnity Agreement
from the Borrower and the Guarantors for the benefit of the Administrative
Agent, on behalf of the Secured Parties, and as thereafter from time to time
amended, supplemented, amended and restated or otherwise modified.

 

“Environmental Law”
means any of:

 

(a)           the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.) (“CERCLA”);

 

(b)           the
Federal Water Pollution Control Act (33 U.S.C. Section 1251, et seq.)
(“CWA”);

 

(c)           the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.)
(“RCRA”);

 

(d)           the
Atomic Energy Act of 1954 (42 U.S.C. Section 2011, et seq.);

 

(e)           the
Clean Air Act (42 U.S.C. Section 7401, et seq.);

 

(f)            the
Emergency Planning and Community Right to Know Act (42 U.S.C. Section 11001,
et seq.);

 

(g)           the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136,
et seq.) (“FIFRA”);

 

(h)           the
Oil Pollution Act of 1990 (P.L. 101-380, 104 Stat. 486);

 

(i)            the
Safe Drinking Water Act (42 U.S.C. Sections 300f, et seq.) (“SDWA”);

 

(j)            the
Surface Mining Control and Reclamation Act of 1974 (30 U.S.C. Sections 1201, et
seq.);

 

(k)           the
Toxic Substances Control Act (15 U.S.C. Section 2601, et seq.) (“TSCA”);

 

(l)            the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.)
(“HMTA”);

 

(m)          the
Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. Section 7901,
et seq.) (“UMTRCA”);

 

11

 

(n)           the
Occupational Safety and Health Act (29 U.S.C. Section 651, et seq.)
(“OSHA”);

 

(o)           the
Nevada Hazardous Materials law (NRS Chapter 459);

 

(p)           the
Nevada Solid Waste/Disposal of Garbage or Sewage law (NRS 444.440 to 444.650,
inclusive);

 

(q)           the
Nevada Water Controls/Pollution law (NRS Chapter 445A);

 

(r)            the
Nevada Air Pollution law (NRS Chapter 445B);

 

(s)           the
Nevada Cleanup of Discharged Petroleum law (NRS 590.700 to 590.920, inclusive);

 

(t)            the
Nevada Control of Asbestos law (NRS 618.750 to 618.850);

 

(u)           the
Nevada Appropriation of Public Waters law (NRS 533.324 to 533.4385, inclusive);

 

(v)           the
Nevada Artificial Water Body Development Permit law (NRS 502.390);

 

(w)          the
Nevada Protection of Endangered Species, Endangered Wildlife Permit (NRS
503.585) and Endangered Flora Permit law (NRS 527.270); and

 

(x)            all
other Federal, state and local Legal Requirements which govern Hazardous
Substances, and the regulations adopted and publications promulgated pursuant
to all such foregoing laws;

 

in each case, as amended
by an amendment thereto or succeeded by a successor law, statute or regulation
thereto.

 

“Environmental
Matter” means any:

 

(a)           release,
emission, entry or introduction into the air including the air within buildings
and other natural or man-made structures above ground in quantities or
concentrations exceeding standards set by Environmental Laws;

 

(b)           discharge,
release or entry into water including into any river, watercourse, lake or pond
(whether natural or artificial or above ground or which joins or flows into any
such water outlet above ground) or reservoir, or the surface of the riverbed or
of other land supporting such waters, ground waters, sewer or the sea in
quantities or concentrations exceeding standards set by Environmental Laws;

 

(c)           deposit,
disposal, keeping, treatment, importation, exportation, production,
transportation, handling, processing, carrying, manufacture, collection,
sorting or 

 

12

 

presence of any Hazardous Substance in quantities or concentrations
exceeding standards set by Environmental Laws (including, in the case of waste,
any substance which constitutes a scrap material or an effluent or other
unwanted surplus substance arising from the application of any process or
activity (including making it reusable or reclaiming substances from it) and
any substance or article which is required to be disposed of as being broken,
worn out, contaminated or otherwise spoiled);

 

(d)           nuisance,
noise, health and safety at work, industrial illness, industrial injury due to
environmental factors, environmental health problems (including asbestosis or
any other illness or injury caused by exposure to asbestos) or genetically
modified organisms; or

 

(e)           conservation,
preservation or protection of the natural or man-made environment or any living
organisms supported by the natural or man-made environment.

 

“Environmental
Reports” means each Phase I Report and, to the extent required, each
Phase II Report.

 

“Equity Interest”
means, relative to any Person, Capital Stock and all warrants, options or other
rights to acquire Capital Stock (excluding,
however, any debt
security that is convertible into, or exchangeable for, Capital Stock prior to
any such conversion) of such Person.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time.  References to sections of ERISA also refer to
any successor sections thereto.

 

“Event of Default”
is defined in Section 8.1.

 

“Event of Loss” means, relative to any property or asset
(tangible or intangible, real or personal), (x) any loss, destruction or
damage of such property or asset, (y) any actual condemnation, seizure or
taking by exercise of the power of eminent domain or otherwise of all or a part
of such property or asset, or confiscation of all or a part of such property or
asset or the requisition of the use of all or a part of such property or asset
or (z) any settlement in lieu of item (y).

 

“Executive Order No. 13224”
shall mean Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001, as the same has been, or shall hereafter be, renewed, extended, amended
or replaced.

 

“Fee Letter” means the confidential letter
agreement, dated the Effective Date, between the Borrower, the Administrative
Agent and the Issuer.

 

“Federal Funds Rate” means, for any period, a fluctuating
interest rate per annum equal for each day
during such period to

 

13

 

(a)           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

 

(b)           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 the
Administrative Agent from three (3) federal funds brokers of recognized
standing selected by it.

 

“FF&E” means all furnishings, fixtures and equipment at, on
or about the Improvements.

 

“Financial Covenant
Commencement Date” is defined in Section 7.2.18(b).

 

“FIRREA” means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, and the regulations thereunder, in each case as
amended, reformed or otherwise modified from time to time.

 

“First Priority”
means, with respect to any Lien created in any Collateral pursuant to any of
the Loan Documents, that such Lien is the only Lien (other than Permitted
Liens) to which such Collateral is subject.

 

“Fiscal
Quarter” means a
calendar quarter ending on the last day of March, June, September or
December.

 

“Fiscal
Year” means, any
period of twelve (12) consecutive calendar months ending on December 31;
references to a Fiscal Year with a number corresponding to any calendar year (e.g.,
the “2009 Fiscal Year”) refer to the last day of the applicable Fiscal Year.

 

“Foothill”
is defined in the preamble.

 

“F.R.S. Board” means the Board of Governors of the
Federal Reserve System or any successor thereto.

 

“GAAP” is defined in Section 1.4.

 

“Gaming Equipment” means the gaming equipment and
gaming devices which are regulated gaming devices under any Nevada Gaming Law
(such as slot machines, cashless wagering systems and associated equipment)
together with all improvements and/or additions thereto.

 

“Gaming Lease”
means that certain Lease Agreement dated as of June 22, 2009 between
Borrower, as the landlord, and Gaming Tenant, as the tenant.

 

“Gaming Lease Assignment,
Subordination and Estoppel” means that certain assignment,
subordination and estoppel agreement entered into by and among the Borrower,
the Gaming Tenant and the Administrative Agent, for the benefit of the Secured
Parties, with respect 

 

14

 

to the Gaming Lease, in form and substance reasonably
satisfactory to the Administrative Agent, as originally in effect on the date of
its execution and delivery pursuant to the terms hereof, and as thereafter from
time to time amended, supplemented, amended and restated, or otherwise modified
in accordance with the terms hereof.

 

“Gaming
License” means any
and all duly issued and valid licenses, approvals, registrations, findings of
suitability and authorizations relating to gaming at the Property under the
Nevada Gaming Laws or required by the Nevada Gaming Authorities or necessary
for the operation of gaming and the sale of alcohol at the Property.

 

“Gaming Tenant”
means Armenco Holdings, LLC.

 

“Governmental
Instrumentality” means any national, state or local government, any political
subdivision thereof or any other governmental, quasi-governmental, judicial,
public or statutory instrumentality, authority, body, agency, bureau or entity
(including the Nevada Gaming Authorities, any zoning authority, the Federal
Deposit Insurance Corporation, the Comptroller of the Currency or the F.R.S.
Board, any central bank or any comparable authority) or any arbitrator with
authority to bind a party at law.

 

“Guarantors” means, collectively, the Parent Guarantors and
the Subsidiary Guarantors.

 

“Guaranty”
means, on any date, the Payment Guaranty as originally in effect on the
Effective Date, from the Guarantors, jointly and severally, in favor of the
Administrative Agent for the benefit of the Secured Parties, on behalf of the
Secured Parties as originally in effect on the Effective Date, and as
thereafter from time to time amended, supplemented, amended and restated or
otherwise modified.

 

“Hard
Costs” means all
Capital Improvement Project Costs expended or incurred by the Borrower for
labor, services, materials, tools, utilities, equipment, fixtures and
furnishings in connection with the Capital Improvement Project, all as set
forth in the Capital Improvement Project Budget.

 

“Hazardous Substances” means (statutory acronyms and
abbreviations having the meaning given them in the definition of “Environmental
Laws”) substances defined as “hazardous substances,” “pollutants” or “contaminants”
in Section 101 of the CERCLA; those substances defined as “hazardous
waste,” “hazardous materials” or “regulated substances” by the RCRA; those
substances designated as a “hazardous substance” pursuant to Section 311
of the CWA; those substances defined as “hazardous materials” in Section 103
of the HMTA; those substances regulated as a hazardous chemical substance or
mixture or as an imminently hazardous chemical substance or mixture pursuant to
Sections 6 or 7 of the TSCA; those substances defined as “contaminants” by Section 1401
of the SDWA, if present in excess of permissible levels; those substances
regulated by the Oil Pollution Act; those substances defined as a pesticide
pursuant to Section 2(u) of the FIFRA; those substances defined as a
source, special nuclear or by-product material by Section 11 of the AEA;
those substances defined as “residual radioactive material” by Section 101
of the UMTRCA; those substances defined as “toxic materials” or “harmful physical
agents” pursuant to Section 6 of the OSHA); those 

 

15

 

substances defined as hazardous wastes in 40 C.F.R. Part 261.3;
those substances defined as hazardous waste constituents in 40 C.F.R. Part 260.10,
specifically including Appendices VII and VIII of Subpart D of 40 C.F.R. Part 261;
those substances designated as hazardous substances in 40 C.F.R. Parts 116.4
and 302.4; those substances defined as hazardous substances or hazardous
materials in 49 C.F.R. Part 171.8; those substances regulated as hazardous
materials, hazardous substances or toxic substances in 40 C.F.R. Part 1910;
those substances defined as hazardous materials, hazardous substances or toxic
substances in any other Environmental Laws; and those substances defined as
hazardous materials, hazardous substances or toxic substances in the
regulations adopted pursuant to said laws, whether or not such regulations or
publications are specifically referenced herein.

 

“herein”, “hereof”, “hereto”, “hereunder” and
similar terms contained in this Agreement or any other Loan Document referred
to in this Agreement or such other Loan Document, as the case may be, as a
whole and not to any particular Section, paragraph or provision of this
Agreement or such other Loan Document.

 

“Holdings” means
Tropicana Las Vegas Hotel and Casino, Inc., a Delaware corporation.

 

“Holdings Intermediary” means Tropicana Las
Vegas Intermediate Holdings, Inc., a Delaware corporation.

 

“Impermissible Qualification” means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of the Borrower or any of the Guarantors, any qualification or
exception to such opinion or certification

 

(a)           which
is of a “going concern” or similar nature;

 

(b)           which
relates to the limited scope of examination of matters relevant to such
financial statement; or

 

(c)           which
relates to the treatment or classification of any item in such financial
statement and which, as a condition to its removal, would require an adjustment
to such item the effect of which would be to cause an Event of Default under Section 8.1.2.

 

“Imposition” means any real estate tax, payment in lieu of taxes or other
assessment (including pursuant to restrictive covenants, deed restrictions or
association documents) levied, assessed or imposed against the Property, and
any water rates, sewer rentals or other governmental, quasi-governmental,
association, municipal or public dues, charges or impositions, of every nature
and to whomever assessed, that may now or hereafter be levied or assessed upon
the Property, or upon the rents, issues, income, proceeds or profits thereof,
whether the Imposition is levied directly or indirectly against the Property or
as excise taxes or income taxes.

 

“Improvements”
is defined in the first recital.

 

16

 

“including” and “include” means including, without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statement, which is
followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.

 

“Indebtedness” means, relative to any Person, without
duplication:

 

(a)           all
obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments;

 

(b)           all
obligations, contingent or otherwise, relative to the face amount of all
letters of credit (or reimbursement agreements in respect thereof), whether or
not drawn, and banker’s acceptances issued for the account of such Person;

 

(c)           all
obligations of such Person as lessee under leases which have been or should be,
in accordance with GAAP, recorded as Capitalized Lease Liabilities;

 

(d)           whether
or not so included as liabilities in accordance with GAAP, all obligations of
such Person to pay the deferred purchase price of property or services, and
indebtedness (excluding, however, prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse; and

 

(e)           all
Contingent Liabilities of such Person in respect of any of the foregoing.

 

For all purposes of this Agreement, (x) the
Indebtedness of any Person shall include the proportion of Indebtedness of any
partnership in which such Person is a general partner or joint venturer to the
extent that such Indebtedness is recourse to such Person and (y) the
amount of any Indebtedness outstanding as of any date shall be the principal
amount thereof, together with any interest thereon that is more than thirty
(30) days past due.

 

“Indebtedness to be Paid” means the
Indebtedness identified in Item
5.1.21 on the  Disclosure
Schedule.

 

“Indemnified
Liabilities” is defined in Section 10.4.

 

“Indemnified Parties”
is defined in Section 10.4.

 

“Independent Consultant” means the Insurance Consultant, the
Environmental Consultant, the Appraiser or their successors engaged pursuant to
this Agreement.

 

“Instrument” means any Contract, agreement, indenture, mortgage, deed of
trust, document or writing (whether by formal agreement, letter or otherwise)
under which any obligation is evidenced, assumed or undertaken, or any Lien (or
right or interest therein) is granted or perfected.

 

17

 

“Insurance Consultant” means T&H Brokers Inc. or any other
Person designated from time to time by the Administrative Agent to serve as the
Insurance Consultant.

 

“Insurance Consultant’s Closing Certificate” means a
certificate from the Insurance Consultant substantially in the form of Exhibit K
hereto stating, among other things, that (x) the Insurance Consultant has
reviewed the Borrower’s certificates of insurance and other material
information deemed necessary by the Insurance Consultant for the purpose of
evaluating whether the Borrower is in compliance with their insurance
obligations hereunder and (y) based on its review of such information, the
Insurance Consultant has reasonably determined that the Borrower is in
compliance with the Insurance Requirements hereunder and that the Borrower’s
insurance policies in effect are adequate for their operation of the Property.

 

“Insurance Consultant’s Report” means a report of the Insurance
Consultant which shall include an analysis of the Insurance Requirements and
the Borrower’s policies of insurance in effect and stating, among other things,
that (x) the Insurance Consultant has reviewed the Borrower’s policies of
insurance and other material information deemed necessary by the Insurance
Consultant for the purpose of evaluating whether the Borrower is in compliance
with its insurance obligations hereunder and (y) based on its review of
such information, the Insurance Consultant is of the opinion that the Borrower
is in compliance with the insurance obligations hereunder and that the Borrower’s
insurance policies in effect are adequate for the construction and operation by
the Borrower of the
Property.

 

“Insurance
Premiums” means, for each applicable period, the insurance premiums
for liability, casualty, environmental and other insurance required by the Loan
Documents to be maintained by the Borrower during such period with respect to
the Property.

 

“Insurance Proceeds”
means all awards, amounts, damages, compensation, payments, settlements and
proceeds (including Instruments) received by any Person in respect of any
damage or destruction to the Improvements (including the Capital Improvement
Project), or any portion thereof, including the proceeds of any insurance
policy required to be maintained by the Borrower pursuant to Section 7.1.4.

 

“Insurance Requirement” means any provisions of any insurance
policy covering or applicable to the Borrower, the Property, the Improvements
thereon, the Capital Improvement Project or any portion thereof, all
requirements of the issuer of any such policy and all orders, rules,
regulations and other requirements of the National Board of Fire Underwriters
(or any body exercising similar functions) applicable to or affecting the Property,
the Improvements thereon, the Capital Improvement Project or any portion
thereof, any use or condition thereof or the Borrower as set forth on Schedule
III hereto.

 

“Interest
Expense” means, for
any period, the aggregate cash interest expense (net of cash interest income)
of the Borrower (including, to the extent the Borrower has any Contingent
Liability in respect of such interest expense, the interest expense of other
Persons) for such period, as determined in accordance with GAAP, including the
portion of any payments made in respect of Capitalized Lease Liabilities
allocable to interest expense, but excluding,
however, deferred
financing costs and other non-cash interest expense.

 

18

 

“Interest Reserve”
means an amount equal to Five Million Dollars ($5,000,000) which shall be
funded from the proceeds of the Required Preferred Rights Offering and
deposited with the Administrative Agent into the Interest Reserve Account to be
used for the payment of Debt Service with respect to the Obligations in
accordance with this Agreement, and which amount shall be increased by One
Million Dollars ($1,000,000) in accordance with the terms and provisions of Section 5.4.5
hereof.

 

“Interest
Reserve Account” means that certain interest-bearing account
entitled “Interest Reserve Account” and established by the Borrower with the
Administrative Agent.

 

“Investment” means, relative to any Person,

 

(a)           any
loan or advance made by such Person to any other Person (including Affiliates)
(excluding, however, commission, travel, petty cash and similar
advances to officers and employees made in the ordinary course of business);

 

(b)           any
Contingent Liability of such Person incurred in connection with loans or
advances described in clause (a);

 

(c)           any
ownership or similar interest held by such Person in any other Person; and

 

(d)           any
other item that is or would be classified as an investment on a balance sheet
of such Person prepared in accordance with GAAP.

 

The amount of any Investment shall be the original
principal or capital amount thereof less all returns of principal or equity
thereon and shall, if made by the transfer or exchange of property other than
cash, be deemed to have been made in an original principal or capital amount
equal to the fair market value of such property at the time of such Investment.

 

“Joint
Venture” means any entity in which any Parent Guarantor, the
Borrower and/or a Subsidiary of the Borrower, collectively and in the
aggregate, own not more than fifty percent (50%) of the outstanding equity
interests in and pursuant to which any Parent Guarantor, the Borrower and/or a
Subsidiary of the Borrower, in association with the other owner(s) of such
Joint Venture, own, develop and operate one or more lines of business at the
Property such as, by way of example but not limitation, restaurants, bars or
nightclubs.

 

“Key Person
Management Agreement” means that certain Employment Agreement
entered into by and between the Borrower and the Key Person Manager dated as of
July 1, 2009.

 

“Key Person Manager”
means Alex Yemenidjian.

 

“Key Person
Management Assignment and Subordination Agreement” means that
certain assignment and subordination agreement entered into by and among the
Borrower, the Key Person Manager and the Administrative Agent, for the benefit
of the Secured Parties, with respect to the Key Person Management Agreement, in
form and substance reasonably satisfactory to the Administrative Agent, as
originally in effect on the date of its execution and 

 

19

 

delivery pursuant to the
terms hereof, and as thereafter from time to time amended, supplemented,
amended and restated, or otherwise modified in accordance with the terms
hereof.

 

“Knowledge”
means, at any time and relative to any matter, knowledge which such Person or,
if applicable, the Authorized Representative of such Person has after
reasonable and customary inquiry of such Persons.

 

“Know Your Customer Letter
Certification” means a letter executed and delivered by an
Authorized Representative of the Borrower substantially in the form of Exhibit L
hereto.

 

“Land” is
defined in the first recital.

 

“Leases” means, relative to any Real Property or the Improvements
thereon, any leases, subleases, lettings, licenses, concessions, operating
agreements, management agreements, arrangements and all other agreements
affecting such Real Property or Improvements, that the owner or such Real
Property has entered into, taken by assignment, taken subject to, or assumed, or
has otherwise become bound by, now or in the future, that give any Person the
right to conduct its business on, or otherwise use, operate or occupy, all or
any portion of such Real Property or Improvements, together with all
amendments, extensions, and renewals of the foregoing, together with all
rental, occupancy, service, maintenance or any other similar agreements
pertaining to the use or occupation of, or the rendering of services at such
Real Property, the Improvements thereon or any part thereof.

 

“Legal Requirement” means, relative to any Person or property,
all laws (including Nevada Gaming Laws, if applicable), statutes, codes,
regulations, rules, acts, ordinances, permits, licenses, authorizations,
directions, decrees, orders and requirements of all Governmental
Instrumentalities, departments, commissions, boards, courts, authorities,
agencies, officials and officers, and any deed restrictions, restrictive
covenants or other requirements of record, applicable to such Person or such
property, or any portion thereof or interest therein or any use or condition of
such property or any portion thereof or interest therein (including those
relating to zoning, planning, subdivision, building, safety, health, use,
environmental quality and other similar matters).

 

“Lender” is defined in the preamble and means any Lender which
has made a Loan Commitment or holds a Loan, including any Person that becomes a
Lender pursuant to Section 10.11.1.

 

“Lender Assignment Agreement” means a lender assignment agreement
substantially in the form of Exhibit I hereto.

 

“Lender
Default” means (x) the
refusal (which has not been retracted) of a Lender to make available its
portion of any Borrowing (other than a refusal based upon a good faith
determination by such Lender that the applicable conditions in Article V
have not been satisfied) or (y) a Lender having notified the
Administrative Agent or the Borrower that it does not intend to perform its
obligations under Section 2.4.

 

20

 

“Lenders’ Environmental Liability” means any and all losses,
liabilities, obligations, penalties, Claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential
damages), disbursements or expenses of any kind or nature whatsoever (including
reasonable attorneys’ fees at trial and appellate levels and reasonable
consultants’ and experts’ fees and disbursements and expenses incurred in
investigating, defending against or prosecuting any litigation, Claim or proceeding)
which may at any time be imposed upon, incurred by or asserted or awarded
against any Lender or any of such Lender’s parent and subsidiary corporations,
and their Affiliates, shareholders, directors, officers, employees, and agents
in connection with or arising from:

 

(a)           any
Hazardous Substances on, in, under or affecting all or any portion of the
Property, the Improvements thereon, the groundwater thereunder, or any
surrounding areas thereof;

 

(b)           any
misrepresentation, inaccuracy or breach of any warranty, contained in Section 6.12;

 

(c)           any
violation or Claim of violation by the Borrower of any Environmental Laws; or

 

(d)           the
imposition of any Lien for damages caused by, or the recovery of any costs for
the cleanup, release or threatened release of, Hazardous Substances from the
Property or the Improvements thereon or in connection with any property owned
or formerly owned by the Borrower.

 

“Lender’s Tax”
is defined in Section 4.2.

 

“Letters
of Credit” means standby letters of credit issued or to be issued by
the Issuer for the account of the Borrower pursuant to Section 2.4.

 

“Letter
of Credit Commitment” means, (x) relative to the Issuer, such
Issuer’s obligation to issue or extend the Letter of Credit Stated Expiry Date
pursuant to Section 2.1.2
and (y) relative to each Lender (other than the Issuer) that has a
Revolving Loan Commitment, the obligation of such Lender to participate in the
Letters of Credit pursuant to Section 2.4.1 in an amount equal to such Lender’s
Percentage of the Letter of Credit Commitment Amount (as such Percentage is set
forth below such Lender’s signature hereto or in a Lender Assignment
Agreement).

 

“Letter
of Credit Commitment Amount” means Five Million Dollars
($5,000,000), as such amount may be permanently reduced from time to time
pursuant to Section 2.2.

 

“Letter of Credit
Commitment Termination Date” means the date on which any Loan
Commitment Termination Event occurs.

 

“Letter
of Credit Disbursement” is defined in Section 2.4.2.

 

“Letter
of Credit Disbursement Date” is defined in Section 2.4.2.

 

21

 

“Letter
of Credit Issuance Request”
means a Letter of Credit request and certificate duly executed by an Authorized
Representative of the Borrower substantially in the form of Exhibit D hereto.

 

“Letter
of Credit Outstandings” means, on any date, an amount equal to the
sum of

 

(a)  the then aggregate amount which is undrawn and available
under all issued and outstanding Letters of Credit,

 

plus

 

(b)  the then aggregate amount of all unpaid and outstanding
Letter of Credit Reimbursement Obligations.

 

“Letter
of Credit Reimbursement Obligation” is defined in Section 2.4.3.

 

“Letter of Credit Stated
Expiry Date” is defined in Section 2.4.

 

“Licensing Date”
is defined in Section 7.3.

 

“Lien” means, relative to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest therein).

 

“Loan” means, as the context may require, a Revolving Loan or a
Delayed Draw Term Loan.

 

“Loan Commitment” means, as the context may require, a
Revolving Loan Commitment and/or a Delayed Draw Term Loan Commitment.

 

“Loan Commitment Amount” means,
as the context may require, the Revolving Loan Commitment Amount and/or the
Delayed Draw Term Loan Commitment Amount.

 

“Loan Commitment
Termination Date” means, as the case may be, a Revolving Loan Commitment
Termination Date or a Delayed Draw Commitment Termination Date.

 

“Loan Commitment
Termination Event” means, as the case may be, the occurrence of a Revolving Loan Commitment
Termination Event or a Delayed Draw Term Loan Commitment Termination
Event.

 

“Loan Documents” means, collectively, this Agreement, each
Note, each Borrowing Request, the Security Agreement, the Trademark Security
Agreement, the Deed of Trust, the Assignment of Leases and Rents, the Assignment of
Permits, Contracts and Agreements, the Guaranty, the Environmental
Indemnity, the Pledge Agreement, the Property Management Assignment and
Subordination Agreement, the Key Person Management Assignment and 

 

22

 

Subordination Agreement, the Gaming Lease Assignment,
Subordination and Estoppel and
any other agreement, certificate, document or Instrument delivered by the
Borrower or any Guarantor in connection with this Agreement and such other
agreements, whether or not specifically mentioned herein or therein.

 

“Loan to Value Ratio”
means, on the Effective Date, the ratio, expressed as a percentage, of (x) the
Loan Commitment Amount plus all other Obligations of the Borrower on
such date to (y) the “as is” value of the Property on such date
based on the Appraisal.

 

“Loss Proceeds”
is defined in clause (a) of Section 7.1.15.

 

“Loss Proceeds
Account” is defined in clause
(a) of Section 7.1.15.

 

“Loss Proceeds Deficiency”
is defined in clause (g) of Section 7.1.15.

 

“L/C Issuance Fee” is defined in Section 3.3.4.

 

“Mandatory Prepayment” is defined in clause
(b) of Section 3.1.1.

 

“Material Adverse Effect” means any change,
effect, fact, event or circumstance which, materially and adversely affects (i) the
financial condition, operations, assets, or business, of the Borrower and the
Guarantors, taken as a whole (except for circumstances or events attributable
to general economic conditions), (ii) the ability of the Borrower or any
Guarantor to perform their respective obligations under the Loan Documents or (iii) the
validity or enforceability of the Loan Documents or the rights, remedies,
options or benefits of the Lenders thereunder.

 

“Material Lease”
means any Lease with an annual total rent in excess of $40,000.

 

“Members” means, relative to any Person which is a limited liability
company, the Persons owning a Membership Interest therein.

 

“Membership Interest” means, relative to any Person which is a
limited liability company, a membership interest or a limited liability company
interest, as the case may be, of such Person.

 

“Moody’s” means Moody’s Investors Service, Inc., a
Delaware corporation, or any successor thereto.

 

“Net Income”
means, for any period, the aggregate of all amounts (including extraordinary
losses) which, in accordance with GAAP, would be included in determining net
income on the financial statements of the Borrower for such period (excluding,
however, all amounts in respect of any extraordinary gains and any
non-cash income).

 

“Nevada
Gaming Authority” means the Nevada Gaming Commission, the Nevada State Gaming Control
Board or the Clark County Liquor and Gaming Licensing Board.

 

23

 

“Nevada
Gaming Law” means
the Nevada Gaming Control Act, as codified in Chapter 463 of the NRS, as
amended from time to time, and the regulations of the Nevada Gaming Commission
promulgated thereunder, as amended from time to time, and Clark County Code
Sections 8.04.010 to 8.04.310 and 8.20.010 to 8.20.580, as amended from time to
time.

 

“New Preferred Stock”
is defined in the definition of Required Preferred Rights Offering.

 

“Non-Defaulting
Lender” means and
includes each Lender other than a “Defaulting Lender”.

 

“Non-U.S. Lender”
is defined in Section 4.2.

 

“Note”
means, as the context may require, a Revolving Note or a Delayed Draw Term Loan
Note.

 

“NRS” means the Nevada Revised Statutes.

 

“Obligations” means (w) all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by the Borrower under this
Agreement to any Secured Party of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment of
money), direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, pursuant to the terms of any of the Loan
Documents, including all interest, fees, charges, expenses, attorneys’ fees,
consultants’ fees and accountants’ fees chargeable to the Borrower in
connection with such Person’s dealings with the Borrower and payable by the
Borrower hereunder or thereunder; (x) any and all sums advanced by the
Secured Parties in order to preserve the Security or preserve any Secured
Parties’ security interest in the Security, including all protective advances; (y) the
reasonable expenses of preparing and negotiating any amendment, modification or
amendment and restatement of any of the Loan Documents including all fees,
charges, expenses, attorneys’ fees, consultants’ fees and accountants’ fees;
and (z) in the event of any proceeding for the collection or enforcement
of, or any “working out” of, the Obligations, the reasonable expenses of
negotiating or restructuring of the Obligations (whether or not any such
restructure is consummated) or a retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Security, or of
any exercise by any Secured Party of its rights under the Loan Documents,
together with reasonable attorneys’ fees and court costs.

 

“OFAC”
means the Office of Foreign Assets Control of the United States Department of
the Treasury.

 

“Official
Records” means the official real property records of Clark County,
Nevada.

 

“Ongoing Investment”
is any Investment listed in Item 7.2.4(a) on the Disclosure
Schedule.

 

“Operative Document” means any Loan Document or Capital
Improvement Project Document.

 

24

 

“Organizational Document” means, relative to any Person, its
certificate or articles of incorporation, by-laws, certificate of partnership,
partnership agreement, certificate of formation, articles of organization,
operating agreement, limited liability company or operating agreement and all
shareholder agreements, voting trusts and similar arrangements applicable to
any of such Person’s partnership interests, limited liability company interests
or authorized shares of capital stock.

 

“Parent Guarantors”
means, collectively, Holdings and Holdings Intermediary.

 

“Partial Condemnation”
means any condemnation or eminent domain proceeding or action (other than a
Total Condemnation) by any Governmental Instrumentality (including, but not
limited to, any transfer made in lieu of, or in anticipation of, the exercise
of such taking), whether for any permanent or temporary use, occupancy or other
interest affecting a portion of the Property.

 

“Participant”
is defined in Section 10.11.2.

 

“PBGC” means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

 

“Pension Plan” means a “pension plan”, as such term is
defined in Section 3(2) of ERISA, which is subject to Title IV
of ERISA or any other applicable substantially similar state or territorial law
(excluding, however, a multiemployer plan as defined in Section 4001(a)(3) of
ERISA), and to which the Borrower or any corporation, trade or business that
is, along with the Borrower, a member of a Controlled Group, has liability or a
reasonable expectation of liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of
ERISA at any time during the preceding five (5) years, or by reason of
being deemed to be a contributing sponsor under Section 4069 of ERISA.

 

“Percentage” means, relative to any Lender, the applicable percentage set
forth opposite its signature to this Agreement, as such percentage may be
adjusted from time to time pursuant to Lender Assignment Agreement(s) executed
by such Lender and its Assignee Lender(s) and delivered pursuant to Section 10.11.1 or Section 4.7,
as the case may be.

 

“Perfection Certificate”
means the Perfection Certificate substantially in the form of Exhibit F
hereto.

 

“Permit” means any building, construction, zoning, land use,
environmental, utility agreement or other permit, license, franchise, approval,
consent and authorization (including central bank and planning board approvals
from applicable Governmental Instrumentalities and approvals required under the
Nevada Gaming Law) required for or in connection with the ownership, use,
occupation or operation of the Property, the Capital Improvement Project, and
the transactions provided for in this Agreement and the other Operative
Documents.

 

“Permitted
Asset Sale” is defined in Section 7.2.9.

