CREDIT AGREEMENT
Dated as of February 20, 2004
among
GOLDEN ROAD MOTOR INN, INC.,
a Nevada corporation,
as Borrower
MONARCH CASINO & RESORT, INC.,
a Nevada corporation,
as Guarantor
the LENDERS herein named
XXXXX FARGO BANK, National Association,
as Swingline Lender, L/C Issuer and Agent Bank
TABLE OF CONTENTS
RECITALS 1
ARTICLE I - DEFINITIONS 2
Section 1.01. Definitions 2
Section 1.02. Interpretation and Construction 25
Section 1.03. Use of Defined Terms 26
Section 1.04. Cross-References 26
Section 1.05. Exhibits and Schedules 27
ARTICLE II - AMOUNT, TERMS AND SECURITY OF THE BANK FACILITIES 27
Section 2.01. The Credit Facility 27
Section 2.02. Use of Proceeds of the Credit Facility 29
Section 2.03. Notice of Borrowings 29
Section 2.04. Conditions of Borrowings 30
Section 2.05. The Revolving Credit Note and Interest Rate Options 30
Section 2.06. Security for the Credit Facility 33
Section 2.07. Place and Manner of Payment 33
Section 2.08. The Swingline Facility 35
Section 2.09. Issuance of Letters of Credit 36
Section 2.10. Fees 38
Section 2.11. Late Charges and Default Rate 39
Section 2.12. Net Payments 39
Section 2.13. Increased Costs 40
Section 2.14. Mitigation; Exculpation. 40
Section 2.15. Guaranty Agreement 41
ARTICLE III - CONDITIONS PRECEDENT TO THE CLOSING DATE 41
A. Closing Conditions 41
Section 3.01. Credit Agreement 41
Section 3.02. The Notes and Guaranty 41
Section 3.03. Security Documentation 41
Section 3.04. Other Loan Documents 42
Section 3.05. Articles of Incorporation, Bylaws, Corporate Resolutions,
Certificates of Good Standing and Closing Certificate 42
Section 3.06. Opinion of Counsel 42
Section 3.07. Title Policy 42
Section 3.08. Survey 42
Section 3.09. Payment of Taxes 43
Section 3.10. Insurance 43
Section 3.11. Payment of Fees and Existing Bank Loan 43
Section 3.12. Reimbursement for Expenses and Fees 43
Section 3.13. Schedules of Spaceleases and Equipment Leases and
Contracts 43
Section 3.14. Phase I Environmental Site Assessments 43
Section 3.15. Evidence of Right to Occupancy of Hotel/Casino Facility 43
Section 3.16. Gaming Permits 44
Section 3.17. Financial Statements, Pricing Certificate and Leverage
Ratio Certification 44
Section 3.18. Schedule of all Significant Litigation 44
Section 3.19. No Injunction or Other Litigation 44
Section 3.20.Additional Documents and Statements 44
B. Conditions Precedent to all Borrowings 44
Section 3.21. Notice of Borrowing 45
Section 3.22. Certain Statements 45
Section 3.23. Gaming Permits 45
C. Additional Conditions Precedent to Commitment Increase 45
Section 3.24. Guaranty Affirmation 45
Section 3.25. Amendments to Security Documents 45
Section 3.26. Revolving Credit Note 46
Section 3.27. Opinion of Counsel - Commitment Increase 46
Section 3.28. Endorsement of Title Insurance Policy 46
Section 3.29. Reimbursement for Expenses and Fees 46
Section 3.30. Pro Forma Financial Compliance 46
Section 3.31. Additional Documents and Statements 46
ARTICLE IV - REPRESENTATIONS AND WARRANTIES 46
Section 4.01. Organization; Power and Authorization 46
Section 4.02. No Conflict With, Violation of or Default Under Laws
or Other Agreements 47
Section 4.03. Litigation 47
Section 4.04. Agreements Legal, Binding, Valid and Enforceable 47
Section 4.05. Information and Financial Data Accurate; Financial
Statements; No Adverse Event 47
Section 4.06. Governmental Approvals 48
Section 4.07. Payment of Taxes 48
Section 4.08. Title to Properties 48
Section 4.09. No Untrue Statements 49
Section 4.10. Brokerage Commissions 49
Section 4.11. No Defaults 49
Section 4.12. Employee Retirement Income Security Act of 1974 49
Section 4.13. Availability of Utility Services 49
Section 4.14. Policies of Insurance 49
Section 4.15. Spaceleases 50
Section 4.16. Equipment Leases and Contracts 50
Section 4.17. Gaming Permits and Approvals 50
Section 4.18. Environmental Certificate 50
Section 4.19. Investment Company Act 50
Section 4.20. Public Utility Holding Company Act 50
Section 4.21. Labor Relations. 50
Section 4.22. Trademarks, Patents, Licenses, Franchises, Formulas and
Copyrights 50
Section 4.23. Contingent Liabilities 50
Section 4.24. Subsidiaries 51
ARTICLE V - GENERAL COVENANTS OF BORROWER AND MCRI 51
A. General Covenants 51
Section 5.01. FF&E 51
Section 5.02. Permits; Licenses and Legal Requirements 51
Section 5.03. Protection Against Lien Claims 51
Section 5.04. Full Payment of Existing Bank Loan 51
Section 5.05. No Change in Character of Business or Location of
Chief Executive Office 51
Section 5.06. Preservation and Maintenance of Properties and
Assets; Acquisition of Additional Property or Leases 52
Section 5.07. Repair of Properties and Assets 52
Section 5.08. Financial Statements; Reports; Certificates and Books
and Records 53
Section 5.09. Insurance 55
Section 5.10. Taxes 58
Section 5.11. Permitted Encumbrances Only 58
Section 5.12. Advances 58
Section 5.13. Further Assurances 58
Section 5.14. Indemnification 59
Section 5.15. Inspection of the Collateral and Appraisal 60
Section 5.16. Compliance With Other Loan Documents 60
Section 5.17. Suits or Actions Affecting Borrower or MCRI 60
Section 5.18. Notice to State Gaming Control Board 60
Section 5.19. Tradenames, Trademarks and Servicemarks 60
Section 5.20. Notice of Hazardous Materials 60
Section 5.21. Compliance with Access Laws 61
Section 5.22. Release of V/P Property as Collateral 61
Section 5.23. Compliance with Pedestrian Crossing Air Space License 62
Section 5.24. Compliance with Adjacent Driveway Lease 62
ARTICLE VI - FINANCIAL COVENANTS 62
Section 6.01. Leverage Ratio 62
Section 6.02. Adjusted Fixed Charge Coverage Ratio 63
Section 6.03. Minimum Tangible Net Worth 63
Section 6.04. Restriction on Share Repurchases 63
Section 6.05. Investment Restrictions 63
Section 6.06. Limitation on Subsidiaries 64
Section 6.07. Indebtedness 64
Section 6.08. Total Liens 64
Section 6.09. Sale of Assets, Consolidation, Merger or Liquidation. 64
Section 6.10. No Transfer of Ownership 65
Section 6.11. Contingent Liability(ies) 65
Section 6.12. Transactions with Members of MCRI Consolidation 65
Section 6.13. Limitation on Consolidated Tax Liability 65
Section 6.14. ERISA 65
Section 6.15. Margin Regulations 66
Section 6.16. Change in Accounting Principles 66
ARTICLE VII - EVENTS OF DEFAULT 66
Section 7.01. Events of Default 66
Section 7.02. Default Remedies 69
Section 7.03. Application of Proceeds 70
Section 7.04. Notices 71
Section 7.05. Agreement to Pay Attorney's Fees and Expenses 71
Section 7.06. No Additional Waiver Implied by One Waiver 71
Section 7.07. Licensing of Agent Bank and Lenders 71
Section 7.08. Exercise of Rights Subject to Applicable Law 71
Section 7.09. Discontinuance of Proceedings 71
ARTICLE VIII - DAMAGE, DESTRUCTION AND CONDEMNATION 72
Section 8.01. No Abatement of Payments 72
Section 8.02. Distribution of Capital Proceeds Upon Occurrence of
Fire, Casualty, Other Perils or Condemnation 72
ARTICLE IX - AGENCY PROVISIONS 74
Section 9.01. Appointment 74
Section 9.02. Nature of Duties 74
Section 9.03. Disbursement of Borrowings 75
Section 9.04. Distribution and Apportionment of Payments 75
Section 9.05. Rights, Exculpation, Etc. 77
Section 9.06. Reliance 77
Section 9.07. Indemnification 77
Section 9.08. Agent Individually 78
Section 9.09. Successor Agent Bank; Resignation of Agent Bank; Removal
of Agent Bank 78
Section 9.10. Consent and Approvals 79
Section 9.11. Agency Provisions Relating to Collateral 80
Section 9.12. Lender Actions Against Collateral 82
Section 9.13. Ratable Sharing 83
Section 9.14. Delivery of Documents 83
Section 9.15. Notice of Events of Default 83
ARTICLE X - GENERAL TERMS AND CONDITIONS 84
Section 10.01. Amendments and Waivers 84
Section 10.02. Failure to Exercise Rights 85
Section 10.03. Notices and Delivery 85
Section 10.04. Modification in Writing 85
Section 10.05. Other Agreements 85
Section 10.06. Counterparts 86
Section 10.07. Rights, Powers and Remedies are Cumulative 86
Section 10.08. Continuing Representations 86
Section 10.09. Successors and Assigns 86
Section 10.10. Assignment of Loan Documents by Borrower, Guarantor or
Syndication Interests by Lenders 86
Section 10.11. Action by Lenders 88
Section 10.12. Time of Essence 88
Section 10.13. Choice of Law and Forum 88
Section 10.14. Arbitration 88
Section 10.15. Waiver of Jury Trial 89
Section 10.16. Scope of Approval and Review 89
Section 10.17. Severability of Provisions 89
Section 10.18. Cumulative Nature of Covenants 89
Section 10.19. Costs to Prevailing Party 90
Section 10.20. Expenses 90
Section 10.21. Setoff 90
Section 10.22. Schedules Attached 91
Schedule 2.01(a) - Schedule of Lenders' Proportions in Credit Facility
Schedule 2.01(c) - Aggregate Commitment Reduction Schedule
Schedule 2.01(c) - Alternate One Aggregate Commitment Reduction
Schedule - Alternate One
Schedule 3.18 - Schedule of Significant Litigation
Schedule 4.15 - Schedule of Spaceleases
Schedule 4.16 - Schedule of Equipment Leases and Contracts
Schedule 4.22 - Schedule of Trademarks, Patents, Licenses, Franchises,
Formulas and Copyrights
Schedule 4.23 - Schedule of Contingent Liabilities
Schedule 6.08 - Schedules of Liens
Schedule A - Hotel/Casino Property - Description
Schedule B - V/P Property - Description
Section 10.23. Exhibits Attached 91
Exhibit A - Revolving Credit Note - Form
Exhibit B - Swingline Note - Form
Exhibit C - Notice of Borrowing - Form
Exhibit D - Continuation/Conversion Notice - Form
Exhibit E - Compliance Certificate - Form
Exhibit F - Pricing Certificate - Form
Exhibit G - Authorized Officer Certificate - Form
Exhibit H - Closing Certificate
Exhibit I - Guaranty - Form
Exhibit J - Legal Opinion - Form
Exhibit K - Notice of Swingline Advance - Form
Exhibit L - Assumption and Consent Agreement - Form
Exhibit M - Assignment and Assumption Agreement - Form
Exhibit N - Cash Collateral Pledge Agreement - Form
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Credit Agreement") is made and entered into as of
the 20th day of February, 2004, by and among GOLDEN ROAD MOTOR INN, INC., a
Nevada corporation (the "Borrower"), and MONARCH CASINO & RESORT, INC., a
Nevada corporation ("Guarantor") and each of the Lenders, as hereinafter
defined, XXXXX FARGO BANK, National Association, as the swingline lender
(herein in such capacity, together with its successors and assigns, the
"Swingline Lender"), and XXXXX FARGO BANK, National Association, as the issuer
of letters of credit following the Closing Date (in such capacity, together
with its successors and assigns, the "L/C Issuer") and XXXXX FARGO BANK,
National Association, as administrative and collateral agent for the Lenders,
Swingline Lender and L/C Issuer (herein, in such capacity, called the "Agent
Bank" and, together with the Lenders, Swingline Lender and L/C Issuer
collectively referred to as the "Banks").
R E C I T A L S:
WHEREAS:
A - In this Credit Agreement all capitalized words and terms shall have
the respective meanings and be construed herein as hereinafter provided in
Section 1.01 of this Credit Agreement and shall be deemed to incorporate such
words and terms as a part hereof in the same manner and with the same effect as
if the same were fully set forth.
B - Borrower owns and operates the Atlantis Hotel & Casino and is a
wholly owned subsidiary of MCRI. On or about December 29, 1997, Borrower and
MCRI entered into a Construction and Reducing Revolving Credit Agreement (the
"Existing Credit Agreement") with certain banks, as lenders, described in the
Existing Credit Agreement (each individually an "Existing Lender" and
collectively the "Existing Lenders") under the terms of which Existing Lenders
established a reducing revolving line of credit in favor of Borrower and MCRI
in the amount of Eighty Million Dollars ($80,000,000.00) (the "Existing Bank
Loan") as evidenced by a Revolving Credit Promissory Note of even date (the
"Existing Note") executed by Borrower and payable to the order of WFB, as agent
for the Existing Lenders.
C - The Borrower desires to refinance the Existing Bank Loan, Existing
Credit Agreement and Existing Note, together with other Indebtedness owing by
Borrower and to provide for the working capital and general corporate needs of
the Borrower.
X - Xxxxx are willing, subject to the terms, covenants and conditions
hereinafter set forth, to refinance the Existing Bank Loan and establish the
Credit Facility in the initial principal amount of Fifty Million Dollars
($50,000,000.00), subject to increase up to Eighty Million Dollars
($80,000,000.00) in accordance with the provisions set forth in Section
2.01(e), including the Swingline Facility to be funded by the Swingline Lender,
as a subfacility in the maximum aggregate amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00) at any time outstanding and a letter of credit
subfacility for the issuance of Letters of Credit up to the maximum aggregate
amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00) at any time
outstanding, all on the terms and subject to the conditions, covenants and
understandings hereinafter set forth and contained in each of the Loan
Documents.
-1-
NOW, THEREFORE, in consideration of the foregoing, and other valuable
considerations as hereinafter described, the parties hereto do promise,
covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 - Definitions. For the purposes of this Credit Agreement,
each of the following terms shall have the meaning specified with respect
thereto, unless a different meaning clearly appears from the context:
"Acquisition" means any transaction, or any series of related
transactions, consummated after the Closing Date, by which the Borrower
directly or indirectly acquires (i) any real property, (ii) any New Venture or
any ongoing business, or (iii) all or substantially all of the assets of any
firm, partnership, joint venture, limited liability company, corporation or
division thereof, whether through purchase of assets, merger or otherwise.
"Adjacent Driveway Property" shall mean the leasehold interest of Borrower
in that portion of the Hotel/Casino Property which is designated as Parcel 6 on
Schedule A attached hereto and incorporated by reference herein, which
leasehold interest is evidenced by the Adjacent Driveway Lease.
"Adjacent Driveway Lease" shall mean that certain Lease Agreement and
Option to Purchase dated January 29, 2004, by and between BLILP, as lessor, and
Borrower, as lessee, pursuant to which, among other things, Borrower is granted
a leasehold interest in, and an option to purchase, the Adjacent Driveway
Property.
"Adjacent Driveway Estoppel" shall mean an estoppel certificate in a form
and substance acceptable to Agent Bank to be executed, on or before the Closing
Date, by Biggest Little City Investments L.P., a Delaware limited partnership,
pursuant to which: (a) it certifies and represents to Agent Bank that the
Adjacent Driveway Lease represents the entire agreement between the parties
thereto with respect to the Adjacent Driveway Property and supercedes all other
previous documents and agreements between them, that the Adjacent Driveway
Lease had not been modified, supplemented or amended except as set forth
therein and that there are no defaults existing or continuing under any of the
provisions of the Adjacent Driveway Lease; and (b) other agreements are made
regarding notice to Agent Bank in the event of a default under this Adjacent
Driveway Lease, Agent Bank's right to cure and the rights of the Banks and
their successors to continue in possession of the Adjacent Driveway Property.
"Adjusted Distributions" shall mean all Distributions during the period
under review, less Distributions made to MCRI and used exclusively by MCRI for
Share Repurchases during such fiscal period.
"Adjusted EBITDA" shall mean EBITDA less MCRI Corporate Overhead
Allocation for the period under review to the extent not deducted from Net
Income in the determination of EBITDA.
"Adjusted Fixed Charge Coverage Ratio" as of the end of any Fiscal Quarter
shall mean with reference to the Borrower:
-2-
For the Fiscal Quarter under review, together with the most recently
ended three (3) preceding Fiscal Quarters (except as provided in (iv)
below), the sum of: (i) Adjusted EBITDA, less (ii) the aggregate amount
of Adjusted Distributions actually paid, without duplication, less
(iii) the aggregate amount of actually paid federal and state taxes on
or measured by income, less (iv) one-half (1/2) of the aggregate amount
of the Capital Expenditures during the Fiscal Quarter under review,
together with the most recently ended seven (7) preceding Fiscal
Quarters
Divided by (/)
The sum of: (i) Interest Expense (expensed and capitalized), plus
(ii) the greater of (x) Four Million Dollars ($4,000,000.00) or (y) the
aggregate of the Scheduled Reductions actually paid during the period
under review, plus (iii) the aggregate of payments required to be made
on all other interest bearing Indebtedness, plus (iv) the aggregate of
payments required to be made on Capitalized Lease Liabilities, in each
instance determined for the Fiscal Quarter under review together with
the most recently ended three (3) preceding Fiscal Quarters.
"Affiliate", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise.
"Agent Bank" shall mean WFB in its capacity as administrative and
collateral agent for Lenders, Swingline Lender and L/C Issuer.
"Aggregate Commitment" shall mean reference to the aggregate amount
committed by Lenders for advance to or on behalf of the Borrower as Borrowings
under the Credit Facility in the initial principal amount of Fifty Million
Dollars ($50,000,000.00), subject to increase in the amount of up to an
additional Thirty Million Dollars ($30,000,000.00) as provided in Section
2.01(e), in each case as may be reduced from time to time by (i) Scheduled
Reductions, (ii) Voluntary Permanent Reductions, and/or (iii) Mandatory
Commitment Reductions.
"Aggregate Commitment Reduction Schedule" shall mean the schedule setting
forth the amount of the Scheduled Reductions as of each Reduction Date under
the Credit Facility, which schedule shall be: (i) the Aggregate Commitment
Reduction Schedule marked "Schedule 2.01(c)", affixed hereto and by this
reference incorporated herein and made a part hereof, or (ii) in the event of
occurrence of the Commitment Increase, the Aggregate Commitment Reduction
Schedule - Alternate One marked "Schedule 2.01(c) - Alternate One", affixed
hereto and by this reference incorporated herein and made part hereof to be
completed by Agent Bank and distributed to Borrower and each of the Lenders,
evidencing the amount of each Scheduled Reduction following the Commitment
Increase Effective Date determined in accordance with the following
calculation:
-3-
a. The amount of the Commitment Increase shall be added to the Aggregate
Commitment on the Commitment Increase Effective Date.
b. The amount of the Commitment Increase shall be added to Fifty Million
Dollars ($50,000,000.00) and the sum multiplied by thirty-five
percent (35%) to arrive at the maximum principal at maturity.
c. The product of (b) shall be deducted from the sum of (a) to determine
the total amount of Scheduled Reductions.
d. The total amount of Scheduled Reductions in (c) shall be divided by
the number of Fiscal Quarters ending subsequent to the Commitment
Increase Effective Date through the Maturity Date to arrive at the
amount of each Scheduled Reduction to be made on the last day of each
Fiscal Quarter.
"Aggregate Outstandings" shall mean collective reference to the sum of the
Funded Outstandings, Swingline Outstandings and L/C Exposure as of any given
date of determination.
"Applicable Margin" means for any Base Rate Loan or LIBOR Loan, the
applicable percentage amount to be added to the Base Rate or LIBO Rate, as the
case may be, as follows: (i) commencing on the Closing Date and continuing
until June 1, 2004, the Applicable Margins as calculated on the Pricing
Certificate to be delivered by Borrower to Agent Bank on the Closing Date
pursuant to Section 3.17(b); and (ii) commencing on June 1, 2004 and continuing
on each Rate Adjustment Date until Bank Facility Termination, the margin rates
as set forth in Table One below in each instance based on the Leverage Ratio
calculated with regard to the Borrower as of each Fiscal Quarter end,
commencing with the Fiscal Quarter ending March 31, 2004, together with the
immediately preceding three (3) Fiscal Quarters on a four (4) Fiscal Quarter
basis:
TABLE ONE TABLE TWO
----------------- ----------
Base LIBO
Rate Rate Commitment
Leverage Ratio Margin Margin Percentage
--------------------------------- -------- -------- ----------
Greater than or equal to 2.50 to
1.00............................. 1.25% 2.50% 0.50%
Greater than or equal to 2.00 to
1.00 but less than 2.50 to 1.00.. 1.00% 2.25% 0.375%
Greater than or equal to 1.50 to
1.00 but less than 2.00 to 1.00.. 0.75% 2.00% 0.375%
Greater than or equal to 1.00 to
1.00 but less than 1.50 to 1.00.. 0.50% 1.75% 0.25%
Less than 1.00 to 1.00........... 0.25% 1.50% 0.25%
"Assets" shall mean the total assets of the Borrower determined in
accordance with GAAP.
-4-
"Assignment and Assumption Agreement" shall mean the document evidencing
an assignment of a Syndication Interest by any Lender to an Eligible Assignee
in the form of the Assignment, Assumption and Consent Agreement marked "Exhibit
M", affixed hereto and by this reference incorporated herein and made a part
hereof.
"Assignment of Entitlements, Contracts, Rents and Revenues" shall mean the
assignment to be executed by Borrower on or before the Closing Date, pursuant
to which Borrower presently assigns to Agent Bank on behalf of the Lenders, in
consideration of the Bank Facilities (reserving a revocable license to retain
use and enjoy): (a) all of its respective right, title and interest under all
Equipment Leases and Contracts and Space Leases relating to the Hotel/Casino
Facility, and (b) all of its right, title and interest in and to all permits,
licenses and contracts relating to the Hotel/Casino Facility, except Gaming
Permits and other permits, licenses and contracts which are unassignable
without prior approval under Nevada law, and (c) all rents, issues, profits,
revenues and income from the Real Property and the Hotel/Casino Facility and
any other business activity conducted thereon, together with any future
expansions thereof, related thereto or used in connection therewith, as such
assignment may be amended, modified, extended, renewed or restated from time to
time.
"Assumption and Consent Agreement" shall mean the document evidencing an
increase of the Aggregate Commitment and assumption of such increase by a
Lender or Eligible Assignee pursuant to Section 2.01(e) in the form of the
Assumption and Consent Agreement marked "Exhibit L", affixed hereto and by this
reference incorporated herein and made a part hereof.
"Authorized Officer(s)" shall mean those of the respective officers of
Borrower whose signatures and incumbency shall have been certified to Agent
Bank and the Banks as required in Section 3.05(iv) of the Credit Agreement with
the authority and responsibility to deliver Notices of Borrowing,
Continuation/Conversion Notices, Pricing Certificates, Compliance Certificates
and all other requests, notices, reports, consents, certifications and
authorizations on behalf of Borrower.
"Authorized Officer Certificate" shall have the meaning set forth in
Section 3.05.
"Available Borrowings" shall mean, at any time, and from time to time, the
aggregate amount available to Borrower for a Borrowing, a Swingline Advance or
issuance of a Letter of Credit not exceeding the amount of the Maximum
Availability, as of each date of determination.
"BLILP" shall mean Biggest Little Investments L.P., a Delaware limited
partnership.
"Bank Facilities" shall mean collective reference to the Credit Facility,
Swingline Facility and L/C Facility.
"Bank Facility Termination" shall mean indefeasible payment in full of all
sums owing under the Bank Facilities and each of the Loan Documents, the
occurrence of the Stated Expiry Date or other termination of all outstanding
Letters of Credit, and the irrevocable termination of: (i) the obligation of
Lenders to advance Borrowings under the Credit Facility, (ii) the obligation of
Swingline Lender to advance Swingline Advances under the Swingline Facility,
-5-
and (iii) the obligation of L/C Issuer to issue Letters of Credit under the L/C
Facility.
"Banking Business Day" means (a) with respect to any Borrowing, payment or
rate determination of LIBOR Loans, a day, other than a Saturday or Sunday, on
which Agent Bank is open for business in San Francisco and on which dealings in
Dollars are carried on in the London interbank market, and (b) for all other
purposes any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the States of California and/or Nevada, or is a day
on which banking institutions located in California and/or Nevada are required
or authorized by law or other governmental action to close.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as
amended, 11 U.S.C. Section 101, et seq.
"Banks" shall have the meaning set forth in the Preamble to this Credit
Agreement.
"Base Rate" shall mean, as of any date of determination, the rate per
annum equal to the higher of (a) the Prime Rate in effect on such date and (b)
the Federal Funds Rate in effect on such date plus one-half of one percent (0.5
of 1%) (fifty basis points).
"Base Rate Loan" shall mean reference to that portion of the unpaid
principal balance of the Credit Facility bearing interest with reference to the
Base Rate plus the Applicable Margin.
"Borrower" shall mean Golden Road Motor Inn, Inc., a Nevada corporation.
"Borrowing(s)" shall mean such amounts as Borrower may request from Agent
Bank from time to time to be advanced under the Credit Facility by Notice of
Borrowing in the manner provided in Section 2.03 or at the request of Agent
Bank pursuant to Section 2.08 or Section 2.09.
"Breakage Charges" shall have the meaning set forth in Section 2.07(c) of
the Credit Agreement.
"Capital Expenditures" shall mean, for any period, without duplication,
the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during that period and including Capitalized Lease Liabilities) by
Borrower during such period that, in conformity with GAAP, are required to be
included in or reflected by the property, plant or equipment or similar fixed
or capital asset accounts reflected in the balance sheet of Borrower (including
equipment which is purchased simultaneously with the trade-in of existing
equipment owned by Borrower to the extent of (a) the gross amount of such
purchase price less (b) the cash proceeds of trade-in credit of the equipment
being traded in at such time), but excluding capital expenditures made in
connection with the replacement or restoration of assets, to the extent
reimbursed or refinanced from insurance proceeds paid on account of the loss of
or damage to the assets being replaced or restored, or from awards of
compensation arising from the taking by condemnation of or the exercise of the
power of eminent domain with respect to such assets being replaced or restored.
"Capital Proceeds" shall mean the Net Proceeds available to Borrower from
(i) partial or total condemnation, eminent domain or destruction of any part of
the Collateral or by settlement in lieu of condemnation or eminent domain
-6-
proceedings, (ii) insurance proceeds (other than rent insurance and business
interruption insurance) received in connection with damage to or destruction of
the Collateral, (iii) the sale or other disposition of any portion of the
Collateral in accordance with the provisions of this Credit Agreement (not
including, however, any proceeds received by Borrower from a sale,
condemnation, damage or destruction of FF&E or other personal property if such
FF&E or other personal property is replaced by items of equivalent value or
utility, in each case such exclusion to apply only during any period in which
no Default in the payment of any principal or interest owing under the terms of
the Bank Facilities or an Event of Default has occurred and is continuing), and
(iv) any other extraordinary receipt of proceeds not in the ordinary course of
business and treated, for accounting purposes, as capital in nature, other than
capital contributions made by MCRI to the Borrower.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower under any leasing or similar arrangement which, in accordance with
GAAP, would be classified as capitalized leases, and, for purposes of this
Credit Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Cash" shall mean, when used in connection with any Person, all monetary
and non-monetary items owned by that Person that are treated as cash in
accordance with GAAP.
"Cash Collateral Account" shall mean the restricted depository savings
account to be established by Borrower or Agent Bank on behalf of Borrower with
L/C Issuer at its offices located at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxx,
Xxxxxx, or at such other office located in the United States as may be
designated from time to time by L/C Issuer, for the purpose of depositing Cash
collateral for the aggregate L/C Exposure upon the occurrence of any Event of
Default.
"Cash Collateral Pledge Agreement" shall mean the Pledge and Assignment of
Savings Account Agreement to be executed by Borrower in favor of L/C Issuer as
of the Closing Date, as the same may be amended or modified from time to time
under the terms of which all sums held from time to time, in the Cash
Collateral Account are pledged in favor of L/C Issuer to secure repayment of
any funding required under any outstanding Letters of Credit, a copy of the
form of which Cash Collateral Pledge Agreement is marked "Exhibit N", affixed
to the First Amendment and by this reference incorporated herein and made a
part hereof.
"Cash Equivalents" shall mean, when used in connection with any Person,
that Person's Investments in:
(a) Government Securities due within one (1) year after the date of the
making of the Investment;
(b) readily marketable direct obligations of any State of the United
States of America given on the date of such Investment a credit rating
of at least Aa by Xxxxx'x Investors Service, Inc. or AA by Standard &
Poor's Corporation, in each case due within one (1) year from the
making of the Investment;
-7-
(c) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptance of, and repurchase agreements
covering Government Securities executed by, any bank incorporated
under the laws of the United States of America or any State thereof
and having on the date of such Investment combined capital, surplus
and undivided profits of at least Two Hundred Fifty Million Dollars
($250,000,000.00), or total assets of at least Five Billion Dollars
($5,000,000,000.00), in each case due within one (1) year after the
date of the making of the Investment;
(d) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and repurchase agreements
covering Government Securities executed by, any branch or office
located in the United States of America of a bank incorporated under
the laws of any jurisdiction outside the United States of America
having on the date of such Investment combined capital, surplus and
undivided profits of at least Five Hundred Million Dollars
($500,000,000.00), or total assets of at least Fifteen Billion Dollars
($15,000,000,000.00) in each case due within one year after the date
of the making of the Investment;
(e) repurchase agreements covering Government Securities executed by a
broker or dealer registered under Section 15(b) of the Securities
Exchange Act of 1934 having on the date of the Investment capital of
at least One Hundred Million Dollars ($100,000,000.00), due within
thirty (30) days after the date of the making of the Investment;
provided that the maker of the Investment receives written
confirmation of the transfer to it of record ownership of the
Government Securities on the books of a "primary dealer" in such
Government Securities on the books of such registered broker or
dealer, as soon as practicable after the making of the Investment;
(f) readily marketable commercial paper of corporations doing business in
and incorporated under the laws of the United States of America or any
State thereof or of any corporation that is the holding company for a
bank described in clauses (c) or (d) above given on the date of such
Investment a credit rating of at least P-1 by Xxxxx'x Investors
Service, Inc. or A-1 by Standard & Poor's Corporation, in each case
due within three hundred sixty-five (365) days after the date of the
making of the Investment;
(g) "money market preferred stock" issued by a corporation incorporated
under the laws of the United States of America or any State thereof
given on the date of such Investment a credit rating of at least Aa by
Xxxxx'x Investors Service, Inc. or AA by Standard & Poor's
Corporation, in each case having an investment period not to exceed
fifty (50) days; provided that (i) the amount of all such Investments
issued by the same issuer does not exceed Five Million Dollars
($5,000,000.00) and (ii) the aggregate amount of all such Investments
does not exceed Fifteen Million Dollars ($15,000,000.00); and
(h) a readily redeemable "money market mutual fund" sponsored by a bank
described in clauses (c) or (d) hereof, or a registered broker or
dealer described in clause (e) hereof, that has and maintains an
investment policy limiting its investments primarily to instruments of
the types described in clauses (a) through (g) hereof and having on
the date of such Investment total assets of at least One Billion
Dollars ($1,000,000,000.00).
-8-
"Change in Control" shall mean the occurrence of any of the following:
(a) any Person, other than members of the Farahi Family Group, owns or
controls, more than fifty percent (50%) of the common voting stock
of MCRI; or
(b) MCRI fails to own, directly or indirectly, one hundred percent
(100%) of the capital stock interests of Borrower.
"Closing Certificate" shall have the meaning ascribed to such term in
Section 3.05(v).
"Closing Date" shall mean the date upon which: (i) each condition
precedent required under Article IIIA of this Credit Agreement has been
satisfied by Borrower or waived by Agent Bank and (ii) the Security
Documentation has been filed and/or recorded in accordance with and in the
manner required by the Closing Instructions, or such other date as to which
Agent Bank and Borrower agree in writing.
"Closing Disbursements" shall have the meaning set forth in Section
2.02(a).
"Closing Instructions" shall mean the Closing Instructions to be given by
Agent Bank to the Title Insurance Company on or before the Closing Date setting
forth the requirement of Lenders for issuance of the Title Policy and other
conditions for the occurrence of the Closing Date.
"Collateral" shall mean collective reference to: (i) all of the Real
Property, and all presently owned, or hereafter acquired, personal property of
Borrower (including, without limitation, the FF&E), and the contract rights,
leases, intangibles and other interests of Borrower, which are subject to the
liens and security interests of the Security Documents; (ii) all rights of
Borrower assigned as additional security pursuant to the terms of the Security
Documents; and (iii) any and all other property and/or intangible rights,
interest or benefits inuring to or in favor of Borrower, which are in any
manner assigned, pledged, encumbered or otherwise hypothecated in favor of
Agent Bank on behalf of Lenders to secure payment of the Bank Facilities.
"Commercial Letter(s) of Credit" shall mean a letter or letters of credit
issued by L/C Issuer pursuant to Section 2.09 of the Credit Agreement for the
purpose of assuring payment for goods, equipment or materials supplied to
Borrower.
"Commitment Fee" shall have the meaning ascribed to such term in Section
2.10(b) of this Credit Agreement.
"Commitment Increase" shall have the meaning ascribed to such term in
Section 2.01(e).
"Commitment Increase Effective Date" shall mean the date upon which each
of the requirements and conditions precedent for the effectiveness and funding
of the Commitment Increase as set forth in Section 2.01(e) and in Article III C
shall have been fully satisfied.
"Commitment Percentage" shall mean the per annum percentage to be used in
the calculation of the Commitment Fee based on the Leverage Ratio of the
Borrower determined as set forth in Table Two of the definition of Applicable
Margin.
-9-
"Compliance Certificate" shall mean a compliance certificate as described
in Section 5.08(g) which is more particularly described on "Exhibit E", affixed
hereto and by this reference incorporated herein and made a part hereof.
"Contingent Liability(ies)" shall mean, as to any Person any obligation of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness, leases or dividends ("primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation, (d) to make payment in respect of any
net liability arising in connection with any Interest Rate Xxxxxx, foreign
currency exchange agreement, commodity hedging agreement or any similar
agreement or arrangement in any such case if the purpose or intent of such
agreement is to provide assurance that such primary obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such primary obligation will be protected (in whole or in
part) against loss in respect thereof or (e) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Liability shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business or player points programs awarded in connection with gaming operations
at the Hotel/Casino Facility in the ordinary course of business, in the event
such player points programs are determined to constitute Contingent
Liabilities. The amount of any Contingent Liability shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Liability is made or, if not stated or
determinable, the reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such Person in
good faith.
"Continuation/Conversion Notice" shall mean a notice of continuation of or
conversion to a LIBOR Loan and certificate duly executed by an Authorized
Officer of Borrower, substantially in the form of that certain exhibit marked
"Exhibit D", affixed hereto and by this reference incorporated herein and made
a part hereof.
"Convert, Conversion and Converted" shall refer to a Borrowing at or
continuation of a particular interest rate basis or conversion of one interest
rate basis to another pursuant to Section 2.05(c).
"Credit Agreement" shall mean this Credit Agreement together with all
Schedules and Exhibits attached thereto, executed by and among Borrower, MCRI
and Banks setting forth the terms and conditions of the Bank Facilities, as may
be amended, modified, extended, renewed or restated from time to time.
"Credit Facility" shall mean the agreement of Lenders to fund a reducing
revolving line of credit, subject to the terms and conditions set forth in this
Credit Agreement and the Revolving Credit Note, up to the Maximum Permitted
Balance as reduced from time to time in accordance with the terms of this
Credit Agreement and the Revolving Credit Note.
-10-
"Deed of Trust" shall mean the Deed of Trust, Fixture Filing and Security
Agreement with Assignment of Rents to be executed by Borrower on or before the
Closing Date in favor of Agent Bank on behalf of the Lenders, encumbering the
Real Property, all personal property of Borrower (including, without
limitation, the FF&E), and other Collateral therein described, together with
all right, title and interest of Borrower acquired on and after the Closing
Date, in any such property, for the purpose of securing the Bank Facilities and
Borrower's payment and performance under each of the Loan Documents (other than
the Environmental Certificate), as such deed of trust may be amended, modified,
extended, renewed or restated from time to time.
"Default" shall mean the occurrence or non-occurrence, as the case may be,
of any event that with the giving of notice or passage of time, or both, would
become an Event of Default.
"Default Rate" shall have the meaning set forth in Section 2.11(b).
"Defaulting Lender" means any Lender which fails or refuses to perform its
obligations under this Credit Agreement within the time period specified for
performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of five (5) Banking Business Days
after notice from Agent Bank.
"Designated Deposit Account" shall mean a deposit account to be maintained
by Borrower with Agent Bank, as from time to time designated in writing by an
Authorized Officer of Borrower.
"Disposition" shall have the meaning ascribed to such term in Section
6.09(c).
"Dispute" shall have the meaning set forth in Section 10.14(a).
"Distributions" shall mean and collectively refer to any and all cash
dividends, loans, management fees, payments, advances or other distributions,
fees or compensation of any kind or character whatsoever made by Borrower to or
for the benefit of MCRI, any Subsidiary or Affiliate thereof or any member of
the Farahi Family Group, but shall not include consideration paid for tangible
and intangible assets in an arms length exchange for fair market value, trade
payments made and other payments for liabilities incurred in the ordinary
course of business or compensation to officers, directors and employees of
Borrower in the ordinary course of business.
"Documents" shall have the meaning set forth in Section 10.14(a).
"Dollars" and "$" means the lawful money of the United States of America.
"EBITDA" shall mean with reference to any Person, for any fiscal period
under review, the sum of (i) Net Income for that period, less (ii) interest
income reflected in such Net Income, less (iii) any extraordinary one-time non-
Cash gain reflected in such Net Income, plus (iv) any extraordinary losses on
sales of assets and other extraordinary losses and one-time non-Cash charges,
plus (v) Interest Expense (including expensed and capitalized) for that period,
plus (vi) the aggregate amount of federal and state taxes on or measured by
income for that period (whether or not payable during that period), plus (vii)
depreciation, amortization and all other non-cash expenses for that period, in
each case determined in accordance with GAAP and, in the case of items (iv),
(v), (vi) and (vii), only to the extent deducted in the determination of Net
Income for that period.
-11-
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eligible Assignee" means (a) another Lender, (b) with respect to any
Lender, any Affiliate of that Lender and (c) any commercial bank having a
combined capital and surplus of One Hundred Fifty Million Dollars
($150,000,000.00) or more that is (i) organized under the Laws of the United
States of America, any State thereof or the District of Columbia or (ii)
organized under the Laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of such a country, provided that (A) such bank is acting through a
branch or agency located in the United States of America and (B) is otherwise
exempt from withholding of tax on interest and delivers Form 1001 or Form 4224
at the time of any assignment, (d) a financial institution which is an
accredited investor as defined by the Securities Act of 1934 and is otherwise
exempt from withholding tax on interest at the time of any assignment, (e) any
other financial institution that meets the requirements set forth in subclauses
(c)(i) or (c)(ii) above that (i) has a net worth of One Hundred Fifty Million
Dollars ($150,000,000.00) or more, (ii) is engaged in the business of lending
money and extending credit under credit facilities substantially similar to
those extended under this Credit Agreement, and (iii) is operationally and
procedurally able to meet the obligations of a Lender hereunder to the same
degree as a commercial bank, and (f) with respect to such commercial bank or
financial institution as described in (a) through (e) above, no finding of
unsuitability has been made or determined by any Gaming Authority or the gaming
authorities of any other States of the United States of America.
"Environmental Certificate" shall mean the Certificate and Indemnification
Regarding Hazardous Substances to be executed by Borrower on or before the
Closing Date as a further inducement to the Banks to establish the Credit
Facility, as it may be amended, modified, extended, renewed or restated from
time to time.
"Equipment Leases and Contracts" shall mean the executed leases and
purchase contracts pertaining to the FF&E wherein Borrower is the lessee or
vendee, as the case may be, as set forth on that certain schedule marked
"Schedule 4.16", affixed hereto and by this reference incorporated herein and
made a part hereof.
"Event of Default" shall mean any event of default as defined in Section
7.01 hereof.
"Excess Capital Proceeds" shall have the meaning ascribed to such term in
Section 6.09(c) of this Credit Agreement.
"Existing Bank Loan" shall have the meaning ascribed to such term in
Recital Paragraph B.
"Existing Bank Loan Security Documents" shall mean collective reference to
all pledges, security agreements, mortgages, deeds of trust, financing
statements and other documents and instruments securing repayment of the
Existing Bank Loans.
"Existing Credit Agreement" shall have the meaning ascribed to such term
in Recital Paragraph B.
-12-
"Existing Lender(s)" shall have the meaning ascribed to such term in
Recital Paragraph B.
"Existing Note" shall have the meaning ascribed to such term in Recital
Paragraph B.
"FF&E" shall mean collective reference to any and all furnishings,
fixtures and equipment, including, without limitation, all Gaming Devices and
associated equipment, which have been installed or are to be installed and used
in connection with the operation of the Hotel/Casino Facility and in connection
with any other business operation conducted on the Real Property and those
items of furniture, fixtures and equipment which have been purchased or leased
or are hereafter purchased or leased by Borrower in connection with the
Hotel/Casino Facility and in connection with any other business operation
conducted on the Real Property.
"FIRREA" shall mean the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
"Farahi" shall mean collective reference to Xxxx Xxxxxx, Xxxxxx (Xxx)
Xxxxxx and Xxxxxxx (Xxx) Xxxxxx.
"Farahi Family Group" shall mean collective reference to Farahi, Xxxx
Xxxxxx Trust created by agreement dated May 20, 2002, and their respective
children, grandchildren, executors, administrators, testamentary trustees,
heirs, legatees and beneficiaries.
"Federal Funds Rate" means, as of any date of determination, the rate set
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such date opposite the caption "Federal Funds
(Effective)". If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m., New York City Time,
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any successor, the
"Composite 3:30 p.m., New York City Time, Quotation") for such date under the
caption "Federal Funds Effective Rate". If on any relevant date the
appropriate rate for such date is not yet published in either H.15(519) or the
Composite 3:30 p.m. Quotations, the rate for such date will be the arithmetic
mean of the rates for the last transaction in overnight Federal funds arranged
prior to 9:00 a.m. (New York City time) on that date by each of three leading
brokers of Federal funds transactions in New York City selected by the Agent
Bank. For purposes of the Credit Agreement, any change in the Base Rate due to
a change in the Federal Funds Rate shall be effective as of the opening of
business on the effective date of such change.
"Fee Side Letter" shall mean the Side Letter of Understanding Regarding
Fees to be executed by and between Borrower and Agent Bank on or before the
Closing Date concerning payment of the Agent Fees more particularly therein
described.
"Financial Covenants" shall mean collective reference to the financial
covenants set forth in Article VI of this Credit Agreement.
"Financing Statements" shall mean the Uniform Commercial Code financing
statements to be filed in the Office of the Secretary of State of the State of
-13-
Nevada and in the Office of the County Recorder of Washoe County, Nevada, in
order to perfect the security interest granted to Agent Bank on behalf of
Lenders under the Deed of Trust and other Security Documents in accordance with
requirements of the Nevada Uniform Commercial Code, as such financing
statements may be amended, modified, extended, renewed or restated from time to
time.
"Fiscal Quarter" shall mean the consecutive three (3) month periods during
each Fiscal Year beginning on January 1, April 1, July 1 and October 1 and
ending on March 31, June 30, September 30 and December 31, respectively.
"Fiscal Year" shall mean the fiscal year period beginning January 1 of
each calendar year and ending on the following December 31.
"Fiscal Year End" shall mean December 31 of each calendar year.