 

25

 

“Permitted Lien” means any of the following types of Liens
(excluding, however, any such Lien imposed pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or by ERISA, any such Lien relating
to or imposed in connection with any Environmental Claim and any such Lien
expressly prohibited by any applicable terms of any of the Operative
Documents):

 

(a)           Liens
securing the Obligations under the Loan Documents;

 

(b)           Liens
set forth in Item 7.2.3 of the Disclosure Schedule;

 

(c)           (x) Liens
for Impositions or (y) statutory Liens of landlords, and carriers’,
warehousemen’s, mechanics’, suppliers’, materialmen’s, repairmen’s or other
similar Liens arising in the ordinary course of business, in the case of each
of items (x) and (y), with respect to amounts that either (1) are
not yet delinquent or (2) are being diligently contested in good faith by
appropriate proceedings; provided, however, that, in each case,
any reserve or other appropriate provision as shall be required in conformity
with GAAP shall have been made therefor and the Borrower either has obtained a
title insurance endorsement insuring against losses arising therewith or has
bonded such Lien within thirty (30) days after becoming aware of the existence of
such Lien;

 

(d)           Easements,
rights-of-way, avigational servitudes, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances which do not
interfere in any material respect with the ordinary conduct of business of the Borrower,
the Property or the Improvements thereon;

 

(e)           licenses
of patents, trademarks and other intellectual property rights granted by the
Borrower in the ordinary course of business;

 

(f)            Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (excluding,
however, obligations for the payment of borrowed money), incurred in the
ordinary course of business so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the Security on
account thereof, (x) for amounts not yet overdue or (y) for amounts
that are overdue and that (in the case of any such amounts overdue for a period
in excess of five (5) days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate provisions,
if any, as shall be required by GAAP shall have been made for any such
contested amounts and (2) in the case of a Lien with respect to any
portion of the Security, such contest proceedings conclusively operate to stay
the sale of any portion of the Security on account of such Lien;

 

(g)           Liens
for Taxes, assessments or governmental charges or Claims, the payment of which
is not at the time due and payable or which is being contested in good faith by
appropriate governmental proceedings promptly instituted and diligently
contested, so long as (x) such reserve or other appropriate provision, if
any, as shall be 

 

26

 

required in conformity with generally accepted accounting principles
shall have been made therefor and (y) in case of any charge or Claim which
has or may become a Lien against any of the Security, such contest proceedings
conclusively operate to stay the sale of any portion of the Security to satisfy
such charge or Claim;

 

(h)           Liens
created by or resulting from any litigation or legal proceeding in the ordinary
course of business which is being contested in good faith by appropriate
proceedings; provided, however, that, in each case, any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; and

 

(i)            Liens
consisting of any right of offset, or statutory bankers’ lien, on deposit bank
accounts made in the ordinary course of business.

 

“Person” means any natural person, corporation, limited liability
company, partnership, joint venture, joint stock company, firm, association,
trust or unincorporated organization, government, governmental agency,
Governmental Instrumentality, court or any other legal entity, whether acting
in an individual, fiduciary or other capacity.

 

“Phase I
Project” means the renovation of the
Improvements, including, without limitation, renovation of the hotel rooms and
convention center, a refurbishment of the casino floor, the redevelopment of
the pool area, the expansion and renovation of the showroom, the enhancement of
the food and beverage facilities, the refurbishment of outdoor signage and
façade, the reconfiguration of the pedestrian bridge between the Property and
the MGM Grand Hotel and Casino, back of house improvements, upgrades to the
information technology systems, the installation of new slot machines and
infrastructure upgrades, all as contemplated in and pursuant to the Phase I Project
Budget.

 

“Phase I Project Budget”
means the budget set forth on Schedule
V annexed hereto and made a part hereof (as amended from time to
time in accordance with Section 7.2.10)
which shall include (x) a breakdown of all Hard Costs and Soft Costs, together
with a schedule of the Phase I Project Costs incurred prior to the Effective
Date, (y) a schedule setting forth the FF&E which is to be purchased
in connection with the construction of the Phase I Project from the proceeds of the
Loans or otherwise, and (z) a balanced statement of sources and uses of
proceeds (and any other funds necessary to complete the Phase I Project).

 

“Phase I
Project Costs” means
all costs incurred or to be incurred which are described in the Phase I Project
Budget in connection with the development, design, engineering, procurement,
installation and construction of the Phase I Project, including, but not
limited to:

 

(a)           all
costs incurred under the applicable Construction Contracts;

 

(b)           Interest
accruing under this Agreement and the other Loan Documents with respect to the
Revolving Loans;

 

(c)           reasonable
financing and closing costs related to the Phase I Project, including insurance
costs (including, with respect to directors and officers insurance, 

 

27

 

costs relating to such insurance), guarantee fees, attorney fees,
financial advisory fees and expenses, technical fees and expenses (including
fees and expenses of the Independent Consultants), commitment fees, management
fees, agency fees (including fees and expenses of the Administrative Agent),
Interest, Taxes and other out-of-pocket expenses payable by the Borrower under
all documents related to the financing and construction of the Phase I Project;
and

 

(d)           the
costs of acquiring Permits for the Phase I Project (including Permits required
for the operation of the Property).

 

“Phase I Project Documents” means, collectively, each
Construction Contract applicable to the Phase I Project, the Phase I Project
Budget and any other material certificate, document, instrument, agreement,
permit or approval prepared by or on behalf of the Borrower now or hereafter in
effect, relating to the Property and the construction, maintenance or operation
of the Phase I Project or any portion thereof, whether or not specifically
mentioned herein or therein (other than the Loan Documents), as the same may
thereafter from time to time be amended, supplemented, amended and restated or
thereafter modified in accordance with this Agreement.

 

“Phase I Report” is defined in Section 5.1.7.

 

“Phase II Club” means a night club and related amenities to
be constructed at the Property in connection with the Phase II Project.

 

“Phase II Club Management
Agreement” means that certain management agreement entered into
between Borrower, as owner, and the Phase II Club Operator, as manager,
relating to the management of the Phase II Club in form and substance
reasonably satisfactory to the Administrative Agent.

 

“Phase II Club Net
Income” means the Net
Income generated by the Phase II Club.

 

“Phase II Club Operator” means any Person experienced in the managing and operation
of night clubs comparable to the Phase II Club and reasonably acceptable to the
Administrative Agent.

 

“Phase II Project” means the construction and build-out of the
Phase II Club satisfactory to the Administrative Agent, in its sole discretion.

 

“Phase II Project Budget” means the budget set forth on Schedule VI annexed hereto and
made a part hereof (as amended from time to time in accordance with Section 7.2.10) which shall
include (x) a breakdown of all Hard Costs and Soft Costs, together with a
schedule of Phase II Costs incurred prior to the Effective Date, (y) a
schedule setting forth the FF&E which is to be purchased in connection with
the construction of the Phase II Project from the proceeds of the Loans or
otherwise, and (z) a balanced statement of sources and uses of proceeds
(and any other funds necessary to complete the Phase II Project).

 

28

 

“Phase II
Project Costs” means
all costs incurred or to be incurred which are described in the Phase II
Project Budget in connection with the development, design, engineering,
procurement, installation and construction of the Phase II Project, including,
but not limited to:

 

(a)           all
costs incurred under the applicable Construction Contracts;

 

(b)           Interest accruing under this Agreement and the other Loan
Documents with respect to the Delayed Draw Term Loans;

 

(c)           reasonable financing and closing costs related to the
Phase II Project, including insurance costs (including, with respect to
directors and officers insurance, costs relating to such insurance), guarantee
fees, attorney fees, financial advisory fees and expenses, technical fees and
expenses (including fees and expenses of the Independent Consultants),
commitment fees, management fees, agency fees (including fees and expenses of
the Administrative Agent), Interest, Taxes and other out-of-pocket expenses
payable by the Borrower under all documents related to the financing and
construction of the Phase II Project; and

 

(d)           the costs of acquiring Permits for the Phase II Project
(including Permits required for the operation of the Phase II Club).

 

“Phase II Project Documents” means, collectively, each Construction
Contract applicable to the Phase II Project, the Phase II Project Budget and
any other material certificate, document, instrument, agreement, permit or
approval prepared by or on behalf of the Borrower now or hereafter in effect,
relating to the Property and the construction, maintenance or operation of the
Phase II Project or any portion thereof, whether or not specifically mentioned
herein or therein (other than the Loan Documents), as the same may thereafter
from time to time be amended, supplemented, amended and restated or thereafter
modified in accordance with this Agreement.

 

“Phase II Report” is defined in Section 5.1.7.

 

“Plan” means any Pension Plan or Welfare Plan.

 

“Pledge Agreement”
means, on any date, the Pledge Agreement, as in effect on the Effective Date,
by and among Holdings, Holdings Intermediary, the Borrower and the
Administrative Agent, for the benefit of the Secured Parties, and as thereafter
from time to time amended, supplemented, amended and restated or otherwise
modified in accordance with the terms thereof.

 

“Preferred Stock” means any Capital Stock with preferential
right of payment of dividends or distributions, as applicable, or upon
liquidation, dissolution or winding up.

 

“Process Agent” is defined in Section 10.15.

 

“Property” is
defined in the first recital.

 

29

 

“Property Management
Agreement”  means that
certain Property Management Agreement entered into pursuant to Section 7.1.24
hereof between Borrower, as owner, and the Property Manager, as manager, in
form and substance reasonably satisfactory to the Administrative Agent.

 

“Property Management
Assignment and Subordination Agreement” means an assignment,
subordination, non-disturbance and attornment agreement entered into by and
among the Borrower, the Property Manager and the Administrative Agent, for the
benefit of the Secured Parties, with respect to the Property Management
Agreement, in form and substance reasonably satisfactory to the Administrative
Agent, as originally in effect on the date of its execution and delivery
pursuant to the terms hereof, and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified in accordance with
the terms hereof.

 

“Property Manager”
means Trilliant Management I, L.P., a Delaware limited partnership, or any
other Person with experience managing hotel casino properties comparable to the
Property and otherwise reasonably acceptable to the Administrative Agent.

 

“Quarterly Payment Date” means the last Business Day of each
Fiscal Quarter.

 

“Real Property” means, relative to any Person, such Person’s
present and future right, title and interest (including any leasehold estate)
in

 

(a)           any
plots, pieces or parcels of land;

 

(b)           any
improvements, buildings, structures and fixtures now or hereafter located or
erected thereon or attached thereto of every nature whatsoever;

 

(c)           any
other interests in property constituting appurtenances to such plots, pieces or
parcels of land, or which hereafter shall in any way belong, relate or be
appurtenant thereto; and

 

(d)           all
other rights and privileges thereunto belonging or appertaining and all
extensions, additions, improvements, betterments, renewals, substitutions and
replacements to or of any of the rights and interests described in clause (c).

 

“Register” is
defined in Section 2.6.

 

“Release” means a “release”,
as such term is defined in CERCLA.

 

“Required Lenders” means, at any time,

 

(a)           Non-Defaulting
Lenders holding greater than fifty percent (50%) of the aggregate outstanding
principal amount of the Loans then held by such Non-Defaulting Lenders, plus
the Revolving Loan Commitment Amount (inclusive of the Letter of Credit
Outstandings of such Non-Defaulting Lenders) of such Non-Defaulting Lenders, or

 

30

 

(b)           if
no Loans are then outstanding, Lenders holding greater than fifty percent (50%)
of the Loan Commitments,

 

provided, however, that (x) amendments
affecting only one class of Lenders (with a separate class for the Revolving
Lenders and the Delayed Draw Term Lenders) will require the approval of the
Non-Defaulting Lenders holding greater than fifty percent (50%) of the
aggregate principal amount of the Loans, Letters of Credit or Loan Commitments
for such class and (y) with respect to the matters set forth in clauses (a) through (g) of Section 10.1,
the consent of all of the Non-Defaulting Lenders in the same class shall be
required with respect to matters affecting such class and the consent of all of
the Non-Defaulting Lenders of all classes shall be required with respect to all
other matters except as otherwise set forth in clauses (a) through
(g) of  Section 10.1.

 

“Required Preferred Rights Offering”
means the issuance and sale of, on or before the Effective Date, shares of
newly issued Class A Series 2 Convertible Participating Preferred
Stock of Holdings (the “New Preferred Stock”)
aggregating not less than $50,000,000, each of which will be convertible
initially into share(s) of common stock of the Borrower, as more
particularly set forth therein.

 

“Restoration” means the repair and
restoration of the Improvements to the condition that it was in immediately
prior to the applicable Event of Loss.

 

“Restricted Payment” is
defined in Section 7.2.5.

 

“Retainage Amount” means, at any given time, amounts which
have accrued and are owing under the terms of a construction contract for work
or services already provided but which at such time (and in accordance with the
terms of the construction contract) are being withheld from payment to the
contractor, until certain subsequent events (e.g., completion benchmarks) have been achieved under such
construction contract, which shall be ten percent (10%) of the costs for all
work under a construction contract; provided, that, (i) no
amount shall be withheld with regard to any construction contract where the
party thereto solely supplies materials to the Property and (ii) no amount
withheld shall exceed the amount permitted under NRS  624.609.

 

“Revolving Lender”
means any Lender which has made a Revolving Loan Commitment or holds a
Revolving Loan.

 

“Revolving Loan” is defined in Section 2.1.1.

 

“Revolving Loan
Commitment” means, on any date, relative to any Revolving Lender,
such Revolving Lender’s Percentage of the Revolving Loan Commitment Amount
reduced by the principal amount of any Revolving Loans made by such Revolving
Lender as of such date.  The Revolving
Loan Commitment of each Revolving Lender is set forth below such Revolving
Lender’s signature hereto or in a Lender Assignment Agreement.

 

“Revolving Loan Commitment
Amount” means the aggregate principal amount of Revolving Loans that
the Revolving Lenders are obligated to make pursuant to Section 2.1.1. 
The Revolving Loan Commitment Amount shall not exceed Fifty Million
Dollars ($50,000,000) 

 

31

 

of which (x) all or a portion may be used to
reimburse the Issuer for draws under the Letters of Credit and (y) the
balance thereof, may be used by the Borrower for the purposes permitted under Section 7.1.8.

 

“Revolving Loan  Commitment Fee” is
defined in Section 3.3.1.

 

“Revolving Loan Commitment Termination Date”
means the date on which any Revolving Loan Commitment Termination Event
occurs.  Upon the occurrence of a
Revolving Loan Commitment Termination Event, the Revolving Loan Commitments
shall terminate automatically and without any further action.

 

“Revolving  Loan Commitment
Termination Event” means

 

(a)           the
failure of the Borrower to satisfy, or the Lenders to waive in their sole and
absolute discretion, all Conditions Precedent to Loan Commitments set forth in Section 5.2
of this Agreement by May 15, 2010;

 

(b)           the
Stated Maturity Date;

 

(c)           the occurrence of
any Event of Default described in Section 8.1.9; or

 

(d)           the occurrence and continuance of any other Event of
Default and either (x) the declaration of all or any portion of the
Revolving Loans to be immediately due and payable pursuant to Section 8.3 or (y) the
giving of notice by the Administrative Agent, acting at the direction of the
Required Lenders, to the Borrower that the Revolving Loan Commitments have been
terminated.

 

Upon the occurrence of any
event described above, the
Revolving Loan Commitments shall terminate automatically without any further
action.

 

“Revolving Loan Interest Rate” means, on any date and relative
to all Revolving Loans, the fixed rate of interest per annum
equal to four percent (4.00%).

 

“Revolving Note” means, on any date, a promissory note of the
Borrower payable to any Revolving Lender, in the form of Exhibit B-1 hereto (as such
promissory note may thereafter from time to time be amended, supplemented,
amended and restated, endorsed or otherwise modified), evidencing the aggregate
Indebtedness of the Borrower to such Revolving Lender resulting from
outstanding Revolving Loans, and also means all other promissory notes accepted
from time to time in substitution or replacement therefor or renewal thereof.

 

“S&P”
means Standard & Poor’s Rating Group, Inc., a New York
corporation, or any successor thereto.

 

“Secured
Party” means the Lenders, the Issuer,
the Administrative Agent and each of their respective successors,
transferees and assigns.

 

32

 

“Security” means all
Real Property and personal property which is subject or is intended to become
subject to the security interests or Liens granted by any of the Loan
Documents.

 

“Security
Agreement” means, on any date, the Security Agreement, as originally in
effect on the Effective Date, between the Borrower and the Administrative Agent
(for its benefit and the benefit of the Lenders) and as thereafter from time to
time amended, supplemented, amended and restated or otherwise modified.

 

“Soft Cost” means any Capital Improvement
Project Cost which is not a Hard Cost, including appraisal fees, fees payable
pursuant to this Agreement and the Fee Letter, interest payable on the Loans,
brokers’ commissions, fees of the Independent Consultants, insurance, bond
premiums (if any), cost of surveys, Impositions, title examination and title
insurance premiums, recording expenses and tax payments in connection with the
Loan Documents and attorney fees.

 

“Solvency
Certificate” means a solvency certificate to be executed and delivered by
the chief financial or accounting Authorized Representative of the Borrower or
any of the Guarantors substantially in the form of Exhibit G
hereto.

 

“Stated Amount”
of each Letter of Credit means the total amount available to be drawn under
such Letter of Credit upon the issuance thereof.

 

“Stated Maturity Date”
means March 17, 2014.

 

“Subsidiary” means, relative to any Person, any
corporation, partnership or other business entity of which more than fifty
percent (50%) of the outstanding Capital Stock (or other ownership interest)
having ordinary voting power to elect the board of directors, managers or other
voting members of the governing body of such Person (irrespective of whether at
the time Capital Stock (or other ownership interest) of any other class or
classes of such Person shall or might have voting power upon the occurrence of
any contingency) is at the time directly or indirectly owned by such Person or
one or more other Subsidiaries of such Person.

 

“Subsidiary Guarantors” means,
collectively, each of the Parent Guarantor’s direct and indirect wholly-owned
subsidiaries (other than the Borrower) set forth on Item 6.30 of the Disclosure
Schedule and any other Subsidiary that becomes a Subsidiary Guarantor
pursuant to a joinder agreement to the Guaranty in accordance with Section 7.2.8
hereof.

 

“Tax” means any
federal, state, local, foreign or other tax, levy, impost, fee, assessment or
other government charge, including income, estimated income, business,
occupation, franchise, property, payroll, personal property, sales, transfer,
use, employment, commercial rent, occupancy, franchise or withholding taxes,
and any premium, including interest, penalties and additions in connection
therewith.

 

“Tax
Certificate” means a Tax Certificate substantially in the form of Exhibit J
hereto.

 

“Title
Insurer” means First American Title Insurance Company or any other
nationally reputable title insurance company that is reasonably acceptable to
the Administrative Agent.

 

33

 

“Title
Policy” means the title insurance policy described in Section 5.2.9.

 

“Total Condemnation” means any
condemnation or eminent domain proceeding or action (including but not limited
to any transfer made in lieu of or in anticipation of the exercise of such
taking) by any Governmental Instrumentality, whether for any permanent or
temporary use, occupancy or other interest affecting such portion of the
Property or the Improvements as, when so taken or condemned, would leave, in
the Administrative Agent’s good faith determination, a balance of the Property
or Improvements that, due either to the area so taken or the location of the
part so taken in relation to the part not taken, would not, under economic
conditions, physical constraints, zoning laws, building regulations and other
Legal Requirements then existing, readily accommodate a new or reconstructed
building or buildings and other improvements of a type fully comparable to the
Improvements prior to giving effect to of such taking or condemnation.

 

“Total
Debt” means, on any
date, the outstanding principal amount of all Indebtedness of the Borrower of
the type described in clauses (a),
(b) and (c) of
such definition and (without duplication) any Contingent Liability in respect
of any of the foregoing of any other Person.

 

“Total
Debt to EBITDA Ratio”
means, as of the close of any Fiscal Quarter, commencing with the close of the
first full Fiscal Quarter following the occurrence of the Financial Covenant
Commencement Date, the ratio of

 

(a) 
Total Debt outstanding on the last day of such Fiscal Quarter

 

to

 

(b)  EBITDA computed for the period
consisting of such Fiscal Quarter and each of the three immediately preceding
Fiscal Quarters (or such lesser number of Fiscal Quarters to have closed since
the Financial Covenant Commencement Date) and determined for any period ending
on or prior to four full fiscal quarters following the Financial Covenant
Commencement Date, consistently with the proviso to the definition of the term “EBITDA”.

 

“Trademark Security
Agreement” means, on
any date, the Trademark Security Agreement executed and delivered by an
Authorized Representative of the Borrower, as originally in effect on the
Effective Date, and as amended, supplemented, amended and restated or otherwise
modified thereafter from time to time.

 

“Transaction” means the
transactions contemplated by the Operative Documents.

 

“Trilliant” means Trilliant Gaming
Nevada Inc., a Delaware corporation.

 

“Trilliant & H/2 Side Letter”
means that certain letter agreement dated as of January 28, 2010 by and
among Trilliant, H/2 Special Opportunities Ltd. and Foothill.

 

“UCC” means the
Uniform Commercial Code of the jurisdiction the law of which governs the
document with respect to the term used.

 

34

 

“Undrawn L/C Fee” is defined in Section 3.3.3.

 

“United
States” or “U.S.” means the
United States of America, its fifty states and the District of Columbia.

 

“Unsuitable Lender” is defined in clause (b) of Section 4.7.

 

“USA Patriot Act” shall
mean the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56,
115 Stat. 272 (2001), as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

 

“Welfare
Plan”
means a “welfare plan”, as such term is defined in Section 3(1) of
ERISA.

 

“Withdrawal Period”
is defined in clause (b) of Section 4.7.

 

“Work” means the “work” covered by the
Construction Contracts.

 

SECTION 1.2  Use of
Defined Terms.  Unless otherwise
defined or the context otherwise requires, terms for which meanings are
provided in this Agreement shall have such meanings when used in each other
Loan Document, the Disclosure Schedule, or any Borrowing Request, Compliance
Certificate, notice or other communications delivered from time to time in
connection with this Agreement or any other Loan Document.

 

SECTION 1.3  Cross-References.  Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement
or such other Loan Document, as the case may be, and, unless otherwise
specified, references in any Article, Section or definition
to any item or clause are references to such item or clause of such Article,
Section or definition.

 

SECTION 1.4  Accounting
and Financial Determinations.  Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, and all accounting determinations and
computations hereunder or thereunder shall be made, in accordance with, those
generally accepted accounting principles (“GAAP”) applied in the United States in the
preparation of the unaudited financial statements of the Borrower, prepared as
of the end of each Fiscal Year and a statement of earnings and cash flow of the
Borrower for such Fiscal Year, as prepared by a nationally recognized
independent public accountant acceptable to the Administrative Agent.

 

ARTICLE
II

LOAN COMMITMENTS, NOTES AND EXTENSION OPTIONS

 

SECTION 2.1  Loan Commitment.  On the terms and subject to the conditions of
this Agreement (including, without limitation, Article II and Article V),
(i) each Lender severally agrees to make Loans pursuant to its Loan
Commitment as described in Sections 2.1.1, 2.1.2, and 

 

35

 

2.1.3, (ii) the
Issuer agrees that it will issue Letters of Credit, and (iii) each
Revolving Lender that has a Revolving Loan Commitment severally agrees that it
will purchase a participation interest in such Letters of Credit pursuant to Section 2.4.1 and that such
Revolving Lender shall fund promptly, to the extent of its then existing
Revolving Loan Commitment, the amount of any Letter of Credit Reimbursement
Obligation required to be funded by such Revolving Lender in accordance with Section 2.4.3.  No
Lender shall have any liability for the failure of another Lender to make its
Loan Commitment available or to advance such Lender’s Percentage of any Loans
to be made to the Borrower; provided, however, any Lender
hereunder shall have the right to fund such Defaulting Lender’s Percentage of a
Loan in which case the Lender’s Percentage for the Defaulting Lender and such
Lender funding such Defaulting Lender’s Percentage of a Loan shall be adjusted
to reflect such funding by such Lender and payments and repayments of amounts
due to the Defaulting Lender shall be subject and subordinate to the repayment
in full of the Lenders which are not Defaulting Lenders and such Defaulting
Lender shall have no right to participate in any decision under Section 10.1.

 

SECTION 2.1.1  Revolving Loan Commitments.  From time to time on any Business Day
occurring from and after the Effective Date but prior to the Revolving Loan
Commitment Termination Date, each Revolving Lender that has a Revolving Loan Commitment will make a revolving loan (relative to such Revolving
Lender, its “Revolving
Loan”) to the Borrower equal to such Revolving
Lender’s Percentage of the aggregate
amount of each Borrowing of the Revolving Loans requested by the Borrower to be made on such day.  The balance of the Revolving Loan Commitments shall only be available to
the Borrower from time to time to reimburse the Issuer for, or fund drawings
of, one or more Letters of Credit up to the maximum aggregate Stated Amount of
$50,000,000.  The Revolving Loan Commitment Amount shall not exceed
$50,000,000 of which (x) all or a portion thereof may be used to reimburse
the Issuer for draws under the Letters of Credit to be issued by the Issuer and
delivered for the account of the Borrower and (y) the balance thereof, may
be used by the Borrower in accordance with Section 7.1.8.  On the terms and subject to the conditions
hereof, the Borrower may from time to time borrow, prepay and reborrow the Revolving
Loans, the proceeds of which shall be used
by the Borrower in accordance with Section 7.1.8.

 

SECTION 2.1.2  Letter of Credit
Commitments.  From time to time on
any Business Day occurring from and
after the Effective Date but prior to the Letter of Credit Commitment
Termination Date, the Issuer will

 

(a)           issue one or more
Letters of Credit in form reasonably satisfactory to the Borrower and the
Issuer for the account of the Borrower in the Stated Amount requested by the
Borrower on such day; or

 

(b)           extend the Letter of
Credit Stated Expiry Date of an existing Letter of Credit previously issued in
accordance with clause (a) of this Section 2.1.2 to a date not
later than five (5) Business Days immediately preceding the Stated
Maturity Date.

 

SECTION 2.1.3  Delayed Draw Term Loan
Commitment.  From time to time on any
Business Day occurring from and after the Effective Date but prior to the
Delayed Draw 

 

36

 

Term Loan Commitment Termination Date, each
Delayed Draw Term Lender that has a Delayed Draw Term Loan Commitment will make a delayed draw
term loan (relative to such Delayed Draw Term Lender, its “Delayed Draw Term Loan”)
to the Borrower equal to such Delayed Draw Term Lender’s Percentage of the
aggregate amount of each Borrowing of the Delayed Draw Term Loans requested by the Borrower to be made
on such day.  The Delayed Draw
Term Loan Commitment Amount shall not
exceed $10,000,000 of which all or a portion thereof may be used by the
Borrower in accordance with Section 7.1.8.  On
the terms and subject to the conditions hereof, the Borrower may prepay the
Delayed Draw Term Loans but no amount paid or prepaid with respect to the
Delayed Draw Term Loans may be reborrowed.

 

SECTION 2.1.4  Lenders Not Required to Make
Loans.  No Lender shall be
required to make any Loan if, after giving effect thereto, the aggregate
outstanding principal amount of:

 

(a)           all Revolving Loans

 

(i)  of all Revolving Lenders with a Revolving Loan Commitment would
exceed the Revolving Loan Commitment Amount reduced by the aggregate amount of
the outstanding Revolving Loans and the aggregate amount of all Letter of
Credit Outstandings; or

 

(ii)  of such Revolving Lender with a Revolving Loan Commitment would exceed
such Revolving Lender’s
Revolving Loan Commitment reduced by the aggregate amount of such Revolving
Lender’s outstanding Revolving Loans and such Revolving Lender’s percentage of
the aggregate amount of all Letter of Credit Outstandings; or

 

(b)           all
Delayed Draw Term Loans

 

(i)  of all
Delayed Draw Term Lenders with a Delayed Draw Term Loan Commitment would exceed
the Delayed Draw Term Loan Commitment Amount reduced by (x) the
aggregate amount of the outstanding Delayed Draw Term Loans and (y) the
aggregate amount of Delayed Draw Term Loans that have theretofore been prepaid
by the Borrower; or

 

(ii)  of such
Delayed Draw Term Lender with a Delayed Draw Term Loan Commitment would exceed
such Delayed Draw Term Lender’s Delayed Draw Term Loan Facility Commitment reduced
by (x) such Delayed Draw Term Lender’s then outstanding Delayed Draw
Term Loans and (y) such Delayed Draw Term Lender’s previous Delayed Draw
Term Loans that have theretofore been prepaid by the Borrower;

 

provided, however, in no event shall the foregoing prohibit or
restrict any Lender from acquiring another Lender’s Loan Commitment in
accordance with Section 10.11.

 

37

 

SECTION 2.1.5              Issuer Not
Required to Issue Letters of Credit. 
The Issuer shall not be required to issue any Letter of Credit if, after
giving effect thereto (x) the aggregate amount of all Letter of Credit
Outstandings would exceed the Letter of Credit Commitment Amount or (y) the
sum of the aggregate amount of all Letter of Credit Outstandings plus
the aggregate principal amount of all Revolving Loans then outstanding would
exceed the Revolving Loan Commitment Amount.

 

SECTION 2.2  Reduction
of the Loan Commitment Amount. 
The Borrower may, from time to time on any Business Day occurring after
the Effective Date, voluntarily reduce, as applicable, the Loan Commitment
Amount on the Business Day so specified by the Borrower; provided, however, that no such reduction of the Revolving Loan
Commitment Amount shall apply to Letter of Credit Outstandings and all such
reductions shall require at least one (1) Business Day’s prior written
notice to the Administrative Agent and be permanent.  Any partial reduction of the Loan Commitment
Amount shall be in a minimum amount of $1,000,000 and in an integral multiple
of $500,000.  Any such reduction shall be
made pro rata according to the respective Percentage of the
relevant Lender.

 

SECTION 2.3  Borrowing
Procedure.  Loans shall be made by the Lenders in
accordance with this Section 2.3.

 

SECTION 2.3.1  Borrowing
Procedure.  On the terms and
subject to the conditions of this Agreement, by delivering a Borrowing Request
to the Administrative Agent on or before 10:00 a.m. Pacific time on a
Business Day, the Borrower may from time to time irrevocably request, on not
less than one Business Day’s notice, that a Borrowing be made.  On the terms and subject to the conditions of
this Agreement, each Borrowing shall be made on the Business Day specified in
such Borrowing Request.  On or before
2:00 p.m. Pacific time on such Business Day, each Lender that has a Loan
Commitment to make the Loans being requested shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender’s
Percentage of the requested Borrowing. 
Such deposit will be made to an account which the Administrative Agent
shall specify from time to time by notice to the Lenders.  To the extent funds are received from the
Lenders, the Administrative Agent shall make such funds available to the
Borrower by wire transfer to the account specified in the Borrowing Request.

 

SECTION 2.3.2  Revolving
Loans.  On the terms and
subject to the conditions of this Agreement prior to a Revolving Loan
Commitment Termination Event, the Borrower may from time to time irrevocably
request that Revolving Loans in addition to Revolving Loans then outstanding be
made by the Revolving Lenders.  Any such
request for such Revolving Loans shall be made in accordance with Section 2.3.1;  provided, however,
that any of the Revolving Loans which are advanced by the Revolving Lenders to
reimburse the Issuer for, or fund draws under, a Letter of Credit shall be made
in accordance with Sections 2.4.1
and 2.4.2.

 

SECTION 2.3.3  Delayed Draw Term Loans.  On the terms and subject to the conditions of
this Agreement prior to a Delayed Draw Term Loan Commitment Termination Event,
the Borrower may from time to time irrevocably request that Delayed Draw Term 

 

38

 

Loans in addition to Delayed Draw Term Loans then outstanding be made
by the Delayed Draw Term Lenders, up to the Delayed Draw Term Loan Commitment
Amount.  Any such request for such
Delayed Draw Term Loans shall be made in accordance with Section 2.3.1.

 

SECTION 2.4  Letter
of Credit Issuance Procedures.  By delivering to the Administrative
Agent a Letter of Credit Issuance Request on or before 11:00 a.m. Pacific
time, on a Business Day prior to the Letter of Credit Commitment Termination
Date, the Borrower may from time to time irrevocably request, on not less than
two (2) Business Days’ prior notice (or such later date and time as the
Issuer may agree to, in the Issuer’s sole and absolute discretion) in the case
of a request for the extension of the Letter of Credit Stated Expiry Date of a
Letter of Credit, that the Issuer issue, or extend the Letter of Credit Stated Expiry
Date of, as the case may be, one or more irrevocable Letters of Credit for the
purposes described in Section 7.1.8.  Each Letter of Credit Issuance Request shall
specify (a) the number of Letters of Credit to be issued (not to exceed
three (3) Letters of Credit per request), (b) the proposed date of
issuance (which shall be a Business Day), (c) the face amount of each
Letter of Credit, (d) the Letter of Credit Stated Expiry Date, (e) the
name and address of the beneficiary, (f) either the verbatim text of each
proposed Letter of Credit or the proposed terms and conditions thereof and (g) a
precise description of any documents to be presented by the beneficiary which,
if presented by the beneficiary prior to the expiration date of the Letter of
Credit, would require the Issuer to make payment under the Letter of Credit; provided,
however, that the Issuer, in its reasonable discretion, may require
changes in the text of any proposed Letter of Credit or any such documents; and
provided further, however, that no Letter of Credit
shall require payment against a conforming draft to be made thereunder on the
same Business Day that such draft is presented in the office designated by the
Issuer in such Letter of Credit if such presentation is made after 10:00 a.m.
(in the time zone of such office of the Issuer) on such Business Day.  Each Letter of Credit shall by its terms be
stated to expire on a date (its “Letter
of Credit Stated Expiry Date”)
no later than the earlier to occur of (x) five (5) Business Days immediately
preceding the Stated Maturity Date or (y) one (1) year from the date
of its issuance.  The Issuer will make
available to the beneficiary thereof the original of each Letter of Credit
which it issues hereunder.  The issuance
of a Letter of Credit under this Section 2.4
shall be deemed to be a Borrowing under the Revolving Loan Commitment in the
Stated Amount of such Letter of Credit.