"Funded Debt" shall mean with reference to the Borrower for any period the
daily average of the Aggregate Outstandings for the last month of such period,
plus the total as of the last day of such period of both the long-term and
current portions (without duplication) of all other interest bearing
Indebtedness and Capitalized Lease Liabilities.
"Funded Outstandings" shall mean the unpaid principal amount outstanding
on the Credit Facility as of any given date of determination for Borrowings
made thereunder, not including Swingline Outstandings or the amount of any L/C
Exposure.
"Funding Date" shall mean each date upon which Lenders fund Borrowings
requested by Borrower in accordance with the provisions of Section 2.03 or at
the request of Agent Bank pursuant to Section 2.08 or 2.09.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Gaming Devices" shall mean slot machines and other devices which
constitute gaming devices and related equipment as defined in Nevada Revised
Statute Chapter 463 and Nevada Gaming Commission Regulations by the Nevada
Gaming Authorities and Gaming Laws.
"Gaming Laws" shall mean all statutes, rules, regulations, ordinances,
codes and administrative or judicial precedents pursuant to which any Gaming
Authority possesses regulatory licensing or permit authority over gambling,
gaming or casino activities conducted by Borrower at the Hotel/Casino Facility,
including the Nevada Gaming Control Act and regulations promulgated thereunder.
"Gaming Permits" shall mean collective reference to every license, permit
or other authorization required to own, operate and otherwise conduct gambling,
gaming and casino activities at the Hotel/Casino Facility, including, without
limitation, all licenses granted by the Nevada Gaming Authorities.
-14-
"Gaming Revenues" shall mean all income and revenues of Borrower derived
from gaming and gambling activities which are subject to taxation by the Nevada
Gaming Authorities.
"Government Securities" means readily marketable (a) direct full faith and
credit obligations of the United States of America or obligations guaranteed by
the full faith and credit of the United States of America and (b) obligations
of an agency or instrumentality of, or corporation owned, controlled or
sponsored by, the United States of America that are generally considered in the
securities industry to be implicit obligations of the United States of America.
"Governmental Authority" or "Governmental Authorities" shall mean any
federal, state, regional, county or municipal governmental agency, board,
commission, officer or official in the United States of America whose consent
or approval is required or whose regulations must be followed as a prerequisite
to (i) the continued operation and occupancy of the Real Property and the
Hotel/Casino Facility or (ii) the performance of any act or obligation or the
observance of any agreement, provision or condition of whatever nature herein
contained.
"Gross Revenues" shall mean all income and revenues of Borrower at the
Hotel/Casino Facility from all sources.
"Guarantor" shall mean MCRI.
"Guaranty" shall mean the General Continuing Guaranty to be executed by
MCRI in favor of the Agent Bank on behalf of Banks, under the terms of which
MCRI irrevocably and unconditionally guaranties to Agent Bank on behalf of the
Banks the full and prompt payment and performance of all Obligations, a copy of
the form of which is marked "Exhibit I", affixed hereto and by this reference
incorporated herein and made a part hereof, as the same may be amended,
modified, supplemented, replaced, renewed or restated from time to time.
"Hazardous Materials Laws" shall have the meaning ascribed to such term in
the Environmental Certificate.
"Hotel/Casino Facility" shall mean collective reference to the Real
Property, the improvements located thereon and the hotel and casino business
and related activities conducted on the Real Property.
"Hotel/Casino Property" shall mean that certain real property more
particularly described on that certain schedule marked "Schedule A", affixed
hereto and by this reference incorporated herein and made a part hereof.
"Indebtedness" of any Person includes all obligations, contingent or
otherwise, which in accordance with GAAP should be classified upon such
Person's balance sheet as liabilities, but in any event including liabilities
for borrowed money or other liabilities secured by any lien existing on
property owned or acquired by such Person, or a Subsidiary thereof (whether or
not the liability secured thereby shall have been assumed), obligations which
have been or under GAAP should be capitalized for financial reporting purposes,
the face amount of all Letters of Credit issued for the account of such Person
and all guaranties, endorsements, and other contingent obligations with respect
to Indebtedness of others, including, but not limited to, any obligations to
acquire any of such Indebtedness, to purchase, sell, or furnish property or
-15-
services primarily for the purpose of enabling such other Person to make
payment of any of such Indebtedness, or otherwise to assure the owner of any of
such Indebtedness against loss with respect thereto.
"Intangibles" shall mean the aggregate goodwill, trademarks, patents,
organizational expense and other similar intangible items of the Borrower
determined in accordance with GAAP.
"Interest Expense" shall mean with respect to any Person, as of the last
day of any fiscal period under review, the sum of (i) all interest, fees,
charges and related expenses paid or payable (without duplication but including
capitalized interest) for that fiscal period by such Person to a lender in
connection with borrowed money (including any obligations for fees, charges and
related expenses payable to the issuer of any letter of credit) or the deferred
purchase price of assets that are considered "interest expense" under GAAP,
plus (ii) the portion of the up front costs and expenses for Interest Rate
Xxxxxx (to the extent not included in (i)) fairly allocated to such interest
rate xxxxxx as expenses for such period, plus (iii) the portions of Capital
Lease Liabilities paid or payable with respect to such period that should be
treated as interest in accordance with GAAP.
"Interest Period(s)" shall have the meaning set forth in Section 2.05(d)
of the Credit Agreement.
"Interest Rate Xxxxxx" shall mean, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements, basis swap, forward rate agreement and interest collar or floor
agreements and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.
"Interest Rate Option" shall have the meaning ascribed to such term in
Section 2.05(b) of the Credit Agreement.
"Investment" shall mean, when used in connection with any Person: (i) any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of a
loan, advance creating a debt, capital contribution, guaranty or other debt or
equity participation or interest in any other Person, including any partnership
and joint venture interests of such Person, (ii) any Acquisition, and (iii) any
other item that is or would be classified as an investment on a balance sheet
of such Person prepared in accordance with GAAP, as in effect as of the Closing
Date. The amount of any Investment shall be the amount actually invested
without adjustment for subsequent increases or decreases in the value of such
Investment.
"L/C Agreement(s)" shall mean collective reference to the Application and
Agreement for Standby Letter of Credit and Application for Commercial Letter of
Credit and addendum(s) thereto executed by an Authorized Officer of Borrower in
favor of L/C Issuer in L/C Issuer's standard form, setting forth the terms and
conditions upon which L/C Issuer shall issue a Letter(s) of Credit, as the same
may be amended or modified from time to time.
"L/C Exposure" shall mean the aggregate amount which L/C Issuer may be
required to fund or is contingently liable for disbursement under all issued
and outstanding Letter(s) of Credit, which amount shall be determined by
subtracting from the aggregate of the Stated Amount of each such Letter(s) of
-16-
Credit (to the extent such Letter of Credit is not secured by Cash deposited
into the Cash Collateral Account and subject to the Cash Collateral Pledge
Agreement), the principal amount of all L/C Reimbursement Obligations which
have accrued and have been fully satisfied as of each date of determination.
"L/C Facility" shall mean the agreement of L/C Issuer to issue Letters of
Credit subject to the terms and conditions and up to the maximum amounts and
duration as set forth in Section 2.09 of the Credit Agreement.
"L/C Fee" shall have the meaning set forth in Section 2.10(c) of the
Credit Agreement.
"L/C Issuer" shall mean WFB in its capacity as the issuer of Letters of
Credit under the L/C Facility.
"L/C Reimbursement Obligation(s)" shall mean the obligation of Borrower to
reimburse L/C Issuer for amounts funded or disbursed under a Letter(s) of
Credit, together with accrued interest thereon.
"LIBO Rate" means, relative to any LIBOR Loan Interest Period for any
LIBOR Loan included in any Borrowing, the per annum rate (reserve adjusted as
hereinbelow provided) of interest quoted by Agent Bank, at which Dollar
deposits in immediately available funds are offered to Agent Bank by leading
banks in the London interbank market at approximately 11:00 a.m. London,
England time two (2) Banking Business Days prior to the beginning of such
Interest Period, for delivery on the first day of such Interest Period for a
period approximately equal to such Interest Period and in an amount equal or
comparable to the LIBOR Loan to which such Interest Period relates. The
foregoing rate of interest shall be reserve adjusted by dividing the applicable
LIBO Rate by one (1.00) minus the LIBOR Reserve Percentage, with such quotient
to be rounded upward to the nearest whole multiple of one-hundredth of one
percent (0.01%). All references in this Credit Agreement or other Loan
Documents to a LIBO Rate include the aforesaid reserve adjustment.
"LIBOR Loan" shall mean each portion of the total unpaid principal under
the Credit Facility which bears interest at a rate determined by reference to
the LIBO Rate plus the Applicable Margin.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBOR Loans made by any Lender, the reserve percentage (expressed as a decimal)
equal to the actual aggregate reserve requirements (including all basic,
emergency, supplemental, marginal and other reserves and taking into account
any transactional adjustments or other scheduled changes in reserve
requirements) announced within Agent Bank as the reserve percentage applicable
to Agent Bank as specified under regulations issued from time to time by the
Federal Reserve Board. The LIBOR Reserve Percentage shall be based on
Regulation D of the Federal Reserve Board or other regulations from time to
time in effect concerning reserves for "Eurocurrency Liabilities" from related
institutions as though Agent Bank were in a net borrowing position.
"Laws" means, collectively, all international, foreign, federal, state and
local statutes, rules, regulations, ordinances, codes and administrative or
judicial precedents.
"Lender Reply Period" shall have the meaning set forth in Section 9.10(d).
-17-
"Lender" shall mean individual reference and "Lenders" shall mean
collective reference to WFB and any other bank, finance company, insurance
company or other financial institution which is or becomes a party to this
Credit Agreement by execution of a counterpart signature page hereto or an
Assignment and Assumption Agreement, as assignee. At all times that there are
no Lenders other than WFB, the terms "Lender" and "Lenders" means WFB in its
individual capacity. With respect to matters requiring the consent to or
approval of all Lenders at any given time, all then existing Defaulting Lenders
will be disregarded and excluded, and, for voting purposes only, "all Lenders"
shall be deemed to mean "all Lenders other than Defaulting Lenders".
"Letter(s) of Credit" shall mean collective reference to the Standby
Letter(s) of Credit and/or Commercial Letter(s) of Credit, as the case may be,
issued by L/C Issuer on behalf of Borrower, as the same may be extended,
renewed or reissued from time to time.
"Leverage Ratio" as of the end of any Fiscal Quarter shall mean the ratio
resulting by dividing (a) Funded Debt for the Fiscal Quarter under review by
(b) the sum of Adjusted EBITDA for the Fiscal Quarter under review plus
Adjusted EBITDA for each of the most recently ended three (3) preceding Fiscal
Quarters.
"Liabilities" shall mean the total liabilities of the Borrower in
accordance with GAAP.
"Liabilities and Costs" means all claims, judgments, liabilities,
obligations, responsibilities, losses, damages (including lost profits),
punitive or treble damages, costs, disbursements and expenses (including,
without limitation, reasonable attorneys', experts' and consulting fees and
costs of investigation and feasibility studies), fines, penalties and monetary
sanctions, interest, direct or indirect, absolute or contingent, past, present
or future.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof, and any agreement
to give any security interest) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing.
"Loan Documents" shall mean collective reference to the Credit Agreement,
the Revolving Credit Note, the Swingline Note, the Security Documentation, Cash
Collateral Pledge Agreement, the Environmental Certificate and all other
documents and instruments which may hereafter be executed and delivered by or
on behalf of Borrower or any other Person in connection with the Credit
Facility for the benefit of Banks or Agent Bank on behalf of the Lenders, the
Swingline Lender and/or the L/C Issuer
"MCRI" shall mean Monarch Casino & Resort, Inc., a Nevada corporation.
"MCRI Consolidation" shall mean MCRI and its Subsidiaries on a
consolidated basis.
"MCRI Corporate Overhead Allocation" shall mean for any fiscal period, all
costs and expenses of MCRI or any Affiliate of MCRI which are paid by Borrower
or which are paid by Distributions made by Borrower to MCRI or such Affiliate
of MCRI.
-18-
"Mandatory Commitment Reduction(s)" shall mean a permanent reduction of
the Aggregate Commitment which shall be made from time to time as may be
required under Sections 5.12, 6.09(c) and/or 8.02.
"Margin Stock" shall have the meaning provided in Regulation U of the
Board of Governors of the Federal Reserve System.
"Material Adverse Change" shall mean: (i) any set of circumstances of
events which, other than with respect to the Representations and Warranties set
forth in Article IV of the Credit Agreement which shall be construed to be
applicable to circumstances and events existing both as of the Closing Date (or
such earlier date as may be referenced in each particular provision) and
subsequent to the Closing Date, are not in existence as of the Closing Date,
which are material and adverse to (a) the Collateral or (b) the condition
(financial or otherwise) or business operations of the Borrower taken as a
whole, or (c) the ability of any of the Lenders to enforce any of their
material rights or remedies under any of the Loan Documents, or (ii) any events
or changes, which, other than with respect to the Representations and
Warranties set forth in Article IV of the Credit Agreement which shall be
construed to be applicable to events and changes existing both as of the
Closing Date (or such earlier date as may be referenced in each particular
provision) and subsequent to the Closing Date, are not in existence as of the
Closing Date and which have or result in a material adverse effect upon (a) the
priority of the security interests granted to Agent Bank, (b) the validity of
any of the Loan Documents, which is not promptly cured or corrected to the
reasonable satisfaction of Agent Bank, as provided in Section 5.13 or (c) the
use, occupancy or operation of the Hotel/Casino Facility taken as a whole,
except during periods of repair or replacement as provided under Section 8.02.
"Maturity Date" shall mean February 23, 2009.
"Maximum Availability" shall mean the Maximum Permitted Balance less the
Aggregate Outstandings.
"Maximum Permitted Balance" shall mean the maximum amount of Aggregate
Outstandings which may be outstanding on the Bank Facilities from time to time,
which shall be the amount of the Aggregate Commitment as may be reduced from
time to time by: (i) Scheduled Reductions, (ii) Voluntary Permanent Reductions
and (iii) Mandatory Commitment Reductions.
"Net Income" shall mean with respect to any Person for any fiscal period,
the net income of such Person during such fiscal period determined in
accordance with GAAP.
"Net Proceeds" shall mean the aggregate Capital Proceeds received by the
Borrower in Cash or Cash Equivalent in respect of any partial or total
condemnation or destruction of any part of the Collateral or any sale,
transfer, conveyance or disposition of FF&E, net of: (i) the direct costs
relating to such sale, transfer, conveyance or disposition of FF&E, (ii)
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such sale, transfer,
conveyance or disposition of FF&E, and (iii) any reserve for adjustment in
respect of the sale price of such FF&E or liabilities associated with such
sale, transfer, conveyance or disposition of FF&E and retained by the Borrower.
-19-
"Nevada Gaming Authorities" shall mean, without limitation, the Nevada
Gaming Commission and the State Gaming Control Board and any other applicable
governmental or administrative state or local agency involved in the regulation
of gaming and gaming activities conducted by the Borrower in the State of
Nevada.
"Non Pro Rata Borrowing" means a Borrowing with respect to which fewer
than all Lenders have funded their respective Pro Rata Shares of such Borrowing
and the failure of the non-funding Lender or Lenders to fund its or their
respective Pro Rata Shares of such Borrowing constitutes a breach of this
Credit Agreement.
"Notes" shall mean collective reference to the Revolving Credit Note and
the Swingline Note.
"Notice of Borrowing" shall have the meaning set forth in Section 2.03.
"Notice of Swingline Advance" shall have the meaning set forth in Section
2.08(b).
"Obligations" means, from time to time, all Indebtedness of Borrower owing
to Agent Bank, any Lender or any Person entitled to indemnification pursuant to
Section 5.14, or any of their respective successors, transferees or assigns, of
every type and description, whether or not evidenced by any note, guaranty or
other instrument, arising under or in connection with this Credit Agreement or
any other Loan Document, whether or not for the payment of money, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, reasonable attorneys' fees and disbursements, reasonable fees
and disbursements of expert witnesses and other consultants, and any other sum
now or hereinafter chargeable to Borrower under or in connection with Credit
Agreement or any other Loan Document. Notwithstanding the foregoing definition
of "Obligations", Borrower's obligations under any environmental indemnity
agreement constituting a Loan Document, or any environmental representation,
warranty, covenant, indemnity or similar provision in this Credit Agreement or
any other Loan Document, shall be secured by the Collateral only to the extent,
if any, specifically provided in the Security Documentation.
"Pedestrian Crossing" shall mean the elevated pedestrian crossing which is
constructed between the Hotel/Casino Property and the V/P Property which
includes, among other things, a restaurant, bar, gaming space and other public
areas.
"Pedestrian Crossing Air Space" shall mean that portion of the airspace
between the Hotel/Casino Property and the V/P Property within which the
Pedestrian Crossing is constructed.
"Pedestrian Crossing Air Space License" shall mean that certain
Application and Permit for Occupancy of Nevada Department of Transportation
Right of Way, which was issued to Borrower by the State of Nevada Department of
Transportation, under Permit Number 2-28-97, for the purpose of authorizing
Borrower's construction and use of the Pedestrian Crossing within the
Pedestrian Crossing Air Space.
-20-
"Pension Plan" means any "employee pension benefit plan" that is subject
to Title IV of ERISA and which is maintained for employees of Borrower or any
of its ERISA Affiliates.
"Permitted Encumbrances" shall mean, at any particular time, (i) liens for
taxes, assessments or governmental charges not then due and payable or not then
delinquent, (ii) statutory liens for labor and/or materials and liens for
taxes, assessments or governmental charges the validity of which, in either
instance, are being contested in good faith by Borrower by appropriate
proceedings, and as provided in Sections 5.03 and 5.10 hereof, respectively,
provided that, Borrower shall have maintained adequate reserves in accordance
with GAAP for payment of same, (iii) liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment
of borrowed money); (iv) leases or subleases granted to others (including,
without limitation, any Subsidiary) not interfering in any material respect
with the ordinary conduct of the business of the Hotel/Casino Facility; (v)
liens created or contemplated by the Security Documents, (vi) the liens,
encumbrances and restrictions on the Real Property, FF&E and existing
improvements which are shown as exceptions on Schedule B of the Title Policy to
be issued by Title Insurance Company as of the Closing Date, (vii) liens
consented to in writing by Agent Bank upon the approval of Requisite Lenders,
(viii) liens of legally valid capital leases and purchase money security
interests for FF&E to the extent permitted by Section 6.08(c), and (ix) each
and every easement, license, restriction or right-of-way that (A) is hereafter
granted to any Governmental Authority or public utility providing services to
the Real Property or (B) does not interfere in any material respect with the
business operation of the Hotel/Casino Facility; and (x) judgment liens, writs,
warrants, levies, distraints, attachments and other similar process which do
not constitute an Event of Default.
"Person" means an individual, firm, corporation, limited liability
company, trust, association, partnership, joint venture, tribunal or other
entity.
"Policies of Insurance" shall mean the insurance to be obtained and
maintained by Borrower throughout the term of this Credit Agreement as provided
by Section 5.09 herein.
"Post Foreclosure Plan" shall have the meaning set forth in Section
9.11(e).
"Pricing Certificate" shall have the meaning set forth in Section 5.08(c).
"Prime Rate" means at any time, and from time to time, the rate of
interest most recently announced within WFB at its principal office in San
Francisco, California, as its "Prime Rate", with the understanding that WFB's
"Prime Rate" is one of its base rates and serves as the basis upon which
effective rates of interest are calculated for those loans and extensions of
credit making reference thereto, and is evidenced by the recording thereof
after its announcement in such internal publication or publications as WFB may
designate. Each change in the Prime Rate shall be effective on the day the
change is announced within WFB.
-21-
"Principal Prepayments" shall have the meaning set forth in Section
2.07(a) of this Credit Agreement.
"Pro Rata" or "Pro Rata Share" shall mean, with respect to any Lender, a
percentage equal to such Lender's Syndication Interest in the Credit Facility
as set forth on the Schedule of Lenders' Proportions in Credit Facility.
"Protective Advance" means all sums expended as reasonably determined by
Agent Bank to be necessary to: (a) protect the priority, validity and
enforceability of the Security Documentation on, and security interests in, any
Collateral and the instruments evidencing or securing the Obligations, or (b)
prevent the value of any Collateral from being materially diminished (assuming
the lack of such a payment within the necessary time frame could potentially
cause such Collateral to lose value), or (c) protect any of the Collateral from
being materially damaged, impaired, mismanaged or taken, including, without
limitation, any amounts expended in accordance with Section 10.20 or post-
foreclosure ownership, maintenance, operation or marketing of any Collateral.
"Qualified Appraisal" shall mean reference to an appraisal or appraisals
of the Hotel/Casino Facility and Collateral, or any portion thereof, acceptable
to Agent Bank, prepared at Borrower's expense in compliance with FIRREA by an
appraiser acceptable to Agent Bank, with sufficient copies delivered to Agent
Bank for distribution to each of the Lenders.
"Rate Adjustment Date" shall mean June 1, 2004 and thereafter the first
(1st) day of the third (3rd) month immediately following each Fiscal Quarter
end.
"Real Property" shall mean collective reference to the Hotel/Casino
Property, the Pedestrian Crossing Airspace, the V/P Property; provided,
however, that in the event the V/P Property, or any portion thereof, is
released as Collateral pursuant to the provisions of Section 5.23 of this
Credit Agreement, the term "Real Property" shall thereafter mean only the
Hotel/Casino Property, the Pedestrian Crossing Airspace and that portion of the
V/P Property not released.
"Reduction Date(s)" shall mean, subject to the effect of Section 2.01(f),
reference to each date or the dates, as the context may require, upon which the
Aggregate Commitment is reduced by a Scheduled Reduction as set forth on the
Aggregate Commitment Reduction Schedule.
"Related Entities" shall mean collective reference to all stockholders,
Affiliates and Subsidiaries of the Borrower.
"Replacement Note(s)" shall have the meaning set forth in Section 2.06(i)
of the Credit Agreement.
"Reportable Event" shall mean any of the events described in Section
4043(b) of ERISA, other than an event for which the thirty (30) day notice
requirement is waived by regulations.
"Requisite Lenders" means, as of any date of determination prior to the
occurrence of an Event of Default, Lenders holding Syndication Interests equal
to or in excess of sixty-six and two-thirds percent (66-2/3%) of the Credit
Facility; and at all times during which an Event of Default has occurred and
remains continuing, Lenders holding a percentage equal to or in excess of
sixty-six and two-thirds percent (66-2/3%) of the Funded Outstandings; provided
-22-
that, (i) in determining such percentage at any given time, all then existing
Defaulting Lenders will be disregarded and excluded and the Pro Rata Shares of
Lenders shall be redetermined, for voting purposes only, to exclude the Pro
Rata Shares of such Defaulting Lenders, and (ii) notwithstanding the foregoing,
at all times when two or more Lenders are party to this Credit Agreement, the
term Requisite Lenders shall in no event mean less than two (2) Lenders.
"Revolving Credit Note" shall mean the Revolving Credit Note, a copy of
which is marked "Exhibit A", affixed hereto and by this reference incorporated
herein and made a part hereof, to be executed by Borrower on the Closing Date,
payable to the order of Agent Bank on behalf of the Lenders, evidencing the
Credit Facility.
"Revolving Credit Period" shall mean the period commencing on the Closing
Date and terminating on the Maturity Date.
"Schedule of Lenders' Proportions in Credit Facility" shall mean the
Schedule of Lenders' Proportions in Credit Facility, a copy of which is marked
"Schedule 2.01(a)", affixed hereto and by this reference incorporated herein
and made a part hereof, setting forth the respective Syndication Interest and
maximum amount to be funded under the Credit Facility by each Lender, as the
same may be amended, modified or restated from time to time in connection with
an Assignment and Assumption Agreement.
"Schedule of Significant Litigation" shall mean the Schedule of
Significant Litigation, a copy of which is set forth as Schedule 3.18, affixed
hereto and by this reference incorporated herein and made a part hereof,
setting forth the information described in Section 3.18 with respect to each
Significant Litigation.
"Scheduled Reductions" shall mean, subject to the effect of Section
2.01(f), the amount by which the Aggregate Commitment is reduced on each
Reduction Date as set forth on the Aggregate Commitment Reduction Schedule.
"Second Anniversary Date" shall mean the second annual anniversary of the
Closing Date.
"Secured Interest Rate Hedge(s)" shall mean any Interest Rate Hedge
entered into between Borrower and any Lender, or Affiliate of any Lender, which
is secured by the Security Documentation.
"Security Documentation" shall mean collective reference to the Deed of
Trust, Assignment of Entitlements, Contracts, Rents and Revenues and all other
documents, instruments or agreements which are executed or delivered by or on
behalf of Borrower and accepted by Agent Bank, on behalf of the Lenders, as
security for payment of the Bank Facilities.
"Share Repurchases" shall mean the purchase of shares of any class of
stock, option, right or other equity interest, whether voting or non-voting of
MCRI by MCRI.
"Significant Litigation" shall mean each action, suit, proceeding,
litigation and controversy involving Borrower involving claims in excess of Two
Million Dollars ($2,000,000.00) or which if determined adverse to the interests
of Borrower could result in a Material Adverse Change.
-23-
"Spaceleases" shall mean the executed leases and concession agreements
pertaining to the Hotel/Casino Facility, or any portion thereof, wherein
Borrower is the lessor, as set forth on that certain schedule marked "Schedule
4.15", affixed hereto and by this reference incorporated herein and made a part
hereof.
"Standby Letter(s) of Credit" shall mean a letter or letters of credit
issued by L/C Issuer pursuant to Section 2.09 of the Credit Agreement for the
purpose of securing payment or performance of a financial obligation of
Borrower, other than in connection with the payment for goods, equipment or
materials.
"Stated Amount" shall mean the maximum amount which L/C Issuer may be
required to disburse to the beneficiary(ies) of a Letter(s) of Credit under the
terms thereof.
"Stated Expiry Date(s)" shall mean the date set forth on the face of a
Letter(s) of Credit as the date when all obligations of L/C Issuer to advance
funds thereunder will terminate, as the same may be extended from time to time.
"Stock Repurchase Limitation Release" shall have the meaning ascribed to
such term in Section 6.04.
"Subsidiary" shall mean, on the date in question, any Person of which an
aggregate of 50% or more of the stock of any class or classes (or equivalent
interests) is owned of record or beneficially, directly or indirectly, by
another Person and/or any of its Subsidiaries, if the holders of the stock of
such class or classes (or equivalent interests) (a) are ordinarily, in the
absence of contingencies, entitled to vote for the election of a majority of
the directors (or individuals performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are entitled, as such holders, to vote for the election of
a majority of the directors (or individuals performing similar functions) of
such Person, whether or not the right so to vote exists by reason of the
happening of a contingency.
"Swingline Advance" shall mean each advance made by Swingline Lender to
Borrower under the Swingline Facility.
"Swingline Facility" shall mean the agreement of Swingline Lender to make
Swingline Advances to Borrower subject to the terms and conditions and up to
the maximum amounts and for the duration as set forth in Section 2.08 of this
Credit Agreement.
"Swingline Lender" shall have the meaning set forth in the Preamble of
this Credit Agreement.
"Swingline Note" shall mean the Swingline Note, a copy of which is marked
"Exhibit B", affixed hereto and by this reference incorporated herein and made
a part hereof, to be executed by Borrower on the Closing Date, payable to the
order of Swingline Lender evidencing the Swingline Facility.
"Swingline Outstandings" shall mean the aggregate amount of all
outstanding and unpaid Swingline Advances as of each date of determination.
-24-
"Syndication Interest" shall mean the proportionate interest of each
Lender in the Credit Facility as set forth on the Schedule of Lenders'
Proportions in Credit Facility, as the same may be amended or restated from
time to time.
"Tangible Net Worth" shall mean Assets, excluding Intangibles, less
Liabilities.
"Title Insurance Company" shall mean Ticor Title Insurance Company, and
its issuing agent, Western Title Company, Inc., with offices located at 000
Xxxxx Xxxxxx, Xxxx, Xxxxxx, together with such reinsurers with direct access as
are requested by Agent Bank or other title insurance company or companies as
may be acceptable to Agent Bank.
"Title Policy" shall mean the ALTA Extended Coverage Lenders Policy of
Title Insurance, and the endorsements thereto, which are to be issued by the
Title Insurance Company, as of the Closing Date, in the amount of Fifty Million
Dollars ($50,000,000.00), in favor of Agent Bank, insuring the Deed of Trust as
a first priority mortgage lien encumbering the Real Property therein described
subject only to the exceptions shown therein in Schedule B, Part One, together
with all such endorsements thereto as are required by Agent Bank; all in
accordance with the Closing Instructions.
"Trademark Security Agreement" shall mean the security agreement to be
executed by Borrower as of the Closing Date for the purpose of granting a
security interest in favor of Agent Bank on behalf of Lenders in all
trademarks, tradenames, copyrights and servicemarks used in connection with the
Hotel/Casino Facility, including, without limitation each registration and
application set forth on Schedule 4.22 or otherwise described on Schedule A to
the Trademark Security Agreement.
"Unsuitable Lender" shall have the meaning set forth in Section 10.10(d).
"V/P Property" shall mean the real property more particularly described on
that certain schedule marked "Schedule B", affixed hereto and by this reference
incorporated herein and made a part hereof.
"Village Shopping Center" shall mean the shopping center known as "The
Village" and formerly known as the Sierra Marketplace Shopping Center, located
at the southeast corner of Virginia Street and Xxxxx Xxxx, Reno, Nevada, that
is owned by BLILP, a portion of which is the subject of the Adjacent Driveway
Lease.
"Voluntary Permanent Reduction" shall have the meaning set forth in
Section 2.01(c).
"WFB" shall mean Xxxxx Fargo Bank, National Association.
Section 1.02 - Interpretation and Construction. In this Credit Agreement,
unless the context otherwise requires:
A - Articles and Sections mentioned by number only are the respective
Articles and Sections of this Credit Agreement as so numbered;
-25-
B - Words importing a particular gender mean and include every other
gender, and words importing the singular number mean and include the plural
number and vice versa;
C - All times specified herein, unless otherwise specifically referred,
shall be the time in San Francisco, California;
D - Any headings preceding the texts of the several Articles and Sections
of this Credit Agreement, and any table of contents or marginal notes appended
to copies hereof, shall be solely for convenience of reference and shall not
constitute a part of this Credit Agreement, nor shall they affect its meaning,
construction or effect;
E - If any clause, definition, provision or Section of this Credit
Agreement shall be determined to be apparently contrary to or conflicting with
any other clause, definition, provision or Section of this Credit Agreement
then the clause, definition, provision or Section containing the more specific
provisions shall control and govern with respect to such apparent conflict.
The parties hereto do agree that each has contributed to the drafting of this
Credit Agreement and all Loan Documents and that the provisions herein
contained shall not be construed against either Borrower or Lenders as having
been the person or persons responsible for the preparation thereof;
F - The terms "herein", "hereunder", "hereby", "hereto", "hereof" and any
similar terms as used in the Credit Agreement refer to this Credit Agreement;
the term "heretofore" means before the date of execution of this Credit
Agreement; and the term "hereafter" means after the date of the execution of
this Credit Agreement;
G - All accounting terms used herein which are not otherwise specifically
defined shall be used in accordance with GAAP;
H - If any clause, provision or Section of this Credit Agreement shall be
ruled invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any of the remaining
provisions hereof; and
I - Each reference to this Credit Agreement or any other Loan Document or
any of them, as used in this Credit Agreement or in any other Loan Document,
shall be deemed a reference to this Credit Agreement or such Loan Document, as
applicable, as the same may be amended, modified, supplemented, replaced,
renewed or restated from time to time.
Section 1.03 - Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Credit Agreement shall have such meanings when used in the Notes and in each
Loan Document and other communication delivered from time to time in connection
with this Credit Agreement or any other Loan Document.
Section 1.04 - Cross-References. Unless otherwise specified, references
in this Credit Agreement and in each other Loan Document to any Article or
Section are references to such Article or Section of this Credit Agreement or
such other Loan Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references
to such clause of such Article, Section or definition.
-26-
Section 1.05 - Exhibits and Schedules. All Exhibits and Schedules to this
Credit Agreement, either as originally existing or as the same may from time to
time be supplemented, modified or amended, are incorporated herein by this
reference.
ARTICLE II
AMOUNT, TERMS AND SECURITY OF THE BANK FACILITIES
Section 2.01 - The Credit Facility.
a. Subject to the conditions and upon the terms hereinafter set forth and
in accordance with the terms and provisions of the Revolving Credit Note, on
and after the Closing Date Lenders severally agree in the proportions set forth
on the Schedule of Lenders' Proportions in Credit Facility to lend and advance
Borrowings to Borrower, up to the Aggregate Commitment in the initial amount of
Fifty Million Dollars ($50,000,000.00), subject to increase by up to an
additional Thirty Million Dollars ($30,000,000.00) as provided in Section
2.01(e) hereinbelow, in such amounts as Borrower may request by Notice of
Borrowing duly executed by an Authorized Officer and delivered to Agent Bank
from time to time as provided in Section 2.03.
b. Subject to the uses and purposes set forth in Section 2.02, on and
after the Closing Date Borrower may borrow, repay and reborrow the Borrowings
up to the Available Borrowings from time to time. Provided, however, amounts
of Funded Outstandings bearing interest with reference to a LIBO Rate shall be
subject to Breakage Charges incident to prepayment. The Credit Facility shall
be for a term commencing on the Closing Date and terminating on the Maturity
Date. In no event shall any Lender be liable to fund any amounts under the
Credit Facility in excess of its respective Syndication Interest in any
Borrowing.
c. Notwithstanding the Scheduled Reductions to the Maximum Permitted
Balance as set forth on the Aggregate Commitment Reduction Schedule, Borrower
may voluntarily further reduce the Maximum Permitted Balance from time to time
(a "Voluntary Permanent Reduction") on the following conditions:
(i) that each such Voluntary Permanent Reduction be in the minimum
amount of Five Hundred Thousand Dollars ($500,000.00) and in
increments of Fifty Thousand Dollars ($50,000.00) and made in
writing by an Authorized Officer of Borrower, effective on the
third (3rd) Banking Business Day following receipt by Agent
Bank; and
(ii) that each such Voluntary Permanent Reduction shall be
irrevocable and a permanent reduction to the Maximum Permitted
Balance.
d. In the event any Scheduled Reduction, Voluntary Permanent Reduction or
Mandatory Commitment Reduction reduces the Maximum Permitted Balance to
less than the sum of the Funded Outstandings, the Borrower shall immediately,
cause the Funded Outstandings to be reduced by such amount as may be necessary
to cause the Funded Outstandings to be equal to or less than the Maximum
Permitted Balance.
e. Commitment Increase. Borrower may, by written notice to the Agent Bank
and the Lenders, increase the Aggregate Commitment by up to an additional
Thirty Million Dollars ($30,000,000.00) (the actual amount of such
-27-
increase to the Aggregate Commitment being herein referred to as the
"Commitment Increase"); provided that (i) no Default or Event of Default has
occurred and remain continuing, (ii) the Second Anniversary Date has not then
occurred, (iii) the obligation to fund the Commitment Increase is assumed by a
Lender or Lenders then party to this Credit Agreement or (after having first
offered the Commitment Increase to the Lenders then party to the Credit
Agreement) by a Person or Persons that are Eligible Assignees, in each case
acceptable to Borrower and, in the latter case, reasonably acceptable to the
Agent Bank, and in each instance evidenced in writing by execution of an
Assumption and Consent Agreement in the form of Exhibit L attached hereto,
executed by each such assuming Lender or Eligible Assignee, Agent Bank and
Borrower, provided that no Lender shall have any obligation to increase its
Syndication Interest in effect as of the Closing Date, (iv) each such assuming
Lender or Eligible Assignee concurrently purchases a Pro Rata Share of the
Funded Outstandings from the Lenders party to the Credit Agreement (and each
Lender hereby agrees to sell the appropriate proportion of its Pro Rata Share
at par value to such assuming Lender or Eligible Assignee) that is equivalent
to the increased new Pro Rata Share of each such assuming Lender or Eligible
Assignee after giving effect to the Commitment Increase and such Lender's
Syndication Interest in the Aggregate Commitment, (v) Borrower pays Agent Bank
any amount owing under Section 2.07(c) and any fees owing to the Agent Bank or
to the assuming Lenders or Eligible Assignees committing to fund the Commitment
Increase based upon negotiations made in connection with the funding of the
Commitment Increase, (vi) the Commitment Increase shall not increase the Pro
Rata Share of the Aggregate Commitment and the Pro Rata Share of the amount of
the Funded Outstandings held by any other Lender absent the express written
consent of that Lender, (vii) the Commitment Increase shall be made on a one-
time basis only, and (viii) the Commitment Increase shall not be available for
advance by Lenders until each condition precedent set forth in Sections 3.24
through 3.31 of Article III C shall have occurred and been fully satisfied.
Giving effect to the Commitment Increase and purchase of Pro Rata Shares of the
Funded Outstandings, adjustments shall be made to the Pro Rata Shares of the
Lenders in the Aggregate Commitment and the Pro Rata Shares of Funded
Outstandings such that the Pro Rata Shares of each Lender in the Aggregate
Commitment shall be identical to its Pro Rata Share of the Funded Outstandings.
The Agent Bank shall promptly thereafter prepare and circulate to Borrower and
the Banks a revised Schedule of Lenders' Proportions in Credit Facility
reflecting such increased Aggregate Commitment and the revised Pro Rata Shares
of the Lenders in the Credit Facility, and such revised Schedule of Lenders'
Proportions in Credit Facility shall supersede and replace the then existing
Schedule of Lenders' Proportions in Credit Facility.
f. Waiver of Scheduled Reductions. Notwithstanding anything herein
contained or set forth on the Aggregate Commitment Reduction Schedule to the
contrary, in the event Borrower achieves a Leverage Ratio equal to or less than
1.00 to 1.00 as of the end of any two (2) consecutive Fiscal Quarters, the
Scheduled Reduction required to be made as of the next consecutive Fiscal
Quarter shall be waived for that Fiscal Quarter. In the event after having
achieved a Leverage Ratio equal to or less than 1.00 to 1.00 as of the end of
any two (2) consecutive Fiscal Quarters Borrower realizes a Leverage Ratio
greater than 1.00 to 1.00, then the Scheduled Reductions required at the end of
the next consecutive Fiscal Quarter and as of the end of each consecutive
Fiscal Quarter shall be made until Borrower again achieves a Leverage Ratio
equal to or less than 1.00 to 1.00 as of the end of any two (2) consecutive
Fiscal Quarters in which case the Scheduled Reduction required to be made as
-28-
of the next consecutive Fiscal Quarter shall be waived for such Fiscal Quarter
as provided above.
Section 2.02 - Use of Proceeds of the Credit Facility. Available
Borrowings shall be used for the purposes of:
a. On the Closing Date (collectively the "Closing Disbursements"):
(i) paying in full all loans and advances outstanding under the
Existing Bank Loan as of the Closing Date; and
(ii) paying in full the fees due Agent Bank as set forth in the Fee
Side Letter, the costs, fees and expenses of Title Company
incurred in connection with the issuance of the Title Insurance
Policy, the reasonable costs, fees and expenses of Xxxxxxxxx &
Xxxxxx, LLC, attorneys for Agent Bank, and insurance consultants
retained by them incurred to the Closing Date.
b. During the Revolving Credit Period:
(i) funding working capital needs and general corporate purposes of
the Borrower relating to the Hotel/Casino Facility;
(ii) funding ongoing Capital Expenditure requirements of the
Borrower relating to the Hotel/Casino Facility; and
(iii) funding repayment of Swingline Advances as provided in
Section 2.08.
Section 2.03 - Notice of Borrowings.
a. An Authorized Officer of Borrower may give Agent Bank, no later than
10:00 a.m. on any Banking Business Day at Agent Bank's office specified in
Section 2.07, three (3) full Banking Business Days prior written notice in the
form of the Notice of Borrowing ("Notice of Borrowing"), a copy of which is
marked "Exhibit C", affixed hereto and by this reference incorporated herein
and made a part hereof, for each proposed Borrowing to be made with reference
to a LIBO Rate and at least two (2) full Banking Business Days prior notice for
all other Borrowings, specifying the date and amount of each proposed
Borrowing. Agent Bank shall give prompt notice of each Notice of Borrowing to
Lenders of the amount to be funded and specifying the Funding Date. Not later
than 11:00 a.m. on the Funding Date specified, each Lender shall disburse to
Agent Bank its Pro Rata Share of the amount to be advanced by each such Lender
in lawful money of the United States of America and in immediately available
funds. Agent Bank shall make the proceeds of such fundings that it receives
from the Lenders on or before 11:00 a.m. available to Borrower by depositing,
prior to 1:00 p.m. on the day so received (but not prior to the Funding Date),
the amounts received from the Lenders in the Designated Deposit Account
maintained with Agent Bank. No Borrowing may exceed the Available Borrowings.
Each Borrowing shall be in a minimum amount of Fifty Thousand Dollars
($50,000.00) and in increments of Ten Thousand Dollars ($10,000.00). Borrower
shall be entitled to no more than three (3) Borrowings during each calendar
month, exclusive of Borrowings made for the sole purpose of funding repayment
of a Swingline Advance or L/C Reimbursement.
b. The failure of any Lender to fund its Pro Rata Share of any Borrowing
on any Funding Date shall neither relieve any other Lender of any obligation
hereunder to fund its Pro Rata Share of such Borrowing on such Funding Date nor
relieve such Lender which has failed to fund its Pro Rata Share of its
obligations to Borrower hereunder. No Lender shall be responsible for the
failure of any other Lender to fund its Pro Rata Share of such Borrowing on
-29-
any Funding Date nor shall any Lender be responsible for the failure of any
other Lender to perform its respective obligations hereunder. The provisions
set forth in Section 10.10(d) shall be applicable to a Defaulting Lender to the
same extent as if such Defaulting Lender was found to be an Unsuitable Lender.
Section 2.04 - Conditions of Borrowings. During the Revolving Credit
Period, Borrowings, other than Borrowings made at the request of Agent Bank for
the purpose of funding repayment of Swingline Outstandings and/or L/C
Reimbursement Obligations as hereinafter provided, will only be made so long as
Borrower is in full compliance with each of the requirements and conditions
precedent set forth in Article III B of this Credit Agreement. Provided,
however, upon the consent of Requisite Lenders, Lenders shall advance
Borrowings notwithstanding the existence of less than full compliance with the
requirements of Article III B and Borrowings so made shall be deemed to have
been made pursuant to this Credit Agreement.
Section 2.05 - The Revolving Credit Note and Interest Rate Options.
a. The Credit Facility shall be further evidenced by the Revolving Credit
Note payable to the order of Agent Bank on behalf of the Lenders. Agent Bank
shall record manually or electronically the date and amount of each Borrowing
advanced by the Lenders together with the applicable Interest Period in the
case of portions of the unpaid principal under the Credit Facility bearing
interest with reference to a LIBO Rate, and the amount of each repayment of
principal made thereunder by Borrower and the entry of such records shall be
conclusive absent manifest or demonstrable error; provided, however, the
failure to make such a record or notation with respect to any Borrowing or
repayment thereof, or an error in making such a record or notation, shall not
limit or otherwise affect the obligations of Borrower hereunder or under the
Revolving Credit Note.
b. Interest shall accrue on the entire outstanding principal balance of
the Credit Facility at a rate per annum equal to the Base Rate plus the
Applicable Margin, unless Borrower requests a LIBOR Loan pursuant to Section
2.03 or elect pursuant to Section 2.05(c) hereinbelow to have interest accrue
on a portion or portions of the outstanding principal balance of the Credit
Facility at a LIBO Rate ("Interest Rate Option"), in which case interest on
such portion or portions shall accrue at a rate per annum equal to such LIBO
Rate plus the Applicable Margin in effect as of the second Banking Business Day
prior to the first day of the applicable Interest Period, as long as: (i) each
such LIBOR Loan is in a minimum amount of One Hundred Thousand Dollars
($100,000.00) plus minimum increments of Ten Thousand Dollars ($10,000.00), or
such lesser amount as equals the Maximum Permitted Balance, and (ii) no more
than five (5) LIBOR Loans may be outstanding at any one time. Interest accrued
on each Base Rate Loan shall be due and payable on the first day of the month
following the Closing Date, on the first day of each successive month
thereafter, and on the Maturity Date. For each LIBOR Loan, accrued interest
shall be due and payable at the end of each Interest Period applicable thereto,
but in any event no less frequently than at the end of
each three (3) month period during the term of such LIBOR Loan. Except as
qualified above, the outstanding principal balance hereunder may be a Base Rate
Loan or one or more LIBOR Loans, or any combination thereof, as Borrower shall
specify.