 

SECTION 2.4.1  Other
Lenders’ Participation.  Upon
the issuance of each Letter of Credit pursuant hereto, and without further
action, each Revolving Lender (other than the Issuer) shall be deemed to have
irrevocably purchased, to the extent of its Letter of Credit Commitment, a
participation interest in each such Letter of Credit (including any Letter of
Credit Reimbursement Obligation with respect thereto), and each Revolving
Lender shall, to the extent of its then existing Revolving Loan Commitment, be
responsible for funding promptly (and in any event within one (1) Business
Day) to the Issuer the amount of any Letter of Credit Reimbursement Obligation
which has not otherwise been reimbursed by the Borrower in accordance with Section 2.4.3.  In addition, each Revolving Lender shall, to
the extent of its Revolving Loan Commitment, be entitled to receive interest
payable pursuant to Section 3.2
with respect to any Letter of Credit Reimbursement Obligation.  To the extent that a Revolving Lender has
reimbursed the Issuer for a Letter of Credit Disbursement as required by this Section 2.4.1,
such Revolving Lender shall be entitled to receive its ratable portion of any 

 

39

 

amounts subsequently received (from the Borrower or
otherwise) in respect of such Letter of Credit Disbursement.  The obligations of each Revolving Lender under
this Section 2.4.1
are obligatory on the part of each Revolving Lender, such obligations of each
Revolving Lender shall be performed whether or not a Default exists hereunder
and whether or not the conditions set forth in Article V have been satisfied, shall be absolute,
unconditional, and irrevocable, and shall be performed by each Revolving Lender
strictly in accordance with the terms and provisions of this Agreement, under
any and all circumstances and irrespective of any set-off, counterclaim, or defense
to payment which the Revolving Lenders, individually or collectively, may have
or have had against the Issuer. 
Notwithstanding anything to the contrary in this Section 2.4.1, so long as
any Letter of Credit is outstanding, each of the Revolving Lenders shall have
the absolute obligation to make a Revolving Loan on behalf of the Borrower for
the benefit of the Issuer in accordance with Section 2.4.2.

 

SECTION 2.4.2  Letter
of Credit Disbursements.  The
Issuer will notify the Borrower and the Administrative Agent promptly of the
presentment for payment of any Letter of Credit, together with notice of the
date (the “Letter of Credit
Disbursement Date”)
such payment shall be made (each such payment, a “Letter of Credit Disbursement”).  Immediately thereafter,
the Administrative Agent shall give telephonic and facsimile notice to the
Revolving Lenders of the presentation of such sight draft, the amount of such
sight draft, the date on which payment thereon has been or will be made, and
the Percentage of each Revolving Lender in the amount of such sight draft
together with a copy of the sight draft and accompanying documents.  A copy of such sight draft, together with
such accompanying documents, shall, for purposes of this Agreement, be deemed
to be an Borrowing Request for a Revolving Loan to each of the Revolving
Lenders.  Subject to the terms and
provisions of such Letter of Credit, the Issuer shall make such Letter of
Credit Disbursement to the beneficiary (or its designee) of such Letter of
Credit.  Prior to 11:00 a.m. Pacific
time on the first Business Day following the date on which notice was given by
the Administrative Agent to the Revolving Lenders, the Revolving Lenders shall
advance as an obligatory advance hereunder a Revolving Loan to the Administrative
Agent (whether or not the Borrower has satisfied the conditions set forth in Article V of this
Agreement), for the account of the Issuer, in an amount equal to such Revolving
Lender’s Percentage of the amount which the Issuer has disbursed under such
Letter of Credit, together with interest thereon for the period from the Letter
of Credit Disbursement Date through the date of such reimbursement.  The Revolving Loans made pursuant to this Section 2.4.2 shall be
applied to the payment of such sight draft (and at the election of the Issuer
be advanced directly to the beneficiary) and shall not be used for any other
purpose.  Without limiting in any way the
foregoing and notwithstanding anything to the contrary contained herein or in
any separate application for any Letter of Credit, the Borrower hereby
acknowledges and agrees that it shall be obligated to reimburse the Issuer upon
each Letter of Credit Disbursement by means of a Borrowing of Revolving Loans
made pursuant to this Section 2.4.2.  Upon the occurrence and during the
continuance of any Default of the type described in Section 8.1.9,
all Revolving Loans made by any Revolving Lender pursuant to this Section 2.4.2
shall be deemed to be such Revolving Lender’s Letter of Credit Reimbursement
Obligations in accordance with Section 2.4.3.

 

SECTION 2.4.3  Reimbursement.  The obligation (a “Letter of Credit Reimbursement Obligation”) of the Borrower under Section 2.4.2 to reimburse
the Issuer with

 

40

 

respect to each Letter of Credit Disbursement
(including interest thereon), and, upon the failure of the Borrower to
reimburse the Issuer, each Revolving Lender’s obligation under Section 2.4.1 to reimburse
the Issuer, shall be absolute, unconditional and irrevocable under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or such Revolving Lender, as the case may be, may
have or have had against the Issuer or any other Revolving Lender, including
any defense based upon the failure of any Letter of Credit Disbursement to
conform to the terms of the applicable Letter of Credit (if, in the Issuer’s
good faith opinion, such Letter of Credit Disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of the
proceeds of such Letter of Credit; provided, however, that after paying
in full its Letter of Credit Reimbursement Obligation hereunder, nothing herein
shall adversely affect the right of the Borrower or such other Revolving
Lender, as the case may be, to commence any proceeding against the Issuer for
any wrongful Letter of Credit Disbursement made by the Issuer under a Letter of
Credit as a result of acts or omissions in violation of the terms of this Agreement
or constituting gross negligence or willful misconduct on the part of the
Issuer.

 

SECTION 2.4.4  Deemed
Letter of Credit Disbursements. 
Upon the occurrence and during the continuance of any Default of the
type described in Section 8.1.9 or, with notice from the
Administrative Agent, upon the occurrence and during the continuance of any
other Event of Default,

 

(a)           an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is undrawn and available
under all Letters of Credit issued and outstanding hereunder shall, without
demand upon or notice to the Borrower, be deemed to have been paid or disbursed
by the Issuer under such Letters of Credit (notwithstanding that such amount
may not in fact have been so paid or disbursed); and

 

(b)           the Borrower shall be immediately obligated to reimburse
the Issuer for the amount deemed to have been so paid or disbursed by such
Issuer, in which case the last four sentences of Section 2.4.2 shall apply (the Administrative Agent
shall endeavor to give notice to the Borrower of its obligations under this Section unless
prohibited by applicable law).

 

Any amounts so payable by the Borrower pursuant to this Section 2.4.4 shall be
deposited in cash with the Administrative Agent and held as collateral security
for the Obligations in connection with the Letters of Credit issued by the
Issuer, and the Administrative Agent shall make disbursements thereof from time
to time to reimburse the Issuer for payments made by the Issuer with respect to
Letters of Credit.  At such time when the
Defaults giving rise to the deemed disbursements hereunder shall have been
cured or waived, the Administrative Agent shall return to the Borrower all amounts
then on deposit with the Administrative Agent pursuant to this Section which
have not been applied to the partial satisfaction of such Obligations.

 

SECTION 2.4.5  Nature
of Letter of Credit Reimbursement Obligations.  The Borrower and, to the extent set forth in Section 2.4.1, each Revolving
Lender shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof.  The
Issuer (except to the extent of its own gross negligence or willful misconduct)
shall not be responsible for:

 

41

 

(a)           the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any party
other than the Issuer in connection with the application for and issuance of a
Letter of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;

 

(b)           the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
the proceeds thereof in whole or in part, which may prove to be invalid or
ineffective for any reason;

 

(c)           failure of the beneficiary to comply in all material respects
with conditions required in order to demand payment under a Letter of Credit;

 

(d)           errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, facsimile or otherwise; or

 

(e)           any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Letter of Credit Disbursement
under a Letter of Credit.

 

None of the foregoing shall affect, impair or prevent the vesting of
any of the rights or powers granted to the Issuer or any Revolving Lender
hereunder.  In furtherance and not in
limitation or derogation of any of the foregoing, any action taken or omitted
to be taken by an Issuer in good faith (and not constituting gross negligence
or willful misconduct) shall be binding upon the Borrower and each such
Revolving Lender, and shall not put such Issuer under any resulting liability
to the Borrower or any such Revolving Lender, as the case may be.

 

SECTION 2.5  Notes. 
Each Revolving Lender’s Revolving Loans shall be evidenced by a Revolving
Note and each Delayed Draw Term Lender’s Delayed Draw Term Loans shall be
evidenced by a Delayed Draw Term Loan Note payable to the order of such Lender
in a maximum principal amount equal to such Lender’s applicable Percentage of
the applicable Loan Commitment Amount. 
The Borrower hereby irrevocably authorizes each Lender to make (or cause
to be made) appropriate notations on the grid attached to such Lender’s Note
(or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and the
interest rate of such Loans.  Such
notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however, that the failure of any Lender to make
any such notations shall not limit or otherwise affect any Obligations of the
Borrower or any other Person.

 

SECTION 2.6  Register.  The Borrower hereby designates the
Administrative Agent to serve as the Borrower’s agent, solely for the purpose
of this clause, to maintain a register (the “Register”)
on which the Administrative Agent will record each Lender’s Loan Commitment,
the Loans made by each Lender and each repayment in respect of the principal
amount of the Loans, annexed to which the Administrative Agent shall retain a
copy of each Lender Assignment Agreement delivered to the Administrative Agent
pursuant to Section 10.11.1.  Failure to make any recordation, or any error
in such recordation, shall not affect the Obligations.  The entries in the Register shall be
conclusive, in the absence of manifest error, and the 

 

42

 

Borrower, the Administrative
Agent and the Lenders shall treat each Person in whose name a Loan is
registered (or, if applicable, to which a Note has been issued) as the owner
thereof for the purposes of all Loan Documents, notwithstanding notice or any
provision herein to the contrary.  Any
assignment or transfer of a Loan Commitment or the Loans made pursuant hereto
shall be registered in the Register only upon delivery to the Administrative
Agent of a Lender Assignment Agreement that has been executed by the requisite
parties pursuant to Section 10.11.1.  No assignment or transfer of a Lender’s Loan
Commitment or Loans shall be effective unless such assignment or transfer shall
have been recorded in the Register by the Administrative Agent as provided in
this Section 2.6.

 

ARTICLE
III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

 

SECTION 3.1  Repayments and Prepayments; Application.

 

SECTION 3.1.1  Repayments and Prepayments.

 

(a)           The
Borrower shall repay in full the unpaid principal amount of the Loans upon the
Stated Maturity Date.  Prior thereto,
from time to time on any Business Day, the Borrower may make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of the
Loans; provided, however, that

 

(i)            all
payments and prepayments of Loans shall be made in Dollars;

 

(ii)           all
such voluntary prepayments shall require at least one (1) but no more than
five (5) Business Days’ prior written notice to the Administrative Agent;

 

(iii)          all
such voluntary prepayments shall be in an aggregate minimum amount of $500,000
and in integral multiples of $500,000; and

 

(iv)          solely
with respect to Delayed Draw Term Loans, amounts which the Borrower elects to
prepay may not thereafter be re-borrowed.

 

(b)           The
Borrower shall make a mandatory prepayment of the Loans (each, a “Mandatory Prepayment”) under the
circumstances set forth below, all such prepayments to be applied as set forth
in Section 3.1.2:

 

(i)            Within
five (5) Business Days after a Change of Control and a demand for payment
by the Administrative Agent, in the amount of all Obligations outstanding;

 

(ii)           Simultaneously
upon a sale, transfer or conveyance of all or a portion of the Property, in the
amount of all Obligations outstanding; provided, however, if such
sale, transfer or conveyance is a Permitted Asset Sale in accordance with Section 7.2.9
and the net proceeds thereof have not otherwise 

 

43

 

been used to fund the purchase or acquisition of replacement assets,
then in the amount of one hundred percent (100%) of the net proceeds of such
Permitted Asset Sale;

 

(iii)          Within
five (5) Business Days following the acceleration of the Loans pursuant to
Section 8.2 or Section 8.3, in the amount of all
Obligations outstanding;

 

(iv)          Subject
to the provisions of Section 7.1.15 relating to retention and/or
reinvestment of Loss Proceeds, the Borrower shall prepay the Loans in an
aggregate amount equal to one hundred percent (100%) of the Loss Proceeds
within five (5) Business Days after receipt of the same;

 

(v)           Except
in connection with Cash Contributions to Capital, simultaneously upon (a) the issuance, transfer or sale of
Capital Stock of the Borrower, (b) any public offering or private
placement of equity securities of the Borrower, (c) any issuance of a
security of the Borrower that is convertible or exchangeable into common stock
or preferred stock, (d) any other securities of the Borrower involving any
refinancing, tender or restructuring of existing indebtedness or (e) any
recapitalization, extraordinary dividend, spin-off or divestiture of the
Borrower, in each case, in an amount equal to fifty
percent (50%) of the net cash proceeds received
by the Borrower from such issuance, transfer or sale, whether or not permitted
pursuant to Section 7.2.9;

 

(vi)          Except
in connection with Cash Contributions to Capital or as permitted pursuant to Section 7.2.2,
simultaneously upon any debt issuance, in an amount equal to one hundred
percent (100%) of the net cash proceeds received by the Borrower or any of its
Subsidiaries from such debt issuance; and

 

(vii)         For
so long as any Delayed Draw Term Loans remain outstanding, upon each Quarterly
Payment Date, in an amount equal to one hundred percent (100%) of the Phase II
Club Net Income for prepayment of the Delayed Draw Term Loan only.

 

In addition to the Mandatory Prepayments required to be made pursuant
to this clause (b) of this Section 3.1.1, the
obligation of any Revolving Lender to make a Revolving Loan shall automatically
terminate in full upon the occurrence of any event listed in items (i), (ii) (to
the extent such Mandatory Prepayment is for all Obligations outstanding) and (iii) of
this clause (b) of this Section 3.1.1 and, upon the
occurrence of any event listed in items (iv) and (vi) of
this clause (b) of this Section 3.1.1, the Revolving
Loan Commitments shall be permanently reduced by an amount equal to the
Mandatory Prepayment required by such item.

 

SECTION 3.1.2  Application.  Amounts paid or prepaid pursuant to Section 3.1.1
shall be applied as set forth in this Section 3.1.2.

 

44

 

(a)           So
long as no Event of Default has occurred and is continuing, the Administrative
Agent shall apply all amounts received in accordance with the provisions of
this Agreement first, to all Obligations (other than principal and
interest on the Loans), second, to accrued and unpaid interest on the
Loans and third, to the outstanding principal amount of the Loans until
they are fully repaid, provided, however, that Phase II Club Net
Income received shall only be applied to the outstanding principal amount of
the Delayed Draw Term Loans until they are fully repaid and, thereafter, to the
balance of the Loans.

 

(b)           After
an Event of Default has occurred and is continuing, all amounts received by the
Administrative Agent shall be applied first, to the costs and expenses
of protecting and preserving the security interests of the Secured Parties
under the Loan Documents, second, to the costs and expenses of
protecting and preserving the Security, third, to the costs and expenses
of enforcing the rights of the Secured Parties under this Agreement and the
other Loan Documents, fourth, to all other Obligations due under this
Agreement and the other Loan Documents (other than principal and interest on
the Loans), fifth, to the Lenders for accrued and unpaid interest on the
Loans, and, after all amounts evidenced and secured by the Loan Documents have
been indefeasibly paid in full and the Borrower has performed its obligations
under the Loan Documents, the balance, if any, shall be delivered to the
Borrower.

 

SECTION 3.2  Interest Provisions.  Interest on the outstanding principal amount
of Loans shall accrue and be payable in accordance with this Section 3.2.

 

SECTION 3.2.1  Interest Rates.  Subject to Sections 5.1 and 5.2,
pursuant to an appropriately delivered Borrowing Request, the Borrower may
request that Loans be made prior to, with respect to Revolving Loans, a
Revolving Loan Commitment Termination Event and with respect to Delayed Draw
Term Loans, a Delayed Draw Term Loan Commitment Termination Event, accruing
interest at a rate equal to, with respect to Revolving Loans, the Revolving Loan
Interest Rate and with respect to Delayed Draw Term Loans, the Delayed Draw
Term Loan Interest Rate.

 

SECTION 3.2.2  Post-Default Rates.  From and after the occurrence of an Event of
Default, the Borrower shall pay, but only to the extent not prohibited by law,
interest (after as well as before judgment) on such amounts at a rate per annum
equal to:

 

(a)           in
the case of any overdue amounts in respect of Revolving Loans, the Revolving
Loan Interest Rate, plus two percent (2.00%); or

 

(b)           in
the case of any overdue amounts in respect of Delayed Draw Term Loans or any
other monetary Obligations, the Delayed Draw Term Loan Interest Rate, plus two
percent (2.00%).

 

SECTION 3.2.3  Payment Dates.  Interest accrued on each  Loan shall be payable in arrears, without
duplication:

 

45

 

(a)           on
the Stated Maturity Date;

 

(b)           on each Quarterly Payment Date; and

 

(c)           on
that portion of any Loan the Stated Maturity Date of which is accelerated
pursuant to Section 8.2 or Section 8.3, immediately
upon such acceleration.

 

Interest accrued on Loans or other monetary Obligations arising under
this Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.

 

SECTION 3.3  Fees. 
The Borrower agrees to pay the fees set forth in the Fee Letter.  All such fees shall be nonrefundable. In
addition, the Borrower agrees to pay the following fees when due:

 

SECTION 3.3.1  Revolving Loan Commitment
Fee.  From and after the date
that is the earlier of (i) May 15, 2010 or (ii) the date that
the conditions precedent set forth in Section 5.2 hereof and the
initial Borrowing of the Revolving Loans is made, and until the Stated Maturity
Date, a nonrefundable fee with respect to the Revolving Loans (the “Revolving Loan  Commitment
Fee”) in the amount
of three-quarters of one percent (0.75%) per annum
of the aggregate amount of the then existing respective Revolving Loan
Commitment Amounts shall accrue on the average daily amount of respective
Revolving Loan Commitment Amounts not advanced. 
The Revolving Loan Commitment Fee shall be payable in arrears to the
Lenders on each Quarterly Payment Date in proportion to such Lenders’ respective
then existing Revolving Loan Commitment Amount.

 

SECTION 3.3.2  Delayed
Draw Term Loan Commitment Fee. 
From and after the date that is the earlier of (i) May 15,
2010 or (ii) the date that the conditions precedent set forth in Section 5.2
hereof and the initial Borrowing of the Revolving Loans is made, and until the
Stated Maturity Date, a nonrefundable fee with respect to the Delayed Draw Term
Loans (the “Delayed Draw Term Loan  Commitment Fee”) in the amount of one percent
(1.00%) per annum of the aggregate
amount of the then existing respective Delayed Draw Term Loan Commitment
Amounts shall accrue on the average daily amount of respective Delayed Draw
Term Loan Commitment Amounts not advanced. 
The Delayed Draw Term Loan Commitment Fee shall be payable in arrears to
the Lenders on each Quarterly Payment Date in proportion to such Lenders’
respective then existing Delayed Draw Term Loan Commitment Amount.

 

SECTION 3.3.3  Undrawn Letter of Credit Fee. 
From and after the date that a Letter of Credit is issued until such
time as such Letter of Credit is fully drawn or, if applicable, returned to the
Issuer, the Borrower agrees to pay to the Administrative Agent, for the account
of the Lenders, a nonrefundable Letter of Credit fee (the “Undrawn
L/C Fee”) in the amount of three-quarters of one
percent (0.75%) per annum of the average
daily undrawn portion of any and all Letters of Credit, such fees being payable
on each Quarterly Payment Date in arrears to the Revolving Lenders in
proportion to such Revolving Lenders’ respective Percentage of the Stated
Amount of such Letter of Credit.  The
Borrower further agrees to 

 

46

 

pay in advance on each Quarterly Payment Date to the Issuer the
issuance fee as specified in the Fee Letter.

 

SECTION 3.3.4  Letter of Credit Issuance Fee.  On the date that a Letter of Credit is
issued, the Borrower shall pay the Issuer its customary and standard
nonrefundable fee (the “L/C Issuance Fee”)
generally charged by the Issuer for issuing letters of credit similar to the
Letter of Credit.

 

SECTION 3.4  Payments from Interest Reserve Account.  Notwithstanding anything to the contrary
contained in this Article III, the various fees, costs and charges
that may be imposed pursuant to this Article III may be funded from
the Interest Reserve Account in accordance with the terms and conditions of Section 7.1.16
hereof.

 

ARTICLE
IV

CAPITAL COSTS, LENDER’S TAX AND CERTAIN OTHER PROVISIONS

 

SECTION 4.1  Increased Capital Costs.  If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other Governmental
Instrumentality affects the amount of capital required or expected to be
maintained by any Lender or any Person controlling such Lender, and such Lender
determines (in its good faith reasonable discretion) that the rate of return on
its or such controlling Person’s capital as a consequence of the Loan
Commitments or the Loans made by such Lender is reduced to a level below that
which such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower, the Borrower shall immediately pay
directly to such Lender additional amounts sufficient to compensate such Lender
or such controlling Person for such reduction in rate of return.  A statement of such Lender as to any such
additional amount or amounts shall include calculations thereof in reasonable
detail.  In determining such amount, such
Lender may use any method of averaging and attribution that it (determines in
its good faith reasonable discretion) shall deem applicable.

 

SECTION 4.2  Lender’s Tax.  All payments by the Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder (including
fees) shall be made free and clear of and without deduction for any present or
future excise, stamp or franchise taxes and other taxes, income taxes, fees,
duties, withholdings or other charges of any nature whatsoever imposed by any
taxing authority, but excluding franchise taxes and other taxes based on a Lender’s
net income, gross income or gross receipts imposed on such Lender by a
Governmental Instrumentality located in (i) the jurisdiction where such
Lender is organized or (ii) any jurisdiction in which such Lender
maintains a lending office which is applicable to the Transactions contemplated
hereunder (each such non-excluded item being called a “Lender’s Tax”).  In the event that any withholding or
deduction from any payment to be made by the Borrower hereunder is required in
respect of any Lender’s Tax pursuant to any applicable Legal Requirement, then
the Borrower will upon written notice

 

47

 

(a)           pay
directly to the relevant authority the full amount required to be so withheld
or deducted;

 

(b)           promptly
forward to the Administrative Agent an official receipt or other documentation
satisfactory to the Administrative Agent evidencing such payment to such
authority; and

 

(c)           pay
to the Administrative Agent for the account of the Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required.

 

Moreover, if any Lender’s Tax is directly asserted against the
Administrative Agent or any Lender with respect to any payment received by the
Administrative Agent or such Lender hereunder, the Administrative Agent or such
Lender may pay such Lender’s Tax and the Borrower will promptly pay upon
written notice such additional amounts (including any penalties, interest or
expenses) as is necessary in order that the net amount received by such Person
after the payment of such Lender’s Tax (including any Lender’s Tax on such
additional amount) shall equal the amount such Person would have received had
not such Lender’s Tax been asserted.

 

If the Borrower fails to pay upon written notice any Lender’s Tax when
due to the appropriate taxing authority or fails to remit to the Administrative
Agent, for the account of the respective Lenders, the required receipts or
other required documentary evidence, the Borrower shall indemnify the Lenders
for any incremental Lender’s Tax, interest or penalties that may become payable
by any Lender as a result of any such failure. 
For purposes of this Section 4.2, a distribution hereunder
by the Administrative Agent or any Lender to or for the account of any Lender
shall be deemed a payment by the Borrower.

 

Each Lender that is organized under the laws of a jurisdiction other
than the United States or a State thereof (for purposes of this Section 4.2,
a “Non-U.S. Lender”) must, prior to the date such
Lender becomes a Lender hereunder (or in the case of a Lender that becomes a
party to this Agreement pursuant to Section 4.7 or any Assignee
Lender, before it becomes a party hereto) (a) execute and deliver to the
Borrower and the Administrative Agent one or more (as the Borrower or the
Administrative Agent may reasonably request) United States Internal Revenue
Service Form W-8BEN, Form W-8ECI, Form W-9, a Tax Certificate or
such other forms or documents (or successor forms or documents as the Internal
Revenue Service may from time to time prescribe), appropriately completed,
certifying in each case that such Lender or Assignee Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, and an applicable Internal Revenue Service Form W-8BEN,
Form W-8ECI or Form W-9 or successor applicable form (if required by
law), as the case may be, establishing an exemption from United States backup
withholding tax or (b) if such Non-U.S. Lender is not a “bank” or other
Person described in Section 881(c)(3) of the Code and cannot deliver
either Form W-8BEN or Form W-8ECI pursuant to clause (a) above,
execute and deliver to the Borrower and the Administrative Agent one or more
(as the Borrower or the Administrative Agent may reasonably request) copies of
the Tax Certificate, Form W-8BEN or 

 

48

 

Form W-8ECI (or any successor form) and any other
certificate or statement of exemption required under the Code or Treasury
Regulations issued thereunder, appropriately completed, certifying that such
Lender or Assignee Lender is entitled to receive payments under this Agreement
without deduction or withholding of United States federal income tax and
establishing an exemption from United States backup withholding tax.  All Lenders, other than Non-U.S. Lenders,
shall, prior to the date on which any Loan is made (or in the case of a Lender
that becomes a party to this Agreement pursuant to Section 4.7 or
is an Assignee Lender, before such Lender becomes a party hereto), execute and
deliver to the Borrower and the Administrative Agent one or more copies (as the
Borrower or the Administrative Agent may reasonably request) of United States
Internal Revenue Form W-9 or applicable successor form (if required by
law), as the case may be, to establish exemption from United States backup
withholding tax.

 

Each Lender which undertakes to deliver to the Borrower a Tax
Certificate, a Form W-8BEN, Form W-8ECI or Form W-9 pursuant to
the preceding paragraph shall further undertake to deliver to the Borrower (x) two
further copies of said Tax Certificate, Form W-8BEN, Form W-8ECI or Form W-9
(if required by law), or applicable successor forms, or other manner of
certification, as the case may be, on or before the date that such form expires
or becomes obsolete or after the occurrence of an event requiring a change in the
most recent form delivered by it to the Borrower and the Administrative Agent
and (y) such extensions or renewals thereof as may be reasonably requested
by the Borrower or the Administrative Agent, certifying in the case of a Tax
Certificate, Form W-8BEN or Form W-8ECI that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of
any United States federal income taxes, unless in any case an event (including
any change in treaty, law or regulation) has occurred prior to the date on
which such delivery would otherwise be required which renders all forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the
Borrower and the Administrative Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax, and in the case of a Form W-8BEN, Form W-8ECI or Form W-9,
establishing an exemption from backup withholding.

 

SECTION 4.3  Payments, Computations, etc.  Unless otherwise expressly provided, all
payments by the Borrower pursuant to the Loan Documents shall be made by the
Borrower to the Administrative Agent for the pro rata account of the
Lenders entitled to receive such payment. 
All such payments required to be made to the Administrative Agent shall
be made, without setoff, deduction or counterclaim, not later than 11:00 a.m.
Pacific time on the date due, in same day or immediately available funds, to
such account as the Administrative Agent shall specify from time to time by
notice to the Borrower.  Funds received
after that time shall be deemed to have been received by the Administrative
Agent on the next succeeding Business Day. 
The Administrative Agent shall promptly remit in same day funds to each
Lender its share, if any, of such payments received by the Administrative Agent
for the account of such Lender.  All
interest and fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of
365 days or, if appropriate, 366 days.  Whenever any payment to be made shall otherwise
be due on a day which is not a Business Day, such payment shall be made on the 

 

49

 

next succeeding Business Day
and such extension of time shall be included in computing interest and fees, if
any, in connection with such payment.

 

SECTION 4.4  Sharing of Payments.  If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Section 4.1
or Section 4.2) in excess of its pro rata share of payments
then or therewith obtained by all Lenders, such Lender shall purchase from the
other Lenders such participations in Loans made by them as shall be necessary
to cause such purchasing Lender to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion
of the excess payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and each Lender which has
sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling Lender’s ratable share (according to the
proportion of

 

(a)           the
amount of such selling Lender’s required repayment to the purchasing Lender

 

to

 

(b)           total
amount so recovered from the purchasing Lender)

 

of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.5) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. 
If, under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this Section to share in the benefits of any recovery on
such secured claim.

 

SECTION 4.5  Setoff.  Each Lender shall, upon the occurrence and
during the continuance of any Default described in Section 8.1.9
or, with the consent of the Required Lenders, upon the occurrence and during
the continuance of any other Event of Default, have the right to appropriate
and apply to the payment of the Obligations owing to it (whether or not then
due), and (as security for such Obligations) the Borrower hereby grants upon
the execution of this Agreement to each Lender a continuing security interest
in, any and all balances, credits, deposits, accounts or moneys of the Borrower
then or thereafter maintained with such Lender; provided, however,
that any such appropriation and application shall be subject to the provisions
of Section 4.4.  Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
setoff and application.  The rights of
each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff under applicable law or otherwise)
which such Lender may have.

 

50

 

SECTION 4.6  Mitigation.  Each Lender agrees that if it makes any
demand for payment under Section 4.1 or Section 4.2, it
will use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under Section 4.1
or Section 4.2.

 

SECTION 4.7  Replacement of Lenders.  Each Lender hereby severally agrees as set
forth in this Section.

 

(a)           If
(i) any Lender (an “Affected
Lender”) makes
demand upon the Borrower for (or if the Borrower is otherwise required to pay)
amounts pursuant to Section 4.1
or Section 4.2 and
the payment of such additional amounts are, and are likely to continue to be,
more onerous in the reasonable judgment of the Borrower than with respect to
the other Lenders or (ii) a Lender becomes a Defaulting Lender, then, in
each case of the foregoing, the Borrower or the Issuer may, within thirty
(30) days of receipt by the Borrower or the Issuer of such demand or
notice (or the occurrence of such other event causing the Borrower to be
required to pay such compensation) or from the date that such Lender becomes a
Defaulting Lender, as the case may be, give notice in writing to the
Administrative Agent and such Affected Lender or such Defaulting Lender, as the
case may be, of its intention to replace such Affected Lender or such Defaulting
Lender, as the case may be, with a financial institution designated in such
notice.  The Administrative Agent agrees
to use commercially reasonable efforts to assist the Borrower or the Issuer in
replacing such Affected Lender or Defaulting Lender, as the case may be.  If the Administrative Agent shall, in the
exercise of its reasonable discretion and within thirty (30) days of its
receipt of such notice, notify the Borrower or the Issuer and such Affected
Lender or such Defaulting Lender, as the case may be, in writing that the
designated financial institution is satisfactory to the Administrative Agent
(such consent not being required where such financial institution is already a
Lender or an Approved Fund), then such Affected Lender or such Defaulting
Lender, as the case may be, shall assign, in accordance with Section 10.11.1, all of its
Loan Commitments, Loans, beneficial interests in the Notes and other rights and
obligations under this Agreement and all other Loan Documents to such
designated financial institution; provided, however, that (x) such
assignment shall be without recourse, representation or warranty (except as to (A) such
Affected Lender’s or such Defaulting Lender’s, as the case may be, then
existing Loan Commitments and the outstanding principal amount of Loans held by
such Affected Lender or such Defaulting Lender, as the case may be, and (B) the
absence of Liens arising by, through and under the Affected Lender or such
Defaulting Lender, as the case may be) and shall be on terms and conditions
reasonably satisfactory to such Affected Lender and such designated financial
institution, (y) the purchase price paid by such designated financial
institution shall be in the amount of such Affected Lender’s or such Defaulting
Lender’s, as the case may be, Loans together with all accrued and unpaid
interest and fees in respect thereof, plus all other amounts (including
the amounts demanded and unreimbursed under Section 4.1 and Section 4.2),
owing to such Affected Lender or such Defaulting Lender, as the case may be,
hereunder and (z) the Borrower shall pay to such Affected Lender (but not
to any Defaulting 

 

51

 

Lender) and the Administrative Agent all reasonable out-of-pocket
expenses incurred by such Affected Lender (but not any Defaulting Lender) and
the Administrative Agent in connection with such assignment and assumption
(including the processing fees described in Section 10.11.1).

 

(b)           If
any Nevada Gaming Authority or any other gaming authority with jurisdiction
over the gaming business of the Borrower, as the case may be, shall determine
that any Lender (an “Unsuitable
Lender”) does not
meet the suitability standards prescribed under any applicable Nevada Gaming
Law or the suitability standards of such gaming authority, as the case may be,
the Borrower may give notice in writing to the Administrative Agent, the Issuer
and such Unsuitable Lender of its intention to replace such Unsuitable Lender
with a financial institution designated in such notice.  If the Administrative Agent and the Issuer
shall, in the exercise of their reasonable discretion and promptly following
its receipt of such notice, notify the Borrower and such Unsuitable Lender in writing
that the designated financial institution is satisfactory to the Administrative
Agent and the Issuer (such consent not being required where such financial
institution is already a Lender or an Approved Fund), then such Unsuitable
Lender shall assign, in accordance with Section 10.11.1, all of its Loan Commitments, Loans,
beneficial interests in the Notes and other rights and obligations under this
Agreement and all other Loan Documents (including Letter of Credit
Reimbursement Obligations, if applicable) to such designated financial institution;
provided, however, that (i) such
assignment shall be without recourse, representation or warranty (except as to (x) such
Unsuitable Lender’s then existing Commitment Amount(s) and the principal
amount of Loans held by such Unsuitable Lender and (y) the absence of
Liens arising by, through and under the Unsuitable Lender) and shall be on
terms and conditions reasonably satisfactory to such Unsuitable Lender and such
designated financial institution, (ii) the purchase price paid by such
designated financial institution shall be in the amount of such Unsuitable
Lender’s Loans and its Percentage of outstanding Letter of Credit Reimbursement
Obligations, together with all accrued and unpaid interest and fees in respect
thereof, plus all other amounts (including the amounts demanded and
unreimbursed under Sections 4.1
and 4.2), owing to such
Unsuitable Lender hereunder and (iii) the Borrower shall pay to the
Unsuitable Lender, the Administrative Agent and the Issuer all reasonable
out-of-pocket expenses incurred by the Unsuitable Lender and the Administrative
Agent in connection with such assignment and assumption (including the
processing fees described in Section 10.11.1);
provided further, however, that if the Borrower fails
to find a substitute financial institution within any time specified by the
appropriate gaming authority for the withdrawal of such Unsuitable Lender (the “Withdrawal Period”), the Borrower shall prepay in full
the outstanding principal amount of the Loans made by such Unsuitable Lender
(without giving effect to Section 4.4)
and shall be deemed to have requested a reduction in each of the aggregate
amounts of the Loan Commitment Amounts relating to all Loan Commitments held by
such Lender, in each case, in an amount equal to such Unsuitable Lender’s then
existing Loan Commitment Amounts.

 

(c)           Upon
the effective date of an assignment described in clause (a) or
(b), the Borrower shall issue a replacement Note or Notes, as the case
may be, to such 

 

52

 

replacement Lender and such institution shall become a “Lender” for all
purposes under this Agreement and the other Loan Documents.  Upon any such termination or assignment, such
replaced Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of any provisions of this Agreement which by their
terms survive the termination of this Agreement.

 

ARTICLE
V

 

CONDITIONS
PRECEDENT TO EFFECTIVENESS AND LOANS

 

SECTION 5.1  Conditions Precedent to Loan Commitments
and Effectiveness of this Agreement. 
The Lenders shall have no Loan Commitments hereunder, and this Agreement
shall not be effective, until the prior satisfaction of each of the conditions
precedent hereinafter set forth in this Section 5.1.

 

SECTION 5.1.1  Authority of the Borrower and the
Guarantors.  The Administrative Agent
shall have received each of the following items, which items shall be in form
and substance reasonably satisfactory to the Administrative Agent: (u) a
certified copy of the Organizational Documents of the Borrower, certified by an
Authorized Representative of the Borrower, (v) a certified copy of the
Organizational Documents of each Guarantor, certified by an Authorized
Representative of such Guarantor, (w) a copy of one or more resolutions or
other authorizations of the Board of Managers or Board of Directors, as
applicable, of the Borrower certified by the Authorized Representative of such
Board of Managers or Board of Directors, as applicable, as being in full force
and effect on the Effective Date, authorizing Loans herein provided for, and
the execution, delivery and performance of this Agreement, and any Instruments
required hereunder or thereunder to which each such Person is a party, (x) a
copy of one or more resolutions or other authorizations of the Board of
Managers or Board of Directors, as applicable, of each Guarantor certified by
an Authorized Representative of such Board of Managers or Board of Directors,
as applicable, as being in full force and effect on the Effective Date, authorizing
Loans herein provided for, and the execution, delivery and performance of this
Agreement, and any Instruments required hereunder or thereunder to which each
such Person is a party, (y) a structure or organizational chart of the
Borrower and each Guarantor in reasonable detail and (z) a copy of a good standing certificate, dated a date
within thirty (30) days of the Effective Date, for the Borrower and each
Guarantor, from the state of organization of each such Person.

 

SECTION 5.1.2  Incumbency of the Borrower and the
Guarantors.  The Administrative Agent
shall have received a certificate from the Borrower and each Guarantor, signed
by an Authorized Representative of the Borrower and such Guarantor,
respectively, and dated as of the Effective Date, as to the incumbency of the
Person or Persons authorized to execute and deliver the Loan Documents and any
instruments or agreements required hereunder or thereunder to which each such
Person is a party.

 

SECTION 5.1.3  Corporate Proceedings.  All corporate, limited liability company,
partnership and legal proceedings and all instruments in connection with the
Transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably 

 

53

 

satisfactory in form and substance to the Administrative Agent and the
Administrative Agent shall have received all information, legal and technical
opinions and copies of all documents, including records of corporate, limited
liability company or partnership proceedings and copies of any approval by any
Governmental Instrumentality required in connection with the Transactions
contemplated by the Loan Documents, which the Administrative Agent may have
requested in connection herewith, such documents to be satisfactory in form and
substance to the Administrative Agent and where appropriate to be certified by
the requisite corporate, limited liability company or partnership officers or
Governmental Instrumentalities.

 

SECTION 5.1.4  Financial
Information, etc.  The Administrative Agent shall have received
each of the following items, which items shall be in form and substance
reasonably satisfactory to the Administrative Agent:

 

(a)           copies
of the audited financial statements for the Fiscal Year ending on or about December 31,
2009 for the Borrower and each Guarantor and each of their respective
Subsidiaries, including therein, without limitation, consolidated balance
sheets and related statements of income, stockholders’ equity and cash flows of
each such Person, in each case prepared in accordance with GAAP and as audited
by a nationally recognized independent public accountant acceptable to the
Administrative Agent (in each case, without any Impermissible Qualifications),
together with all audited financial statements of the Borrower and its
Subsidiaries for all Fiscal Quarters ending after December 31, 2009 that
have been prepared and finalized prior to the Effective Date; and

 

(b)           copies
of unaudited financial statements for the calendar months ended within the thirty
(30) day period prior to the Effective Date for each of the Borrower and each
Guarantor and each of their respective Subsidiaries, including therein, without
limitation, consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of each such Person, in each case,
certified as complete and correct by the chief financial or accounting
Authorized Representative of such Person and prepared in accordance with GAAP
(subject to normal year-end audit adjustments and the absence of footnotes).

 

SECTION 5.1.5  Permits.  Copies of all material Permits that have been
issued prior to the date hereof relating to the Capital Improvement Project
shall have been delivered to the Administrative Agent.

 

SECTION 5.1.6  Capital Improvement Project Budget.  The
Administrative Agent shall have received the Capital Improvement Project
Budget for all costs incurred to date and
anticipated costs of the Capital Improvement Project.  The Capital
Improvement Project Budget shall be reasonably
satisfactory to the Administrative Agent. 
The Administrative Agent acknowledges receipt and approval of the
Capital Improvement Project Budget.  The
Borrower shall deliver an officer’s certificate, signed by an Authorized
Representative of the Borrower, certifying that the Capital Improvement
Project Budget:

 

54

 

(a)           is consistent with the provisions of the Loan
Documents in all material respects;

 

(b)           has been and will be prepared in good faith and with
due care;

 

(c)           sets forth the total Capital Improvement
Project Costs which have been incurred and/or,
to the best Knowledge of the Borrower, are anticipated to be incurred with
respect to the Capital Improvement Project; and

 

(d)           fairly represents the Borrower’s expectation as to
the matters covered thereby.

 

SECTION 5.1.7  Environmental Reports.  The Administrative Agent shall have received
a newly commissioned Phase I environmental assessment that conforms to the
ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process, E 1527 (a “Phase I Report”) or a reliance letter
addressed to the Administrative Agent with respect to an acceptable existing
Phase I Report that shall be dated no earlier than sixty (60) days prior
to the Effective Date, in each case, prepared by an environmental consulting
firm or firms reasonably satisfactory to the Administrative Agent regarding
Environmental Matters relating to the Property, the Easements and the
Improvements thereon; provided, however, that to the extent that
any such Phase I Report states that there have been Claims, complaints, notices
or inquiries relating to potential liability under or non-compliance with,
Environmental Laws received by the Borrower in connection with the Property or
the Improvements located thereon, or, if such Phase I Report shall conclude the
necessity thereof, the Borrower shall be required to obtain and deliver to the
Administrative Agent a report that includes a Phase II environmental assessment
which conforms to the ASTM Standard Practice for Environmental Site
Assessments: Phase II Environmental Site Assessment Process, E 1903
prepared by an environmental consulting firm or firms reasonably satisfactory
to the Administrative Agent (“Phase II Report”).

 

SECTION 5.1.8  Searches.  The Borrower shall deliver such UCC,
bankruptcy, judgment, federal and state tax Lien, and such other searches of
public records as the Administrative Agent may reasonably require with respect
to the Borrower, each Guarantor and the Property.

 

SECTION 5.1.9  Real Estate Appraisal.  The Administrative Agent shall have received
a newly commissioned Appraisal of the Property which (i) indicates an “as-is”
value of at least $120,000,000 thereby resulting
in a maximum “as-is” Loan to Value Ratio of fifty percent (50%) and (ii) is
otherwise in form and substance satisfactory to the Administrative
Agent.

 

SECTION 5.1.10  Fees. 
All amounts required to be paid to or deposited with the Administrative
Agent and the Issuer and all taxes, fees and other costs payable in connection
with the execution and delivery of this Agreement and the conditions set forth
in this Section 5.1, shall have been paid or deposited, as the case
may be.  The Borrower shall have paid all
fees, expenses and other charges then due and payable by it or by the
Administrative 

 

55

 

Agent under any agreements between the Borrower or the Administrative
Agent and any of the Independent Consultants, including, without limitation,
all fees, costs and expenses due and payable, if then invoiced, pursuant to Section 10.3.

 

SECTION 5.1.11  Opinions of Counsel.  The Administrative Agent shall have received
opinions from the Borrower’s and each Guarantors’ New York counsel and Nevada
counsel, each dated the Effective Date and addressed to the Administrative
Agent, the Issuer and the Lenders which shall be in form and substance
satisfactory to the Administrative Agent.

 

SECTION 5.1.12  Information pursuant to Anti-Terrorism
Laws.  The Borrower and each of the Guarantors shall
have supplied the Lenders, the Issuer and the Administrative Agent with all
information required under the Lender’s Customer Identification Program (as
defined in the Anti-Terrorism Laws) as stipulated by the Anti-Terrorism Laws.

 

SECTION 5.1.13  No Material Adverse Effect.  There exists no Material Adverse Effect.

 

SECTION 5.1.14  No Defaults.  No Default shall have occurred and be
continuing.

 

SECTION 5.1.15  No Restrictions.

 

(a)           The making of the Loans, the issuance of the Letters of
Credit, the receipt of proceeds of the Loans by the Borrower or the Liens on
the Security in favor of the Secured Parties shall not breach or be in conflict
with any Instrument related to the Indebtedness of any Person that owns any
Capital Stock of the Borrower.

 

(b)           The Lenders shall be authorized to make the Loans, and the Issuer shall be authorized to issue
the Letters of Credit, to the Borrower under all Legal Requirements, and no
order, judgment or decree of any court, arbitrator or Governmental
Instrumentality shall purport to enjoin or restrain the Lenders, the Issuer or
the Administrative Agent from entering into this Agreement or any of the other
Loan Documents to which any of them is a party.

 

(c)           Neither the making of the Loans, nor the receipt of
proceeds of the Loans by the Borrower or any Person that owns, directly or
indirectly, any Capital Stock of the Borrower or any other direct or indirect
equitable, legal or beneficial interest in the Borrower shall violate any Legal
Requirements applicable to such Person including, without limitation, any of
the Anti-Terrorism Laws.  None of the
Borrower or any Person which owns, directly or indirectly any Capital Stock or
any other direct or indirect equitable, legal or beneficial interest in the
Borrower shall be the subject of any of the Anti-Terrorism Laws.

 

SECTION 5.1.16  No Violation of Certain Regulations.  The entering into of the Loan Documents by
the Borrower and each of the Guarantors shall not violate any law, including
Regulation T, Regulation U or Regulation X of the Board of
Governors of the FRS Board.

 

56

 

SECTION 5.1.17  Representations and Warranties.  Both before and after giving effect to the
Loan Commitments and the funding of each Borrowing, the representations and
warranties contained in Article VI and each other Loan Document are
accurate as if made on the Effective Date (except those that relate to a
different date).

 

SECTION 5.1.18  Other Documents.  The Administrative Agent shall have received
such other documents and evidence as the Administrative Agent may reasonably
request in connection with the Transactions.

 

SECTION 5.1.19  Satisfactory Form and Substance.  All documents, closing certificates,
resolutions, and certificates executed or submitted pursuant to Section 5.1
by the Borrower and each of the Guarantors, as applicable, shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel,
and the Administrative Agent and its counsel shall have received all
information, approvals, opinions, documents or instruments as the
Administrative Agent or its counsel may reasonably request.

 

SECTION 5.2  Conditions Precedent to the Initial
Borrowing of the Revolving Loans and the Issuance of Letters of Credit.  Not in limitation but in furtherance of the
other conditions in this Agreement and the other Loan Documents after the
Effective Date, the following conditions shall be satisfied prior to making of
the initial Borrowing of the Revolving Loans or issuing any Letters of Credit.

 

SECTION 5.2.1  Commitment Conditions.  The continued satisfaction of each of the
conditions enumerated in Sections 5.1.1, 5.1.2, 5.1.3 and 5.1.4
hereof.

 

SECTION 5.2.2  Loan
Documents.  Each Loan Document
shall be in full force and effect, without amendment since the respective date
of its execution and delivery (other than amendments which are permitted by
this Agreement or which have otherwise been approved by the Administrative
Agent and, in each case, which have been delivered to the Administrative
Agent), and in a form which was approved by the Administrative Agent, except as
otherwise permitted pursuant to this Agreement. 
All obligations and requirements thereunder which are to be performed or
satisfied, as the case may be, shall have been performed and satisfied in all
material respects and both before and after giving effect to this Agreement and
any Instruments required hereunder, no act, condition or event shall exist
which, with the giving of notice and/or passage of time would constitute a
breach or event of default thereunder.

 

SECTION 5.2.3  Required Preferred Rights Offering.  The Administrative Agent shall have received
satisfactory evidence of the consummation of the transactions contemplated by
the Required Preferred Rights Offering and the sale of all New Preferred Stock.

 

SECTION 5.2.4  Interest Reserve.  The Administrative Agent shall have received
satisfactory evidence that a portion of the Interest Reserve in an amount no
less than $5,000,000 shall have been funded into the Interest Reserve Account.

 

57

 

SECTION 5.2.5  Side Letter.  The Administrative Agent shall have received
satisfactory evidence the transactions contemplated by the Trilliant &
H/2 Side Letter shall have taken place.

 

SECTION 5.2.6  Insurance.

 

(a)           Insurance
in Effect.  Insurance complying with
the Insurance Requirements shall be in place and in full force and effect with
respect to the Improvements, the Property and the Capital Improvement Project,
if applicable.

 

(b)           The
Borrower’s Insurance Certificates. 
The Borrower shall have delivered to the Administrative Agent and the
Insurance Consultant certificates of insurance naming the Administrative Agent
as (i) an additional insured with respect to every commercial general
liability policy and (ii) a mortgagee and loss payee with respect to every
property policy, and such certificates shall otherwise be in form and substance
reasonably satisfactory to the Administrative Agent and the Insurance
Consultant.

 

(c)           Insurance Consultant’s Report.  The Administrative Agent shall have received
the Insurance Consultant’s Closing Certificate with the Insurance Consultant’s
Report together with evidence of insurance coverages and endorsements listed in
said Insurance Consultant’s Report, which shall be in form and substance
reasonably satisfactory to the Administrative Agent, attached thereto.

 

SECTION 5.2.7  Key Person Management Agreement.  The Administrative Agent shall have received from
the Borrower a certified copy of the Key Person Management Agreement.

 

SECTION 5.2.8  Gaming Lease.  The Administrative Agent shall have received
from the Borrower a certified copy of the Gaming Lease.  The term and the form and content of the
Gaming Lease shall be reasonably satisfactory to the Administrative Agent in
all respects.  The Gaming Lease shall be
in full force and effect and no breach shall exist thereunder.  Any payments under the Gaming Lease shall be
subject and subordinate in all respects to all payments to be made under the
Loan Documents, pursuant to the Gaming Lease Assignment, Subordination and
Estoppel.

 

SECTION 5.2.9  Title Policy; Title Documents.  The Borrower shall have delivered to the
Administrative Agent a title insurance policy (the “Title Policy”) with respect to the Property in the
amount of $60,000,000, together with a copy of all title exception documents
and all Easements, reciprocal easement agreements, operating agreements,
declarations, and other legal documents affecting the use or operation of the
Property or the Improvements located or to be located thereon.  The Title Policy shall: (x) include an
endorsement protecting against forfeiture or reversion due to covenants,
restrictions or encroachments and such other endorsements as are reasonably
required by the Administrative Agent, (y) be issued by the Title Insurer
in form and substance satisfactory to the Administrative Agent and (z) insure
that (1) the Borrower has good and marketable, fee simple title to the
Property, the Easements and the Improvements thereon, free and clear of all
Liens (other than Permitted 

 

58

 

Liens), (2) the Deed of Trust is a valid, perfected First Priority
Lien on the Security entitled to the priority described therein, free and clear
of all Liens (other than Permitted Liens), (3) the Secured Parties have
the right to foreclose against the Property, the Easements and the Improvements
now or hereafter thereon and that no forfeiture or right of reversion exists
due to covenants, restrictions or encroachments and (4) the Borrower has
all utility, access, support and other Easements necessary for the construction
and operation of the Property and the other Improvements located or to be
located thereon.  If the Property
consists of several parcels, the Title Policy must affirmatively insure the
contiguity of all such parcels.

 

SECTION 5.2.10  A.L.T.A. Survey.  The Administrative Agent shall have received
an A.L.T.A. survey of the Property and any Easements, satisfactory in form and
substance to the Title Insurer and the Administrative Agent, dated no earlier
than thirty (30) days prior to the Effective Date and certified to each such
Person by a surveyor licensed in the state of Nevada and satisfactory to each
such Person, showing (v) the exact location and dimensions of the
Property, including the location of all means of access thereto and all
Easements relating thereto; (w) all exterior building walls; (x) as
to the existing utility facilities servicing the Improvements located on the
Property (including water, electricity, gas, telephone, sanitary sewer and
storm water distribution and detention facilities), the exact location and
means of access thereto, to the extent capable of being described without
additional cost or expense; (y) that there are no gaps, gores,
projections, protrusions or other survey defects unless same are Permitted
Liens; and (z) whether the Property or any portion thereof is located in a
special flood hazard zone.

 

SECTION 5.2.11  Zoning Information.  The Administrative Agent shall have received
such zoning information for the Property, the Improvements and the Capital
Improvement Project as shall be reasonably acceptable to the Administrative
Agent, confirming that the Property is zoned in a classification which permits
renovation of the Capital Improvement Project and that the Property can be used
for its intended purposes.

 

SECTION 5.2.12  Payment of Outstanding Indebtedness, etc. 
All Indebtedness to be Paid on or before the Effective Date, together
with all interest, all prepayment premiums and other amounts due and payable
with respect thereto, shall (after applying the Initial Borrowing) have been
paid in full and the commitments in respect of such Indebtedness shall have
been terminated, and all Liens securing payment of any such Indebtedness shall
have been discharged and released and the Administrative Agent shall have
received copies of all termination statements or other instruments as may be
suitable or appropriate in connection therewith.

 

SECTION 5.2.13  Fees. 
All amounts required to be paid to or deposited with the Administrative
Agent and the Issuer and all taxes, fees and other costs payable in connection
with the execution, delivery, recordation and filing of the Instruments
referred to in this Section 5.2, shall have been paid or deposited,
as the case may be.  The Borrower shall
have paid all fees, expenses and other charges then due and payable by it under
this Agreement or the other Loan Documents or under any agreements between the
Borrower and any of the Independent Consultants, including, without limitation,
all fees, costs and expenses due and payable pursuant to Section 3.3
and, if then invoiced, Section 10.3.

 

59

 

SECTION 5.2.14  Loan Documents.  The Administrative Agent shall have received
duly executed counterparts of each of the documents listed below:

 

(a)           Counterparts
of this Agreement, each duly executed and delivered by an Authorized
Representative of the Borrower, each Lender, the Issuer and the Administrative
Agent.

 

(b)           One
or more Notes in the principal amount of the Loans, each duly executed and
delivered by an Authorized Representative of the Borrower.

 

(c)           Counterparts
of the Deed of Trust and the Assignment of Leases and Rents, each duly executed
and delivered by an Authorized Representative of the Borrower, together with
evidence of the completion (or satisfactory arrangements for the completion) of
all recordings and filings of the Deed of Trust and the Assignment of Leases
and Rents in the Official Records, in each case, as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable effectively to create
a valid, perfected First Priority Lien against the Property, subject only to
Permitted Liens.

 

(d)           Counterparts
of the Security Agreement, each duly executed and delivered by an Authorized
Representative of the Borrower, together with

 

(i)            copies
of Uniform Commercial Code financing statements (Form UCC-1), naming the
Borrower, as the debtor, and the Administrative Agent, as the secured party, or
other similar instruments or documents, to be filed under the Uniform
Commercial Code of all jurisdictions as may be necessary or, in the reasonable
opinion of the Administrative Agent, desirable to perfect the security
interests of the Administrative Agent pursuant to the Security Agreement and
the other Loan Documents;

 

(ii)           executed
copies of proper Uniform Commercial Code termination statements, if any,
necessary to release all Liens and other rights of any Person

 

(1)           in
any collateral described in the Security Agreement previously subject to a Lien
or other right granted to any Person, and

 

(2)           securing
any of the Indebtedness to be Paid, together with such other Uniform Commercial
Code termination statements as the Administrative Agent may reasonably request
from such Persons; and

 

(iii)          certified
copies of search reports certified by the offices from which they were
requested or another Person acceptable to the Administrative Agent, dated a
date reasonably near to the Effective Date, listing all effective financing
statements which name the Borrower (under its present name and any previous
names) and such other Persons designated by the Administrative Agent as the
debtor and which are filed in the jurisdictions in which filings were made

 

60

 

 

pursuant to clause (i) above, together with copies of
such financing statements (none of which (other than those described in clause (i),
if such search report, as the case may be, is current enough to list such
financing statements described in clause (i)) shall cover any
collateral described in the Security Agreement).

 

(e)           Counterparts
of the Trademark Security Agreement, each duly executed and delivered by an
Authorized Representative of the Borrower or appropriate owner of the related
intellectual property registration.

 

(f)            Counterparts
of the Assignment of Permits, Contracts and Agreements, each duly executed and
delivered by an Authorized Representative of the Borrower.

 

(g)           Counterparts
of the Guaranty, each duly executed and delivered by an Authorized
Representative of each of the Guarantors.

 

(h)           Counterparts
of the Environmental Indemnity, each duly executed and delivered by an
Authorized Representative of the Borrower and each of the Guarantors.

 

(i)            Counterparts
of the Pledge Agreement, each duly executed and delivered by an Authorized
Representative of the parties thereto.

 

(j)            Counterparts
of the Borrower’s Closing Certificate, each duly executed and delivered by an
Authorized Representative of the Borrower.

 

(k)           Counterparts
of Solvency Certificates, each duly executed and delivered by an Authorized
Representative of the Borrower and each of the Guarantors.

 

(l)            Counterparts
of the Key Person Management Assignment and Subordination Agreement, each duly
executed and delivered by an Authorized Representative of the Borrower, the Key
Person Manager and the Administrative Agent.

 

(m)          Counterparts
of the Gaming Lease Assignment, Subordination and Estoppel, each duly executed
and delivered by an Authorized Representative of the Borrower, the Gaming Tenant
and the Administrative Agent.

 

(n)           Counterparts
of the Know Your Customer Letter Certification, each duly executed and
delivered by an Authorized Representative of the Borrower.

 

(o)           Counterparts
of the Perfection Certificate, each duly executed and delivered by an
Authorized Representative of the Borrower.

 

SECTION 5.2.15  Opinions of Counsel.  The Administrative Agent shall have received
opinions from the Borrower’s and each Guarantors’ New York counsel and Nevada
counsel (including opinions as to the non-impairment of any Liens or security
interests created under, or any guarantees made under, any Loan Document in
favor of the Administrative Agent for the benefit of the Secured Parties), each
addressed to the 

 

61

 

Administrative Agent, the Issuer and the Lenders which shall be in form
and substance satisfactory to the Administrative Agent.

 

SECTION 5.2.16  Service
of Process.  The
Administrative Agent shall have received a conformation letter from a process
agent, in form and substance satisfactory to the Administrative Agent,
consenting to its appointment by the Borrower and each of the Guarantors as
each such Person’s agent to receive service of process located in New York, New
York.

 

SECTION 5.2.17  Other Documents.  The Administrative Agent shall have received
such other documents and evidence as the Administrative Agent may reasonably
request in connection with the Transactions.

 

SECTION 5.2.18  Satisfactory Form and Substance.  All documents, closing certificates,
resolutions, and certificates executed or submitted pursuant to Section 5.2
by the Borrower and each of the Guarantors, as applicable, shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel,
and the Administrative Agent and its counsel shall have received all
information, approvals, opinions, documents or instruments as the
Administrative Agent or its counsel may reasonably request.

 

SECTION 5.3  Conditions
Precedent to all Loans and the Issuance of Letters of Credit.  Not in limitation but in furtherance of the
other conditions in this Agreement and the other Loan Documents after the
Effective Date, the following conditions shall be satisfied prior to making any
Loan or issuing any Letters of Credit; provided, however,
the following conditions shall not apply to Sections 2.4.2, 2.4.3,
2.4.4 and 2.4.5.

 

SECTION 5.3.1  Commitment Conditions.  The continued satisfaction of each of the
conditions enumerated in Sections 5.1.1, 5.1.2, 5.1.3, 5.1.4, 5.2.2,
5.2.3, 5.2.4 and 5.2.8 hereof.

 

SECTION 5.3.2  Compliance with Warranties,
No Default, etc.  Both before
and after giving effect to any Borrowing the following shall be true and
correct:

 

(a)           the
accuracy of the representations and warranties contained in Article VI as if made on the
date of the Borrowing (except those that relate to a different date) unless the
failure of the foregoing to be the case could not reasonably be expected to
result in a Material Adverse Effect;

 

(b)           except
as disclosed by the Borrower to the Administrative Agent pursuant to Section 6.7 there exists

 

(i)            no
material litigation which could reasonably be expected to have a Material
Adverse Effect or which purports to affect the legality, validity or
enforceability of this Agreement, the Notes or any other Loan Document; and

 

62

 

(ii)           no
material development shall have occurred in any litigation disclosed pursuant
to Section 6.7
which could reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.3.3  No Events of Default.  No Default or Event of Default shall have
occurred and be continuing or, after giving effect to such Borrowing, could
reasonably be expected to result, as certified by the Borrower in the relevant
Borrowing Request.

 

SECTION 5.3.4  Borrowing Request.  The Administrative Agent shall have received
a Borrowing Request for the Loan being requested or a Letter of Credit Issuance
Request if a Letter of Credit is being requested or extended together with all attachments,
exhibits and certificates which conform to the requirements of Section 2.3
or Section 2.4, as applicable. 
Each delivery of a Borrowing Request or Letter of Credit Issuance
Request and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing (both immediately before and after giving effect to such
Borrowing and the application of the proceeds thereof) the statements made in Section 5.3.2
and Section 5.3.3 are true and correct in all material respects.

 

SECTION 5.3.5  Additional
Documents.  With respect to
any Loan Documents entered into or obtained, transferred or required since the
date of the most recent Borrowing (if a subsequent Borrowing) there shall be
redelivery of such matters as are described in Section 5.2.2,
Section 5.1.2 (to the extent such Loan Document is in
substitution of or is a replacement for another Loan Document) and, if
requested by the Administrative Agent, Section 5.1.1, in each case to the extent not
previously addressed. If such delivery or redelivery has not been made, the
Borrowing shall not be made by the Administrative Agent until the conditions
set forth herein have been satisfied.

 

SECTION 5.3.6  Title
Insurance Policy Endorsements. 
The Administrative Agent shall have received an endorsement to the Title
Policy in the form of an ALTA Revolving Loan Endorsement insuring the
continuing First Priority of the Lien of the Deed of Trust as security for the
Borrowing on the date such Borrowing is made and insuring that (i) there
has been no change in the condition of title unless permitted by the Loan
Documents and (ii) there are no intervening Liens or encumbrances
(including inchoate mechanic’s Liens) which may then or thereafter take
priority over the Lien of the Deed of Trust or the Borrowing.  The Lenders will not be required to make any
Loans and the Issuer will not be required to issue any Letters of Credit while
there exist any mechanics’ Lien Claims against all or part of the Property or
the Improvements (unless the Borrowing will be used to discharge such mechanic’s
lien Claims or unless the Borrower shall have delivered a bond in form and
substance satisfactory to the Administrative Agent and in such amount determined
by the Administrative Agent in its reasonable judgment to be adequate to cover
the payment of such Lien).

 

SECTION 5.3.7  No Restriction.  No order, judgment or decree of any court,
arbitrator or Governmental Instrumentality shall purport to enjoin or restrain
the Borrower or any of the Guarantors, the Administrative Agent, the Issuer
and/or any of the Lenders from 

 

63

 

making the Borrowing or issuing the Letter of Credit to be made by it
on the date set forth in the Borrowing Request or the Letter of Credit Issuance
Request, as applicable.

 

SECTION 5.3.8  Fees, Expenses, etc.  All amounts required to be paid to or
deposited with the Administrative Agent by the Borrower or any Guarantor and
all taxes, fees and other costs payable in connection with the execution,
delivery, recordation and filing of the documents and Instruments referred to
in Section 5.1, Section 5.2 and Section 5.3
shall have been paid or deposited, as the case may be, in full.  The Borrower shall have paid or arranged for
payment out of the requested Borrowing or otherwise all fees, expenses and
other charges then due and payable by it under this Agreement or the other Loan
Documents or under any agreements between the Borrower and any of the
Independent Consultants, including, without limitation, all fees, costs and
expenses due and payable pursuant to Section 3.3 and Section 10.3, if then invoiced.

 

SECTION 5.3.9  Loan Documents.  Each of the Loan Documents shall be in full
force and effect without amendment since the respective date of its execution
and delivery, except as otherwise permitted pursuant to this Agreement and each
certificate delivered by the Borrower with respect to any such document shall
be true and correct in all material respects, as certified by the Borrower in
the relevant Borrowing Request or Letter of Credit Issuance Request.

 

SECTION 5.3.10  Security Interests.  All actions necessary or desirable (including
all filings) in the opinion of the Administrative Agent to perfect or continue
the perfection of the Administrative Agent’s security interests in the Security
having the exclusive First Priority contemplated therefor by this Agreement and
the other Loan Documents (subject only to Permitted Liens) shall have been
taken or made.  All property, rights and
assets required for the Property, the Improvements and the Capital Improvement
Project shall be free and clear of all Liens and encumbrances except for the
Permitted Liens.

 

SECTION 5.3.11  No Restrictions.  No order, judgment or decree of any court,
arbitrator or Governmental Instrumentality shall purport to enjoin or restrain
the Lenders, the Issuer or the Administrative Agent from making the requested
Borrowing or issuing the requested Letter of Credit, as applicable, and no
Legal Requirement shall prohibit, prevent or impair the Borrower or any
Guarantor from performing their obligations under the Operative Documents to
which they are a party or the ability of the Borrower to own and operate the
Property, the Improvements and the Capital Improvement Project.  Neither the making of the requested Borrowing
or the issuance of the requested Letter of Credit, nor the receipt of proceeds
of the Loans by the Borrower or any Person which owns, directly or indirectly,
any Capital Stock of the Borrower or any Guarantor (excluding any Capital Stock
traded on a public exchange) or any other direct or indirect equitable, legal
or beneficial interest in any such Person violates any Legal Requirement
applicable to such Person including, without limitation, any of the
Anti-Terrorism Laws.  None of the
Borrower, any Guarantor or any other Person which owns, directly or indirectly
any Capital Stock or any other direct or indirect equitable, legal or
beneficial interest in any such Person shall be the subject of any of the
Anti-Terrorism Laws.

 

64

 

SECTION 5.3.12  Required Documents.  At least five (5) Business Days
prior to the requested Borrowing or Letter of Credit, the Administrative Agent
shall have received the following in form and substance satisfactory to the
Administrative Agent:

 

(a)           any
material amendments or material modifications to the Capital Improvement
Project Budget last delivered to the Administrative Agent, or a statement that
no material changes have been made to the Capital Improvement Project Budget;

 

(b)           if
any material dispute has arisen between the Borrower and any Contractor and/or
material supplier which may have a Material Adverse Effect, a written summary
of the nature of such dispute; and

 

(c)           such
other Instruments, documents and information pertaining to the Borrowing or
Letter of Credit as the Lender or Issuer, as applicable, may reasonably
request.

 

SECTION 5.3.13  Satisfactory
Legal Form.  All documents,
certificates and/or instruments executed or submitted pursuant hereto by or on
behalf of the Borrower, any of the Guarantors and any other Person shall be
reasonably satisfactory in form and substance to the Administrative Agent and
its counsel, shall satisfy the applicable provisions of Section 7.1.10
and the Administrative Agent and its counsel shall have received all
information, approvals, opinions, documents or instruments as the
Administrative Agent or its counsel may reasonably request.

 

SECTION 5.4  Conditions Precedent to Delayed Draw Term Loans.  Not in limitation but in furtherance of the
other conditions in this Agreement and the other Loan Documents, in addition to
the conditions set forth in Sections 5.1.1, 5.1.2, 5.1.3, 5.1.4, 5.2.2,
5.2.3, 5.2.4, 5.2.9 and Section 5.3 hereof,
the following conditions shall be satisfied prior to the making of any Delayed
Draw Term Loan:

 

SECTION 5.4.1  Phase II Club Operator.  The
Administrative Agent shall have approved in writing, such approval not to be unreasonably
withheld or delayed, the Phase II Club Operator, and shall have received a copy
of the Phase II Club Management Agreement.

 

SECTION 5.4.2  Phase II Project Plans and
Specifications.  The Administrative Agent shall have approved
in writing, such approval not to be unreasonably withheld or delayed, the
proposed plans and specifications of the Phase II Project.

 

SECTION 5.4.3  Phase II Project Budget.  The Administrative Agent shall have received any
material amendments or material modifications to the Phase II Project Budget
last delivered to the Administrative Agent, or a statement that no material
changes have been made to the Phase II Project Budget.

 

SECTION 5.4.4  Assignment and Subordination
of Phase II Club Management Agreement. 
The Phase II Club Operator, the Borrower and the Administrative Agent
shall have entered into an assignment, subordination, non-disturbance
and attornment agreement with respect to the Phase II Club Management Agreement
delivered in accordance with 

 

65

 

Section 5.4.1 hereof for the benefit of
the Secured Parties, such agreement to be in form and substance reasonably
satisfactory to the Administrative Agent.

 

SECTION 5.4.5  Interest Reserve.  The Administrative Agent shall have
received satisfactory evidence that a portion of the Interest Reserve in an
amount no less than $1,000,000 shall have been funded into the Interest Reserve
Account.