-30-
c. So long as no Default or Event of Default shall have occurred and
remains continuing, Borrower may Convert from one Interest Rate Option to
another Interest Rate Option or continue an Interest Rate Option for another
Interest Period by giving irrevocable notice to Agent Bank of such Conversion
by 11:00 a.m., on a day which is at least three (3) Banking Business Days prior
to the proposed date of such Conversion to or Continuation of each LIBOR Loan
or one (1) Banking Business Day prior to the proposed date of such Conversion
to each Base Rate Loan. Each such notice shall be made by an Authorized
Officer by telephone and thereafter immediately confirmed in writing by
delivery to Agent Bank of a Continuation/Conversion Notice specifying the date
of such Conversion or Continuation, the amounts to be so Converted or Continued
and the Interest Period if the Conversion or Continuation is being made with
reference to a LIBOR Loan. Upon receipt of such Continuation/Conversion
Notice, Agent Bank shall promptly set the applicable interest rate (which in
the case of a LIBOR Loan shall be the LIBO Rate plus the Applicable Margin as
of the second Banking Business Day prior to the first day of the applicable
Interest Period) and the applicable Interest Period if the Conversion or
Continuation is being made with reference to a LIBOR Loan and shall confirm the
same in writing to Borrower and Lenders. Each Conversion or Continuation shall
be on a Banking Business Day. No LIBOR Loan shall be converted to a Base Rate
Loan or renewed on any day other than the last day of the current Interest
Period relating to such amounts outstanding unless Borrower pays any applicable
Breakage Charges. All Borrowings advanced at the request of Agent Bank under
Section 2.08 of the Credit Agreement shall bear interest with reference to the
Base Rate plus the Applicable Margin, subject to Borrower's right to Convert
such Borrowing to a LIBOR Loan or LIBOR Loans as provided herein. If Borrower
fails to give a Continuation/Conversion Notice for the continuation of a LIBOR
Loan as a LIBOR Loan for a new Interest Period in accordance with this Section
2.05(c), such LIBOR Loan shall automatically become a Base Rate Loan at the end
of its then current Interest Period.
d. Each interest period (each individually an "Interest Period" and
collectively the "Interest Periods") for a LIBOR Loan shall commence on the
date such LIBOR Loan is made or the date of Conversion or Continuation of any
amount or amounts of the outstanding Borrowings hereunder to a LIBOR Loan, as
the case may be, and shall end on the date which is one (1), two (2), three (3)
or six (6) months thereafter, as elected by Borrower. However, no Interest
Period may extend beyond the Maturity Date. Each Interest Period for a LIBOR
Loan shall commence and end on a Banking Business Day. If any Interest Period
commences on a date for which there is no corresponding date in the month in
which it is scheduled to end, such Interest Period shall end on the last
Banking Business Day of such month. If any Interest Period would otherwise
expire on a day which is not a Banking Business Day, the Interest Period shall
be extended to expire on the next succeeding Banking Business Day, unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the
immediately preceding Banking Business Day.
e. The applicable LIBO Rate and Base Rate shall be determined by the Agent
Bank, and notice thereof shall be given promptly to Borrower and Lenders. Each
determination of the applicable Base Rate and LIBO Rate shall
be conclusive and binding upon the Borrower, in the absence of manifest or
demonstrable error. The Agent Bank shall, upon written request of Borrower or
any Lender, deliver to Borrower or such Lender, as the case may be, a statement
showing the computations used by the Agent Bank in determining any rate
hereunder.
-31-
f. Computation of interest on all Base Rate Loans shall be calculated on
the basis of a year of three hundred sixty-five (365), or when appropriate
three hundred sixty-six (366), days and the actual number of days elapsed.
Computation of interest on all LIBOR Loans shall be calculated on the basis of
a year of three hundred sixty (360) days and the actual number of days elapsed.
The applicable Base Rate shall be effective the same day as a change in the
Base Rate is announced by WFB as being effective.
g. If with respect to any Interest Period, (a) the Agent Bank reasonably
determines (which determination shall be binding and conclusive on Borrower)
that by reason of circumstances affecting the inter-bank eurodollar market
adequate and reasonable means do not exist for ascertaining the applicable LIBO
Rate, or (b) Requisite Lenders advise Agent Bank that the LIBO Rate as
determined by Agent Bank will not adequately and fairly reflect the cost to
such Lenders of maintaining or funding, for such Interest Period, a LIBOR Loan,
then so long as such circumstances shall continue: (i) Agent Bank shall
promptly notify Borrower thereof, (ii) the Agent Bank shall not be under any
obligation to make a LIBOR Loan or Convert a Base Rate Loan into a LIBOR Loan
for which such circumstances exist, and (iii) on the last day of the then
current Interest Period, the LIBOR Loan for which such circumstances exist
shall, unless then repaid in full, automatically Convert to a Base Rate Loan.
h. Notwithstanding any other provisions of the Credit Agreement, if, after
the Closing Date, any law, rule, regulation, treaty, interpretation or
directive (whether having the force of law or not) or any change therein shall
make it unlawful for any Lender to make or maintain LIBOR Loans, then (i) the
commitment and agreement to maintain LIBOR Loans as to such Lender shall
immediately be suspended, and (ii) unless required to be terminated earlier
(which termination shall be without Breakage Charges), LIBOR Loans as to such
Lender, if any, shall be Converted on the last day of the then current Interest
Period applicable thereto to Base Rate Loans. If it shall become lawful for
such Lender to again maintain LIBOR Loans, then Borrower may once again as to
such Lender request Conversions to the LIBO Rate. During any period of such
suspension, such Lender shall make Base Rate Loans.
i. The Borrower agrees that upon written notice by: (y) Agent Bank or (z)
any Lender to the Borrower (with a copy of such notice concurrently delivered
to Agent Bank) to the effect that a promissory note or other evidence of
indebtedness is required for such Lender by a Governmental Authority, banking
regulatory agency or regulatory audit in order for such Lender to evidence
(whether for the purposes of pledge, enforcement or otherwise) the Borrowings
owing to, or to be made by, such Lender:
(i) The Borrower shall promptly execute and deliver to each Lender a
promissory note payable to the order of each such Lender (each
individually a "Replacement Note" and collectively the
"Replacement Notes") in the form of the Revolving Credit Note in
the amount of each Lender's respective Syndication Interest in
the Credit Facility subject to Scheduled Reductions to be
allocated amongst Lenders in accordance with their respective
Syndication Interests;
(ii) The Replacement Notes shall, in the aggregate, fully replace the
Revolving Credit Note and each reference to the Revolving Credit
Note in this Credit Agreement and each of the Loan Documents
shall be deemed to be a collective reference to the Replacement
Notes;
-32-
(iii)Borrowings, Interest Rate Options, Continuation/Conversion
Notices and all other provisions for the disbursement of funds,
setting of interest rates and collection of repayments of
interest and principal shall continue to be made by Agent Bank
as the administrative and collateral agent for the Lenders in
the same manner and to the same extent as provided in the
Revolving Credit Note and this Credit Agreement as fully
applicable to each of the Replacement Notes;
(iv) the Agent Bank, upon the consent of Requisite Lenders, shall
cause the Title Insurance Company to issue, at the expense of
Borrower, such endorsements to the Title Policy as may be
reasonably necessary to assure the aggregate obligation
evidenced by the Replacement Notes is secured by the Deed of
Trust with the same coverage and priority as the obligation
evidenced by the Revolving Credit Note; and
(v) Concurrently with the delivery of the Replacement Notes, Agent
Bank shall return the original Revolving Credit Note to Borrower
marked as superseded and replaced by the Replacement Notes.
Section 2.06 - Security for the Credit Facility. As security for the due
and punctual payment and performance of the terms and provisions of this Credit
Agreement, the Notes and all of the other Loan Documents, the Security
Documentation shall be executed and delivered, as of the Closing Date, by the
respective parties to each of the Security Documentation.
Section 2.07 - Place and Manner of Payment.
a. All amounts payable by Borrower to the Lenders or Agent Bank on behalf
of Lenders pursuant to the Credit Facility shall be made on a Banking Business
Day in lawful money of the United States of America and in immediately
available funds. Other than in connection with: (i) the Scheduled Reductions
of principal, or (ii) principal payments which may be required to decrease the
Funded Outstandings to an amount equal to or less than the Maximum Permitted
Balance, Borrower shall not make repayments ("Principal Prepayments") of the
outstanding balance of principal owing under the Revolving Credit Note more
frequently than three such Principal Prepayments during each calendar month.
Each such Principal Prepayment shall be in a minimum amount of Two Hundred
Thousand Dollars ($200,000.00) and in increments of Ten Thousand Dollars
($10,000.00). Borrower shall give written notice to Agent Bank of each
Principal Payment by 11:00 a.m. on a day which is at least three (3) Banking
Business Days prior to each Principal Prepayment of all or any portion of a
LIBOR Loan or one (1) Banking Business Day prior to each Principal Prepayment
of all or any portion of a Base Rate Loan.
b. All such amounts payable by Borrower shall be debited by Agent Bank
from Borrower's Designated Deposit Account on the earlier of: (i) the date
specified by Borrower by written notice to Agent Bank, or (ii) the fifth (5th)
day following the date upon which such payment is due. If such written notice
is received by Agent Bank prior to 11:00 a.m., Agent Bank shall credit Borrower
with such payment on the day so received and shall promptly disburse to the
appropriate Lenders on the same day the Pro Rata Share of payments
relating to the Credit Facility, in immediately available funds. If such
written notice is received by Agent Bank after 11:00 a.m., Agent Bank shall
credit Borrower with such payment as of the next Banking Business Day and
disburse to the appropriate Lenders on the next Banking Business Day such Pro
Rata Share of such payment relating to the Credit Facility in immediately
-33-
available funds. Any payment on the Credit Facility made by Borrower to Agent
Bank pursuant to the terms of this Credit Agreement or the Revolving Credit
Note for the account of Lenders shall constitute payment to the appropriate
Lenders. If the Revolving Credit Note or any payment required to be made
thereon or hereunder, is or becomes due and payable on a day other than a
Banking Business Day, the due date thereof shall be extended to the next
succeeding Banking Business Day and interest thereon shall be payable at the
then applicable rate during such extension.
c.. The outstanding principal owing under the Credit Facility and the
Revolving Credit Note may, subject to Section 2.07(a), be prepaid at any time
in whole or in part without penalty, provided, however, that any portion or
portions of the unpaid principal balance which is accruing interest at a LIBO
Rate may only be prepaid or repaid on the last day of the applicable Interest
Period unless Borrower gives three (3) days prior written notice to Agent Bank
and additionally pays concurrently with such prepayment or repayment such
additional amount or amounts as will compensate Lenders for any losses, costs
or expenses which they may incur as a result of such payment, including,
without limitation, any loss (including loss of anticipated profits), cost or
expense incurred by the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain such LIBOR Loan ("Breakage
Charges"). A certificate of a Lender as to amounts payable hereunder shall be
conclusive and binding on Borrower for all purposes, absent manifest or
demonstrable error. Any calculation hereunder shall be made on the assumption
that each Lender has funded or will fund each LIBOR Loan in the London
interbank market; provided that no Lender shall have any obligation to actually
fund any LIBOR Loan in such manner.
d. Unless the Agent Bank receives notice from an Authorized Officer prior
to the date on which any payment is due to the Lenders that the Borrower will
not make such payment in full as and when required, the Agent Bank may assume
that the Borrower has made such payment in full to the Agent Bank on such date
in immediately available funds and the Agent Bank may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower has not made such payment in full to the Agent Bank, each
Lender shall repay to the Agent Bank on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
e. If, other than as expressly provided elsewhere herein, any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Syndication Interest, such
Lender shall immediately (a) notify the Agent Bank of such fact, and (b)
purchase from the other Lenders such participations in the Credit Facility as
shall be necessary to cause such purchasing Lender to share the excess payment
with each of them in proportion to their respective Syndication Interests;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender
the purchase price paid therefor, together with an
amount equal to such paying Lender's ratable share (according to the proportion
of (i) the amount of such paying Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so
-34-
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Agent Bank will keep records
(which shall be conclusive and binding in the absence of manifest or
demonstrable error) of each participation purchased under this section and will
in each case notify the Lenders following any such purchases or repayments.
Section 2.08 - The Swingline Facility.
a. Subject to the conditions and upon the terms hereinafter set forth and
in accordance with the terms and provisions of the Swingline Note, Swingline
Lender agrees to lend and advance Swingline Advances to Borrower in the amounts
and at the times provided below. Notwithstanding anything herein contained to
the contrary, however, Borrower shall not be entitled to any Swingline Advances
on and after thirty-five (35) calendar days prior to the Maturity Date.
b. With respect to each proposed Swingline Advance, an Authorized Officer
shall no later than 1:00 p.m. on the date for such proposed Swingline Advance
give Swingline Lender written notice in the form of the Notice of Swingline
Advance ("Notice of Swingline Advance"), a copy of which is marked "Exhibit K",
affixed hereto and by this reference incorporated herein and made a part
hereof, specifying the requested amount to be funded. Swingline Lender shall
deposit such amounts as Borrower may request into the Designated Deposit
Account in lawful money of the United States of America in immediately
available funds, provided, that: (i) after giving effect to such Swingline
Advance, the Swingline Outstandings do not exceed Two Million Five Hundred
Thousand Dollars ($2,500,000.00), (ii) the amount requested does not exceed the
Available Borrowings, and (iii) no Default or Event of Default has occurred and
remains continuing. Within the foregoing limitations, Borrower may borrow,
repay and reborrow under the Swingline Facility. Each Swingline Advance shall
be in an integral multiple of Ten Thousand Dollars ($10,000.00). Promptly
after receipt of each request for a Swingline Advance, Swingline Lender shall
obtain telephonic verification from Agent Bank that, giving effect to such
request, the amount of such request does not exceed the Available Borrowings
(such verification to be promptly confirmed in writing). Unless Borrower is
notified to the contrary by the Swingline Lender, each repayment of a Swingline
Advance shall be in an amount which is an integral multiple of Ten Thousand
Dollars ($10,000.00). The Swingline Lender shall promptly notify the Agent
Bank of the Swingline Outstandings each time there is a change therein.
c. Each Swingline Advance shall bear interest at the Base Rate plus the
Applicable Margin and shall be payable at the times and in the manner set forth
below and, in any event, on or before thirty-five (35) days prior to the
Maturity Date. Unless otherwise paid, interest accrued on the unpaid balance
of Swingline Outstandings shall be paid monthly on or before the fifth (5th)
day following receipt by Borrower of an invoice from Swingline Lender setting
forth the amount of such accrued interest. In the event any Swingline Advance
is outstanding for thirty (30) consecutive calendar days,
then on the next Banking Business Day (unless Borrower has made other
arrangements acceptable to the Swingline Lender to pay the Swingline
Outstanding in full or to continue such Swingline Outstanding), Borrower shall
request a Borrowing under the Credit Facility in an amount sufficient to pay
the applicable Swingline Advance in full. Upon receipt of the amount
-35-
of the Borrowing from the Lenders, the Agent Bank shall provide such amount to
the Swingline Lender for repayment of the applicable Swingline Advance and the
balance of the Borrowing, if any, shall be deposited in immediately available
funds to the Designated Deposit Account. In the event Borrower fails to
request a Borrowing within the period specified above, Agent Bank shall,
without notice to the Borrower and without regard to any other conditions
precedent for the making of Borrowings under the Credit Facility, including,
without limitation the remedies set forth in Section 7.02, promptly (but
subject to the notice periods for Borrowings set forth in Section 2.03) cause a
Borrowing to be made and funded by the Lenders under the Credit Facility in the
amount necessary to pay the applicable Swingline Advance in full, together with
all interest accrued thereon, to the extent of Available Borrowings, and the
Borrower shall be deemed to have requested such Borrowing and consented to its
being made as provided for herein.
d. Each Lender's obligation to advance Borrowings in the proportionate
amount of its Syndication Interest in the Credit Facility of any unreimbursed
Swingline Outstandings pursuant hereto is irrevocable and several, and not
joint or joint and several. The failure of any Lender to perform its
obligation to advance a Borrowing in a proportionate amount of such Lender's
Syndication Interest of any unreimbursed Swingline Outstandings shall neither
relieve any other Lender of its obligation hereunder to advance such Borrowing
in the amount of such other Lender's proportionate Syndication Interest of such
amount, nor relieve the Lender which has failed to fund of its obligations to
Borrower hereunder. The Borrower agrees to accept the Borrowings for payment
of Swingline Outstandings as provided hereinabove, whether or not such
Borrowings could have been made pursuant to the terms of Article III B, or any
other section of this Credit Agreement.
Section 2.09 - Issuance of Letters of Credit.
a. Any Authorized Officer of Borrower may from time to time request that a
Standby Letter of Credit or Commercial Letter of Credit be issued by delivering
to L/C Issuer (with a telecopy to the Agent Bank) on a Banking Business Day, at
least five (5) Banking Business Days prior to the date of such proposed
issuance, an L/C Agreement in L/C Issuer's then standard form (consistent with
the terms of the Credit Agreement), completed to the satisfaction of L/C Issuer
and such other certificates as the L/C Issuer may reasonably request; provided,
however, that no Letter of Credit shall be issued (a) if any Default or Event
of Default has occurred and remains continuing, or (b) if after giving effect
to the issuance thereof, the aggregate Stated Amount of outstanding Letters of
Credit would exceed Two Million Five Hundred Thousand Dollars ($2,500,000.00),
or (c) the Stated Amount of the requested Letter of Credit exceeds the Maximum
Availability. Each Letter of Credit shall be issued by the L/C Issuer on the
Banking Business Day specified in the Borrower's application therefor. Each
request for a Letter of Credit and each Letter of Credit shall be subject to
the Uniform Customs and Practice for Documentary Credits, International Chamber
of Commerce Publication New 1994 Revision No. 500, or any successor publication
then in effect. Each Standby Letter of Credit will be issued for a term not
greater than one (1) year and shall not include any provision for automatic
renewal. Each Commercial Letter of Credit will be issued for a
term not greater than one hundred eighty (180) calendar days. In no event
shall any Letter of Credit have a Stated Expiry Date later than thirty (30)
days prior to the Maturity Date. Promptly after receipt of each request for
the issuance of a Letter of Credit and immediately prior to the issuance
-36-
thereof, L/C Issuer shall obtain telephonic verification from Agent Bank that
the amount of such request does not exceed the then Available Borrowings. The
L/C Issuer shall promptly notify the Agent Bank of the aggregate L/C Exposure
of outstanding Letters of Credit each time there is a change
therein.
b. Upon presentation of a draft drawn under any Letter of Credit, L/C
Issuer shall promptly notify the Agent Bank and Borrower of the amount under
such draft and the date upon which such draft is to be funded. On or before
two (2) Banking Business Days following such notice (unless Borrower has made
other arrangements acceptable to the L/C Issuer to pay the amount of such draft
in full), Borrower shall advance to L/C Issuer the amount of such draft from
Borrower's available funds or shall request a Borrowing under the Credit
Facility in an amount sufficient to pay the amount of such draft in full. The
Agent Bank, upon receipt of such funds from the Lenders, shall automatically
provide such amount to the L/C Issuer for payment of the amount of such draft
and the balance of the Borrowing shall be deposited in immediately available
funds to the Designated Deposit Account. In the event Borrower fails to
advance to L/C Issuer the amount of such draft from Borrower's available funds
or to request a Borrowing within two (2) Banking Business Days from receipt of
the notice as specified above, on the third (3rd) Banking Business Day
following Agent Bank's receipt of such notice, Agent Bank shall, without notice
to or consent of the Borrower and without regard to any other conditions
precedent for the making of Borrowings under the Credit Facility, cause a
Borrowing to be made and funded by the Lenders under the Credit Facility in the
amount necessary to pay the amount of such draft in full. Upon the occurrence
of any Event of Default, L/C Issuer shall, without notice or further
authorization or consent of Borrower whatsoever, be authorized to immediately
cause the Cash Collateral Account to be established and funded by Lenders with
a Borrowing advanced to Agent Bank equal to the aggregate amount of the L/C
Exposure then outstanding. All amounts held by L/C Issuer in the Cash
Collateral Account shall be held as security for the repayment of any L/C
Reimbursement Obligation thereafter arising pursuant to the terms of the L/C
Agreement(s) and the Cash Collateral Pledge Agreement. Borrowings advanced by
Lenders to pay drafts drawn upon or to secure repayment of the L/C Exposure
under Letters of Credit pursuant to this subsection shall: (i) constitute
Borrowings under the Credit Facility, (ii) initially be Base Rate Loans and
(iii) be subject to all of the provisions of this Credit Agreement concerning
Borrowings under the Credit Facility, except that such Borrowings shall be made
upon demand of the Agent Bank as set forth above rather than upon Notice of
Borrowing by Borrower and shall be made, notwithstanding anything in this
Credit Agreement to the contrary, without regard to any other conditions
precedent to the making of Borrowings under the Credit Agreement and
notwithstanding any Default or Event of Default thereunder. All amounts paid
by L/C Issuer on a draft drawn under any Letter of Credit which has not been
funded or concurrently reimbursed by Borrower or through a Borrowing as
provided hereinabove, shall bear interest at the Base Rate plus the Applicable
Margin per annum until repaid or reimbursed to L/C Issuer.
c. Each Lender's obligation to advance Borrowings in the proportionate
amount of its Syndication Interest in the Credit Facility of any unreimbursed
amounts outstanding under any Letter of Credit pursuant hereto is several,
and not joint or joint and several. The failure of any Lender to perform its
obligation to advance a Borrowing in a proportionate amount of such Lender's
Syndication Interest of any unreimbursed amounts outstanding under a Letter of
Credit will not relieve any other Lender of its obligation hereunder to
-37-
advance such Borrowing in the amount of such other Lender's proportionate
Syndication Interest of such amount, nor relieve the Lender which has failed to
fund of its obligation to fund hereunder. The Borrower agrees to accept the
Borrowings for payment of Letters of Credit as provided hereinabove, whether or
not such Borrowings could have been made pursuant to the terms of Article III B
or C, or any other section of the Credit Agreement.
d. Letters of Credit shall be used and issued for the benefit of Borrower
for the general corporate purposes of Borrower relating to the Hotel/Casino
Facility.