 

SECTION 5.4.6  Miscellaneous.  The Administrative Agent shall have received
such other documentation or evidence it may reasonably request with respect to
the Phase II Project and the Phase II Club.

 

ARTICLE
VI

 

REPRESENTATIONS
AND WARRANTIES

 

In order to induce the Lenders, the Administrative Agent and the Issuer
to enter into this Agreement and to make the Loans and/or issue Letters of
Credit hereunder, the Borrower represents and warrants unto the Administrative
Agent, the Issuer and each Lender as set forth in this Article VI.

 

SECTION 6.1  Organization, etc. 
The Borrower and each of the Guarantors is validly organized and
existing and in good standing under the laws of the state or jurisdiction of
such Person’s organization, is duly qualified to do business and is in good
standing in each jurisdiction where the nature of its business requires such
qualification; and has full power and authority and holds all requisite Permits
to enter into and perform its Obligations under this Agreement and each of the
other Loan Documents to which it is a party, and to consummate the Transactions
and conduct its business as currently conducted by it and as contemplated by
the Transactions.

 

SECTION 6.2  Due Authorization, Non-Contravention, etc. 
The execution, delivery and performance by the Borrower and each of the
Guarantors of each of the Loan Documents to which it is a party, and
participation by the Borrower and each of the Guarantors, in the consummation
of all aspects of the Transactions, and the execution, delivery and performance
by the Borrower and each of the Guarantors of the other agreements executed and
delivered in connection with the Transactions are, in each case, within such
Person’s powers, have been duly authorized by all necessary action, and do not

 

(a)           contravene
any of such Person’s Organizational Documents;

 

(b)           contravene
any contractual restriction binding on or affecting such Person;

 

(c)           contravene
any Legal Requirement binding on or affecting such Person or the Property; or

 

(d)           result
in, or require the creation or imposition of, any Lien on any portion of the
Property (except as expressly permitted or required by this Agreement).

 

66

 

SECTION 6.3  Governmental Approval, Regulation, etc. 
No authorization or approval or other action by, and no notice to or
filing with, any Governmental Instrumentality or regulatory body or other
Person (other than those that are not required to have been made until after
the Effective Date, and except for filings and registrations of any UCC
financing statements, the Deed of Trust or intellectual property filings (all
of which have been duly executed and delivered to the Administrative Agent on
the Effective Date by the Borrower) necessary to record the Lenders’ security
interest in certain personal, real or intellectual property included in the
Security) is required for the due execution, delivery or performance by the
Borrower and each of the Guarantors of this Agreement and any other Loan
Document to which it is a party, in each case, by the parties thereto, or the
consummation of the Transactions.

 

SECTION 6.4  Validity, etc.  Each of the Loan
Documents will, on the due execution and delivery thereof by the Borrower and
each Guarantor, constitute the legal, valid and binding obligation of such
Person enforceable against it in accordance with its terms (except, in any case
above, as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally and by principles of equity).

 

SECTION 6.5  No Material Misstatement.  The Borrower represents that (a) all
factual information that has been or will be made available to the
Administrative Agent, the Issuer or the Lenders by or on behalf of the Borrower
is or will be, when furnished, complete and correct in all material respects
and does not or will not, when furnished, contain any untrue statement of a
fact or omit to state a fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which such
statements are made and (b) the projections that have been made available
to the Administrative Agent, the Issuer or the Lenders by or on behalf of the
Borrower have been prepared in good faith based upon reasonable assumptions.

 

SECTION 6.6  No Material Adverse Effect.  There exists no Material Adverse Effect.

 

SECTION 6.7  Litigation, Labor Controversies, etc. 
There is no pending litigation, action, proceeding, labor controversy or
other event which could affect the legality, validity or enforceability of this
Agreement, the Notes or any other Operative Document, except as disclosed in Item
6.7 of the Disclosure Schedule.

 

SECTION 6.8  Taxes.

 

(a)           The
Borrower and each of the Guarantors have filed, or caused to be filed, all tax
and informational returns that are required to have been filed by such Person
in any jurisdiction, and have paid all Taxes shown to be due and payable on
such returns and all other taxes and assessments payable by such Person, to the
extent the same have become due and payable (other than those Taxes that it is
contesting in good faith and by appropriate proceedings, with adequate,
segregated reserves established for such Taxes) and, to the extent such Taxes
are not due, has established reserves therefor by allocating amounts that are
adequate for the payment thereof and are required by GAAP.

 

67

 

(b)           Neither
the Borrower nor any Guarantor has incurred any Tax liability in connection
with the Property, the Capital Improvement Project or the other Transactions contemplated
by the Operative Documents which has not been disclosed in writing to, and
approved by, the Administrative Agent, except as set forth in Item 6.8(b) of
the Disclosure Schedule.

 

SECTION 6.9  Pension and Welfare Plans.  No steps have been taken by the Borrower or
any Guarantor to terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. 
No condition exists or event or transaction has occurred with respect to
any Pension Plan which would reasonably be expected to result in a Material
Adverse Effect.  Except as disclosed in Item
6.9 in the Disclosure Schedule, neither the Borrower nor any
Guarantor has any material Contingent Liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.

 

SECTION 6.10  Permits.  There are no material Permits that are
required or will become required for the ownership and operation of the
Property as it is presently operated other than the Permits described in Schedule
II.  Each Permit described in Schedule
II as required to be obtained by the Effective Date is in full force and
effect and is not subject to any appeals or further proceedings (other than
with respect to renewal of such Permit from time to time) or to any unsatisfied
condition (that is required to be satisfied by the Effective Date) that may
allow modification or revocation.  Each Permit described in Schedule II as not
required to have been obtained by the Effective Date is of a type that is
routinely granted on application except for approvals, licenses, authorizations
and findings of suitability required under Nevada Gaming Laws for the operation
of the Property as a casino or for the sale of alcoholic beverages.  The Borrower is not in violation of
any condition in any Permit that may reasonably be expected to result in a
Material Adverse Effect.

 

SECTION 6.11  Representations and Warranties.  As of the Effective Date, all representations
and warranties of the Borrower and each Guarantor contained in the Loan
Documents are true, correct and complete in all material respects and the
Borrower hereby confirms each such representation and warranty made by it with
the same effect as if set forth in full herein.

 

SECTION 6.12  Environmental Warranties.  Except as set forth in Item 6.12 in
the Disclosure Schedule and as set forth in the Environmental Reports:

 

(a)           all
facilities and property (including underlying groundwater) owned or leased by
the Borrower have been, and continue to be, owned or leased by the Borrower in
material compliance with all Environmental Laws;

 

(b)           there
have been no past, and, to the Knowledge of the Borrower, there are no pending
or threatened

 

(i)            Claims,
complaints, notices or requests for information received by the Borrower with
respect to any alleged violation of any Environmental Law, or

 

68

 

(ii)           complaints,
notices or inquiries to the Borrower regarding potential liability under any
Environmental Law relating to any Real Property;

 

(c)           to
the Knowledge of the Borrower, there have been no Releases of Hazardous
Substances at, on or under the Property that, singly or in the aggregate, have,
or may reasonably be expected to have, a Material Adverse Effect;

 

(d)           the
Borrower has been issued and is in compliance with all material Permits,
approvals and other authorizations relating to Environmental Matters which are
necessary for its businesses;

 

(e)           no
property now or previously owned or leased by the Borrower is listed or
proposed for listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list
of sites requiring investigation or clean-up;

 

(f)            to
the Knowledge of the Borrower, there are no current underground storage tanks,
active or abandoned, including petroleum storage tanks, on or under the Land;

 

(g)           the
Borrower has not directly transported or directly arranged for the
transportation of any Hazardous Substances to any location which is listed or
proposed for listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list or which is the subject of federal, state
or local enforcement actions or other investigations which could reasonably be
expected to result in a Material Adverse Effect;

 

(h)           to
the Knowledge of the Borrower, there are no polychlorinated biphenyls or
friable asbestos present at the Property; and

 

(i)            to
the Knowledge of the Borrower, no conditions exist at, on or under the Property
which, with the passage of time, or the giving of notice or both, would give
rise to a Material Adverse Effect under any Environmental Law.

 

SECTION 6.13  Intellectual Property.  The Borrower owns or licenses (as the case
may be) all patents, patent rights, trademarks, trademark rights, trade names,
trade name rights, service marks, service mark rights and copyrights as the
Borrower considers necessary for the conduct of the businesses of the Borrower
without any infringement upon rights of other Persons and there is no
individual patent, patent right, trademark, trademark right, trade name, trade
name right, service mark, service mark right or copyright, the loss of which
would result in a Material Adverse Effect except as may be disclosed in Item 6.13 in the Disclosure
Schedule.

 

SECTION 6.14  Regulations U and X.  The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of any Loans will be used to purchase or carry margin stock or
otherwise for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation U or X.  Terms for
which meanings are 

 

69

 

provided in F.R.S. Board
Regulation U or X or any regulations substituted therefor, as from time to
time in effect, are used in this Section 6.14 with such meanings.

 

SECTION 6.15  Security Interests.

 

(a)           The
security interests granted to the Secured Parties pursuant to the Loan
Documents (i) constitute, as to personal property included in the
Security, subject to the Nevada Gaming Laws, the filings, registrations and
recordations set forth on Schedule IV hereto and, with respect to
subsequently acquired personal property included in the Security, will
constitute, a perfected security interest under the UCC and/or other applicable
law, except for any subsequently issued certificate or instrument that
constitutes collateral thereunder which will be perfected upon the delivery of
such certificate or instrument to the Administrative Agent, and (ii) have
been, and, with respect to such subsequently acquired property will be,
perfected under the UCC and/or other applicable law as aforesaid, with (A) the
First Priority contemplated thereby and (B) as between the Secured Parties
and any third Persons, superior priority and rights over the rights of any such
third Persons now existing or hereafter arising whether by way of mortgage,
deed of trust, lien, security interests, encumbrance, assignment or otherwise,
subject to Permitted Liens.  All such
action as is necessary has been taken to establish and perfect the Secured
Parties’ rights in and to the Security, including any recording, filing,
registration, giving of notice or other similar action, subject to the filings,
registrations and recordations set forth on Schedule IV
hereto.  As of the Effective Date, no
filing, registration, recordation, re-filing or re-recording other than those
listed on Schedule IV hereto is necessary to perfect and maintain
the perfection of the interest, title or Liens of the Loan Documents, and on
the Effective Date, all such filings or recordings will have been made except
for any filings or recordings for Liens as to which the Title Insurer has
issued or committed to issue a Title Policy. 
The Borrower has properly delivered or caused to be delivered to the
Administrative Agent all Security that requires perfection of the Lien and
security interest described above by possession.

 

(b)           No authorization, approval or other action by, and
no notice to or filing with, any Governmental Instrumentality is required
(except for those by or with the Nevada Gaming Authorities) for either (i) the pledge or grant by the Borrower of the
Liens purported to be created in favor of the Secured Parties pursuant to any
of the Loan Documents or (ii) the exercise by the Administrative Agent and
the other Secured Parties of any rights or remedies in respect of any Security
(whether specifically granted or created pursuant to any of the Loan Documents
or created or provided for by applicable law), except for filings or
recordings contemplated by clause (a) of this Section 6.15
or as set forth on Schedule IV hereto.

 

(c)           Except
such as may have been filed in favor of the Secured Parties as contemplated by clause
(a) of this Section 6.15
as set forth on Schedule IV hereto or with respect to those Liens
permitted under Section 7.2.3, no effective UCC financing
statement, fixture filing or other instrument similar in effect covering all or
any part of the Security is on file in any filing or recording office.

 

70

 

 

SECTION 6.16  Existing Defaults.  There is no Default that has occurred and is
continuing under any of the Loan Documents.

 

SECTION 6.17  Contingent Liabilities.  After repayment of the Indebtedness to be
Paid with the proceeds of the initial Borrowing, the Borrower has no Contingent
Liabilities in respect of Indebtedness except those authorized under, disclosed
under or contemplated by the Loan Documents and not prohibited by this
Agreement.

 

SECTION 6.18  Business, Debt, Contracts, etc. 
The Borrower has not conducted any business other than the business
contemplated by the Loan Documents.  The
Borrower has no outstanding Indebtedness other than Indebtedness incurred,
disclosed or permitted under the Loan Documents or liabilities other than those
incurred, disclosed or permitted under the Loan Documents.

 

SECTION 6.19  Utilities.  All utility services necessary for the
operation of the Property for its intended purposes are available at the
Property on commercially reasonable terms.

 

SECTION 6.20  Sufficiency of Interests.  The Borrower does not own, lease or hold any
option to own or lease any Real Property other than the Property, the
Improvements thereon and the property listed in Item 6.20 of the Disclosure
Schedule.  Except for the Permitted
Liens, the Borrower (x) owns good and marketable fee simple title to the
Property, free and clear of all Liens and (y) has good legal and
beneficial title to the property, assets and revenues on which it purports to
grant Liens pursuant to the Loan Documents. 
The Borrower owns all of the property interests and has entered into all
documents and agreements necessary to own the Property and to operate the
Property, and has or will enter into all documents and agreements necessary to
construct the Capital Improvement Project in accordance with all Legal
Requirements and as contemplated in the Operative Documents.

 

SECTION 6.21  Foreign Person.  The Borrower is not a “foreign person” within
the meaning of Sections 1445 or 7701 of the Code.

 

SECTION 6.22  Building Code Violations.  Except as may be disclosed in Item 6.22
of the Disclosure Schedule, the Borrower represents that it has received
no written notice from any Governmental Instrumentality of any material
building or other similar violation with respect to the Property or the
Improvements thereon and the Borrower does not otherwise have actual Knowledge
that there are no such violations, other than violations either first occurring
after the Effective Date or which are to be remedied as part of the Capital
Improvement Project.

 

SECTION 6.23  Fees and Enforcement.  Other than amounts that have been paid in
full or will have been paid in full by the Effective Date or the date when due
for same, to the Borrower’s Knowledge, no fees, Impositions or Taxes, including
stamp, transaction, registration or similar taxes, are required to be paid for
the legality, validity or enforceability of any of the Loan Documents.

 

SECTION 6.24  ERISA Compliance.  The Borrower and each member of the
Controlled Group have fulfilled their obligations (if any) under the minimum
funding standards of ERISA 

 

71

 

and the Code for each Pension Plan in compliance in
all material respects with the currently applicable provisions of ERISA and the
Code and have not incurred any material liability to the PBGC or a Pension Plan
under Title IV of ERISA (other than liability for premiums due in the ordinary
course).  Neither the execution of this
Agreement or the other Loan Documents nor the consummation of the Transactions
is reasonably expected to constitute a “prohibited transaction” within the
meaning of Section 406 of ERISA or Section 4975 of the Code which is
not exempt under (i) Section 408 of ERISA, (ii) under Section 4975(d) of
the Code, (iii) regulations thereunder or (iv) an individual or class
exemption.

 

SECTION 6.25  Labor Disputes; Acts of God; Casualty and
Condemnation.  As of the date hereof,
neither the Improvements nor the business of the Borrower is affected by any
strike, lockout or other labor dispute, act of the public enemy, or Event of
Loss, except as set forth in Item 6.25 in the Disclosure Schedule.  As of the date hereof, there is no proceeding
of the type described in clauses (y) and (z) in the
definition of Event of Loss is pending or, to the best Knowledge of the
Borrower, threatened, affecting all or a portion of the Property or the
Improvements.

 

SECTION 6.26  Liens. 
Except for Permitted Liens, the Borrower has not secured or agreed to
secure any Indebtedness by any Lien upon any of its present or future revenues
or assets or upon the Borrower’s Equity Interests.  The Borrower does not have outstanding any
Lien or obligation to create Liens on or with respect to the Property, the
Improvements, the Capital Improvement Project or revenues therefrom other than
Permitted Liens.

 

SECTION 6.27  Offices; Location of Collateral.

 

(a)           The chief executive
office or chief place of business (as such term is used in Article 9 of
the Uniform Commercial Code as in effect in the State of New York from time to
time) of the Borrower is located in Clark County, Nevada.  The Borrower’s federal employer
identification number is 27-0295690 and its organizational identification
number is E0296852009-0.

 

(b)           All of the Security
is, or when installed will be, located on the Property except as otherwise
disclosed in Item 6.27 of the Disclosure Schedule.

 

(c)           The Borrower’s books
of accounts and records are located at the Property.

 

SECTION 6.28  Government Regulation.  None of the Borrower nor any Guarantor is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or the Interstate Commerce Act or registration under 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 the
Nevada Gaming Laws (from and after the date that such Person holds any Gaming
License), or which may otherwise render all or any portion of the Obligations
unenforceable.  Incurrence of the Obligations
under the Loan Documents complies with all applicable provisions of the Nevada
Gaming Laws.

 

72

 

SECTION 6.29  Brokers.  The Borrower represents that no broker or
finder was responsible for or involved with the parties in connection with the
transactions contemplated by this Agreement and the other Loan Documents and
that there is no obligation for the payment of any brokerage commission,
compensation or fee of any kind with respect to this Agreement or any other
Loan Document.

 

SECTION 6.30  Subsidiaries.  The Borrower represents that:

 

(a)           100% of the Capital
Stock of Holdings Intermediary is owned directly by Holdings;

 

(b)           100% of its Capital
Stock is owned directly by Holdings Intermediary; and

 

(c)           it has no
Subsidiaries and that the Parent Guarantors have no Subsidiaries except for
those listed on Item 6.30 of the Disclosure Schedule.

 

SECTION 6.31  Capital Improvement Project Budget.  The Capital Improvement Project Budget:

 

(a)           is consistent with the provisions of the Loan
Documents in all material respects;

 

(b)           has been and will be prepared in good faith and with
due care;

 

(c)           sets forth the total Capital Improvement
Project Costs which have been incurred and/or,
to the best Knowledge of the Borrower, are anticipated to be incurred with
respect to the Capital Improvement Project; and

 

(d)           fairly represent the Borrower’s expectation as to the
matters covered thereby.

 

SECTION 6.32  Anti-Terrorism Laws.

 

SECTION 6.32.1  Anti-Terrorism
Laws.  None of the Borrower, any
Guarantor nor, to Borrower’s Knowledge, any of their respective Affiliates is
in violation of any Anti-Terrorism Law or engages in or conspires to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.

 

SECTION 6.32.2  Executive
Order No. 13224.  None of the
Borrower, any Guarantor nor, to Borrower’s Knowledge,  any of their respective Affiliates is any of
the following (each a “Blocked Person”):

 

(a)           a Person that is
listed in the annex to, or is otherwise subject to the provisions of, Executive
Order No. 13224;

 

73

 

(b)           a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order No. 13224;

 

(c)           a Person or entity
with which any bank or other financial institution is prohibited from dealing
or otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(d)           a Person or entity
that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224;

 

(e)           a Person or entity
that is named as a “specially designated national” on the most current list
published by OFAC at its official website or any replacement website or other
replacement official publication of such list; or

 

(f)            a Person who is
affiliated with a Person listed above.

 

Neither
the Borrower, any Guarantor nor, to the Borrower’s Knowledge,  any of their respective Affiliates (i) conducts
any business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any Blocked Person or (ii) deals in,
or otherwise engages in any transaction relating to, any property or interests
in property blocked pursuant to Executive Order No. 13224.

 

SECTION 6.32.3  OFAC.  Neither the Borrower, any Guarantor nor, to
the Borrower’s Knowledge,  any of their
respective Affiliates is in violation of any rules or regulations
promulgated by OFAC or of any economic or trade sanctions or engages in any
transaction administered and enforced by OFAC or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any rules or
regulations promulgated by OFAC.

 

SECTION 6.33  Gaming Lease.  Provided that the Gaming Lease has not been
terminated in accordance with the terms and provisions of the Loan Documents,
the Gaming Lease is in full force and effect, without amendment since the date
of its execution and delivery, and all obligations and requirements thereunder
which are to be performed or satisfied, as the case may be, have been performed
and satisfied in all material respects, and no act, condition or event exists
which, with the giving of notice and/or passage of time would constitute a
breach or event of default thereunder.

 

SECTION 6.34  Key Person Management Agreement.  Provided that the Key Person Management
Agreement has not been terminated in accordance with the terms and provisions
of the Loan Documents, the Key Person Management Agreement is in full force and
effect, without amendment since the date of its execution and delivery, and all
obligations and requirements thereunder which are to be performed or satisfied,
as the case may be, have been performed and satisfied in all material respects,
and no act, condition or event exists which, with the giving of notice and/or
passage of time would constitute a breach or event of default thereunder.

 

74

 

ARTICLE VII

COVENANTS

 

SECTION 7.1  Affirmative Covenants.  The Borrower agrees with the Administrative
Agent, the Issuer and each Lender that, until all Loan Commitments and Letter
of Credit Commitments have terminated and all Obligations have been
indefeasibly paid and performed in full, the Borrower will perform or cause to
be performed the obligations set forth in this Section 7.1.

 

SECTION 7.1.1  Financial
Information, Reports, Notices, etc.  The Borrower will furnish, or will cause to
be furnished, to each Lender, the Issuer and the Administrative Agent copies of
the following financial statements, reports, notices and information:

 

(a)           as soon as available
and in any event within forty-five (45) days after the end of each of the
first three Fiscal Quarters of each Fiscal Year of the Borrower and each
Guarantor, a copy of the quarterly unaudited financial statements for such
Fiscal Quarter for the Borrower and each Guarantor, including therein a balance
sheet of the Borrower and each Guarantor as of the end of such Fiscal Quarter
and a statement of earnings and cash flow of the Borrower and each Guarantor
for such Fiscal Quarter, certified as correct and complete in all material
respects by the Borrower and prepared in accordance with GAAP (subject to
normal year-end audit adjustments and the absence of footnotes);

 

(b)           as soon as available
and in any event within one hundred twenty (120) days after the end of
each Fiscal Year of the Borrower and each Guarantor, as applicable, a copy of
the annual audited financial statements for such Fiscal Year for the Borrower
and each Guarantor including therein a balance sheet of the Borrower and each
Guarantor as of the end of such Fiscal Year and a statement of earnings and
cash flow of the Borrower and each Guarantor for such Fiscal Year, in each case
prepared in accordance with GAAP and as audited by a nationally recognized
independent public accountant acceptable to the Administrative Agent (in each
case, without any Impermissible Qualifications);

 

(c)           as soon as available
and in any event within forty five (45) days after the end of each of the
first three (3) Fiscal Quarters of each Fiscal Year of the Borrower and
each Guarantor, and within one hundred twenty (120) days after the end of
the Fiscal Year of the Borrower and each Guarantor, a Compliance Certificate,
executed by the chief financial or accounting Authorized Representative of each
such Person, showing compliance with its covenants set forth in this Article VII
and, once applicable, a calculation of the Total Debt to EBITDA Ratio and
EBITDA for each such prior Fiscal Quarter;

 

(d)           as soon as possible
and in any event within five (5) Business Days after the occurrence of a
Default under the Loan Documents, a statement of the chief executive, financial
or accounting Authorized Representative of the Borrower setting 

 

75

 

forth
details of such Default or other default, as the case may be, and the action
which such Person has taken and proposes to take with respect thereto;

 

(e)           as soon as possible
and in any event within five (5) Business Days after (x) the
occurrence of any material adverse development with respect to any litigation,
action, proceeding or labor controversy of the type and materiality described
in Item 6.7 of the Disclosure Schedule, or (y) the
commencement of any litigation, action, proceeding or labor controversy of the
type and materiality described in Item 6.7 of the Disclosure Schedule,
notice thereof and, to the extent the Administrative Agent reasonably requests,
copies of all documentation relating thereto;

 

(f)            promptly after the
sending or filing thereof, copies of all material reports, registration
statements and financial statements delivered to any Governmental
Instrumentality;

 

(g)           as soon as possible
and in any event within five (5) Business Days after becoming aware of (v) the
institution of any steps by the Borrower, any Guarantor or any other Person to
terminate any Pension Plan if termination of such plan would reasonably be
expected to result in a liability to the Borrower or any Guarantor in excess of
$250,000, (w) the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under Section 302(f) of
ERISA, (x) the taking of any action with respect to a Pension Plan which
would reasonably be expected to result in the requirement that the Borrower,
any Guarantor or any member of the Borrower’s Controlled Group furnish a bond
or other security to the PBGC or such Pension Plan, (y) the occurrence of
any event with respect to any Pension Plan which would reasonably be expected
to result in the incurrence by the Borrower or any Guarantor of any material
liability, fine or penalty, notice thereof and copies of all documentation
relating thereto or (z) any material increase in the Contingent Liability
of the Borrower or any Guarantor with respect to any post-retirement Welfare
Plan benefit, notice thereof and copies of all documentation relating thereto;

 

(h)           promptly upon
receipt thereof, copies of all detailed management letters submitted to the
Borrower or any Guarantor by the independent public accountants referred to in clause (b) in
connection with each audit made by such accountants of the books of the
Borrower or any Guarantor;

 

(i)            as soon as
possible, and in any event within five (5) days after receipt thereof,
copies of all notices of termination or event of default or notice thereof or
any requests for indemnification of any other party or any other notice
relating to material rights or obligations with respect to the Material Leases
pursuant to the terms thereof;

 

(j)            any change in the
Authorized Representatives of the Borrower or any Guarantor and such notice
shall include a certified specimen signature of any new Authorized
Representative so appointed with respect to such Person and, if requested by
the Administrative Agent, satisfactory evidence of the authority of such new
Authorized Representative;

 

76

 

(k)           the occurrence or
existence of any Environmental Matter requiring notice to a Governmental
Instrumentality or with respect to which notice is received from a Governmental
Instrumentality;

 

(l)            any Event of Loss
or any event or development which could reasonably be expected to have a
Material Adverse Effect;

 

(m)          promptly and in any
event within five (5) days after the receipt thereof, any material notice
received by any of the Borrower, Holdings or Holdings Intermediary from any
Nevada Gaming Authority, including all NGC-1 Reports and all exception reports,
which notice relates to the construction of the Capital Improvement Project,
the operation or maintenance of the Property or any Permit related thereto or
any Equity Interest in any such Person;

 

(n)           if the Borrower
obtains knowledge that one or more Person which owns, directly or indirectly,
any Capital Stock of the Borrower, or any other holder at any time of any direct
or indirect equitable, legal or beneficial interest therein is the subject of
any of the Anti-Terrorism Laws; and

 

(o)           such other
information respecting the condition or operations, financial or otherwise, of
the Borrower as required by the Loan Documents (including information and
reports from the chief accounting or financial Authorized Representative of the
Borrower, in such detail as the Administrative Agent, the Issuer or any Lender
may reasonably request, with respect to the terms of and information provided
pursuant to any Compliance Certificate), the Leases and as the Administrative
Agent, the Issuer or any Lender may from time to time reasonably request.

 

SECTION 7.1.2  Compliance
with Laws, etc.  The Borrower will comply with all applicable
Legal Requirements, including:

 

(a)           the maintenance and
preservation of the corporate or other organizational existence of the
Borrower; and

 

(b)           the payment, before
the same become delinquent, of all Taxes, Impositions, assessments and
governmental charges imposed upon it or upon its property, except to the extent
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves, if any, in accordance with GAAP shall have been set
aside on its books.

 

SECTION 7.1.3  Maintenance
of Property; Operation; Reserves. 
The Borrower will at all times continue to possess good and marketable
fee-simple title to the Property and shall maintain, preserve, protect and keep
the Property, the Improvements and other property owned or leased by it in good
repair, working order and condition (ordinary wear and tear excepted), and make
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.  Unless otherwise properly contested as
permitted under this Agreement, the Borrower shall pay, 

 

77

 

prior
the same becoming delinquent, all non-disputed operating expenses, maintenance
expenses and all other costs and expenses, including Taxes, Impositions and
Insurance Premiums, related to the Property, the Improvements thereon and the
Capital Improvement Project.

 

SECTION 7.1.4  Insurance.  The Borrower shall maintain the insurance in
compliance with the Insurance Requirements and shall comply with the
requirements of such insurance policies.

 

SECTION 7.1.5  Books and
Records.

 

(a)           The Borrower shall
maintain adequate books, accounts and records with respect to the Property, the
Improvements thereon and the Capital Improvement Project in compliance in all
material respects with the regulations of any Governmental Instrumentality
having jurisdiction thereover and, with respect to financial statements, in
accordance with GAAP.  Subject to Nevada
Gaming Laws, the Borrower shall permit employees, agents and accountants of the
Administrative Agent at any reasonable time and upon reasonable prior notice to
inspect the Property, the Improvements thereon and the Capital Improvement
Project, to examine or audit all of the Borrower’s books, accounts and records
pertaining or related to thereto, to make copies and memoranda thereof and,
with respect to any Environmental Matters, to perform any tests or studies and
prepare any reports reasonably required by the Administrative Agent based upon
reasonable cause.

 

(b)           The Borrower shall
prepare all balance sheets, all statements of operations, equity amounts, cash
flow and all other financial information of the Borrower and the Property in
accordance with GAAP consistently applied such that the financial condition of
the Borrower has been fairly presented as at the dates thereof and the results
of its operations for the periods then ended, except that quarterly financial
statements delivered pursuant to Section 7.1.1 need not include
footnote disclosure and may be subject to ordinary year-end adjustment.  All factual information that is made
available to the Administrative Agent, any of the Lenders or the Issuer by or
on behalf of the Borrower or any Guarantor is or shall be, when furnished,
complete and correct in all material respects and shall not, when furnished,
contain any untrue statement of a fact or omit to state a fact necessary in
order to make the statements contained therein not misleading in light of the
circumstances under which such statements are made.  All projections that are made available to
the Administrative Agent, any of the Lenders or the Issuer by or on behalf of
the Borrower shall be prepared in good faith based upon reasonable assumptions.

 

SECTION 7.1.6  Environmental.  The Borrower will:

 

(a)           use and operate the
Property in material compliance with all Environmental Laws, keep all necessary
material permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Substances at the Property and 

 

78

 

with
respect to the Capital Improvement Project in material compliance with all
applicable Environmental Laws;

 

(b)           promptly notify the
Administrative Agent and provide copies upon receipt of all material written
Claims, complaints, notices or inquiries relating to potential liability under
or non-compliance with, Environmental Laws in connection with the Property, and
shall promptly resolve or diligently undertake to resolve any non-compliance
with Environmental Laws and keep its property free of any Lien imposed by any
Environmental Law; and

 

(c)           provide such
information and certifications which the Administrative Agent may reasonably
request from time to time to evidence compliance with this Section 7.1.6;
provided that the Borrower shall not have to pay the cost of any third party
reports requested by the Administrative Agent in connection therewith more than
once during any 180-day period if such request is not based upon a reasonable
belief of a change in status of the Property since the last time any such
reports from third parties were provided.

 

SECTION 7.1.7  Additional
Collateral.  The Borrower shall cause
the Administrative Agent to have at all times a First Priority perfected
security interest in and Lien on (subject only to Permitted Liens) all of the
property (real and personal) owned from time to time by the Borrower to the
extent the same constitutes or would constitute “Security” under the Loan
Documents.  Without limiting the
generality of the foregoing, the Borrower shall execute, deliver and/or file
(as applicable) or cause to be executed, delivered and/or filed (as
applicable), pledge agreement(s), security agreement(s), mortgage(s), Uniform
Commercial Code (Form UCC-1) financing statements, Uniform Commercial Code
termination statements, and other documentation necessary to grant and perfect
such security interest and Lien, in each case in form and substance
satisfactory to the Administrative Agent.

 

SECTION 7.1.8  Use of
Proceeds.  The Borrower shall apply
the proceeds of the Revolving Loans to fund ongoing working capital and other
general corporate purposes of the Borrower and to pay the Capital Improvement
Project Costs which are identified in the Capital Improvement Project Budget to
be paid from the Loans.  The Borrower
shall apply the proceeds of the Delayed Draw Term Loans to pay the Phase II
Project Costs which are identified in the Phase II Project Budget approved in accordance with Section 5.4.3
hereof.  The Borrower shall ensure
that no portion of the Loans will be used, disbursed or distributed for any
purpose, or to any Person, directly or indirectly, in violation of this
Agreement or any Legal Requirement including, without limitation, any of the
Anti-Terrorism Laws and shall take all necessary action to comply with all
Anti-Terrorism Laws with respect thereto.

 

SECTION 7.1.9  Repayment
of Indebtedness.  The Borrower shall
repay all Indebtedness due under the Loan Documents in accordance with the
terms hereof.  In the case of any
Indebtedness of the Borrower under any of the Loan Documents which is not an
Obligation and the repayment of which is limited by any term of such Loan Documents,
the Borrower shall repay such Indebtedness in accordance with such limitation.

 

79

 

SECTION 7.1.10  Compliance
with Legal Requirements.  The
Borrower promptly and diligently shall (x) own, maintain and operate the
Property in compliance with all applicable Legal Requirements, including the
Permits, the Environmental Laws and the Nevada Gaming Laws and (y) procure,
maintain and comply with, or cause to be procured, maintained and complied
with, all Permits required for any ownership, financing, maintenance or
operation of the Property or renovation of the Capital Improvement Project or
any part thereof at or before the time each such Permit becomes necessary
therefor, as contemplated by the Loan Documents, except that the Borrower may,
at its expense, contest by appropriate proceedings conducted in good faith the
validity or application of any such Legal Requirements; provided, however,
that (i) none of the Administrative Agent, the Lenders, the Issuer or the
Borrower would be subject to any criminal liability for failure to comply
therewith and (ii) all proceedings to enforce such Legal Requirements
against the Administrative Agent, the Lenders or the Issuer are effectively
stayed during the entire pendency of such contest.