Section 2.10 - Fees.
a. On the Closing Date and on each other applicable date, Borrower shall
pay the fees as required in the Fee Side Letter, each of such fees to be
retained by Agent Bank or distributed to Lenders as agreed between Agent Bank
and each Lender.
b. Borrower shall pay a quarterly nonusage fee (the "Commitment Fee") to
the Agent Bank for the account of Lenders based on the Leverage Ratio,
calculated as of each Fiscal Quarter end following the Closing Date with
reference to the Borrower, to determine the applicable Commitment Percentage
determined as set forth in Table Two of the definition of Applicable Margin.
As of the Closing Date, the Commitment Percentage shall be set in accordance
with the Pricing Certificate to be delivered by Borrower to Agent Bank on the
Closing Date pursuant to Section 3.17(b).
The Commitment Fee shall commence to accrue on the Closing Date and shall
be calculated as the product of (i) the applicable Commitment Percentage
multiplied by (ii) the daily average of the Maximum Permitted Balance less the
daily average of the Funded Outstandings computed on the basis of a three
hundred sixty (360) day year based on the number of actual days elapsed. Each
Commitment Fee shall be payable in arrears on a quarterly basis on or before
the fifth (5th) day following receipt by Borrower of an invoice from Agent Bank
setting forth the amount of such Commitment Fee for each applicable Fiscal
Quarter, and upon Bank Facility Termination. Each Commitment Fee shall be
promptly distributed by Agent Bank to Lenders in proportion to their respective
Syndication Interests in the Credit Facility, as in effect from time to time
during each applicable Fiscal Quarter.
c. Concurrently with the issuance of each Letter of Credit, Borrower shall
pay an issuance fee to the L/C Issuer ("L/C Fee") in an amount equal to the
Stated Amount of each such Letter of Credit multiplied by the Applicable Margin
then in effect for LIBOR Loans, as shown in Table One of the definition of
Applicable Margin with reference to the LIBO Rate Margin, on a per annum basis
for the number of days elapsing from the issuance date to the Stated Expiry
Date of each such Letter of Credit, but in no event shall the L/C Fee be less
than Five Hundred Dollars ($500.00) for each Letter of Credit. From each L/C
Fee the greater of Five Hundred Dollars ($500.00) or one quarter of one percent
(.25%) of the Stated Amount of each such Letter of Credit, calculated on a per
annum basis as provided hereinabove, shall be retained by L/C Issuer for its
own account and the balance of each L/C Fee
shall be promptly distributed by Agent Bank to Lenders in proportion to their
respective Syndication Interests in the Credit Facility. All L/C Fees paid by
Borrower are nonrefundable and shall be deemed fully earned upon issuance of
the applicable Letter of Credit.
-38-
Section 2.11 - Late Charges and Default Rate.
a. If any payment due under the Revolving Credit Note is not paid by the
end of any applicable grace period as provided in Article VII hereof, within
one (1) Banking Business Day after receipt by Borrower of written notice of
such nonpayment from Agent Bank, Borrower promises to pay a late charge in the
amount of three percent (3%) of the amount of such delinquent payment and Agent
Bank need not accept any late payment made unless it is accompanied by such
three percent (3%) late payment charge. Any late charge shall be paid to
Lenders in proportion to their respective Syndication Interests.
b. In the event of the existence of an Event of Default, commencing on the
first (1st) Banking Business Day following the receipt by Borrower of written
notice of the occurrence of such Event of Default from Agent Bank, the total of
the unpaid balance of the principal and the then accrued and unpaid interest
owing under each of the Notes shall commence accruing interest at a rate equal
to two percent (2.0%) over the interest rate otherwise applicable to each such
Note (the "Default Rate") until all Events of Default which may exist have been
cured, at which time the interest rate shall revert to the rate of interest
otherwise accruing pursuant to the terms of each such Note.
c. In the event of the occurrence of an Event of Default, Borrower agrees
to pay all reasonable costs of collection, including the reasonable attorneys'
fees incurred by Agent Bank, in addition to and at the time of the payment of
such sum of money and/or the performance of such acts as may be required to
cure such Event of Default. In the event legal action is commenced for the
collection of any sums owing hereunder or under the terms of the Revolving
Credit Note or the Swingline Note, the Borrower agrees that any judgment issued
as a consequence of such action against Borrower shall bear interest at a rate
equal to the Default Rate until fully paid.
Section 2.12 - Net Payments. All payments under this Credit Agreement and
the Revolving Credit Note, the Swingline Note and/or a L/C Reimbursement
Obligation shall be made without set-off, counterclaim, recoupment or defense
of any kind and in such amounts as may be necessary in order that all such
payments, after deduction or withholding for or on account of any future taxes,
levies, imposts, duties or other charges of whatsoever nature imposed by the
United States or any Governmental Authority, other than franchise taxes or any
tax on or measured by the gross receipts or overall net income of any Lender
pursuant to the income tax laws of the United States or any State, or the
jurisdiction where each Lender's principal office is located (collectively
"Taxes"), shall not be less than the amounts otherwise specified to be paid
under this Credit Agreement and the Notes. A certificate as to any additional
amounts payable to the Lenders under this Section 2.12 submitted to the
Borrower by the Lenders shall show in reasonable detail an accounting of the
amount payable and the calculations used to determine in good faith such amount
and shall be conclusive absent manifest or demonstrable error. Any amounts
payable by the Borrower under this Section 2.12 with respect to past payments
shall be due within ten (10) days following receipt by the Borrower of such
certificate from the Lenders; any such amounts payable with respect to future
payments shall be due within
ten (10) days after demand with such future payments. With respect to each
deduction or withholding for or on account of any Taxes, the Borrower shall
promptly furnish to the Lenders such certificates, receipts and other documents
as may be required (in the reasonable judgment of the Lenders) to establish any
tax credit to which the Lenders may be entitled.
-39-
Section 2.13 - Increased Costs. If after the date hereof the adoption of,
or any change in, any applicable law, rule or regulation (including without
limitation Regulation D of the Board of Governors of the Federal Reserve System
and any successor thereto), or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender with any future request or future directive (whether
or not having the force of law) of any such Governmental Authority, central
bank or comparable agency:
a. Shall subject any Lender to any tax, duty or other charge payable to
the United States or any Governmental Authority with respect to the Credit
Facility, the Revolving Credit Note, the Swingline Note or such Lender's
obligation to make any funding of the Credit Facility, or shall change the
basis of taxation of payments to such Lender of the principal of, or interest
on, the Credit Facility or any other amounts due under the Revolving Credit
Note and/or the Swingline Note in respect of the Credit Facility or such
Lender's obligation to fund the Credit Facility (except for changes in the rate
of tax on the overall net income of such Lender imposed by the United States or
any Governmental Authority pursuant to the income tax laws of the United States
or any State, or the jurisdiction where each Lender's principal office is
located); or
b. With respect to the Credit Facility or the obligation of the Requisite
Lenders to advance Borrowings under the Credit Facility, shall impose, modify
or deem applicable any reserve imposed by the Board of Governors of the Federal
Reserve System, special deposit, capitalization, capital adequacy or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, Requisite Lenders; or
c. Shall impose on any Lender any other condition affecting the Credit
Facility, the Revolving Credit Note or such Lender's obligation to advance
Borrowings under the Credit Facility; and the result of any of the foregoing,
as set forth in subsections (a), (b) or (c) is to increase the cost to (or in
the case of Regulation D or reserve requirements referred to above or a
successor thereto, to impose a cost on) such Lender of making or maintaining
the Credit Facility, or to reduce the amount of any sum or rate of return
received or receivable by such Lender under the Revolving Credit Note, then
within ten (10) days after demand by such Lender (which demand shall be
accompanied by a certificate setting forth the basis of such demand), the
Borrower shall pay directly to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost (or in the case of
Regulation D or reserve requirements referred to above or a successor thereto,
such costs which may be imposed upon such Lender) or such reduction of any sum
or rate of return received or receivable under the Revolving Credit Note. A
certificate as to any additional amounts payable to any Lender under this
Section 2.13 submitted to the Borrower by such Lender shall show in reasonable
detail an accounting of the amount payable and the calculations used to
determine in good faith such amount and shall be conclusive absent manifest or
demonstrable error. Each Lender agrees to use its reasonable efforts not
materially disadvantageous to it (in its reasonable determination) to minimize
such increased or imposed costs or such reduction.
Section 2.14 - Mitigation; Exculpation.
a. Each Lender agrees that it will promptly notify the Borrower in writing
upon its becoming aware that any payments are to become due to it
-40-
under this Credit Agreement pursuant to Section 2.12 or 2.13. Each Lender
further agrees that it will use reasonable efforts not materially
disadvantageous to it (in its reasonable determination) in order to avoid or
minimize, as the case may be, the payment by the Borrower of any additional
amounts pursuant to Section 2.12 or 2.13. Each Lender represents, to the best
of its knowledge, that as of the Closing Date no such amounts are payable to
it.
b. Borrower shall not be liable to any Lender for any payments under
Section 2.12 or 2.13 arising to the extent of such Lender's gross negligence or
wilful misconduct or breach of any laws (other than as a result of Borrower's
breach), or for amounts which were incurred more than ninety (90) days prior to
the date Borrower are notified of the incurrence of such amount.
Section 2.15 - Guaranty Agreement. As additional security for the due and
punctual payment and performance of the Credit Facility and each of the terms,
covenants, representations, warranties and provisions herein contained and
contained in each of the Loan Documents, on or before the Closing Date MCRI
shall execute the Guaranty in the form of Exhibit I affixed hereto.
ARTICLE III
CONDITIONS PRECEDENT TO THE CLOSING DATE
A. Closing Conditions. The obligation of each of the Banks to fund any
Closing Disbursement under the Credit Facility is subject to the following
conditions precedent, each of which shall be satisfied on or before February
27, 2004 (unless all of the Banks, in their sole and absolute discretion, shall
agree otherwise). The occurrence of the Closing Date is subject to and
contingent upon Agent Bank having received, in each case in form and substance
reasonably satisfactory to Agent Bank, or in the case of an occurrence, action
or event, the occurrence of, each of the following:
Section 3.01 - Credit Agreement. Executed counterparts of this Credit
Agreement in sufficient duplicate originals for Borrower and each of the Banks.
Section 3.02 - The Notes and Guaranty.
a. The Revolving Credit Note duly executed by the Borrower, payable to the
order of Agent Bank, on behalf of the Lenders.
b. The Swingline Note duly executed by the Borrower, payable to the order
of Swingline Lender.
c. The Guaranty duly executed by MCRI in favor of Agent Bank, on behalf of
the Lenders.
Section 3.03 - Security Documentation. The Security Documentation duly
executed by Borrower or other applicable party thereto, consisting of the
following:
a. Deed of Trust;
b. Financing Statements;
c. Assignment of Entitlements, Contracts, Rents and Revenues; and
d. Trademark Security Agreement.
-41-
Section 3.04 - Other Loan Documents. The following Loan Documents duly
executed by Borrower and each other applicable party thereto consisting of the
following:
a. Environmental Certificate.
b. Adjacent Driveway Estoppel.
Section 3.05 - Articles of Incorporation, Bylaws, Corporate Resolutions,
Certificates of Good Standing and Closing Certificate. On or before the
Closing Date, Agent Bank shall have received from each of the Borrower and
MCRI: (i) a Certificate of Good Standing issued by the Secretary of State of
the State of Nevada and dated within thirty (30) Banking Business Days of the
Closing Date, (ii) a copy of the articles of incorporation and by-laws of
Borrower and MCRI certified to be true and correct by an Authorized Officer,
(iii) an original Certificate of Corporate Resolution and Certificate of
Incumbency executed by the respective Secretaries of Borrower and MCRI and
attested to by its respective President, Vice President, or Treasurer
authorizing Borrower and MCRI to enter into all documents and agreements to be
executed by them pursuant to this Credit Agreement and further authorizing and
empowering the officer or officers who will execute such documents and
agreements with the authority and power to execute such documents and
agreements on behalf of Borrower and MCRI, (iv) designation by corporate
certificate ("Authorized Officer Certificate"), substantially in the form of
the Authorized Officer Certificate marked "Exhibit G", affixed hereto and by
this reference incorporated herein and made a part hereof, of the officers of
Borrower who are authorized to give Notices of Borrowing,
Continuation/Conversion Notices, Pricing Certificates, Compliance Certificates
and all other notices, requests, reports, consents, certifications and
authorizations on behalf of the Borrower, each individually an "Authorized
Officer" and collectively the "Authorized Officers", and (v) an original
closing certificate ("Closing Certificate"), substantially in the form of the
Closing Certificate marked "Exhibit H", affixed hereto and by this reference
incorporated herein and made a part hereof, duly executed by an Authorized
Officer of Borrower.
Section 3.06 - Opinion of Counsel. Opinion of counsel to the Borrower and
Guarantor, dated as of the Closing Date and addressed to the Agent Bank on
behalf of itself and each of the Banks, together with their respective
successors and assigns, substantially in the form of the legal opinion marked
"Exhibit J", affixed hereto and by this reference incorporated herein and made
a part hereof.
Section 3.07 - Title Policy. As of the Closing Date, the Title Policy (or
proforma commitment for the issuance thereof) consistent with the requirements
of the Closing Instructions.
Section 3.08 - Survey. If required by Title Insurance Company as a
condition for the issuance of the Title Policy in compliance with the Closing
Instructions, a current boundary and location survey for the Real Property
delivered to Agent Bank no less than ten (10) Banking Business Days prior to
the Closing Date, which must (a) be certified to Agent Bank and the Title
Insurance Company, (b) show the Real Property to be free of encroachments,
overlaps, and other survey defects, (c) show the courses and distances of the
lot lines for the Real Property, (d) show that all existing improvements are
located within said lot and building lines, and (e) show the location of all
above and below ground easements, improvements, appurtenances, utilities,
-42-
rights-of-way, water rights and ingress and egress, by reference to book and
page numbers and/or filed map reference. On or before the Closing Date, all
other survey requirements of Title Insurance Company for the issuance of the
Title Policy.
Section 3.09 - Payment of Taxes. Evidence satisfactory to Agent Bank that
all past and current real and personal property taxes and assessments which are
presently due and payable applicable to the Real Property have been paid in
full.
Section 3.10 - Insurance. Copies of declaration pages of each insurance
policy, certified to be true and correct in all respects by an Authorized
Officer of Borrower, together with original binders evidencing Borrower as the
named insured, and original certificates of insurance, loss payee and mortgagee
endorsements naming Agent Bank as mortgagee, loss payee and additional insured
as required by the insurance provisions set forth in Section 5.09 of this
Credit Agreement.
Section 3.11 - Payment of Fees and Existing Bank Loan. Payment by
Borrower to Agent Bank of the fees to the extent then due and payable on the
Closing Date as provided in Section 2.09(a) hereinabove. Payment in full of
the Existing Bank Loan from the Closing Disbursement under the Credit Facility.
Section 3.12 - Reimbursement for Expenses and Fees. Reimbursement by
Borrower for all reasonable fees and out-of-pocket expenses incurred by Agent
Bank in connection with the Credit Facility, including, but not limited to,
escrow charges, title insurance premiums, environmental examinations, recording
fees, appraisal fees, reasonable attorney's fees of Xxxxxxxxx & Xxxxxx, LLC and
insurance consultant fees, and all other like fees and expenses remaining
unpaid as of the Closing Date to the extent then due and payable on the Closing
Date, provided that the amount then invoiced shall not thereafter preclude
Borrower's obligation to pay such costs and expenses relating to the closing of
the Credit Facility following the Closing Date or to reimburse Agent Bank for
the payment thereof.
Section 3.13 - Schedules of Spaceleases and Equipment Leases and
Contracts. The Schedules of Spaceleases (Schedule 4.15) and Equipment Leases
and Contracts (Schedule 4.16) in each instance setting forth the name of the
other party thereto, a brief description of each spacelease, equipment lease
and contract and the commencement and ending date thereof.
Section 3.14 - Phase I Environmental Site Assessments.
a. The Environmental Risk Disclosure Questionnaire dated January 20, 2004,
together with Borrower's written statement detailing Borrower's program for
dealing with the asbestos-containing material in the ceiling of the motel units
therein disclosed.
b. Borrower hereby confirms the representations contained in Sections 2.1
and 2.2 of the Environmental Certificate are true and correct in all respects,
except with respect to the matters disclosed on the Schedule of Significant
Litigation.
Section 3.15 - Evidence of Right to Occupancy of Hotel/Casino Facility. A
copy of the certificate of occupancy issued by each applicable Governmental
-43-
Authority, evidencing the right of the Borrower to use and hold open for the
use and occupancy of the public of the Hotel/Casino Facility.
Section 3.16 - Gaming Permits. Copy of the Gaming Permits issued by the
Nevada Gaming Authorities evidencing the right of the Borrower to conduct
gaming activities and games of chance at the Hotel/Casino Facility.
Section 3.17 - Financial Statements, Pricing Certificate and Leverage
Ratio Certification.
a. Audited financial statements of the Borrower for the most recently
ended Fiscal Year, to the extent the same have been prepared and are available.
b. A Pricing Certificate prepared as of the end of the most recently ended
Fiscal Quarter, giving pro forma effect to the occurrence of the Closing Date
and advance of the Closing Disbursement hereunder.
c. A Certificate prepared as of the four (4) consecutive Fiscal Quarter
periods ending September 30, 2003, and December 31, 2003, respectively, in each
instance calculating the Leverage Ratio in the manner set forth in the Pricing
Certificate and giving pro forma effect to the occurrence of the Closing Date
and advance of the Closing Disbursement hereunder, demonstrating a Leverage
Ratio less than 2.00 to 1.00 for each of such four (4) consecutive Fiscal
Quarter periods.
Section 3.18 - Schedule of all Significant Litigation. A Schedule of
Significant Litigation (Schedule 3.18) involving any member of the MCRI
Consolidation, in each instance setting forth the names of the other parties
thereto, a brief description of such litigation, whether or not such litigation
is covered by insurance and, if so, whether the defense thereof and liability
therefor has been accepted by the applicable insurance company indicating
whether such acceptance of such defenses with or without a reservation of
rights, the commencement date of such litigation and the amount sought to be
recovered by the adverse parties thereto or the amount which is otherwise in
controversy.
Section 3.19 - No Injunction or Other Litigation. No law or regulation
shall prohibit, and no order, judgment or decree of any Governmental Authority
shall, and no litigation shall be pending or threatened which in the reasonable
judgment of the Agent Bank would or would reasonably be expected to, enjoin,
prohibit, limit or restrain the execution and delivery of this Credit Agreement
or the making of any advance under the Credit Facility.
Section 3.20 - Additional Documents and Statements. As of the Closing
Date such additional documents, affidavits, certificates and opinions as
Requisite Lenders may reasonably require to insure compliance with this Credit
Agreement. The statements set forth in Section 3.22 shall be true and correct.
B. Conditions Precedent to all Borrowings. The obligation of each Lender
and Agent Bank to make any Borrowing requested to be made on any Funding Date
is, except Borrowings made upon the demand of Agent Bank for the purpose of
funding repayment of Swingline Outstandings and/or L/C Reimbursement
Obligations, subject to the occurrence of each of the following conditions
precedent as of such Funding Date:
-44-
Section 3.21 - Notice of Borrowing. With respect to any Borrowing, the
Agent Bank shall have received in accordance with Section 2.03 on or before
such Funding Date an original and duly executed Notice of Borrowing or
facsimile copy thereof, to be promptly followed by an original.
Section 3.22 - Certain Statements. On the Closing Date and as of the
Funding Date the following statements shall be true and correct:
a. The representations and warranties with respect to the Borrower and
MCRI contained in Article IV hereof (other than representations and warranties
which expressly speak only as of a different date which shall be true and
correct as of such date) are true and correct on and as of the Funding Date and
as of the Closing Date in all material respects as though made on and as of
that date, except to the extent that such representations and warranties are
not true and correct as a result of a change which is permitted by this Credit
Agreement or by any other Loan Document, or which is otherwise consented to by
Requisite Lenders;
b. The representations and certifications contained in the Environmental
Certificate are true and correct in all material respects (other than
representations and warranties which expressly speak only as of a different
date which shall be true and correct as of such date);
c. Since the date of the most recent financial statements referred to in
Section 3.17 and 5.08, no material adverse change shall have occurred; and
d. No event has occurred or as a result of any Borrowings contemplated
hereby would occur and is continuing, or would result from the making thereof,
which constitutes a Default or Event of Default hereunder.
Section 3.23 - Gaming Permits. The Borrower shall have all Gaming Permits
material to or required for the conduct of its gaming businesses and the
conduct of games of chance at the Hotel/Casino Facility and such Gaming Permits
shall not then be suspended, enjoined or prohibited (for any length of time) by
the Nevada Gaming Authorities or any other Governmental Authority.
C. Additional Conditions Precedent to Commitment Increase. In addition to
the requirements set forth in Articles III A and B, the obligation of Lenders
(as such Lenders are defined as of the applicable date of determination) and
Agent Bank to make available the Commitment Increase is subject to and
contingent upon (i) satisfaction of each of the conditions and requirements set
forth in Section 2.01(e), and (ii) Agent Bank having received in each case in
form and substance reasonably satisfactory to Agent Bank or in the case of an
occurrence, action or event, the occurrence of each of the following:
Section 3.24 - Guaranty Affirmation. The Guarantor shall have consented
to the Commitment Increase and ratified and affirmed the Guaranty as applicable
to the Commitment Increase.
Section 3.25 - Amendments to Security Documents. Borrower shall execute
and deliver to Agent Bank such amendments to the Security Documentation as may
be required by Agent Bank to add the Commitment Increase as an Obligation
secured by the Security Documentation.
-45-
Section 3.26 - Revolving Credit Note. Borrower shall execute and deliver
an amendment and restatement of the Revolving Credit Note, in a form reasonably
acceptable to Agent Bank, in the amount of the then Aggregate Commitment as
increased by the Commitment Increase.