 

SECTION 7.1.11  Security
Interest in Newly Acquired Property. 
If the Borrower shall at any time acquire any interest in property or
enter into any document or agreement after the Effective Date, relating to the
development, renovation, maintenance or operation of the Property not otherwise
subject to the Lien and security interests created by the applicable Loan
Documents (with the priority contemplated thereby in favor of each Secured
Party), the Borrower shall execute and deliver such Instruments reasonably
satisfactory in form and substance to the Administrative Agent and deliver to
the Administrative Agent, on behalf of the Secured Parties, consents with
respect to the collateral assignment of any such document or agreement, so the
same shall be made subject to the Lien and security interests created by the
applicable Loan Documents (with the priority contemplated thereby in favor of
each Secured Party).

 

SECTION 7.1.12  Proper
Legal Forms.  The Borrower shall take
all action within its control required or advisable to ensure that each of the
Operative Documents is in proper legal form.

 

SECTION 7.1.13  Preserving
the Security.  The Borrower shall
undertake all actions which are necessary or appropriate in the reasonable
judgment of the Administrative Agent and as required by the Nevada Gaming Laws
to (x) maintain the Secured Parties’ respective security interests under
the Loan Documents in the Security in full force and effect at all times
(including the priority thereof) and (y) preserve and protect the Security
and protect and enforce the Borrower’s rights and title and the respective
rights of the Secured Parties to the Security, including the making or delivery
of all filings and recordations, the payments of fees and other charges, the
issuance of supplemental documentation, the discharge of all Claims or other
Liens (other than the Permitted Liens) adversely affecting the respective
rights of the Secured Parties to and under the Security (except to the extent
same is being contested in good faith by appropriate governmental proceedings
promptly instituted and diligently contested, so long as (i) such reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (ii) in case of any charge or Claim
which has or may become a Lien against any of the Security, such contested
proceedings conclusively operate to stay the sale of any portion of the
Security to satisfy

 

80

 

such charge or Claim which has or may become a Lien against any of the
Security, such contested proceedings conclusively operate to stay the sale of
any portion of the Security to satisfy such charge or Claim) and the
publication or other delivery of notice to third parties.

 

SECTION 7.1.14  Event of Loss.  As a material inducement for the Lenders, the
Administrative Agent and the Issuer to enter into this Agreement, if any Event
of Loss shall occur with respect to the Property or the Improvements or any part
thereof, the Borrower shall (x) upon discovery or receipt of notice
thereof, promptly provide written notice thereof to the Administrative Agent, (y) diligently
pursue all of its rights to compensation against all relevant insurers,
reinsurers and/or Governmental Instrumentalities, as applicable, in respect of
such event and (z) not, without consent of the Administrative Agent (which
consent shall not be unreasonably withheld or delayed), compromise or settle
any Claim involving an amount in excess of $2,500,000 per Claim.  Unless such Event of Loss is a Total
Condemnation, the Borrower shall promptly commence and diligently prosecute
Restoration of the Property, the Improvements and the Capital Improvement
Project affected thereby subject to the terms and provisions of Section 7.1.15.  Notwithstanding any Event of Loss, the
Borrower shall continue to make all payments required to be made pursuant to
the Loan Documents in accordance with the terms thereof, the Obligations shall
not be reduced until any Loss Proceeds shall have been actually received and
applied by the Administrative Agent in accordance with Section 7.1.15,
and the Administrative Agent shall not be limited to the interest paid as part
of the Condemnation Proceeds but shall be entitled to receive interest at the
applicable rate provided for herein.

 

SECTION 7.1.15  Application of Loss Proceeds.

 

(a)           All
Insurance Proceeds and Condemnation Proceeds (collectively, “Loss Proceeds”) relating to the Property, the Improvements
and the Capital Improvement Project are hereby assigned to the Administrative
Agent and shall be applied as provided in this clause (a).  All Loss Proceeds in excess of $10,000,000
shall be paid by the insurers, reinsurers, Governmental Instrumentalities or
other payors directly to the Administrative Agent for deposit in an account
(the “Loss Proceeds Account”) which will be
established by the Borrower and the Administrative Agent after the occurrence
of an Event of Loss (and, prior to the occurrence of an Event of Default, as to
which the Borrower shall have direct access); such Loss Proceeds shall be
disbursed in accordance with the terms hereof. 
If any such Loss Proceeds in excess of $10,000,000 are paid directly to
the Borrower or any other Person by any insurer, reinsurer, Governmental
Instrumentality or such other payor, (x) such Loss Proceeds shall be
received in trust for the Administrative Agent, (y) such Loss Proceeds
shall be segregated from other funds of the Borrower or such other Person and (z) the
Borrower shall deposit (or, if applicable, the Borrower shall cause such other
Person to pay) such Loss Proceeds into the Loss Proceeds Account.  In the event the Loss Proceeds are
$10,000,000 or less, the Borrower shall be entitled to receive the Loss
Proceeds directly and apply such Loss Proceeds to restoration in accordance
with this Section 7.1.15.

 

(b)           The
Administrative Agent may participate in any action, suit or proceeding relating
to any such proceeds, causes of action, claims, compensation, awards 

 

81

 

or recoveries, and the Borrower shall, from time to time, deliver to
the Administrative Agent any instrument required to permit such participation
or further evidence such Claim.

 

(c)           Subject
to all Legal Requirements applicable to the Property, the Improvements and the
Capital Improvement Project, other than with respect to a Total Condemnation,
the Administrative Agent shall make Loss Proceeds available to the Borrower for
the Restoration of an Event of Loss, provided that each of the following
conditions are met:

 

(i)            no
Default shall have occurred and be continuing; provided, however,
that if a Default that is not an Event of Default exists during such time as
Loss Proceeds are in the Loss Proceeds Account, all Loss Proceeds shall remain
in the Loss Proceeds Account and shall be available for the Restoration if such
Default is cured prior to the expiration of any applicable cure period (but not
thereafter and clause (k) of this Section 7.1.15 shall
apply);

 

(ii)           the
Borrower promptly commences Restoration and diligently continues same through
completion;

 

(iii)          Restoration
is being completed in accordance with all applicable Legal Requirements;

 

(iv)          the
quality and character of the Property, the Improvements and the Capital
Improvement Project after Restoration shall be at least comparable, in the
reasonable judgment of the Administrative Agent, to the quality and character
of the Property, the Improvements and the Capital Improvement Project
immediately prior to such casualty or Partial Condemnation;

 

(v)           the
Borrower delivers to the Administrative Agent a written undertaking that it
will expeditiously commence and satisfactorily complete Restoration with due
diligence in accordance with the terms of this Agreement; and

 

(vi)          the
Borrower delivers to the Administrative Agent evidence that the Loss Proceeds,
together with any Loss Proceeds Deficiency, are sufficient to cover all costs
of the Restoration.

 

In the event any of the foregoing conditions are not
satisfied at any time or if the Event of Loss is a Total Condemnation, the
disbursement of Loss Proceeds shall be made in accordance with clause (k) of
this Section 7.1.15.

 

(d)           The
Loss Proceeds (in excess of $10,000,000) shall be held in the Loss Proceeds
Account and shall be pledged to the Administrative Agent, and until disbursed
in accordance with the provisions of this Section 7.1.15, shall
constitute additional security for repayment of the Loans.  Loss Proceeds in the Loss Proceeds Account
may be invested in Cash Equivalent Investments in accordance with the agreement
covering 

 

82

 

the Loss Proceeds Account. 
Subject to clause (c) of this Section 7.1.15,
the Loss Proceeds shall be disbursed by the Administrative Agent to the
Borrower from time to time during the course of Restoration, upon receipt of
evidence satisfactory to the Administrative Agent, providing that all materials
installed and Work and labor performed in connection with the Restoration have
either been paid for or are to be paid for out of the requested disbursement.

 

(e)           Subject
to applicable Legal Requirements, in no event shall the Administrative Agent be
obligated to make disbursements of Loss Proceeds in excess of an amount equal
to the costs actually incurred from time to time for Work in place as part of
the Restoration, minus the Retainage Amount.  The final advance of Retainage Amount shall
not be made until (A) ten (10) Business Days after the Administrative
Agent has received reasonably satisfactory evidence that (y) the
Restoration has been completed in accordance with the provisions of this Section 7.1.15
and (z) all Permits necessary for the re-occupancy and use of the Property
have been obtained from all appropriate Governmental Instrumentalities, (B) the
Administrative Agent receives evidence satisfactory to it that the costs of the
Restoration have been paid in full in cash or will be paid in full out of the
Retainage Amount, and (C) the Administrative Agent receives and approves
an endorsement to the Title Policy insuring that the First Priority of the Lien
of the Deed of Trust has not changed.

 

(f)            The
Administrative Agent shall not be obligated to make disbursements of the Loss
Proceeds more frequently than twice in any calendar month.

 

(g)           If
at any time the Loss Proceeds or the undisbursed balance thereof shall not be
sufficient to pay the balance of the total costs to be incurred in connection
with the completion of the Restoration, the Borrower shall promptly deposit
with the Administrative Agent cash or Cash Equivalent Investments in an amount
equal to the deficiency (the “Loss Proceeds Deficiency”)
before any further disbursement of the Loss Proceeds shall be made; provided,
however, in the event that the Financial Covenant Commencement Date has
commenced and Borrower is otherwise in compliance with such covenants, then
Borrower may, in accordance with Section 2.3 and Section 5.3
hereof, request that Revolving Loans, in an amount not to exceed the then
available Revolving Loan Commitment, be made by the Revolving Lenders for
completion of the Restoration, after the utilization of the Loss Proceeds.  The Loss Proceeds Deficiency deposited with
the Administrative Agent shall be held by the Administrative Agent and shall be
disbursed for costs actually incurred in connection with the Restoration on the
same conditions applicable to the disbursement of the Loss Proceeds, and until
so disbursed pursuant to this Section shall constitute additional security
for the Obligations.

 

(h)           Provided
no Default shall have occurred and be continuing, if at any time the Loss
Proceeds, together with any Loss Proceeds Deficiency, or the undisbursed
balance thereof, shall be in excess of the balance of the total costs to be
incurred in connection with the completion of the Restoration, the
Administrative Agent shall pay such excess to the Borrower; provided, however,
that if a Default shall have occurred and be continuing, the Administrative
Agent shall continue to hold such excess and shall 

 

83

 

deliver same to the Borrower in accordance with this Section if
such Default is cured prior to the expiration of any applicable cure
period.  No payment made to the Borrower
pursuant to this Section shall in any event prevent the Administrative
Agent from requiring the Borrower to make further Loss Proceeds Deficiency
deposits in the event same shall be required pursuant to clause (g) of
this Section 7.1.15.

 

(i)            So
long as no Default has occurred and is continuing, any excess of Loss Proceeds
(together with any earnings thereon) and the remaining balance, if any, of the
Loss Proceeds Deficiency deposited with the Administrative Agent (together with
any earning thereon) shall be remitted by the Administrative Agent to the
Borrower after the Administrative Agent receives reasonably satisfactory
evidence that Restoration has been substantially completed in accordance with
the provisions of this Section and the receipt by the Administrative Agent
of evidence satisfactory to the Administrative Agent that all costs incurred in
connection with Restoration have been paid in full or are being contested as
permitted under Section 7.1.13.

 

(j)            If
the Property or the Improvements (or any portion thereof) are sold, through
foreclosure or otherwise, prior to the receipt by the Administrative Agent of
the Insurance Proceeds or Condemnation Proceeds (as applicable), the
Administrative Agent shall have the right, whether or not a deficiency judgment
shall have been sought, recovered or denied, to receive such Insurance Proceeds
or Condemnation Proceeds (as applicable), or the portion thereof sufficient to
pay the Obligations.

 

(k)           Subject
to all Legal Requirements applicable to the Property, the Improvements and the
Capital Improvement Project, all Loss Proceeds (together with any earnings
thereon) not required (i) to be made available for the Restoration, or (ii) to
be returned to the Borrower as excess Loss Proceeds pursuant to clauses (h) or
(i) of this Section 7.1.15, may be retained and applied
by the Administrative Agent toward the payment of the Obligations, whether or
not then due and payable or, at the discretion of the Administrative Agent, the
same may be paid, either in whole or in part, to the Borrower.  If the Administrative Agent shall receive and
retain Loss Proceeds, the Lien of the Deed of Trust shall be reduced only by
the amount thereof actually applied by the Administrative Agent in reduction of
the principal amount of the Loans.

 

SECTION 7.1.16  Interest Reserve Account.  On the Effective Date, the Interest Reserve
shall be funded from the proceeds of the Required Preferred Rights Offering in
an amount equal to $5,000,000, and thereafter in accordance with Section 5.4.5
hereof.  During the twenty-four (24)
month period following the Effective Date, the Borrower shall deliver a written
notice to the Administrative Agent at least three (3) Business Days prior
to each Quarterly Payment Date requesting disbursements from the Interest
Reserve in order to pay all interest payable or accrued from time to time under
any of the Loan Documents due from the Borrower and to pay other fees, costs
and charges permitted under Section 3.4 hereof with respect to the
current Fiscal Quarter.  Upon such
written request of the Borrower, the Administrative Agent shall direct the
Account Bank to disburse the amount requested by the Borrower for such payments
to the Administrative Agent in accordance with the Loan Documents.  In the event that the Borrower does not make
such written request or otherwise 

 

84

 

make such required payments (interest or otherwise) in accordance with
the Loan Documents, the Administrative Agent shall be permitted to unilaterally
instruct the Account Bank to make the appropriate disbursement to the
Administrative Agent for such required payments (interest or otherwise) and
such amounts shall be disbursed to the Administrative Agent from the Interest
Reserve.  The Administrative Agent shall
not be obligated to make any disbursement for such required payments (interest
or otherwise) from and after the date which is twenty-four (24) months after
the Effective Date.  Each written notice
delivered by the Borrower pursuant to this Section 7.1.16 shall
specify the amount and the date on which such required payments (interest or
otherwise) will become due and payable and if the Borrower fails to set forth
such information, then, the Administrative Agent may revise the written notice
to provide the correct information for such payments from the Interest Reserve. 
Provided that (i) no Default has occurred and is continuing, (ii) the
Borrower is in compliance with all covenants contained in Section 7.2.18
hereof, the Administrative Agent shall (y) instruct the Account Bank to release
the remaining amounts in the Interest Reserve to the Borrower at the end of the eighteen (18) month
period following the Effective Date so long as the EBITDA at the end of
such eighteen (18) month period following is equal to or greater than
$10,000,000 and (z) instruct the
Account Bank to release any remaining amounts in the Interest Reserve to
the Borrower at the end of the
twenty-four (24) month period following the Effective Date.

 

SECTION 7.1.17  Compliance with Capital Improvement Project Documents and Other
Agreements.  The Borrower shall
comply duly and promptly with its obligations under all Capital Improvement Project Documents where the failure
to comply would result in a Material Adverse Effect.

 

SECTION 7.1.18  ERISA Compliance.  The Borrower and each member of the
Controlled Group shall fulfill their obligations (if any) under the minimum
funding standards of ERISA and the Code for each ERISA Plan in accordance with
the currently applicable provisions of ERISA and the Code and shall not incur any
liability to the PBGC or an ERISA Plan under Title IV of ERISA (other than
liability for premiums due in the ordinary course).

 

SECTION 7.1.19  Licenses and Permits.  The Borrower shall ensure that all material
Permits, Gaming Licenses (from and after the date that the Borrower obtains all
such Gaming Licenses from the applicable Nevada Gaming Authorities) and
consents and similar rights required from any Governmental Instrumentality for
the ownership, use and operation of the Property and renovation of the Capital
Improvement Project are issued as required and, after issuance, are in full
force and effect and shall comply with all of the provisions thereof applicable
to it.

 

SECTION 7.1.20  Diligent Construction of the
Capital Improvement Project. 
The Borrower shall diligently construct the Phase I Project, and in the
event the Borrower draws on the Delayed Draw Term Loan, the Phase II Project.

 

85

 

SECTION 7.1.21  Leases.

 

(a)           The
Borrower shall at all times promptly and faithfully perform, or cause to be
performed, in all material respects all of the covenants, conditions and
agreements contained in all Leases, now or hereafter existing, on the part of
the landlord, lessor or licensor thereunder to be kept and performed.  The Borrower, at no cost or expense to the
Administrative Agent, shall use commercially reasonable efforts to enforce,
short of termination or litigation, the performance and observance of each and
every material condition and covenant of each of the other parties under each
Lease where, in the Borrower’s judgment, it is economically practicable and
otherwise desirable to do so.

 

(b)           Each
Lease executed after the date hereof shall state that such Lease and the
leasehold estate created thereby are subject and subordinate to the Deed of
Trust and the Assignment of Leases and Rents.

 

SECTION 7.1.22  Gaming Lease.  The Borrower shall at all times promptly and
faithfully perform, or cause to be performed, in all material respects all of
the covenants, conditions and agreements contained in the Gaming Lease, now or
hereafter existing, on the part of the Borrower thereunder to be kept and
performed.  The Borrower, at no cost or
expense to the Administrative Agent, shall enforce, short of termination or
litigation, the performance and observance of each and every material condition
and covenant of the Gaming Tenant under the Gaming Lease where, in the Borrower’s
judgment, it is economically practicable to do so.

 

SECTION 7.1.23  Key Person Management Agreement.  The Borrower shall at all times promptly and
faithfully perform, or cause to be performed, in all material respects all of
the covenants, conditions and agreements contained in the Key Person Management
Agreement, now or hereafter existing, on the part of the Borrower thereunder to
be kept and performed.  The Borrower, at
no cost or expense to the Administrative Agent, shall enforce, short of
termination or litigation, the performance and observance of each and every
material condition and covenant of the Key Person Manager under the Key Person
Management Agreement where, in the Borrower’s judgment, it is economically
practicable to do so

 

SECTION 7.1.24  Property Management Agreement.  The Borrower shall enter into the Property
Management Agreement concurrently with the Borrower obtaining all necessary
Gaming Licenses from the applicable Nevada Gaming Authorities.  From and after the date on which the Borrower
enters into Property Management Agreement, the Borrower shall at all times
promptly and faithfully perform, or cause to be performed, in all material
respects all of the covenants, conditions and agreements contained in the in
the Property Management Agreement on the part of the Borrower thereunder to be
kept and performed.  The Borrower, at no
cost or expense to the Administrative Agent, shall enforce, short of
termination or litigation, the performance and observance of each and every
material condition and covenant of the Property Manager under the Property
Management Agreement where, in the Borrower’s judgment, it is economically
practicable to do so.

 

SECTION 7.1.25  Property Management Assignment and
Subordination Agreement. 
Concurrently with the Borrower obtaining all necessary Gaming Licenses
from the applicable Nevada Gaming Authorities and entering into the Property
Management Agreement pursuant to 

 

86

 

Section 7.1.24, the Borrower shall enter
into the Property Management Assignment and Subordination Agreement with the
Property Manager and the Administrative Agent.

 

SECTION 7.1.26  Security Interest in Trademark.  Promptly upon obtaining an interest in the
trademark, disclosed in Item 6.7 of the Disclosure Schedules,
that is the subject of that certain
civil action now pending in the District Court for Clark County, Nevada, Case No. A09595469-B,
and in particular the adverse claim of ownership of certain trademarks
(including “Trop” and “Tropicana”) asserted therein, execute and deliver
such Instruments reasonably satisfactory in form and substance to the
Administrative Agent, on behalf of the Secured Parties, subjecting the same to
the Lien and security interests created by the applicable Loan Documents (with
the priority contemplated thereby in favor of each Secured Party).

 

SECTION 7.2  Negative Covenants.  The Borrower agrees with the Administrative
Agent, the Issuer and each Lender that, until all Loan Commitments and Letter
of Credit Commitments have terminated and all Obligations have been
indefeasibly paid and performed in full, the Borrower will perform the
obligations set forth in this Section 7.2.

 

SECTION 7.2.1  Business Activities.  The Borrower will not engage in any business
activity, except the ownership and operation of the Property and construction
of the Capital Improvement Project and such activities as are reasonably
incidental thereto.

 

SECTION 7.2.2  Indebtedness.  The Borrower will not directly or indirectly,
create, incur, assume or suffer to exist or otherwise become or be liable in
respect of any Indebtedness, other than Indebtedness in respect of the Loans,
the other Obligations, the New Preferred Stock on the Effective Date and Cash
Contributions to Capital, except:

 

(a)           Indebtedness
outstanding on the date hereof and identified in Item 7.2.2 on the Disclosure
Schedule and any refinancing, refunding, renewals or extensions thereof
(including refinancing of any fees and premiums incurred in connection
therewith;

 

(b)           letters
of credit, surety bonds and other similar forms of credit enhancement incurred
in the ordinary course of business in an amount not to exceed $1,000,000;

 

(c)           Indebtedness
with respect to Capitalized Lease Liabilities; and

 

(d)           other
Indebtedness at any time outstanding in an aggregate principal amount not to
exceed $3,000,000.

 

SECTION 7.2.3  Liens. 
The Borrower will not create, incur, assume or suffer to exist any Lien
upon any of its property, revenues or assets, whether now owned or hereafter
acquired, or any proceeds, income or profits therefrom, or assign or convey any
right to receive income therefrom, excluding, however,

 

(a)           Liens
securing (x) the Obligations and (y) Permitted Liens;

 

87

 

(b)           Liens
existing on the date hereof and identified in Item 7.2.3 on the Disclosure
Schedule and any renewals or extensions thereof;

 

(c)           Liens
in connection with Capitalized Lease Liabilities; and

 

(d)           Liens
on property acquired or constructed by Borrower and in the proceeds thereof,
that (i) were in existence at the time of the acquisition or construction,
and (ii) secure only the unpaid portion of the acquisition or construction
price for such property, or monies borrowed that were used to pay such
acquisition or construction price.

 

SECTION 7.2.4  Investments.  The Borrower will not make, incur, assume or suffer
to exist any Investment in any other Person, except:

 

(a)           Ongoing
Investments;

 

(b)           Cash
Equivalent Investments;

 

(c)           Joint
Ventures pursuant to which the Borrower shall not invest more than $2,000,000
in any Fiscal Year; and

 

(d)           Investments
constituting (x) accounts receivable arising, (y) trade debt granted
or (z) deposits made in connection with the purchase price of goods or
services, in each case in the ordinary course of business;

 

provided, however, that no Investment otherwise
permitted by clauses (c) and (d) shall be
permitted to be made if any Default has occurred and is continuing or would
result therefrom.

 

SECTION 7.2.5  Restricted Payments, etc. 
On and at all times after the date hereof the Borrower will not

 

(a)           declare,
pay or make any cash dividend or cash distribution on any Equity Interests (now
or hereafter outstanding) of the Borrower or on any warrants, options or other
rights with respect to any shares of any Equity Interests (now or hereafter
outstanding) of the Borrower, or apply any of its funds to the purchase,
redemption, sinking fund or other retirement of any shares of any Equity
Interests (now or hereafter outstanding) of the Borrower, or warrants, options
or other rights with respect to any shares of any Equity Interests (now or
hereafter outstanding) of the Borrower (the foregoing prohibited acts being
herein collectively referred to as “Restricted Payments”); provided,
however, from and after the Financial Covenant Commencement Date, so
long as no Event of Default has occurred and is continuing or would result
therefrom, the Borrower shall be permitted to make Restricted Payments to its
equity holders; or

 

(b)           make
any payment or prepayment of principal of, or make any payment of interest on,
any subordinated debt on any day other than the stated, scheduled maturity date
for subordinated debt as set forth in the documents and Instruments
memorializing 

 

88

 

such subordinated debt, or which would violate the subordination provisions
of such subordinated debt or redeem, purchase or defease any subordinated debt
or make any payment for purposes of funding any of the foregoing.

 

SECTION 7.2.6  Rental Obligations.  The Borrower will not enter into at any time
any arrangement which involves the leasing by the Borrower from any lessor of
any Real Property (or any interest therein) except for leases of Real Property
entered into in the ordinary course of business, provided that the aggregate
annual rental for all such Real Property leases does not exceed $500,000.

 

SECTION 7.2.7  Take or Pay Contracts.  The Borrower will not enter into or be a
party to any arrangement for the purchase of materials, supplies, other
property or services if such arrangement by its express terms requires that
payment be made by the Borrower or such other Person regardless of whether such
materials, supplies, other property or services are in fact or can be required
to be delivered or furnished to it.

 

SECTION 7.2.8  Consolidation, Merger, etc. 
The Borrower will not liquidate or dissolve, consolidate with, or merge
into or with any other Person. 
Furthermore, the Borrower may create direct or indirect Subsidiaries
provided that each such Subsidiary enters into a joinder agreement to the
Guaranty to become a Subsidiary Guarantor thereunder, such joinder agreement to
be in form and substance satisfactory to the Administrative Agent; provided,
however, the Borrower may, without the consent of the Administrative
Agent but with ten (10) Business Days’ prior written notice to the
Administrative Agent but subject to the limitations contained in clause (c) of
Section 7.2.4, form a Joint Venture and such Joint Venture (or a
Subsidiary if the Borrower has formed a Subsidiary for purposes of holding the
Borrower’s interest in such Joint Venture) shall not be required to become a
Guarantor hereunder and the equity interest of such Joint Venture or
Subsidiary, as applicable, which is owned by Borrower shall not be required to
be pledged hereunder.

 

SECTION 7.2.9  Restrictions on Dispositions.  Neither the Borrower nor any of the
Subsidiary Guarantors shall, issue, sell, transfer, lease, contribute or
otherwise convey (including by way of merger), or grant options, warrants or
other rights with respect to, any of its or their assets (including accounts
receivable and Capital Stock) to any Person, except in connection with Cash
Contributions to Capital; provided,
however, that the Borrower and its Subsidiary
Guarantors may (x) make dispositions in the ordinary course of its business,
and (y) dispose of obsolete, worn out or surplus assets or assets no
longer used or useful in its the business, so long as (A) such disposition
does not materially and adversely affect the ability of the Borrower to own and
operate the Property in accordance with the Loan Documents and (B) the net
proceeds thereof, with respect to the property described in clause (y),
are either used to fund other property of utility to the Borrower or, if such
funds have not otherwise been used to fund replacement assets, are delivered to
the Administrative Agent to be applied against the Loans in accordance with Section 3.1.2. 
Each disposition set forth in the proviso of this Section 7.2.9 shall constitute a “Permitted Asset Sale”.

 

89

 

SECTION 7.2.10  Modification of Certain
Agreements.

 

(a)           The
Borrower will not directly or indirectly, enter into, amend, modify, terminate,
supplement or waive a right under or permit or consent to the amendment,
modification, termination, supplement or waiver of any of the provisions of, or
grant any consent under:

 

(i)            the
Phase I Project Budget, the effect of which would modify or amend the Phase I Project
Costs by more than $20,000,000;

 

(ii)           the
Phase II Project Budget, the effect of which would modify or amend the Phase II
Project Costs by more than $10,000,000;

 

(iii)          the
zoning classification of the Property or the Improvements or any portion
thereof, the effect of which could reasonably be expected to have a Material
Adverse Effect; or

 

(iv)          the
Organizational Documents of the Borrower, except as may be required in
connection with the Required Preferred Rights Offering.

 

(b)           Following
an Event of Default under Section 8.1.1 or Section 8.1.9
hereof, or an acceleration of the Loans pursuant to Section 8.3
hereof, the Borrower will not, without, in each case, obtaining the
Administrative Agent’s prior written consent in its reasonable discretion,
directly or indirectly, enter into, amend, modify, terminate, supplement or
waive a right under or permit or consent to the amendment, modification,
termination, supplement or waiver of any of the provisions of, or grant any
consent under:

 

(i)            the
Gaming Lease;

 

(ii)           the
Key Person Management Agreement;

 

(iii)          from
and after the date of its effectiveness, the Property Management Agreement; or

 

(iv)          from
and after the date of its effectiveness, the Phase II Club Management
Agreement.

 

SECTION 7.2.11  Transactions with Affiliates.  Except as disclosed in the Capital
Improvement Project Budget or identified in Item 7.2.11 on the Disclosure
Schedule, the Borrower will not sell, lease, transfer or otherwise dispose
of any of its Real Property or assets to, or purchase any property or assets
from, or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an “Affiliate Transaction”) without
the prior written approval of the Administrative Agent which approval will not
be unreasonably withheld or delayed. 
Notwithstanding anything to the contrary contained herein, the Borrower
shall be: (i) permitted to enter into any Affiliate Transaction with
respect to the construction, operation and management of the Capital
Improvement Project if such Affiliate Transaction (x) is on terms that are
no less favorable to the Borrower than those that would

 

90

 

have been obtained in a comparable transaction by the Borrower with an
unrelated Person of commensurate skill and who provide the Borrower with the
same level of services being provided by the Affiliate, (y) is subject and
subordinate in all respects to the Loans and the Loan Documents and (z) can
be terminated by the Administrative Agent without premium or penalty after the
occurrence of a Default; and (ii) permitted to enter into the Property
Management Agreement upon (a) receipt of all necessary approvals from the
relevant Governmental Instrumentalities and (b) the Administrative Agent’s
review and approval of the Property Management Agreement, such approval not to
be unreasonably withheld, conditioned or delayed.

 

SECTION 7.2.12  Negative Pledges, Restrictive Agreements,
etc.  The Borrower will not enter into any
agreement (excluding, however, this Agreement and any other Loan
Document) governing any Indebtedness prohibiting

 

(a)           the creation or
assumption of any Lien upon its Real Property, revenues or assets, whether now
owned or hereafter acquired; or

 

(b)           the ability of
the Borrower to amend or otherwise modify any Loan Document.

 

SECTION 7.2.13  Sale and Leaseback.  The Borrower will not enter into any
agreement or arrangement with any other Person providing for the leasing by the
Borrower of Real Property or personal property which has been or is to be sold
or transferred by the Borrower to such other Person or to any other Person to
whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of the Borrower.

 

SECTION 7.2.14  Hazardous Substances.  Neither the Borrower nor any Guarantor shall
release, emit or discharge into the environment any Hazardous Substances in
violation of any Environmental Law, Legal Requirement or Permit.

 

SECTION 7.2.15  No Other Powers of Attorney. 
The Borrower shall not execute or deliver any (i) powers of
attorney or (ii) any documents, instruments or agreements (other than the
Loan Documents) if the execution of such powers of attorney, documents,
instruments or agreements would result in or a cause a Default hereunder.

 

SECTION 7.2.16  Agent for Service of Process. 
Other than the Process Agent as designated in Section 10.15
hereof, the Borrower shall not designate any process agent to receive,
on the Borrower’s behalf and on behalf of the Borrower’s property, service of
copies of the summons and complaint and any other process which may be served
in any action or proceeding relating to the Transaction without the prior
written consent of the Administrative Agent.

 

SECTION 7.2.17  Anti-Terrorism Laws.  Neither the Borrower nor any Guarantor shall (i) conduct
any business or engage in any transaction or dealing with any Blocked Person,
including the making or receiving any contribution of funds, goods or services
to or 

 

91

 

for the benefit of any Blocked Person; (ii) deal in, or otherwise
engage in any transaction relating to, any property or interests in property
blocked pursuant to Executive Order No. 13224; (iii) engage in on
conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, (A) any of the
prohibitions set forth in Executive Order No. 13224 or the USA Patriot
Act, or (B) any prohibitions set forth in the rules or regulations
issued by OFAC or any sanctions against targeted foreign countries, terrorism
sponsoring organizations, and international narcotics traffickers based on U.S.
foreign policy. The Borrower shall deliver, and shall cause each Guarantor to
deliver, as applicable, to the Administrative Agent, the Issuer and the Lenders
any certification or other evidence requested from time to time by the
Administrative Agent, the Issuer and any Lender confirming compliance with this
Section 7.2.17.

 

SECTION 7.2.18  Financial
Covenants.

 

(a)           From and after
the Effective Date, the Borrower shall not permit (i) the cash on hand
with respect to gaming operations at the Property to be at any time less than
the amounts required to comply with the minimum casino bankroll requirements
set forth in the Nevada Gaming Laws and (ii) all other cash on hand with
respect to the Property plus the amount of undrawn Loan Commitments available
to the Borrower to be less than $2,000,000.

 

(b)           On the last day
of the sixteenth (16th) month
following the Effective Date, the Borrower shall present to the Administrative
Agent its good faith projections, calculated with such detail as the
Administrative Agent may reasonably request, of the (i) Total Debt to
EBITDA Ratio and (ii) EBITDA (collectively, the “Baseline
Financial Projections”) expected for the Property during the thirty
(30) month period commencing on the last day of the eighteenth (18th) month following the Effective
Date (the “Financial Covenant Commencement Date”).  For purposes of this Section 7.2.18(b),
the “Total Debt” in the Total Debt to EBITDA Ratio shall include all
Indebtedness the Borrower may incur under the Loans.  Such Baseline Financial Projections shall be
used by the Administrative Agent to establish the required Total Debt to EBITDA
Ratio and required EBITDA financial covenants that the Borrower shall maintain,
which financial covenants shall be established with a minimum variance of
twenty percent (20%) of the Baseline Financial Projections (such that the
Borrower may miss its Baseline Financial Projections by twenty percent (20%)
but still be in compliance with the financial covenants), from and after the
Financial Covenant Commencement Date for (i) Total Debt to EBITDA Ratio
and (ii) EBITDA, provided, however, that in the event the
Borrower does not meet the required minimum financial covenants for the Total
Debt to EBITDA Ratio or EBITDA, the Borrower or the Guarantors shall be
entitled to cure such failure to meet either financial covenant by performing
the following (a) within five (5) Business Days after the Borrower or
any Guarantor has Knowledge that any such failure has occurred or (b) on
or before the date that a Compliance Certificate indicating that any such
failure has occurred is delivered pursuant to clause (c) of Section 7.1.1
hereof: (i) in the case of a failure to meet the minimum Total Debt to
EBITDA Ratio, by making a prepayment of the Loans in an amount required to
reduce the Total Debt such as to cause compliance with the minimum Total Debt
to EBITDA Ratio or by depositing into a 

 

92

 

controlled account to be held with the Account Bank as collateral
security for the Obligations an amount equal to the difference between the
actual EBITDA and the amount of EBITDA required to cause compliance with the
minimum Total Debt to EBITDA Ratio or (ii) in the case of a failure to
meet minimum EBITDA, by making a prepayment of the Loans in an amount equal to
the difference between the required minimum EBITDA and the actual EBITDA (the “EBITDA Shortfall”) or by depositing into a controlled
account to be held with the Account Bank as collateral security for the
Obligations an amount equal to the EBITDA Shortfall.

 

(c)           In the event
that the Borrower shall elect to cure a breach of either the Total Debt to
EBITDA Ratio requirement or the minimum EBITDA requirement by depositing into a
controlled account with the Account Bank the amounts required pursuant to clause
(b) above and the Borrower shall thereafter satisfy the applicable
financial covenant for which such deposits were made for two (2) consecutive
Fiscal Quarters (in each case, without giving effect to any amounts then on
deposit in the controlled account held with the Account Bank referenced in item
(i) or item (ii) of clause (b) above) then the
Borrower shall be entitled to receive a disbursement of the amounts then on
deposit in such controlled account within ten (10) Business Days after receipt
by the Administrative Agent of the Borrower’s Compliance Certificate required
by clause (c) of Section 7.1.1 together with a written
request by the Borrower for the disbursement of such sums.

 

(d)           The Borrower
agrees to execute any and all documents, certificates and/or instruments to (i) evidence
the establishment of such minimum thresholds required by clause (a) above,
including without limitation, an amendment to this Agreement and (ii) in
the event that the Borrower shall elect to cure a breach of either the Total
Debt to EBITDA Ratio requirement or the minimum EBITDA requirement by
depositing with the Account Bank the amounts required pursuant to clause (b) above,
grant to the Administrative Agent, for its benefit and the benefit of the
Secured Parties, (x) a perfected First Priority continuing security
interest in each such account and all funds from time to time on deposit in
each such account and (y) sole dominion and control over each such account
and all funds from time to time on deposit in each such account.

 

SECTION 7.2.19  Management Agreement and Management
Services Agreement.  Except for the
Gaming Lease, the Property Management Agreement, the Key Person Management
Agreement and the Phase II Club Management Agreement, following an Event of
Default under Section 8.1.1 or Section 8.1.9 hereof or
an acceleration of the Loans pursuant to Section 8.3 hereof, the
Borrower shall not enter into or be a party to any management contract,
management services agreement, advisor agreement, any agreement covering
FF&E or any other contract material to the operation and management of the
Property without the prior written approval of the Administrative Agent
exercised in its reasonable discretion.

 

SECTION 7.3  Post-Licensing Covenants.  Upon the Borrower obtaining all Gaming
Licenses necessary for it to operate the Property in accordance with all
applicable Legal 

 

93

 

Requirements, as issued by
the applicable Nevada Gaming Authorities (the “Licensing
Date”), the Borrower shall perform the following obligations:

 

SECTION 7.3.1  Gaming Licenses.  Within ten (10) days
after the Licensing Date, the Borrower shall deliver to the Administrative
Agent copies of all Gaming Licenses issued to it by the Nevada Gaming Authorities
certified by an Authorized Representative of the Borrower to be true and
correct copies, or such other evidence reasonably satisfactory to the
Administrative Agent confirming the Borrower’s obtaining such necessary Gaming
Licenses.  For purposes of this Section 7.3.1,
the Administrative Agent acknowledges that the opinion of counsel to be
delivered pursuant to Section 7.3.4 and confirming the issuance of
such Gaming Licenses shall be reasonably satisfactory evidence.

 

SECTION 7.3.2  Property Management Agreement. 
Within ten (10) days after the Licensing Date, the Borrower shall
have delivered to the Administrative Agent a certified copy of the Property
Management Agreement duly executed by an Authorized Representative of the
Borrower and the Property Manager in accordance with Section 7.1.24.

 

SECTION 7.3.3  Property Manager’s Organizational
Documents.  Within ten (10) days
after the Licensing Date, the Borrower shall have delivered to the
Administrative Agent (i) copies of all Organizational Documents of the
Property Manager and (ii) a copy of a good standing certificate of the
Property Manager from the Property Manager’s state
of organization dated within ten (10) days of the Borrower
obtaining such Gaming Licenses.

 

SECTION 7.3.4  Order of Registration.  Borrower shall deliver to the Administrative
Agent a copy of a signed Order of Registration for Holdings entered by the
Nevada Gaming Authority, together with any other evidence of final approvals
given by the Nevada Gaming Authority if not contained or described in such
Order of Registration, of the pledge of the Capital Stock of both Holdings
Intermediary and Borrower pursuant to the Pledge Agreement, as well as
approvals of the negative covenants set forth in Sections 7.2.3 and 7.2.9
of this Agreement.

 

SECTION 7.3.5  Opinion from Borrower’s Gaming Counsel. 
Within thirty (30) days after the Licensing Date, the Borrower shall
have delivered to the Administrative Agent a legal opinion from the Borrower’s
Nevada counsel with respect to the Gaming Licenses held by the Borrower and
each other Person licensed in connection with the operation of the Property,
each dated as of the Licensing Date and addressed to the Secured Parties, which
shall be in form and substance satisfactory to the Administrative Agent.  Borrower’s Nevada counsel shall attach a copy
of the Order of Registration relating to the Borrower’s Gaming Licenses, to the
extent a copy is made available by the applicable Nevada Gaming Authority.

 

ARTICLE
VIII

EVENTS OF DEFAULT

 

SECTION 8.1  Listing of Events of Default.  Each of the following events or occurrences
described in this Section 8.1 shall constitute an “Event of Default”.

 

94

 

SECTION 8.1.1  Non-Payment of Obligations.  The Borrower shall default in the payment or
prepayment when due of

 

(a)           any principal
of or interest on any Loan, and, with respect to any Default in the payment of
interest, such Default shall continue unremedied for a period of five (5) Business
Days;

 

(b)           any Letter of
Credit Reimbursement Obligation, and such Default shall continue unremedied for
a period of five (5) Business Days; or

 

(c)           any fee
described in Section 3.3 or of any other Obligation and such
Default shall continue unremedied for a period of five (5) Business Days
after notice thereof.

 

SECTION 8.1.2  Breach of Warranty.  Any representation or warranty of the
Borrower or any Guarantor made herein or in any other Loan Document or any
other writing or certificate furnished by or on behalf of the Borrower or any
Guarantor to the Administrative Agent, the Issuer or any Lender for the
purposes of or in connection any Loan Document (including any certificates
delivered pursuant to Article VI hereof) is or shall be incorrect
when made or deemed to have been made in any material respect.

 

SECTION 8.1.3  Non-Performance of Certain Covenants and
Obligations.  The Borrower shall
default in the due performance and observance of any of its obligations under Sections
7.1.4, 7.1.14, 7.1.15, 7.1.16 or Section 7.2.

 

SECTION 8.1.4  Non-Performance of Other Covenants and
Obligations.  The Borrower or any
Guarantor shall default in the due performance and observance of any Loan
Document executed by it, and such default shall continue unremedied for a
period of thirty (30) days (or such other period of time during which
performance is required under the applicable Loan Document) after notice
thereof shall have been given to the Borrower or such Guarantor, as applicable,
by the Administrative Agent; provided, however, that if the
default cannot reasonably be cured within such thirty (30) day period despite
the Borrower’s or such Guarantor’s good faith and diligent efforts to do so,
the cure period shall be extended as is reasonably necessary beyond such thirty
(30) day period (but in no event longer than ninety (90) days in the aggregate)
if remedial action reasonably likely to result in cure is promptly instituted
within such thirty (30) day period and is thereafter diligently pursued until
the default is cured.

 

SECTION 8.1.5  Default on Other Indebtedness.  A default shall occur in the payment when due
(subject to any applicable grace period), whether by acceleration or otherwise,
of any Indebtedness of the Borrower in excess of $2,000,000 or any Guarantor in
excess of $2,000,000 (other than Indebtedness described in Section 8.1.1)
if the effect of such Default is to accelerate the maturity of any such
Indebtedness or such Default shall continue unremedied for any applicable
period of time sufficient to permit the holder or holders of such Indebtedness,
or any trustee or agent for such holders, to cause or declare such Indebtedness
to become due and payable or to require such Indebtedness to be prepaid, 

 

95

 

redeemed, purchased or defeased, or to cause an offer to purchase or
redeem such Indebtedness to be required to be made, prior to its expressed
maturity.

 

SECTION 8.1.6  Judgments.  Any final, non-appealable judgment or order
for the payment of money in excess of $10,000,000 individually or in the
aggregate (excluding, however, any amounts fully covered by
insurance (less any applicable deductible) or indemnification and as to which
the insurer or the indemnifying party, as the case may be, has acknowledged its
responsibility to cover such judgment or order) shall be rendered against the
Borrower, any Guarantor, the Property, the Improvements or the Capital
Improvement Project and such judgment shall not have been vacated or discharged
or stayed or bonded pending appeal within thirty (30) days after the entry
thereof.

 

SECTION 8.1.7  Pension Plans.  Any of the following events shall occur with
respect to any Pension Plan:

 

(a)           the institution
of any steps by the Borrower, any member of its Controlled Group or any other
Person to terminate a Pension Plan if, as a result of such termination, the
Borrower or any such member would reasonably be required to make a contribution
to such Pension Plan, or would reasonably expect to incur a liability or
obligation to such Pension Plan, in excess of $1,000,000; or

 

(b)           a contribution
failure occurs with respect to any Pension Plan sufficient to give rise to a
Lien under Section 302(f) of ERISA and such failure continues for
sixty (60) days or more.

 

SECTION 8.1.8  Change of Control.  Any Change of Control shall occur.

 

SECTION 8.1.9  Bankruptcy, Insolvency, etc.  The Borrower or any Guarantor shall:

 

(a)           become
insolvent or generally fail to pay, or admit in writing its inability or
unwillingness generally to pay, debts as they become due;

 

(b)           apply for,
consent to, or acquiesce in the appointment of a trustee, receiver,
sequestrator or other custodian for any substantial part of the property of any
thereof, or make a general assignment for the benefit of creditors;

 

(c)           in the absence
of such application, consent or acquiescence, permit or suffer to exist the
appointment of a trustee, receiver, sequestrator or other custodian for a
substantial part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within ninety (90)
days; provided, however, that the Borrower hereby expressly
authorizes the Administrative Agent and each Lender to appear in any court
conducting any relevant proceeding during such ninety (90) day period to
preserve, protect and defend their rights under this Agreement and the other
Loan Documents;

 

(d)           permit or
suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or 

 

96

 

insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by the Person which is the subject of such case or proceeding, such
case or proceeding shall be consented to or acquiesced in by such Person or
shall result in the entry of an order for relief or shall remain for ninety
(90) days undismissed; provided, however, that the Borrower
hereby expressly authorizes the Administrative Agent and each Lender to appear
in any court conducting any such case or proceeding during such ninety
(90) day period to preserve, protect and defend their rights under the
Loan Documents; or

 

(e)           take any action
authorizing, or in furtherance of, any of the foregoing.

 

SECTION 8.1.10  Impairment of Security, etc. 
Any Loan Document, or any Lien granted thereunder, shall (except in
accordance with its terms), in whole or in part, terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of the Borrower or any Guarantor, as applicable, the effect of which could
reasonably be expected to have a Material Adverse Effect or the Borrower or any
Guarantor shall, directly or indirectly, repudiate any Loan Document or contest
in any manner such effectiveness, validity, binding nature or enforceability;
or, except as permitted under any Loan Document, any Lien securing any
Obligation shall, in whole or in part, cease to be a perfected First Priority
Lien, except as otherwise permitted hereunder.

 

SECTION 8.1.11  Abandonment of the Capital Improvement
Project.

 

(a)           The Borrower
shall cease to own the Property, the Improvements thereon or the Easements
associated therewith which are material and necessary for the purpose of
owning, maintaining and operating the Property and construction of the Phase I
Project, and if the Borrower draws on the Delayed Draw Term Loan, the Phase II
Project, in the manner contemplated by the Operative Documents; or

 

(b)           The Borrower shall abandon the Property or the Improvements thereon or
otherwise cease operations of the Property or shall sell or otherwise dispose
of its interest in the Property or the Improvements.

 

SECTION 8.1.12  Government Authorizations.

 

(a)           Any Permit
necessary for the ownership, maintenance, financing or operation of the
Property, the Improvements thereon or the Capital Improvement Project shall be
modified, refused, rejected, suspended, revoked or canceled, or allowed to
lapse or a notice of a material violation is issued under any Permit, by the
issuing agency or other Governmental Instrumentality having or asserting
jurisdiction, or any proceeding is commenced by any Governmental
Instrumentality for the purpose of modifying, suspending, revoking or canceling
any Permit and such modification, refusal, rejection, revocation or loss of
such Permit or such notice of a material violation or proceeding (i) is
reasonably likely to have a Material Adverse Effect or (ii) is not
reinstated within thirty (30) days thereafter.

 

97

 

(b)           The zoning
classification necessary for the ownership, maintenance or operation of the
Property (or any portion thereof) as they are currently being operated shall be
modified, refused, rejected, suspended, revoked or canceled, or allowed to
lapse or a notice of a material violation is issued in connection with any
Legal Requirement related to such zoning classification or other land use
regulations by the issuing agency or other Governmental Instrumentality having
jurisdiction, or any proceeding is commenced by any Governmental
Instrumentality for the purpose of modifying, suspending, revoking or canceling
any such zoning classification and such modification, refusal, rejection,
revocation or loss of such zoning classification or such notice of a violation
or proceeding in connection with any such Legal Requirement is reasonably
likely to have a Material Adverse Effect.

 

SECTION 8.1.13  Gaming Tenant’s Licenses.  The termination of any Gaming License held by
the Gaming Tenant prior to the date upon which the Borrower shall have obtained
all such Gaming Licenses.

 

SECTION 8.1.14  Gaming Lease.  The termination of the Gaming Lease prior to
the date upon which the Borrower shall have obtained all Gaming Licenses

 

SECTION 8.1.15  Borrower’s Gaming Licenses.  The termination of any Gaming License after
the date upon which the Borrower shall have obtained all such Gaming Licenses.

 

SECTION 8.1.16  Key Person Management Agreement.  From and after the Effective Date, the termination
of the Key Person Management Agreement unless such termination is made in
accordance with the procedures set forth in the terms and provisions of the Key
Person Assignment and Subordination Agreement.

 

SECTION 8.1.17  Property Management Agreement.  From and after the date on which the Borrower
enters into the Property Management Agreement, the termination of the Property
Management Agreement unless such termination is made in accordance with the
procedures set forth in the terms and provisions of the Property Management
Assignment and Subordination Agreement.

 

SECTION 8.1.18  Material Adverse Effect.  The occurrence of a Material Adverse Effect.

 

SECTION 8.2  Action if Bankruptcy.  If any Event of Default described in Section 8.1.9
shall occur pursuant to the terms thereof, the Loan Commitments and the Letter
of Credit Commitments (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all outstanding Loans and all
other Obligations shall automatically be and become immediately due and payable
without notice or demand.

 

SECTION 8.3  Action if Other Event of Default.  If any Event of Default (other than any Event
of Default described in Section 8.1.9) shall occur for any reason,
whether voluntary or involuntary, and be continuing, the Administrative Agent
upon the direction of the Required 

 

98

 

Lenders, shall by notice to
the Borrower declare all or any portion of the outstanding principal amount of
the Loans and other Obligations to be due and payable or the Loan Commitments
(if not theretofore terminated) to be terminated, whereupon the full unpaid
amount of such Loans and other Obligations which shall be so declared due and
payable shall be and become immediately due and payable, without further
notice, demand or presentment. 
Notwithstanding anything to the contrary contained herein, each Lender
acknowledges and agrees that no Lender shall have the right to proceed individually
against the Borrower, any of the Guarantors or any of the Security with respect
to any rights or remedies under the Loan Documents, and that this sentence
constitutes an explicit statement by each Lender precluding any such
action.  In addition to the foregoing,
the Administrative Agent upon direction of the Required Lenders may, without
further notice of default, presentment or demand for payment, protest or notice
of non-payment or dishonor, or other notices or demands of any kind, all such
notices and demands being waived (to the extent permitted by applicable law),
exercise any or all rights and remedies at law or in equity (in any combination
or order that the Lenders may elect, subject to the foregoing), including,
without prejudice to the Lenders’ other rights and remedies, the following:

 

(a)           refuse, and the
Lenders and the Issuer may suspend or terminate the Lenders’ obligation to make
additional Borrowings or issue additional Letters of Credit, to process
Borrowing Requests or Letter of Credit Issuance Requests and to perform any
other obligations of the Lenders or the Issuer which are expressly subject to
there not being a Default under this Agreement; the remedy set forth in this clause (a) shall be exercised automatically upon an Event of Default
with respect to the Borrower described in Section 8.1.9;

 

(b)           make or do the
same in such manner and to such extent as the Lenders or the Issuer may deem
necessary to protect the Security hereof, the Lenders and the Issuer being
authorized to enter upon and take possession of the Property for such purposes,
and any sums expended for such purposes shall become part of the Indebtedness
evidenced and secured by the Deed of Trust;

 

(c)           commence,
appear in and/or defend any action or proceedings purporting to affect the
Security hereof, and/or any additional or other security therefor, the
interests, rights, powers or duties of the Lenders or the Issuer hereunder,
whether brought by or against the Borrower, the Lenders or the Issuer;

 

(d)           pay, purchase,
contest or compromise any Claim, debt, Lien, charge or encumbrance that in the
judgment of the Lenders or the Issuer may impair or reasonably appear to impair
the security of any Deed of Trust or the other Loan Documents, the interests of
the Lenders or the Issuer or the rights, powers and/or duties of the Lenders or
the Issuer hereunder and any sums expended for such purposes shall become part
of the Indebtedness evidenced and secured by the Loan Documents;

 

(e)           the Lenders
and/or the Issuer (and their respective nominees and/or designees) are
authorized either by themselves or by their agents or by a receiver appointed
by a court of competent jurisdiction, to enter into and upon and take and hold
possession of any portion or the Property and/or the Improvements thereon, both
real and 

 

99

 

personal, and exclude the Borrower and all other Persons therefrom and
thereupon the Lenders and/or the Issuer (or their respective nominees and/or
designees) may, (u) use, operate, manage, control, insure, maintain,
repair, restore and otherwise deal with all and every part of the Property and
conduct business thereat, (v) take possession of all materials, supplies,
tools, equipment and construction facilities and appliances located on the
Property and perform any and all Work and labor existing at the time the
Lenders and/or the Issuer (or their respective nominees and/or designees) enter
into possession of the Property and perform any and all Work and labor
necessary to operate and maintain the Property, and all sums expended in so
doing, together with interest on such total amount at the rate set forth in Section 3.2.2,
shall be repaid by the Borrower to the Lenders and/or the Issuer upon demand
and shall be secured by the Loan Documents, (w) employ watchmen to protect
the Property, (x) make alterations, additions, renewals, replacements and
improvements to the Property, (y) exercise all rights and powers of the
Borrower with respect to the Property and pursuant to or under the Operative
Documents or any agreements relating to the Property, whether in the name of
the Borrower or otherwise, including the right to make, cancel, enforce or
modify any agreements relating to the Property, obtain and evict tenants and
other Persons, and demand, sue for, collect and receive all earnings, revenues,
rents, issues, profits and other income from the Property, and every part
thereof, or any agreements relating to the Property and (z) apply the
receipts therefrom to the payment of the Indebtedness evidenced and secured by
the Loan Documents in accordance with the Loan Documents after deducting
therefrom all expenses (including reasonable attorneys’ fees and costs and
expenses) incurred in connection with the aforesaid operations and all amounts
to pay the Taxes, Impositions, assessments, insurance and other charges in
connection with the Property as well as just and reasonable compensation for
the services of the Administrative Agent, the Issuer, the Lenders and their
counsel, agents and employees;

 

(f)            exercise all
rights and remedies under any Deed of Trust, any Assignment of Leases and
Rents, the Security Agreement and the other Loan Documents;

 

(g)           institute an
action, suit or proceeding in equity for the specific performance by the
Borrower of any covenant, condition, or agreement contained herein or in any of
the other Loan Documents;

 

(h)           apply, ex
parte and without notice to any Person, for the appointment of a custodian,
receiver, liquidator or conservator of the Property, without regard for the
adequacy of the security for the Indebtedness evidenced and secured by the Loan
Documents;

 

(i)            set off and
apply all monies on deposit in any account or any other monies of the Borrower
on deposit with the Administrative Agent to the satisfaction of the Obligations
under all of the Loan Documents;

 

(j)            engage an
Appraiser to obtain an appraisal of the Property which (i) complies with
the appraisal standards set forth in FIRREA, (ii) is prepared in
accordance with the Uniform
Standards of Professional Appraisal Practice as promulgated by The

 

100

 

Appraisal Foundation and the Standards
of Professional Appraisal Practice and Code of Ethics of the Appraisal Institute and (iii) is
otherwise in form and content reasonably satisfactory to the Administrative
Agent; and

 

(k)           exercise any
and all rights and remedies available to it under applicable law or any of the
Operative Documents.

 

Except as otherwise set forth herein, all sums expended by the Lenders
and/or the Issuer for any of the purposes described above shall be deemed to
have been advanced to the Borrower under and pursuant to the provisions of this
Agreement, shall bear interest at the rate of interest set forth in Section 3.2.2
and shall be secured by the Deed of Trust. 
The Administrative Agent, the Issuer or the Lenders (or their respective
nominees and/or designees) may at any time discontinue any action or remedy
commenced by it or them, as the case may be, or change any course of action
undertaken by it or them, and in such event, the Administrative Agent, the
Issuer and the Lenders (or their respective nominees and/or designees) shall
not be bound by any requirements or limitations of time contained in any Deed
of Trust or the other Loan Documents. 
For the foregoing purposes, the Borrower to the fullest extent permitted
by law, hereby constitutes and appoints the Administrative Agent (or the
Administrative Agent’s nominee or designee) as the true and lawful agent and
attorney-in-fact of the Borrower with full power of substitution and hereby
empowers the Administrative Agent (and its nominee or designee) to take such
action and require such performance as it deems necessary or desirable.  This agency and power of attorney shall be
deemed to be coupled with an interest and shall be irrevocable.

 

ARTICLE
IX

THE ADMINISTRATIVE AGENT

 

SECTION 9.1  Designation of the Administrative Agent.  Each Lender and the Issuer hereby makes the
following designations:

 

(a)           Each Lender and
Issuer hereby designates Foothill to act as the Administrative Agent under and
for purposes of this Agreement and the other Loan Documents and authorizes
Foothill, in its capacity as the Administrative Agent, to act on behalf of the
Lenders under this Agreement and the other Loan Documents.  Subject to the terms and conditions hereof, Foothill
accepts such appointment and agrees to act as the Administrative Agent on
behalf of the Lenders in accordance with the provisions of this Agreement and
the other Loan Documents.  Each Lender
agrees that the Administrative Agent may delegate its rights and powers, as its
deems appropriate in its sole discretion and that any such sub-agent shall
implement all such rights and powers on behalf of the Administrative Agent that
are required of the Administrative Agent on behalf of the Lenders.  The Administrative Agent and any such
sub-agent may perform any and all of their duties and exercise their rights and
powers through their respective Affiliates, directors, officers, employees,
agents and advisors.  The exculpatory
provisions of Section 9.3 shall apply to any such sub-agent and
each such Affiliate, director, officer, employee, agent and advisor and to
their respective activities. The 

 

101

 

Administrative Agent may replace such sub-agent upon consent of the
Required Lenders and the exculpatory provisions of Section 9.3
shall apply to such replacement sub-agent.

 

(b)           Each Lender
authorizes the Administrative Agent to act on behalf of such Lender under this
Agreement and the other Loan Documents and, in the absence of other written
instructions from the Required Lenders received from time to time by the
Administrative Agent (with respect to which the Administrative Agent agrees
that it will comply, except as otherwise provided in this Section or as
otherwise advised by counsel in order to avoid contravention of applicable
law), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent, by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto.

 

(c)           Each Lender
hereby indemnifies (which indemnity shall survive any termination of this
Agreement) the Administrative Agent, pro rata according to such Lender’s
Percentage, from and against any and all liabilities, obligations, losses,
damages, Claims, costs or expenses of any kind or nature whatsoever which may
at any time be imposed on, incurred by, or asserted against, the Administrative
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents, including reasonable attorneys’ fees, consultants’ fees and as to
which the Administrative Agent is not reimbursed by the Borrower; provided,
however, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, Claims, costs or expenses (i) which
are determined by a court of competent jurisdiction in a final proceeding to
have resulted solely from the gross negligence or willful misconduct of the
Administrative Agent or (ii) which arise from the failure of another
Lender to advance such Lender’s Percentage of any Loans to be made to the
Borrower (in which case such other Lender shall have responsibility for
indemnification therefor).  The
Administrative Agent shall not be required to take any action under any
Operative Document, or to prosecute or defend any suit in respect of any
Operative Document, unless the Administrative Agent is indemnified hereunder to
its satisfaction.  If any indemnity in
favor of the Administrative Agent shall be or become, in the respective determination
of the Administrative Agent, inadequate, the Administrative Agent may call for
additional indemnification from the Lenders and cease to do the acts
indemnified against hereunder until such additional indemnity is given.

 

SECTION 9.2  Funding Reliance, etc. 
Unless the Administrative Agent shall have been notified by telephone,
confirmed in writing, by any Lender by 2:00 p.m. Pacific time on the
Business Day prior to a Borrowing that such Lender will not make available the
amount which would constitute its Percentage of such Borrowing on the date
specified therefor, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent and, in reliance upon
such assumption, make available to the Borrower a corresponding amount.  If and to the extent that such Lender shall
not have made such amount available to the Administrative Agent, such Lender
and the Borrower severally agree to repay the Administrative Agent forthwith on
demand such corresponding amount, together with interest thereon, for each day
from the date the Administrative Agent made such amount available to the
Borrower to the date such amount is repaid to the Administrative Agent, at the
interest rate 

 

102

 

applicable at the time to
Loans comprising such Borrowing in the case of the Borrower and at the Federal
Funds Rate (in the case of a Lender) (for the first two (2) Business Days
after which such amount has not been repaid) and thereafter at the interest
rate applicable to Loans comprising such Borrowing.  Nothing in this Section shall affect or
impair the rights or remedies of the Borrower against such Lender so long as
such amount and interest, if any, has been repaid by the Borrower to the Administrative
Agent.

 

SECTION 9.3  Exculpation.  The Administrative Agent shall have no
obligations except those expressly set forth herein.  Without limiting the generality of the
foregoing, neither the Administrative Agent nor any of the Administrative Agent’s
directors, officers, employees or agents (i) shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (ii) shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent is required
to exercise in writing by the Required Lenders (or such other Lenders as shall
be required by Section 10.1),
(iii) except as expressly set forth herein, shall have any duty to
disclose, and shall not be liable for failure to disclose any information
relating to the Borrower that is communicated to or obtained by the Person
serving as the Administrative Agent or any of the Administrative Agent’s
Affiliates, (iv) shall be liable for any action taken by the
Administrative Agent with the consent or at the request of the Required Lenders
(or such other number of Lenders as shall be required by Section 10.1), (v) shall be deemed
to have knowledge of any Default unless and until written notice thereof is
given to either the Administrative Agent by the Borrower or a Lender, (vi) shall
be liable to any Lender for any action taken or omitted to be taken by it under
this Agreement or any other Loan Document, or in connection herewith or
therewith, except for the Administrative Agent’s own willful misconduct or
gross negligence, (vii) shall be responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability, validity
or due execution of this Agreement or any other Loan Document, (viii) shall
be responsible for the creation, perfection or priority of any Liens purported
to be created by any of the Loan Documents, (ix) shall be responsible for
the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security or (x) shall have any duty to make any inquiry
respecting the performance by the Borrower of its obligations hereunder or
under any other Loan Document.  Any
inquiry which may be made by the Administrative Agent shall not obligate the
Administrative Agent to make any further inquiry or to take any action.  The Administrative Agent shall be entitled to
rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement or writing which the Administrative Agent
believes to be genuine and to have been presented by a proper Person.

 

SECTION 9.4  Successors.  The Administrative Agent may resign as such
at any time upon at least thirty (30) days’ prior notice to the Borrower
and the Lenders.  If the Administrative
Agent at any time shall resign, the Required Lenders may, after consultation
with the Borrower (but only if no Default then exists hereunder) appoint another
Lender as a successor to the Administrative Agent which shall thereupon become
the Administrative Agent hereunder.  If
no successor for the Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within thirty
(30) days after the retiring Administrative Agent’s giving notice of
resignation, then the retiring Administrative Agent shall, on behalf of the
Lenders and after consultation with the Borrower (such consultation 

 

103

 

being required only if no
Default then exists hereunder), appoint a successor to act in the capacity of
such retiring Administrative Agent which shall be one of the Lenders or a
commercial banking institution organized under the laws of the U.S. (or any
State thereof) or a U.S. branch or agency of a commercial banking institution
and having (x) a combined capital and surplus of at least $250,000,000 and
(y) a credit rating of AA or better by Moody’s or a comparable rating by
S&P; provided, however, that if, after expending all
reasonable commercial efforts, such retiring Administrative Agent is unable to
find a commercial banking institution which is willing to accept such
appointment and which meets the qualifications set forth in item (y),
the retiring Administrative Agent shall be permitted to appoint as its
successor from all available commercial banking institutions willing to accept
such appointment such institution having the highest credit rating of all such
available and willing institutions.  Upon
the acceptance of any appointment by a successor Administrative Agent
hereunder, such successor Administrative Agent shall be entitled to receive
from the retiring Administrative Agent such documents of transfer and
assignment as such successor Administrative Agent may reasonably request, and
shall thereupon succeed to and become vested with all rights, powers,
privileges, obligations and duties of such retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and obligations
under this Agreement.  After any
Administrative Agent’s resignation, the provisions of

 

(a)           this Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by
such retiring Administrative Agent while it was the Administrative Agent under
this Agreement; and

 

(b)           Section 10.3 and Section 10.4 shall continue to inure to
its benefit.

 

SECTION 9.5  Loans by the Administrative Agent.  The Administrative Agent shall have the same
rights and powers with respect to (x) the Loans made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any
other Lender and may exercise the same as if it were not the Administrative
Agent hereunder.  Foothill and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower and its Affiliates as if Foothill were not
the Administrative Agent hereunder.

 

SECTION 9.6  Credit Decisions.  Each Lender acknowledges that it has,
independently of the Administrative Agent and each other Lender, and based on
such Lender’s review of the financial information of the Borrower, the
Guarantors, this Agreement, the other Loan Documents (the terms and provisions
of which being satisfactory to such Lender) and such other documents,
information and investigations as such Lender has deemed appropriate, made its
own credit decision to extend its Loan Commitments.  Each Lender also acknowledges that it will,
independently of the Administrative Agent and each other Lender, and based on
such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.

 

SECTION 9.7  Copies, etc.  The Administrative
Agent shall give prompt notice to each Lender of each notice or request
required or permitted to be given to the Administrative Agent by the Borrower
pursuant to the terms of this Agreement and the other Loan Documents (unless 

 

104

 

concurrently delivered to
the Lenders by the Borrower).  The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from the Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of this Agreement or any
other Loan Document.

 

SECTION 9.8  Consultants and Reports.

 

(a)           The
Administrative Agent, in its sole discretion, may remove from time to time the
Independent Consultants and appoint replacements as the Administrative Agent
may choose in accordance with this Agreement. 
As soon as practicable, notice of any replacement Independent Consultant
shall be given by the Administrative Agent to the Borrower and the Independent
Consultant being replaced.  All
reasonable fees and expenses of the Independent Consultants (whether the
original ones or replacements) shall be paid by the Borrower.

 

(b)           Each of the
Independent Consultants shall be contractually obligated to the Administrative
Agent to carry out the activities required of it in the Loan Documents and as
otherwise requested by the Administrative Agent.  The Borrower acknowledges that it will not
have any cause of action or Claim against any Independent Consultant resulting
from any decision made or not made, any action taken or not taken or any advice
given by such Independent Consultant in the due performance in good faith of
its duties except for the gross negligence and willful misconduct of the
Independent Consultant; provided, however, the foregoing standard
of care shall not affect the standard of care which is required under any
letter or agreement pursuant to which an Independent Consultant was engaged or
the rights, remedies and options of the Lenders under any such letter or
agreement.

 

ARTICLE
X

MISCELLANEOUS PROVISIONS

 

SECTION 10.1  Waivers, Amendments, etc. 
The provisions of this Agreement and of each other Loan Document may
from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the Borrower and the
Required Lenders; provided, however, that no such amendment,
modification or waiver shall:

 

(a)           extend any Loan
Commitment Termination Date or modify this Section without the consent of
all Lenders;

 

(b)           increase the aggregate amount of any Lender’s then existing Loan Commitment
Amounts, increase the aggregate amount of any Loans required to be made by a
Lender pursuant to its Loan Commitments or reduce any fees described in Article III
payable to any Lender without the consent of such affected Lender;

 

105

 

(c)           extend the Stated
Maturity Date for any Lender’s Loan, or reduce the principal amount of or rate
of interest on any Lender’s Loan, without the consent of such Lender; provided,
however, that any vote to rescind any acceleration made pursuant to Section 8.2
or 8.3 of amounts owing with respect to the Loans and other Obligations
shall require the consent of the Required Lenders;

 

(d)           change the
definition of “Required Lenders” or any requirement hereunder that any
particular action be taken by all Lenders without the consent of all Lenders;

 

(e)           discharge the
Lien of any Deed of Trust, release the Guarantors under the Guaranty other than
in accordance with the terms thereof, or release any material portion of the
other security interests granted pursuant to the Loan Documents, in each case,
without the consent of all Lenders as expressly provided herein or therein;

 

(f)            increase the
Stated Amount of any Letter of Credit unless consented to by the Issuer; or

 

(g)           affect
adversely the interests, rights or obligations of the Administrative Agent, the
Issuer or any Lender hereunder, unless consented to by the Administrative
Agent, the Issuer or such Lender.