Section 3.27 - Opinion of Counsel - Commitment Increase. An opinion of
counsel to the Borrower and addressed to the Agent Bank on behalf of itself and
each of the Banks, together with their respective successors and assigns,
opining as to such matters as are reasonably required by Agent Bank and the
Requisite Lenders.
Section 3.28 - Endorsement of Title Insurance Policy. As of the
Commitment Increase Effective Date, Borrower, at Borrower's expense, shall
cause the Title Insurance Policy to be endorsed with an 108.8 or other
appropriate endorsement for the purpose of increasing the policy insured amount
by the amount of the Commitment Increase.
Section 3.29 - Reimbursement for Expenses and Fees. Reimbursement by
Borrower for all reasonable fees and out-of-pocket expenses incurred by Agent
Bank in connection with the Commitment Increase, including, but not limited to,
title insurance premiums, reasonable attorney's fees of Xxxxxxxxx & Xxxxxx, LLC
and all other like fees and expenses relating to the Commitment Increase
Effective Date, provided that the amount then invoiced shall not thereafter
preclude Borrower's obligation to pay such costs and expenses relating to the
Commitment Increase following the Commitment Increase Effective Date or to
reimburse Agent Bank for the payment thereof.
Section 3.30 - Pro Forma Financial Compliance. The Borrower shall deliver
a duly executed and completed Compliance Certificate, as of the end of the most
recently ended Fiscal Quarter, prepared on a pro forma basis based on the
assumption that the Commitment Increase had occurred one (1) year prior to the
end of the most recently ended Fiscal Quarter, evidencing pro forma compliance
with each of the Financial Covenants.
Section 3.31 - Additional Documents and Statements. Such additional
documents, affidavits, certificates and opinions as Agent Bank may reasonably
require to insure compliance with this Credit Agreement. The statements set
forth in Section 3.22 shall be true and correct.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Banks to enter into this Credit Agreement, Borrower and MCRI
make the following representations and warranties:
Section 4.01 - Organization; Power and Authorization. Borrower and MCRI
are each a corporation duly organized and validly existing under the laws of
the State of Nevada. Each of Borrower and MCRI (i) has all requisite corporate
power, authority and legal right to execute and deliver each document,
agreement or certificate to which it is a party or by which it is bound in
connection with the Credit Facility, to consummate the transactions and perform
its obligations hereunder and thereunder, and to own its properties and assets
and to carry on and conduct its business as presently conducted or proposed to
be conducted, and (ii) has taken all necessary corporate action to authorize
the execution, delivery and performance of this Credit Agreement and the other
Loan Documents to which it is a party or by which it is bound
-46-
and to consummate the transactions contemplated hereunder and thereunder.
Section 4.02 - No Conflict With, Violation of or Default Under Laws or
Other Agreements. Neither the execution and delivery of this Credit Agreement,
the Revolving Credit Note, the Swingline Note or any other Loan Document, or
any other agreement, certificate or instrument to which either Borrower or MCRI
is a party or by which it is bound in connection with the Credit Facility, nor
the consummation of the transactions contemplated hereunder or thereunder, nor
the compliance with or performance of the terms and conditions herein or
therein, is prevented by, limited by, conflicts in any material respect with,
or will result in a material breach or violation of, or a material default
(with due notice or lapse of time or both) under, or the creation or imposition
of any lien, charge, or encumbrance of any nature whatsoever upon any of their
respective property or assets by virtue of, the terms, conditions or provisions
of (a) any indenture, evidence of indebtedness, loan or financing agreement,
or other agreement or instrument of whatever nature to which Borrower or MCRI
is bound, or (b) any provision of any existing law, rule, regulation, order,
writ, injunction or decree of any court or Governmental Authority to which
Borrower or MCRI are subject.
Section 4.03 - Litigation. Except as disclosed on the Schedule of
Significant Litigation delivered in connection with Section 3.18, to the best
knowledge of Borrower and MCRI, after due inquiry and investigation, there is
no action, suit, proceeding, inquiry, hearing or investigation pending or
threatened, in any court of law or in equity, or before any Governmental
Authority, which reasonably would be expected to (a) result in any Material
Adverse Change in the Hotel/Casino Facility or in their respective business,
financial condition, properties or operations, (b) materially adversely affect
the Borrower's or MCRI's ability to perform their respective obligations under
the Credit Agreement and the other Loan Documents, or (c) materially adversely
affect the validity or enforceability of this Credit Agreement and the other
Loan Documents. To the best knowledge of Borrower and MCRI, after due inquiry
and investigation, neither Borrower nor MCRI is in violation of or default with
respect to any order, writ, injunction, decree or demand of any Governmental
Authority.
Section 4.04 - Agreements Legal, Binding, Valid and Enforceable. This
Credit Agreement, the Revolving Credit Note, the Swingline Note, the Guaranty,
the Security Documentation and all other Loan Documents, when executed and
delivered by Borrower and/or Guarantor, as applicable, in connection with the
Credit Facility will constitute legal, valid and binding obligations of
Borrower, enforceable against Borrower and/or Guarantor, as applicable, in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
relating to or affecting the enforcement of creditors' rights and the exercise
of judicial discretion in accordance with general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law).
Section 4.05 - Information and Financial Data Accurate; Financial
Statements; No Adverse Event. All information and financial and other data
previously furnished in writing by Borrower and MCRI in connection with the
Credit Facility was true, correct and complete in all material respects as of
the date furnished (unless subsequently corrected prior to the date hereof),
and there has been no Material Adverse Change with respect thereto to the date
of this Credit Agreement since the dates thereof. No information has been
omitted which would make the information previously furnished in such
-47-
financial statements to Banks misleading or incorrect in any material respect
to the date of this Credit Agreement. Any and all financial statements
heretofore furnished to Banks by Borrower and/or MCRI: (a) present fairly the
financial position of Borrower and MCRI as of their respective dates and the
results of operations and changes in financial position for the periods to
which they apply, and (b) have been prepared in conformity with GAAP applied on
a consistent basis throughout the periods involved. Since the date of the
financial statements referred to in this Section 4.05, there has been no
Material Adverse Change in the financial condition, assets, liabilities,
business or operations of Borrower or MCRI.
Section 4.06 - Governmental Approvals. All timely consents, approvals,
orders or authorizations of, or registrations, declarations, notices or filings
with any Governmental Authority which are required in connection with the valid
execution and delivery of this Credit Agreement and the other Loan Documents by
Borrower and the carry-out or performance of any of the transactions required
or contemplated hereunder, or thereunder, by Borrower, have been obtained or
accomplished and are in full force and effect, or can be obtained or
accomplished by Borrower. All timely consents, approvals, orders or
authorizations of, or registrations, declarations, notices or filings with any
Governmental Authority which are required by Borrower in connection with the
use and operation of the Hotel/Casino Facility have been obtained or
accomplished and are in full force and effect.
Section 4.07 - Payment of Taxes. Borrower and MCRI have duly filed or
caused to be filed all federal, state and local tax reports and returns which
are required to be filed by them and have paid or made provisions for the
payment of, all material taxes, assessments, fees and other governmental
charges which have or may have become due pursuant to said returns or otherwise
pursuant to any assessment received by Borrower except such taxes, assessments,
fees or other governmental charges, if any, as are being contested in good
faith by Borrower by appropriate proceedings and for which Borrower or MCRI
have maintained adequate reserves for the payment thereof in accordance with
GAAP.
Section 4.08 - Title to Properties. Borrower shall have good and
marketable title to the Real Property as of the Closing Date and at all times
during the term of the Credit Facility (except for the Adjacent Driveway
Property with respect to which Borrower shall have good and marketable
leasehold title and except for the Pedestrian Crossing Air Space with respect
to which Borrower shall have a valid license). Each of Borrower and MCRI has
good and marketable title to: (a) all of its properties and assets reflected
in the most recent financial statements referred to in Section 4.05 hereof as
owned by them (except those properties and assets disposed of since the date of
said financial statements in the ordinary course of business or those
properties and assets which are no longer used or useful in the conduct of its
businesses), including, but not limited to, Borrower's and MCRI's interest in
patents, trademarks, tradenames, servicemarks, and licenses relating to or
pertaining to the Real Property or the Hotel/Casino Facility, and (b) all
properties and assets acquired by them subsequent to the date of the most
recent financial statements referred to in Section 4.05 hereof. All such
properties and assets are not subject to any liens, encumbrances or
restrictions except Permitted Encumbrances. All roads, easements and rights of
way necessary for the full utilization of the Real Property have been completed
and/or obtained.
-48-
Section 4.09 - No Untrue Statements. All statements, representations and
warranties made by Borrower and MCRI in this Credit Agreement, any other Loan
Document and any other agreement, document, certificate or instrument
previously furnished or to be furnished by Borrower and/or MCRI to Banks
pursuant to the provisions of this Credit Agreement, at the time they were made
and on and as of the Closing Date: (a) are and shall be true, correct and
complete in all material respects, (b) do not and shall not contain any untrue
statement of a material fact, and (c) do not and shall not omit to state a
material fact, the absence of which makes the information contained herein or
therein materially misleading or incomplete. Borrower and MCRI understand that
all such statements, representations and warranties shall be deemed to have
been relied upon by Banks as a material inducement to establish the Credit
Facility.
Section 4.10 - Brokerage Commissions. No person is entitled to receive any
brokerage commission, finder's fee or similar fee or payment in connection with
the extensions of credit contemplated by this Credit Agreement. No brokerage
or other fee, commission or compensation is to be paid by Banks with respect to
the extensions of credit contemplated hereby and Borrower agrees to indemnify
Banks against any such claims for brokerage fees or commissions and to pay all
expenses including, without limitation, reasonable attorney's fees incurred by
Banks in connection with the defense of any action or proceeding brought to
collect any such brokerage fees or commissions.
Section 4.11 - No Defaults. Borrower is not in violation of any
applicable law and/or regulations, the violation of which materially and
adversely affects the business, financial condition or operations of the Real
Property or the Hotel/Casino Facility. Borrower is not in violation or default
(nor is there any waiver in effect which, if not in effect, would result in a
violation or default) in any material and adverse respect under any indenture,
evidence of indebtedness, loan or financing agreement or other agreement or
instrument of whatever nature to which it is a party or by which it is bound
(except for any defaults previously brought to Banks' attention in writing, for
which Borrower has received a waiver from Requisite Lenders), a default under
which would reasonably be expected to result in a Material Adverse Change.
Section 4.12 - Employee Retirement Income Security Act of 1974. No
Reportable Event has occurred and is continuing with respect to any Pension
Plan under ERISA, that gives rise to liabilities that would constitute a
Material Adverse Change.
Section 4.13 - Availability of Utility Services. All utility services and
facilities necessary for the Hotel/Casino Facility and the Real Property
including, without limitation, electrical, water, gas and sewage services and
facilities are available for the use and operation of the Hotel/Casino Facility
and the Real Property.
Section 4.14 - Policies of Insurance. As of the Closing Date, each of the
copies of the declaration pages, original binders and certificates of insurance
evidencing the Policies of Insurance relating to the Hotel/Casino Facility
delivered to Agent Bank by Borrower (i) is a true, correct and complete copy of
the respective original thereof as in effect on the date hereof, and no
amendments or modifications of any of said documents or instruments not
included in such copies have been made, and (ii) has not been
-49-
terminated and is in full force and effect. Borrower is not in default in the
observance or performance of its obligations under said documents and
instruments, and Borrower has done all things required to be done as of the
Closing Date to keep unimpaired its rights thereunder.
Section 4.15 - Spaceleases. Schedules of all executed Spaceleases
pertaining to the Hotel/Casino Facility, or any portion thereof, in existence
as of the Closing Date, are set forth on Schedule 4.15 attached hereto.
Section 4.16 - Equipment Leases and Contracts. Schedules of all executed
Equipment Leases and Contracts pertaining to the Hotel/Casino Facility or any
portion thereof, in existence as of the Closing Date, are set forth on Schedule
4.16 attached hereto.
Section 4.17 - Gaming Permits and Approvals. All Gaming Permits required
to be held by Borrower are current and in good standing and Borrower presently
holds all Gaming Permits necessary for the continued operation of the
Hotel/Casino Facility.
Section 4.18 - Environmental Certificate. The representations and
certifications contained in the Environmental Certificate are true and correct
in all material respects.
Section 4.19 - Investment Company Act. Borrower is neither an "investment
company" nor a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
Section 4.20 - Public Utility Holding Company Act. Borrower is neither a
"holding company," nor a "subsidiary company" of a "holding company," nor an
"affiliate" of a "holding company" nor of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 4.21 - Labor Relations. There is no strike or work stoppage in
existence, or to the best knowledge of Borrower threatened, involving Borrower
or the Hotel/Casino Facility.
Section 4.22 - Trademarks, Patents, Licenses, Franchises, Formulas and
Copyrights. Borrower owns all the patents, trademarks, permits, service marks,
trade names, copyrights, licenses, franchises and formulas set forth in
Schedule 4.22, or has a valid license or sublicense of rights with respect to
the foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected to result in a Material
Adverse Change on the business, operations, property, assets or condition
(financial or otherwise) of Borrower. Each of the patents, trademarks,
servicemarks, tradenames and copyrights owned by Borrower which is registered
with any Governmental Authority is set forth on Schedule 4.22, attached hereto.
Section 4.23 - Contingent Liabilities. As of the Closing Date, Borrower
has incurred no material Contingent Liabilities (any Contingent Liability in
excess of Two Million Dollars ($2,000,000.00) being deemed material) other than
those described on Schedule 4.23.
-50-
Section 4.24 - Subsidiaries. As of the Closing Date, Borrower does not
have any Subsidiaries.
ARTICLE V
GENERAL COVENANTS OF BORROWER AND MCRI
To induce the Banks to enter into this Credit Agreement, Borrower and MCRI
covenant to Banks as follows:
A. General Covenants.
Section 5.01 - FF&E. Borrower shall furnish, fixture and equip the
Hotel/Casino Facility with FF&E it reasonably deems appropriate for the
operation of the Hotel/Casino Facility. All FF&E that is purchased and
installed in the Hotel/Casino Facility shall be purchased free and clear of any
liens, encumbrances or claims, other than Permitted Encumbrances.
Section 5.02 - Permits; Licenses and Legal Requirements. Borrower shall
comply in all material respects with and keep in full force and effect, as and
when required, all Gaming Permits and all material permits, licenses and
approvals obtained from any Governmental Authorities which are required for the
operation and use of the Real Property as the Hotel/Casino Facility. Borrower
shall comply in all material respects with all applicable material existing and
future laws, rules, regulations, orders, ordinances and requirements of all
Governmental Authorities, and with all recorded restrictions affecting the Real
Property.
Section 5.03 - Protection Against Lien Claims. Borrower shall promptly
pay and discharge or cause to be paid and discharged all claims and liens for
labor done and materials and services supplied and furnished in connection with
the Hotel/Casino Facility in accordance with this Section 5.03. If any
mechanic's lien or materialman's lien shall be recorded, filed or suffered to
exist against the Real Property, Hotel/Casino Facility or any interest therein
by reason of work, labor, services or materials supplied, furnished or claimed
to have been supplied and furnished in connection with the Hotel/Casino
Facility, upon Borrower's receipt of written notice from Agent Bank demanding
the release and discharge of such lien: (a) said lien or claim shall be paid,
released and discharged of record within sixty (60) days following its receipt
of such notice, or (b) Borrower shall cause said mechanic's lien or
materialman's lien to be released of record pursuant to the provisions set
forth in the Nevada Revised Statues 108.2413, et. seq., within ninety (90) days
following its receipt of such notice.
Section 5.04 - Full Payment of Existing Bank Loan. On or before the
Closing Date, Borrower shall pay in full or cause to be fully paid all sums of
principal and interest owing under the Existing Bank Loan and shall cause all
Existing Bank Loan Security Documents to be fully released, discharged and
reconveyed.
Section 5.05 - No Change in Character of Business or Location of Chief
Executive Office. At all times throughout the term of the Credit Facility (a)
the chief executive office of Borrower shall be located at 0000 Xxxx Xxxxx
Xxxx, Xxxxx 000, Xxxx, Xxxxxx 00000; provided, however, Borrower shall be
entitled to move its chief executive office to another location within the
State of Nevada upon no less than thirty (30) days prior written notice to
-51-
Agent Bank, (b) the Hotel/Casino Facility shall be operated by the Borrower,
and (c) Borrower shall not effect a material change in the nature and character
of the business at the Hotel/Casino Facility as presently conducted and as
presently contemplated and disclosed to Banks.
Section 5.06 - Preservation and Maintenance of Properties and Assets;
Acquisition of Additional Property or Leases.
a. At all times throughout the term of the Credit Facility, (a) the
Borrower shall operate, maintain and preserve all rights, privileges,
franchises, licenses, Gaming Permits and other properties and assets necessary
to conduct its businesses and the Hotel/Casino Facility, in accordance with all
applicable governmental laws, ordinances, approvals, rules and regulations and
requirements, including, but not limited to, zoning, sanitary, pollution,
building, environmental and safety laws and ordinances, rules and regulations
promulgated thereunder, and (b) Borrower shall not consolidate with, remove,
demolish, materially alter, discontinue the use of, sell, transfer, assign,
hypothecate or otherwise dispose of to any Person, any part of its properties
and assets necessary for the continuance of its business, as presently
conducted and as presently contemplated, other than in the normal course of
business, alterations or modifications as are reasonably expected to increase
the value of the Collateral, or as otherwise permitted pursuant to this Credit
Agreement.
b. Furthermore, in the event Borrower, MCRI or any Affiliate and/or
Related Entity thereof (other than BLILP), shall acquire any other real
property or rights to the use of real property which is: (a) adjacent to any of
the Real Property and used as an integral part of the operation at the Real
Property and/or the Hotel/Casino Facility, or (b) if not so adjacent, necessary
and required for the use and operation of such Real Property or Hotel/Casino
Facility, Borrower shall concurrently with the acquisition of such real
property or the rights to the use of such real property, execute or cause the
execution of such documents as may be necessary to add such real property or
rights to the use of real property as Collateral under the Credit Facility.
Provided, however, in the event the V/P Property, or any portion thereof, is
released as Collateral pursuant to Section 5.22, the V/P Property so released,
or applicable portion thereof, shall be required to be added as Collateral only
in the event that its use in connection with the Hotel/Casino Facility is
required by the Laws of any applicable Governmental Authority.
c. Other than with respect to the Adjacent Driveway Lease, neither
Borrower nor MCRI shall enter into any other leases, licenses, rental or other
arrangements for the use or occupancy of all or any portion of the Village
Shopping Center which use or occupancy is or is planned or projected to be or
become an integral part of the operation at the Real Property and/or the
Hotel/Casino Facility, without the prior written consent of Agent Bank, which
consent shall not be unreasonably withheld or delayed, or if in the opinion of
Agent Bank such amendment, modification or termination is materially adverse to
Borrower or the Banks, without the prior written consent of Requisite Lenders.
Section 5.07 - Repair of Properties and Assets. At all times throughout
the term of the Credit Facility, Borrower shall, at its own cost and expense,
(a) maintain, preserve and keep in a manner consistent with hotel and gaming
casino operating practices, as the case may be, applicable to hotel/casino
operations operating in the Reno, Nevada area, its assets and properties,
including, but not limited to, the Hotel/Casino Facility and all FF&E owned
-52-
or leased by Borrower in good and substantial repair, working order and
condition, ordinary wear and tear excepted, (b) from time to time, make or
cause to be made, all necessary and proper repairs, replacements, renewals,
improvements and betterments thereto, and (c) from time to time, make such
substitutions, additions, modifications and improvements as may be necessary
and as shall not impair the structural integrity, operating efficiency and
economic value of said assets and properties. All alterations, replacements,
renewals, or additions made pursuant to this Section 5.07 shall become and
constitute a part of said assets and property and subject, inter alia, to the
provisions of Section 5.01 and subject to the lien of the Loan Documents.