 

No failure or delay on the part of the Administrative Agent, the Issuer
or any Lender in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right.  No notice to or demand on the Borrower in any
case shall entitle it to any notice or demand in similar or other
circumstances.  No waiver or approval by
the Administrative Agent, the Issuer or any Lender under this Agreement or any
other Loan Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require
any similar or dissimilar waiver or approval thereafter to be granted hereunder.

 

SECTION 10.2  Notices.  All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing and addressed, delivered or transmitted to such party at its address or
facsimile number set forth below its signature hereto or set forth in the
Lender Assignment Agreement or at such other address or facsimile number as may
be designated by such party in a notice to the other parties.  All such notices and communications shall be
deemed to have been properly given if (x) hand delivered with receipt
acknowledged by the recipient, (y) mailed, upon the fifth Business Day
after the date on which it is deposited in registered or certified mail,
postage prepaid, return receipt requested or (z) by Federal Express or
other nationally-recognized express courier service with instructions to
deliver on the following Business Day, on the next Business Day after delivery
to such express courier service.  Notices
and other communications may also be properly given by facsimile but shall be
deemed to be received upon automatic facsimile confirmation of receipt thereof
by the intended recipient machine therefor with a copy of such notice or
communication to be given in the manner provided in the second sentence of this
Section; provided, however, 

 

106

 

that the failure to deliver
a copy in accordance with the second sentence of this Section shall not
invalidate the effectiveness of such facsimile notice.

 

SECTION 10.3  Payment of Costs and Expenses.  The Borrower agrees to pay on demand all
expenses of the Administrative Agent (including the reasonable fees and
out-of-pocket expenses of counsel to the Administrative Agent and of local
counsel, if any, who may be retained by counsel to the Administrative Agent) in
connection with

 

(a)           the
negotiation, preparation, execution and delivery of this Agreement and of each
other Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated;

 

(b)           the filing,
recording, refiling or rerecording of any Loan Document or any Uniform
Commercial Code financing statements relating thereto and all amendments,
supplements, amendments and restatements and other modifications to any thereof
and any and all other documents or instruments of further assurance required to
be filed or recorded or refiled or rerecorded by the terms hereof or the terms
of any Loan Document;

 

(c)           the preparation
and review of the form of any document or instrument relevant to this Agreement
or any other Loan Document; and

 

(d)           the preparation
of any information or response required with respect to any investigative
request or inquiry, approval, findings of suitability or any other response or
communication involving a Governmental Instrumentality arising out of this
Agreement, any other Operative Documents or any Obligation evidenced and
secured by the Loan Documents or the participation in any public or
investigatory hearing or meeting.

 

The Borrower further agrees to pay, and to save the Administrative
Agent, the Issuer and the Lenders harmless from all liability for, any stamp or
other taxes which may be payable in connection with the execution or delivery
of this Agreement, the Loans hereunder, or the issuance of the Notes or any
other Loan Documents.  The Borrower also
agrees to reimburse the Administrative Agent, the Issuer and, following a
Default of the nature set forth in Section 8.1.9 or an Event of
Default, each Lender upon demand for all reasonable out-of-pocket expenses
(including reasonable attorneys’ fees and legal expenses of counsel and fees
and expenses of consultants to the Administrative Agent, the Issuer and the
Lenders, and, based upon the written advice of legal counsel that, in such
counsel’s judgment, having a common counsel for the Administrative Agent, the
Issuer and the Lenders would present such counsel with a conflict of interest,
of other separate counsel for each of the foregoing Persons selected by the
Person so affected by such conflict in connection with (x) the negotiation
of any restructuring or “work-out” with the Borrower, whether or not
consummated, of any Obligations and (y) the enforcement of any
Obligations.

 

107

 

SECTION 10.4  Indemnification.  In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Loan Commitments,
the Borrower hereby indemnifies, exonerates and holds the Administrative Agent,
the Issuer and each Lender and each of their respective officers, directors,
employees and agents (collectively, the “Indemnified Parties”) free and
harmless from and against any and all actions, causes of action, suits, losses,
costs, liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys’
fees and disbursements, whether incurred in connection with actions (i) between
or among the parties hereto or (ii) between or among one or more of the
parties hereto and third parties (collectively, the “Indemnified Liabilities”),
incurred by the Indemnified Parties or any of them as a result of, or arising
out of, or relating to

 

(a)           any transaction
financed or to be financed in whole or in part, directly or indirectly, with
the proceeds of any Loans, including all Indemnified Liabilities arising in
connection with the Transaction;

 

(b)           the entering
into and performance of this Agreement and any other Loan Document by any of
the Indemnified Parties (including any action brought by or on behalf of the
Borrower as the result of any determination by the Required Lenders pursuant to
Article VI not to fund the Loans); provided, however,
that any such action is resolved in favor of such Indemnified Party;

 

(c)           any
investigation, litigation or proceeding related to any acquisition or proposed
acquisition by the Borrower of all or any portion of the stock or assets of any
Person, whether or not the Administrative Agent, the Issuer or any Lender is
party thereto;

 

(d)           any
investigation, litigation or proceeding related to any environmental cleanup,
audit, compliance or other matter relating to the protection of the environment
or the Release by the Borrower;

 

(e)           the presence on
or under, or the escape, seepage, leakage, spillage, discharge, emission,
discharging or releases from, the Property owned or operated by the Borrower of
any Hazardous Substances (including any losses, liabilities, damages, injuries,
costs, expenses or Claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower; or

 

(f)            each Lender’s
Environmental Liability (the indemnification herein for any Environmental Claim
shall survive repayment of the Notes and any transfer of the Property or other
property of the Borrower by foreclosure or by a deed in lieu of foreclosure,
regardless of whether caused by, or within the control of, the Borrower but
such indemnification shall not apply to Environmental Matters first occurring
(as opposed to first discovered) after any such transfer);

 

except for, in each case, any such Indemnified Liabilities arising for
the account of a particular Indemnified Party by reason of the relevant
Indemnified Party’s gross negligence or willful 

 

108

 

misconduct.  The Borrower and its
successors and assigns hereby waive, release and agree not to make any Claim or
bring any cost recovery action against the Administrative Agent, the Issuer or
any Lender under CERCLA or any state equivalent, or any similar law now
existing or hereafter enacted.  It is
expressly understood and agreed that to the extent that any of the Indemnified
Parties is strictly liable under any Environmental Laws, the Borrower’s
obligation to such Person under this indemnity shall likewise be without regard
to fault on the part of the Borrower with respect to the violation or condition
which results in liability of such Person. 
If and to the extent that the foregoing undertaking may be unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.

 

SECTION 10.5  Survival.  The obligations of the Borrower under Sections 4.1,
4.2, 10.3 and 10.4, and the obligations of the
Lenders under Section 8.1, shall in each case survive any
assignment from one Lender to another (in the case of Sections 10.3 and 10.4) and any termination of this
Agreement, the payment in full of all the Obligations and the termination of
all the Loan Commitments.  The
representations and warranties made by the Borrower in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.

 

SECTION 10.6  Severability.  Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

SECTION 10.7  Headings.  The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.

 

SECTION 10.8  Execution in Counterparts, Effectiveness,
etc.  This Agreement may be executed
by the parties hereto in several counterparts, each of which shall be an
original and all of which shall constitute together but one and the same
agreement.  This Agreement shall become
effective when counterparts hereof executed on behalf of the Borrower, the Administrative
Agent, the Issuer and each Lender.

 

SECTION 10.9  Governing Law; Entire Agreement.  THIS AGREEMENT, THE NOTES AND EACH OTHER LOAN
DOCUMENT (INCLUDING PROVISIONS WITH RESPECT TO INTEREST, LOAN CHARGES AND LOAN
COMMITMENT FEES) SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSES
SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW
YORK), EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY
INTEREST OR REMEDIES UNDER A LOAN DOCUMENT IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.  This Agreement, the Notes 

 

109

 

and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and thereof and supersede any and all prior
agreements, written or oral, with respect thereto.

 

SECTION 10.10  Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:

 

(a)           the Borrower
may not assign or transfer its rights or obligations hereunder without the
prior written consent of the Administrative Agent, the Issuer and all Lenders,
in their sole discretion; and

 

(b)           the rights of
sale, assignment and transfer of the Lenders are subject to Section 10.11.

 

SECTION 10.11  Sale and Transfer of Loans and Notes;
Participations in Loans and Notes. 
Each Lender may assign, or sell participations in, its Loans and Loan
Commitments to one or more other Persons in accordance with this Section 10.11.

 

SECTION 10.11.1  Assignments.

 

(a)           Any Lender,

 

(i)            with the
consent of the Borrower (prior to the existence of an Event of Default), such
consent not to be unreasonably withheld, conditioned or delayed, the
Administrative Agent and the Issuer, may at any time assign or sell all or any
fraction of such Lender’s total Loans and Loan Commitments and delegate to one
or more commercial banks, funds or other financial institutions, and

 

(ii)           with notice to
the Borrower, the Administrative Agent and the Issuer, but without the consent
of the Borrower, the Administrative Agent or the Issuer, may assign and
delegate to any of its Affiliates, any other Lender, any Approved Fund or any
Eligible Assignee,

 

(each
Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred
to as an “Assignee
Lender”) in a minimum aggregate amount of $1,000,000 (or, if less, the
entire remaining amount of such Lender’s Loans and Loan Commitments) or such
lesser amount agreed to by the Administrative Agent and the Issuer, provided,
that such minimum aggregate amount shall not be applicable in the case
of assignments by such Lender to another Lender, any Approved Fund or its
Affiliate.  Notwithstanding anything to
the contrary contained herein, except during the existence and the continuance
of an Event of Default, Foothill shall not be permitted to assign, whether by
one or more assignments, in the aggregate, more than 49.9% of its interest in
the Loans or its portion of the Revolving Loan Commitment or the Delayed Draw
Term Loan Commitment without the prior consent of the Borrower, such consent
not to be unreasonably withheld, 

 

110

 

conditioned
or delayed, other than (A) to any Affiliates of Foothill or the Issuer or (B) as
the same may be required by the Trilliant & H/2 Side Letter.

 

(b)           The Borrower,
the Administrative Agent and the Issuer shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee Lender until

 

(i)            notice of such
assignment and delegation, together with (A) payment instructions, (B) the
Internal Revenue Service Forms or other statements contemplated or required to
be delivered pursuant to Section 4.6 and (C) addresses and
related information with respect to such Assignee Lender, shall have been
delivered to the Borrower, the Administrative Agent and the Issuer by such
Lender and such Assignee Lender;

 

(ii)           such Assignee
Lender shall have executed and delivered to the Borrower, the Administrative
Agent and the Issuer a Lender Assignment Agreement, accepted by the
Administrative Agent and the Issuer; and

 

(iii)          the processing
fees described below shall have been paid.

 

(c)           From and after
the date that the Administrative Agent and the Issuer accept such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y) the
assignor Lender, to the extent that rights and obligations hereunder have been
assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents with respect thereto. 
Within five (5) Business Days after its receipt of notice that the
Administrative Agent and the Issuer have each received and accepted an executed
Lender Assignment Agreement, subject, however, to clause (c),
the Borrower shall execute and deliver to the Administrative Agent (for
delivery to the relevant Assignee Lender) a new Note evidencing such Assignee
Lender’s assigned Loans and Loan Commitments and, if the assignor Lender has
retained Loans and Loan Commitments hereunder, a replacement Note in the
principal amount of the Loans and Loan Commitments retained by the assignor
Lender hereunder (such Note to be in exchange for, but not in payment of, the
Note then held by such assignor Lender). 
Each such Note shall be dated the date of the predecessor Note.  The assignor Lender shall mark each
predecessor Note “exchanged” and deliver each of them to the Borrower.  Accrued interest on that part of each
predecessor Note evidenced by a new Note, and accrued fees, shall be paid as
provided in the Lender Assignment Agreement. 
Accrued interest on that part of each predecessor Note evidenced by a
replacement Note shall be paid to the assignor Lender.  Accrued interest and accrued fees shall be
paid at the same time or times provided in the predecessor Note and in this
Agreement.  Such assignor Lender or such
Assignee Lender must also pay a processing fee in the amount of $3,500 to the
Administrative Agent upon

 

111

 

delivery
of any Lender Assignment Agreement.  Any
attempted assignment and delegation not made in accordance with this Section 10.11.1 shall be null and
void.  Notwithstanding anything to the
contrary set forth above, any Lender may (without requesting the consent of the
Borrower, the Administrative Agent or the Issuer) pledge its Loans to a Federal
Reserve Bank in support of borrowings made by such Lender from such Federal
Reserve Bank, and any Lender that is an investment fund that invests in bank
loans may, without the consent of the Administrative Agent, the Issuer or the
Borrower, pledge all or any portion of its interest and rights (but may not
delegate any of its duties or obligations hereunder or under any other Loan
Document, including its Loan Commitment(s), if any) to any trustee or any other
representative of holders of obligations owed or securities issued by such
investment fund as security for such obligations or securities.

 

SECTION 10.11.2  Participations.  Upon prior written notice to the Administrative
Agent and the Issuer, any Lender may at any time sell to one or more commercial
banks or other Persons (other than the Borrower, any Guarantor or an Affiliate
of the Borrower or any Guarantor) (each of such commercial banks and other
Persons being herein called a “Participant”)
participating interests in any of the Loans, Loan Commitments, or other
interests of such Lender hereunder; provided, however, that

 

(a)                                  no
participation contemplated in this Section shall relieve such Lender from
its Loan Commitments or its other obligations hereunder or under any other Loan
Document;

 

(b)                                 such Lender
shall remain solely responsible for the performance of its Loan Commitments and
such other obligations;

 

(c)                                  the Borrower,
each Guarantor and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and each of the other Loan Documents;

 

(d)                                 no Participant,
unless such Participant is an Affiliate of such Lender or an Approved Fund or
is itself a Lender, shall be entitled to require such Lender to take or refrain
from taking any action hereunder or under any other Loan Document, except that
such Lender may agree with any Participant that such Lender will not, without
such Participant’s consent, take any actions of the type described in clauses (a),
(b) or (c) of
Section 10.1; and

 

(e)  the Borrower shall not be required to pay
any amount under this Agreement that is greater than the amount which it would
have been required to pay had no participating interest been sold.

 

The Borrower
acknowledges and agrees that each Participant, for purposes of Sections 4.1,
4.2, 4.4 or 4.5 shall be considered a
Lender.  Each Participant shall only be
indemnified for increased costs pursuant to Section 4.1 or Section 4.2 if and to the extent that the Lender
which sold such participating interest to such Participant concurrently is
entitled to make, and does make, a Claim 

 

112

 

on the Borrower
for such increased costs.  Any Lender
that sells a participating interest in any Loan, Loan Commitment or other
interest to a Participant under this Section 10.11.2 shall indemnify and hold harmless the Borrower and
the Administrative Agent from and against any Taxes, penalties, interest or
other costs or losses (including reasonable attorneys’ fees and expenses)
incurred or payable by the Borrower or the Administrative Agent as a result of
the failure of the Borrower or the Administrative Agent to comply with its
obligations to deduct or withhold any Taxes from any payments made pursuant to
this Agreement to such Lender, the Issuer or the Administrative Agent, as the
case may be, which Taxes would not have been incurred or payable if such
Participant had been a Lender organized under the laws of a jurisdiction other
than the United States that was entitled to deliver to the Borrower, the
Administrative Agent, the Issuer or such Lender, and did in fact so deliver, a
duly completed and valid Form W-8BEN, Form W-8ECI or W-9 (or
applicable successor form) entitling such Participant to receive payments under
this Agreement without deduction or withholding of any United States federal
taxes.

 

SECTION 10.12  Cooperation by the Borrower and the Guarantors;
Acknowledgment and Agreement by Borrower of Syndication.

 

(a)                                  The Borrower
covenants and agrees actively to, and shall cause the Guarantors to, assist
Foothill, in all reasonable respects, in the syndication of the Loans, which
assistance will require, among other things, that the Borrower and the
Guarantors provide all information regarding the Transactions that Foothill
deems to be reasonably necessary to complete successfully the syndication.  In addition, the Borrower also agrees to make
certain members of its management and its consultants and advisors available
upon reasonable prior notice during regular business hours to answer questions
regarding the Transactions.

 

(b)                                 Notwithstanding
anything to the contrary contained herein, the Borrower acknowledges and agrees
that Foothill, in its sole discretion, shall have the right to syndicate and/or
grant participations in the Loans, the reasonable costs and expenses of which
(including, without limitation, reasonable legal fees and expenses) shall be
borne by the Borrower.  Foothill shall
have the right to require, and the Borrower hereby agrees to execute, any and
all necessary amendments to this Agreement, each other Loan Document
(including, without limitation, an amendment to the allocation of the aggregate
principal amount of the Loans), and to cause the Guarantors to reaffirm their
obligations under the Loan Documents to which it is a party in respect of any
such amendment, provided the Borrower shall not be required to pay, with
the exception of the reasonable costs and expenses set forth in the preceding
sentence of this Section 10.12(b), any amount under this Agreement
or any other Loan Document, including, without limitation, as principal,
interest or other fees, that is greater than the amount which it would have
been required to pay had syndication not occurred (other than amounts set forth
in this Section 10.12(b)) or increase its obligations or
liabilities under the Loan Documents.

 

SECTION 10.13  Other Transactions; Publicity.  Nothing contained herein shall preclude the
Administrative Agent, the Issuer or any other Lender from engaging in any
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the 

 

113

 

Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging with any
other Person.  The Administrative Agent
shall have the right to publicly announce that Administrative Agent has made
and closed the Loans to the Borrower.

 

SECTION 10.14  Execution by Authorized Representative.  Any signature by any Authorized
Representative on this Agreement, any Loan Document and any other Instrument
and certificate executed or to be executed pursuant to or in connection with
this Agreement or such other Loan Documents is provided only in such Authorized
Representative’s capacity as an officer or member of the Person in question and
not in any way in such Authorized Representative’s personal capacity.

 

SECTION 10.15  Forum Selection and Consent to
Jurisdiction.  EACH OF THE PARTIES
HERETO AND ITS SUCCESSORS AND ASSIGNS AGREES THAT ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE ISSUER, THE
LENDERS, THE BORROWER, OR THE GUARANTORS IN CONNECTION HEREWITH OR THEREWITH
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN (i) THE COURTS OF THE STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND (ii) SOLELY WITH RESPECT TO ACTIONS BROUGHT
AGAINST IT AS A DEFENDANT, THE COMPETENT COURT OF ITS CORPORATE DOMICILE; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT’S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND.  EACH OF THE
PARTIES HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO SUCH JURISDICTIONS FOR SUCH PURPOSES AND, TO THE FULLEST EXTENT PERMITTED BY
LAW, (A) IRREVOCABLY WAIVES ANY OBJECTION IT MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE LOAN DOCUMENTS BROUGHT IN ANY SUCH COURT; (B) IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM; (C) IRREVOCABLY WAIVES THE RIGHT TO
OBJECT, WITH RESPECT TO SUCH LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH
COURT DOES NOT HAVE JURISDICTION IN ANY SUCH LITIGATION, WHICH IT MAY NOW
OR HEREAFTER BE AFFORDED BY LAW, IN ANY OTHER FORUM.  EACH OF THE PARTIES HERETO FURTHER AGREES
THAT A FINAL JUDGMENT IN ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY MANNER PROVIDED BY LAW, SUBJECT TO THE PARTIES’ RIGHT TO
CONTEST SUCH JUDGMENT BY MOTION OR APPEAL ON ANY GROUNDS NOT EXPRESSLY WAIVED
IN THIS SECTION 10.15.  THE BORROWER HEREBY IRREVOCABLY APPOINTS CT
CORPORATION SYSTEM (THE “PROCESS AGENT”),
WITH AN OFFICE ON THE DATE HEREOF AT 111 EIGHTH AVENUE, NEW YORK, NEW YORK
10011, UNITED STATES, AS ITS AGENT TO RECEIVE, ON THE 

 

114

 

BORROWER’S BEHALF AND ON BEHALF OF THE BORROWER’S
PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING.  SUCH SERVICE MAY BE MADE BY MAILING OR
DELIVERING A COPY OF SUCH PROCESS TO THE BORROWER IN CARE OF THE PROCESS AGENT
AT THE PROCESS AGENT’S ABOVE ADDRESS WITH COPY TO THE BORROWER.  THE BORROWER HEREBY IRREVOCABLY AUTHORIZES
AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE AND/OR FORWARD SUCH
PROCESS ON ITS BEHALF.  AS AN ALTERNATIVE
METHOD OF SERVICE, THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 10.2. 
TO THE EXTENT THAT ANY OF THE PARTIES HERETO HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH PARTY
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

SECTION 10.16  Waiver of Jury Trial; Judicial Reference.  THE ADMINISTRATIVE AGENT, THE ISSUER, THE
LENDERS, AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, THE ISSUER, THE LENDERS OR THE BORROWER IN CONNECTION
HEREWITH OR THEREWITH.  THE
ADMINISTRATIVE AGENT, THE ISSUER, THE LENDERS, AND THE BORROWER EACH
ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THEM
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

 

SECTION 10.17  Maximum Rate of Interest.  Nothing contained in this Agreement or in any
other Loan Documents shall be construed to permit the Lenders to charge or
receive at any time interest, fees or other charges in excess of the amounts
which the Lenders are legally entitled to charge and receive under any law to
which such interest, fees or charges are subject.  In no contingency or event whatsoever shall
the compensation payable to the Lenders by any Person, howsoever characterized
or computed, hereunder or under any of the other Loan Documents, exceed the
highest rate permissible under any law to which such compensation is
subject.  There is no intention that the
Lenders shall contract for, charge or receive compensation in excess of the
highest lawful rate, and, in the event it should be determined that the Lenders
have contracted for any rate of interest in excess of the highest lawful rate,
then ipso facto such 

 

115

 

rate shall be reduced to the highest lawful rate so
that no amounts shall be charged or received which are in excess thereof, and,
in the event it should be determined that any excess over such highest lawful
rate has been charged or received, the Lenders shall promptly refund such
excess to the Person entitled thereto; provided, however, that,
if lawful, any such excess shall be paid by the Borrower to the Lenders as
additional interest (accruing at a rate equal to the maximum legal rate minus
the rate provided for hereunder) during any subsequent period when regular
interest is accruing hereunder at less than the maximum legal rate.

 

SECTION 10.18  Time of Essence.  Time is of the essence as to all times and
dates set forth in or applicable to this Agreement with respect to all payments
to be made by or on behalf of the Borrower hereunder; provided, however,
that whenever any payment to be made under the Loan Documents shall be stated
to be due on a day other than a Business Day, such payment may be made on the
next succeeding Business Day and such extension of time shall in such case be included
in the computation of interest payable hereunder.

 

SECTION 10.19  Consent or Approval of the Administrative
Agent, the Issuer and the Lenders.

 

(a)                                  Any request by
the Borrower for consent or approval by one or more of the Administrative
Agent, the Issuer and/or the Lenders under this Agreement or any of the other
Loan Documents shall be given in writing in accordance with Section 10.2.  Except where a specific time period for
response is otherwise provided in this Agreement, the Administrative Agent from
which such consent has been requested shall have five (5) Business Days
and the Issuer and the Lenders shall have fifteen (15) Business Days to grant
or deny any such request.  If the
Administrative Agent from which such consent has been requested fails to
respond to any such request in writing within such five (5) Business Day
period or the Issuer or the Lenders fail to respond to any such request in
writing within such fifteen (15) Business Day period, the Borrower’s request
shall be deemed disapproved.

 

(b)                                 No Claims may
be made by the Borrower or any other Person against the Administrative Agent,
the Issuer, the Lenders, any Affiliate of the foregoing, or the officers,
directors, employees, attorneys, consultants or agents of any of them for
consequential or punitive damages in respect of any Claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or by the other Operative
Documents, or an act, omission, or event occurring in connection therewith; and
the Borrower, for itself and for all Persons claiming by, through and under it,
waives, releases, and agrees not to sue upon any Claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.

 

SECTION 10.20  No Third Party Beneficiary.  All conditions of the obligations of the
Lenders to make Loans and the Issuer to issue Letters of Credit hereunder are
imposed solely and exclusively for the benefit of the Secured Parties, and no
Person (x) shall have standing to require satisfaction of such conditions
or be entitled to assume that the Lenders will refuse to make Loans and the
Issuer will refuse to issue Letters of Credit in the absence of strict 

 

116

 

compliance with any or all of such conditions or (y) shall,
under any circumstances, be deemed to be a beneficiary under this Agreement or
of such conditions, any or all of which may be waived in whole or in part by
the Administrative Agent, the Issuer or the Lenders at any time if they, in
their sole discretion, deem it advisable to do so.  The waiver by the Administrative Agent, the
Issuer or the Lenders at any time of any of such conditions shall be deemed to
be made pursuant to, and not in modification of, this Agreement.

 

SECTION 10.21  Cumulative Remedies.  No right or remedy conferred upon the
Administrative Agent, the Issuer or the Lenders in this Agreement is intended
to be exclusive of any other right or remedy contained in the other Loan
Documents or at law and equity and every such right and remedy shall be
cumulative and shall be in addition to every other right or remedy contained in
the other Loan Documents and as now or hereafter available to the Lenders at
law or in equity, by statute or otherwise.

 

SECTION 10.22  Estoppel Certificates.  The Borrower shall execute and deliver, or
cause to be executed and delivered, to the Administrative Agent all instruments
and certificates as the Administrative Agent may reasonably request (including
estoppel certificates certifying that the Loans and each of the Loan Documents
are in full force and effect and that there are no defenses or offsets, Claims
or counterclaims with respect thereto or if there are, stating the nature of such
defenses, offsets, Claims or counterclaims) to effect, confirm or assure the
rights, remedies and Liens intended to be granted to the Lenders under the Loan
Documents.

 

[Signature
pages follow]

 

117

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  TROPICANA LAS VEGAS, INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne M. Beckett

  
	
   

  	
   

  	
  Name:

  	
  Joanne M. Beckett

  
	
   

  	
   

  	
  Title:

  	
  VP & General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Tropicana Las
  Vegas, Inc.

  
	
   

  	
  3801 Las Vegas Boulevard
  South

  
	
   

  	
  Las Vegas, NV 89101

  Attention: Joanne Beckett

  
	
   

  	
  Facsimile No.: (702)
  739-2703

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Glaser, Weil, Fink,
  Jacobs, Howard & Shapiro, LLP

  
	
   

  	
  10250 Constellation
  Boulevard, 19th Floor

  
	
   

  	
  Los Angeles, CA 
  90067

  
	
   

  	
  Attention: Carolyn C.
  Jordan, Esq.

  
	
   

  	
  Facsimile: (310) 556-2920

  

 

S-1

 

	
   

  	
  ADMINISTRATIVE
  AGENT:

  
	
   

  	
   

  
	
   

  	
  THE FOOTHILL GROUP, INC.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Michael Bohannon

  
	
   

  	
   

  	
  Name:

  	
  R. Michael Bohannon

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  The Foothill
  Group, Inc.

  
	
   

  	
  2450 Colorado Avenue

  
	
   

  	
  Suite 3000 West

  
	
   

  	
  Santa Monica, California
  90404

  
	
   

  	
  Attention: Michael
  Bohannon

  
	
   

  	
  Facsimile No.: (310)
  453-7470

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Mayer Brown LLP

  
	
   

  	
  1675 Broadway

  
	
   

  	
  New York, New York 10019

  
	
   

  	
  Attention: Michael V.
  Morelli, Esq.

  
	
   

  	
  Facsimile No.:
  (212) 849-5564

  

 

S-2

 

	
   

  	
  ISSUER:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
  as Issuer and on behalf of
  The Foothill Group, Inc.,

  
	
   

  	
  as Administrative Agent
  and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Michael Bohannon

  
	
   

  	
   

  	
  Name:

  	
  R. Michael Bohannon

  
	
   

  	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Wells Fargo Bank, N.A.

  
	
   

  	
  2450 Colorado Avenue

  
	
   

  	
  Suite 3000 West

  
	
   

  	
  Santa Monica, California
  90404

  
	
   

  	
  Attention: Nik Aggerwal

  
	
   

  	
  Facsimile No.: (310)
  453-7470

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Mayer Brown LLP

  
	
   

  	
  1675 Broadway

  
	
   

  	
  New York, New York 10019

  
	
   

  	
  Attention: Michael V.
  Morelli, Esq.

  
	
   

  	
  Facsimile No.: (212)
  849-5564

  

 

S-3

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
  Lender’s Percentage:

  	
  THE FOOTHILL GROUP, INC.

  
	
   

  	
   

  
	
  Revolving Loan

  	
   

  
	
  Commitments: 100%

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Michael Bohannon

  
	
  Delayed Draw Term Loan

  	
   

  	
  Name:

  	
  R. Michael Bohannon

  
	
  Commitments: 100%

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  The Foothill
  Group, Inc.

  
	
   

  	
  2450 Colorado Avenue

  
	
   

  	
  Suite 3000 West

  
	
   

  	
  Santa Monica, California
  90404

  
	
   

  	
  Attention: Michael
  Bohannon

  
	
   

  	
  Facsimile No.: (310)
  453-7470

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Mayer Brown LLP

  
	
   

  	
  1675 Broadway

  
	
   

  	
  New York, New York 10019

  
	
   

  	
  Attention: Michael V.
  Morelli, Esq.

  
	
   

  	
  Facsimile No.:
  (212) 849-5564

  

 

S-4Exhibit 4.1

 

	
  

  	
  AtlanticPower Corporation A BRITISH COLUMBIA BUSINESS
  CORPORATIONS ACT COMPANY Number 00000000 Shares ****0********* *****0********
  ******0******* *******0****** ********0***** THlS CERTIFIES THAT SPECIMEN
  CUSIP 04878Q863 ISIN CA04878Q8636 IS THE REGISTERED HOLDER OF **0** SEE
  REVERSE FOR CERTAIN DEFINITIONS FULLY PAID AND NON-ASSESSABLE COMMON SHARES
  WITHOUT PAR VALUE IN THE CAPITAL OF ATLANTIC POWER CORPORATION in the
  Authorized share structure of the above named Company subject to the Articles
  of the Company transferable on the Central Securities Register of the Company
  by the registered holder in person or by attorney duly authorized in writing
  upon surrender of this certificate properly endorsed. This certificate is not
  valid unless countersigned by the Transfer Agent and Registrar of the
  Company. IN WITNESS WHEREOF the Company has caused this certificate to be
  signed on its behalf by the facsimile signatures of its duly authorized
  officers, at Vancouver, British Columbia. President and Chief Executive
  Officer VOID Secretary and Chief Financial Officer Dated: Jan 01, 1900
  COUNTERSIGNED AND REGISTERED COMPUTERSHARE INVESTOR SERVICES INC, (TORONTO)
  TRANSFER AGENT AND REGISTRAR By VOID Authorized Officer The shares
  represented by this certificate are transferable at the offices of
  Computershare Investor Services Inc. in Toronto, ON. SECURITY INSTRUCTIONS ON
  REVERSE VÓIR LES INSTRUCTIONS DE SÉCURITÉ AU VERSO

  

 

	
  

  	
  [ILLEGIBLE] fixed by the
  directors; and (b) the authority of the directors to fix the rights,
  privileges, restrictions and conditions of subsequent series. The following abbreviations shall be construed as though the
  worts set forth below opposite each abbreviation were written out in full
  whore such abbreviation appears: TEN COM - as tenants in common TEN ENT - as
  tenants by the entireties JT TEN - as joint tenants with rights of
  survivorship and not as tenants in common (Name) CUST (Name) UNIF - (Name) as
  Custodian for (Name) under the GIFT MIN ACT (State) (State) Uniform Gits to
  Minors Act Additional abbreviations may also be used though not in the above
  list. For value received the undersigned
  hereby sells, assigns and transfers unto Insert name and address of transferee shares represented by this certificate and does hereby irrevocably
  constitute and appoint  the attorney  of the undersigned to transfer the said shares on the books of
  the Company with full power of substitution in the premises.  DATED:  Signature of Shareholder  Signature of Guarantor  Signature
  Guarantee:  The
  signature on this assignment must correspond with the name as written upon
  the face of the certificate(s), in every particular, without alteration or
  enlargement, or any change whatsoever and must be guaranteed by a major
  Canadian Schedule I chartered bank or a member of an acceptable Medallion
  Signature Guarantee Program (STAMP, SEMP, MSP). The Guarantor must affix a
  stamp bearing the actual words “Signature Guaranteed”  In the USA, signature guarantees
  must be done by members of a “Medallion Signature Guarantee Program” only.  Signature guarantees are not
  accepted from Treasury Branches, Credit Unions or Caisses Populaires unless
  they are members of the Stamp Medallion Program. SECURITY INSTRUCTIONS - INSTRUCTIONS DE SÉCURITÉ THIS
  WATERMARKED PAPER DO NOT ACCEPT WITHOUT NOTINO WATERMARK HOLD TO LIGHT TO
  VERIFY WATERMARK. PAPIER FILIGRANÉ, NE PAS ACCEPTER SANS VÈRIFIER LA PRÉSENCE
  DU FILIGRANE. POUR CE FAIRE, PLACER À LA LUMIÈRE.

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