Section 5.08 - Financial Statements; Reports; Certificates and Books and
Records. Until Bank Facility Termination, Borrower and MCRI shall, unless the
Agent Bank (with the written approval of the Requisite Lenders) otherwise
consents, at Borrower's sole expense, deliver to the Agent Bank and each of the
Lenders a full and complete copy of each of the following and shall comply with
each of the following financial requirements:
a. As soon as practicable, and in any event within sixty (60) days after
the end of each Fiscal Quarter (including the fourth (4th) Fiscal Quarter in
any Fiscal Year), the balance sheet, income statement, operating statement and
statement of cash flows of the Borrower as at the end of such Fiscal Quarter
and for the portion of the Fiscal Year ended with such Fiscal Quarter, all in
reasonable detail. Such financial statements shall be certified by an
Authorized Officer of Borrower as fairly presenting the financial condition,
results of operations and cash flows of Borrower in accordance with GAAP (other
than footnote disclosures) as at such date and for such periods, subject only
to normal year-end accruals and audit adjustments;
b. As soon as practicable, and in any event within sixty (60) days after
the end of each Fiscal Quarter (including the fourth (4th) Fiscal Quarter in
any Fiscal Year), the consolidated and consolidating balance sheet, income
statement, operating statement and statement of cash flows of the MCRI
Consolidation as at the end of such Fiscal Quarter and for the portion of the
Fiscal Year ended with such Fiscal Quarter, all in reasonable detail. Such
financial statements shall be certified by an Authorized Officer of MCRI as
fairly presenting the financial condition, results of operations and cash flows
of the MCRI Consolidation in accordance with GAAP (other than footnote
disclosures) as at such date and for such periods, subject only to normal year-
end accruals and audit adjustments;
c. As soon as practicable, and in any event within forty-five (45) days
after the end of each Fiscal Quarter (including the fourth (4th) Fiscal Quarter
in any Fiscal Year), a pricing certificate in the form marked "Exhibit F",
affixed hereto and by this reference incorporated herein and made a part hereof
(the "Pricing Certificate") setting forth a preliminary calculation of the
Leverage Ratio as of the last day of such Fiscal Quarter, and providing
reasonable detail as to the calculation thereof, which calculations shall be
based on the preliminary unaudited financial statements of the Borrower for
such Fiscal Quarter, and as soon as practicable thereafter, in the event of any
material variance in the actual calculation of the Leverage Ratio from such
preliminary calculation, a revised Pricing Certificate setting forth the actual
calculation thereof; provided, however, that in the event that Borrower does
not deliver a Pricing Certificate when due, then until (but only until) such
Pricing Certificate is delivered as
-53-
provided herein, the Leverage Ratio shall be deemed, for the purpose of
determining the Applicable Margin, to be greater than 2.50 to 1.0 and the
Applicable Margin determined with respect thereto.
d. As soon as practicable, and in any event within one hundred (100) days
after the end of each Fiscal Year, (i) the balance sheet, income statement,
statement of cash flows (reconciled with year end audited statements) of the
Borrower as at the end of such Fiscal year, all in reasonable detail, and (ii)
the consolidated and consolidating balance sheet, income statement, statement
of retained earnings and cash flows (reconciled with year end audited
statements) of the MCRI Consolidation as at the end of such Fiscal year, all in
reasonable detail. Such financial statements shall be prepared in accordance
with GAAP and shall be accompanied by a report of any "Big 4" accounting firm
or other independent public accountants of recognized standing selected by
Borrower and reasonably satisfactory to the Agent Bank, which report shall be
prepared in accordance with generally accepted auditing standards as at such
date, and shall not be subject to any qualifications or exceptions as to the
scope of the audit nor to any other qualification or exception determined by
the Requisite Lenders in their good faith business judgment to be adverse to
the interests of the Banks. Such accountants' report shall be accompanied by a
certificate stating that, in making the examination pursuant to generally
accepted auditing standards necessary for the certification of such financial
statements and such report, such accountants have obtained no knowledge of any
Default or, if, in the opinion of such accountants, any such Default shall
exist, stating the nature and status of such Default, and stating that such
accountants have reviewed the Financial Covenants as at the end of such Fiscal
Year (which shall accompany such certificate) under Sections 6.01 through 6.03,
have read such Sections (including the definitions of all defined terms used
therein) and that nothing has come to the attention of such accountants in the
course of such examination that would cause them to believe that the same were
not calculated by the Borrower and the MCRI Consolidation, as applicable, in
the manner prescribed by this Credit Agreement. Such financial statements
shall be certified by an Authorized Officers of the Borrower and MCRI in the
same manner as required with respect to financial statements delivered pursuant
to Sections 5.08(a) and (b);
e. As soon as practicable, and in any event no later than fifteen (15)
days prior to the commencement of each Fiscal Year, projections by Fiscal
Quarter for that Fiscal Year, including projected balance sheet, statement of
operations and statement of cash flow of Borrower and projected consolidated
and consolidating balance sheets and statements of operations and cash flows,
of the Borrower, all in reasonable detail;
f. As soon as practicable, and in any event no later than forty-five (45)
days after the commencement of each Fiscal Year, a Capital Expenditure budget
by Borrower for the Hotel/Casino Facility for that Fiscal Year, all in
reasonable detail;
g. Concurrently with the financial statements and reports required
pursuant to Sections 5.08(a), (b) and 5.08(d), a Compliance Certificate signed
by an Authorized Officer of Borrower;
h. Promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication that shall have
been sent to the stockholders of MCRI, and copies of all annual, regular,
periodic and special reports (including, without limitation, each 10Q and 10K
-54-
report) and registration statements which MCRI shall have filed or be required
to file with the Securities and Exchange Commission under Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended, and not otherwise required
to be delivered to the Banks pursuant to other provisions of this Section 5.08.
i. Promptly, and in any event within ten (10) days of the filing thereof,
a copy of any substantive filing, report or other document filed by Borrower,
MCRI or any member of the MCRI Consolidation with the Nevada Gaming
Authorities. Promptly after the same are available, copies of any written
communication to Borrower or MCRI from the Nevada Gaming Authorities advising
them, or either of them, of a material violation of or non-compliance with, any
Gaming Law by Borrower, MCRI or any member of the MCRI Consolidation.
j. Until Bank Facility Termination, Borrower and MCRI, and each of them,
shall keep and maintain complete and accurate books and records in accordance
with GAAP, consistently applied. Borrower and MCRI, and each of them, shall
permit Banks and any authorized representatives of Banks to have reasonable
access to and to inspect, examine and make copies of the books and records, any
and all accounts, data and other documents of Borrower and MCRI at all
reasonable times upon the giving of reasonable notice of such intent. In
addition: (i) in the event of the occurrence of any Default or Event of
Default, or (ii) in the event any Material Adverse Change occurs, Borrower and
MCRI shall promptly, and in any event within three (3) days after actual
knowledge thereof, notify Agent Bank in writing of such occurrence.
k. Until Bank Facility Termination, Borrower and MCRI, and each of them,
shall furnish to Agent Bank, with sufficient copies for distribution to each of
the Banks, any financial information or other information bearing on the
financial status of the Borrower, MCRI, any member of the MCRI Consolidation,
or any of them, which is reasonably requested by Agent Bank or Requisite
Lenders.
Section 5.09 - Insurance. Borrower shall obtain, or cause to be obtained,
and shall maintain or cause to be maintained with respect to the Hotel/Casino
Facility, at all times throughout the term of the Credit Facility, at its own
cost and expense, and shall deposit with Agent Bank on or before the Closing
Date:
a. Property Insurance. Borrower shall maintain an "All Risk" (Special
Causes of Loss or Equivalent) perils policy covering the building and
improvements, and other permanent structures for one hundred percent (100%) of
the replacement cost. The policy will include Agreed Amount (waiving co-
insurance), replacement cost valuation and building ordinance endorsements.
The policy will include a standard mortgagee clause (ISO form or equivalent)
and provide that all losses in excess of One Million Dollars ($1,000,000.00) be
adjusted by Borrower with the consent of Agent Bank. The Borrower waives any
and all rights of subrogation against Banks.
b. Personal Property (including machinery, equipment, furniture, fixtures,
stock). Borrower shall maintain special causes of loss ("All Risk") property
coverage which represents ninety percent (90%) of the values at replacement
costs for all personal property owned, leased or for which Borrower is legally
liable. Such policy shall include a lenders loss payable endorsement in favor
of Agent Bank. The policy providing real and personal property coverage may
include a deductible of no more than Two Hundred Fifty Thousand Dollars
($250,000.00) for any single occurrence.
-55-
c. Business Income/Extra Expense. Borrower shall maintain a combined
Business Income/Extra Expense coverage with a limit no less than eighty percent
(80%) of the net profit, plus continuing expenses (including debt service) for
the Hotel/Casino Facility, which coverage may be included in the coverages
required by Section 5.09(a) and (b) above. Such coverage shall also include
extensions for off premises power losses at One Million Dollars ($1,000,000.00)
and an extended period of indemnity ninety (90) days endorsement. These
coverages (to the extent not covered by Section 5.09(a) and (b) above) may have
a deductible of no greater than forty-eight (48) hours, or One Hundred Thousand
Dollars ($100,000.00), if a separate deductible applies. Agent Bank shall be
endorsed as the loss payee under the above coverages.
d. Boiler and Machinery. Borrower shall maintain a Boiler and Machinery
policy for the Hotel/Casino Facility written on a Comprehensive Form with a
combined direct and indirect limit of no less than Fifteen Million Dollars
($15,000,000.00), which coverage may be included in the coverages required by
Section 5.09(a) and (b) above. The policy shall include extensions for Agreed
Amount (waiving co-insurance) and Replacement Cost Valuation. The policy (to
the extent not covered by Section 5.09(a) and (b) above) may contain
deductibles of no greater than One Hundred Thousand Dollars ($100,000.00)
direct and forty-eight (48) hours indirect.
e. Crime Insurance. Borrower shall obtain a comprehensive crime policy,
including the following coverages:
(i) employee dishonesty - One Million Dollars ($1,000,000.00);
(ii) money and securities (inside) - Five Hundred Thousand Dollars
($500,000.00);
(iii) money and securities (outside) - Five Hundred Thousand Dollars
($500,000.00);
(iv) depositor's forgery - One Million Dollars ($1,000,000.00);
(v) computer fraud - One Million Dollars ($1,000,000.00).
The policy must be amended so that money is defined to include "tokens and
chips". The policy may contain deductibles of no greater than Two Hundred
Thousand Dollars ($200,000.00) for employee dishonesty and Fifty Thousand
Dollars ($50,000.00) for all other coverage agreements listed above.
f. Commercial General Liability (2000 ISO Form or Equivalent). Borrower
shall maintain a Commercial General Liability policy with a One Million Dollar
($1,000,000.00) combined single limit for bodily injury and property damage,
including Contractual Liability, and all standard policy form extensions. The
policy must provide a Two Million Dollar ($2,000,000.00) general aggregate (per
location, if multi-location risk) and be written on an "occurrence form". The
policy will include extensions for Liquor Legal Liability and Employee Benefits
Legal Liability coverages. If the general liability policy contains a self-
insured retention, it shall be no greater than Forty Thousand Dollars
($40,000.00) per occurrence.
The policy shall be endorsed to include Agent Bank as an additional
insured on behalf of the Banks for losses relating to the Hotel/Casino
Facility. Definition of additional insured shall include all officers,
directors, employees, agents and representatives of the additional insured.
The coverage for additional insured shall apply on a primary basis irrespective
of any other insurance whether collectible or not (ISO Form Endorsement No.
CE20261185 Additional Insured - Designated Person, Organization or equivalent).
-56-
g. Automobile. Borrower shall maintain a comprehensive Automobile
Liability Insurance Policy written under coverage "symbol 1", providing a One
Million Dollar ($1,000,000.00) combined single limit for bodily injury and
property damage covering all owned, non-owned and hired vehicles of the
Borrower. If the policy contains a self-insured retention it shall be no
greater than Fifty Thousand Dollars ($50,000.00) per occurrence. The following
additional coverages must be purchased by Borrower:
(i) Garagekeepers Legal Liability. Five Hundred Thousand Dollar
($500,000.00) limit for comprehensive and collision coverages for
physical damage to vehicles in the mortgagors care, custody and control.
The policy can be subject to a deductible of no greater than Five
Thousand Dollars ($5,000.00) for each auto and Twenty-Five Thousand
Dollars ($25,000.00) for each loss.
h. Workers Compensation and Employers Liability Insurance. Borrower shall
maintain standard Workers Compensation Policy covering the State of Nevada and
Employers Liability coverage subject to a limit of no less than Five Hundred
Thousand Dollars ($500,000.00) each employee, Five Hundred Thousand Dollars
($500,000.00) each accident, Five Hundred Thousand Dollars ($500,000.00) policy
limit. The policy shall include endorsements for Voluntary Compensation and
Stop Gap Liability. If the Borrower has elected to self-insure Workers
Compensation coverage in the State of Nevada, the Agent Bank must be furnished
with a copy of the certificate from the state permitting self-insurance and
evidence of a Stop Loss Excess Workers Compensation policy with a specific
retention of no greater than Five Hundred Thousand Dollars ($500,000.00)
thereafter.
i. Umbrella Liability. An Umbrella Liability policy must be purchased
with a limit of not less than Sixty Million Dollars ($60,000,000.00) providing
excess coverage over all limits and coverages indicated in paragraphs f, g and
h above. The limits can be obtained by a combination of Primary and Excess
Umbrella policies, provided that all layers follow form with the underlying
policies indicated in f, g and h and are written on an "occurrence" form. This
policy, or the underlying policy or policies to which the Umbrella Liability
policy pertains, shall be endorsed to include the Agent Bank as an additional
insured on behalf of the Banks.
j. If Borrower's general liability and automobile policies include a self-
insured retention, it is agreed and fully understood that Borrower is solely
responsible for payment of all amounts due within said self-insured retentions.
Any Indemnification/Hold Harmless provision is extended to cover all
liabilities associated with said self-insured retentions.
k. All policies indicated above shall be written with insurance companies
licensed and admitted to do business in the State of Nevada and rated no lower
than "A VIII" in the most recent addition of A.M. Best and/or "AA" in the most
recent edition of Standard & Poor's, or such other carrier reasonably
acceptable to Agent Bank. All policies discussed above shall be endorsed to
provide that in the event of a cancellation, non-renewal or material
modification, Agent Bank shall receive thirty (30) days prior written notice
thereof. The Borrower shall furnish Agent Bank with Certificates of Insurance
executed by an authorized agent evidencing compliance with all insurance
provisions discussed above on an annual basis. Certificates of Insurance
executed by an authorized agent of each carrier providing insurance evidencing
continuation of all coverages will be provided on the Closing Date and annually
on or before ten (10) days prior to the
-57-
expiration of each policy. The Borrower shall also furnish a copy of the
declaration page of each policy required by this section and the actual policy
endorsements evidencing the Agent Bank's status as Mortgagee/Loss Payee
(Property coverage) and Additional Insured (General Liability coverage) as
required. All certificates and other notices related to the insurance program
shall be delivered to Agent Bank concurrently with the delivery of such
certificates or notices to such carrier or to Borrower as applicable.
l. Any other insurance reasonably requested by Agent Bank or Requisite
Lenders in such amount and covering such risks as may be reasonably requested.
Approval of any insurance by the Agent Bank shall not be a representation of
the solvency of any insurer or the sufficiency of any coverage required under
this Credit Agreement. All requirements set forth in this section are
considered minimums in terms of the purchase and maintenance of insurance under
this Credit Agreement.
Section 5.10 - Taxes. Throughout the term of the Credit Facility,
Borrower shall prepare and timely file or cause to be prepared and timely filed
all federal, state and local tax returns required to be filed by it, and
Borrower shall pay and discharge prior to delinquency all taxes, assessments
and other governmental charges or levies imposed upon it, or in respect of any
of any of its properties and assets except such taxes, assessments and other
governmental charges or levies, if any, as are being contested in good faith by
Borrower in the manner which is set forth for such contests by Section 4.07
herein.
Section 5.11 - Permitted Encumbrances Only. At all times throughout the
term of the Credit Facility, Borrower shall not create, incur, assume or suffer
to exist any mortgage, deed of trust, pledge, Lien, security interest,
encumbrance, attachment, levy, distraint, or other judicial process and burdens
of every kind and nature except the Permitted Encumbrances on or with respect
to the Collateral, except (a) with respect to matters described in Sections
5.03 and 5.10 such items as are being contested in the manner described
therein, and (b) with respect to any other items, if any, as are being
contested in good faith by appropriate proceedings and for which Borrower has
maintained adequate reserves for the payment thereof.
Section 5.12 - Advances. At any time during the term of the Credit
Facility, if Borrower should fail (a) to perform or observe, or (b) to cause to
be performed or observed, any covenant or obligation of Borrower under this
Credit Agreement or any of the other Loan Documents, then Agent Bank, upon the
giving of reasonable notice may (but shall be under no obligation to) take such
steps as are necessary to remedy any such non-performance or non-observance and
provide for payment thereof. All amounts advanced by Agent Bank or Lenders
pursuant to this Section 5.12 shall become an additional obligation of Borrower
to Lenders secured by the Deed of Trust and other Loan Documents, shall reduce
the amount of Available Borrowings and shall become due and payable by Borrower
on the next interest payment date, together with interest thereon at a rate per
annum equal to the Default Rate (such interest to be calculated from the date
of such advancement to the date of payment thereof by Borrower).
Section 5.13 - Further Assurances. Borrower and MCRI will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, such amendments or supplements hereto or to any of the Loan
Documents and such further documents, instruments and transfers as Requisite
Lender or Agent Bank may reasonably require for the curing of any defect in
-58-
the execution or acknowledgement hereof or in any of the Loan Documents, or in
the description of the Real Property or other Collateral or for the proper
evidencing of giving notice of each lien or security interest securing
repayment of the Credit Facility. Further, upon the execution and delivery of
the Deed of Trust and each of the Loan Documents and thereafter, from time to
time, Borrower shall cause the Deed of Trust and each of the Loan Documents and
each amendment and supplement thereto to be filed, registered and recorded and
to be refiled, re-registered and re-recorded in such manner and in such places
as may be reasonably required by the Requisite Lenders or Agent Bank, in order
to publish notice of and fully protect the lien of the Deed of Trust and the
Loan Documents and to protect or continue to perfect the security interests
created by the Deed of Trust and Loan Documents in the Real Property and
Collateral and to perform or cause to be performed from time to time any other
actions required by law and execute or cause to be executed any and all
instruments of further assurance that may be necessary for such publication,
perfection, continuation and protection.
Section 5.14 - Indemnification. Borrower agrees to and does hereby
jointly and severally indemnify, protect, defend and save harmless Agent Bank
and each of the Banks and their respective trustees, officers, employees,
agents, attorneys and shareholders (individually an "Indemnified Party" and
collectively the "Indemnified Parties") from and against any and all losses,
damages, expenses or liabilities of any kind or nature from any suits, claims,
or demands, including reasonable counsel fees incurred in investigating or
defending such claim, suffered by any of them and caused by, relating to,
arising out of, resulting from, or in any way connected with this Credit
Agreement, with any other Loan Document or with the transactions contemplated
herein and thereby; provided, however, Borrower shall not be obligated to
indemnify, protect, defend or save harmless an Indemnified Party if, and to the
extent, the loss, damage, expense or liability was caused by (a) the gross
negligence or intentional misconduct of such Indemnified Party, (b) a dispute
amongst the Lenders not involving or arising from Borrower's or Guarantor's
Default, or (c) the breach of this Credit Agreement or any other Loan Document
by such Indemnified Party or the breach of any laws, rules or regulation by
such Indemnified Party (other than those breaches of Laws arising from
Borrower's or Guarantor's Default). In case any action shall be brought
against any Indemnified Party based upon any of the above and in respect to
which indemnity may be sought against Borrower, Agent Bank shall promptly
notify Borrower in writing, and Borrower shall assume the defense thereof,
including the employment of counsel selected by Borrower and reasonably
satisfactory to Indemnified Party, the payment of all costs and expenses and
the right to negotiate and consent to settlement upon the consent of the
Indemnified Party. Upon reasonable determination made by Indemnified Party
that such counsel would have a conflict representing such Indemnified Party and
Borrower, the applicable Indemnified Party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof.
Borrower shall not be liable for any settlement of any such action effected
without its consent, but if settled with Borrower's consent, or if there be a
final judgment for the claimant in any such action, Borrower agrees to
indemnify, defend and save harmless such Indemnified Parties from and against
any loss or liability by reason of such settlement or judgment. The provisions
of this Section 5.14 shall survive the termination of this Credit Agreement and
Bank Facility Termination and the assignment or subparticipation of all or any
portion of the Syndication Interest held by any Lender pursuant to Section
10.10.
-59-
Section 5.15 - Inspection of the Collateral and Appraisal. At all times
during the term of the Credit Facility, Borrower shall provide or cause to be
provided to Banks and any authorized representatives of Banks, accompanied by
representatives of Borrower, the reasonable right of entry and free access to
the Real Property to inspect same on reasonable prior notice to Borrower. If
at any time any Qualified Appraisal of the Hotel/Casino Facility is required to
be made by any banking regulatory authority or determined to be necessary by
Agent Bank or Requisite Lenders after the occurrence of an Event of Default,
Borrower agrees to pay all fees, costs and expenses incurred by Agent Bank in
connection with the preparation of such Qualified Appraisal. Borrower shall
not be obligated to pay for more than one of such Qualified Appraisals during
any Fiscal Year.
Section 5.16 - Compliance With Other Loan Documents. Borrower shall
comply with each and every term, condition and agreement contained in the Loan
Documents.
Section 5.17 - Suits or Actions Affecting Borrower or MCRI. Throughout
the term of the Credit Facility, Borrower and MCRI shall promptly advise Agent
Bank in writing within ten (10) days after Borrower or MCRI obtain knowledge of
(a) any claims, litigation, proceedings or disputes (whether or not purportedly
on behalf of Borrower) against, or to the actual knowledge of Borrower or MCRI,
threatened or affecting Borrower or MCRI which, if adversely determined, would
result in a Material Adverse Change in the Hotel/Casino Facility or the
business, operations or financial conditions of Borrower or MCRI, (b) any
material labor controversy resulting in or threatening to result in a strike
against the Hotel/Casino Facility, or (c) any proposal by any Governmental
Authority to acquire any of the material assets or business of Borrower or
MCRI.
Section 5.18 - Notice to State Gaming Control Board. Borrower shall make
all required reports and disclosures to the Nevada State Gaming Control Board,
including, but not limited to, reporting the Credit Facility within the time
period required by Regulation 8.130(2) of the Regulations of Nevada Gaming
Commission and State Gaming Control Board.
Section 5.19 - Tradenames, Trademarks and Servicemarks. Borrower shall
not assign or in any other manner alienate its interests in any material
tradenames, trademarks or servicemarks relating or pertaining to the
Hotel/Casino Facility during the term of the Credit Facility. Borrower shall
not change its name without first giving at least thirty (30) days prior
written notice to Agent Bank.
Section 5.20 - Notice of Hazardous Materials. Within ten (10) days after
an executive officer of Borrower shall have obtained actual knowledge thereof,
Borrower shall promptly advise Agent Bank and each of the Lenders in writing of
and deliver a copy of: (a) any and all enforcement, clean-up, removal or other
governmental or regulatory actions instituted or threatened by any Governmental
Agency pursuant to any applicable federal, state or local laws, ordinances or
regulations relating to any Hazardous Materials (as defined in the
Environmental Certificate) affecting the Hotel/Casino Facility, or any portion
thereof; (b) all written claims made or threatened by any third party against
Borrower, the Real Property, or the Hotel/Casino Facility, relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any
Hazardous Materials (the matters set forth in clauses (a) and (b) above are
hereinafter referred to as "Hazardous Materials Claims"); and (c) the discovery
of any occurrence or condition on any real
-60-
property adjoining or in the vicinity of the Real Property or the Hotel/Casino
Facility that could cause Borrower or any part thereof to be held liable under
the provisions of, or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use of the Real Property or the
Hotel/Casino Facility under, any Hazardous Materials Laws.
Section 5.21 - Compliance with Access Laws.
a. Borrower agrees that Borrower and the Hotel/Casino Facility shall at
all times take all reasonable steps to comply with the requirements of the
Americans with Disabilities Act of 1990; the Fair Housing Amendments Act of
1988; and other federal, state or local laws or ordinances related to disabled
access; or any statute, rule, regulation, ordinance, order of Governmental
Authorities, or order or decree of any court adopted or enacted with respect
thereto, as now existing or hereafter amended or adopted (collectively, the
"Access Laws"). At any time, Agent Bank may require a certificate of
compliance with the Access Laws and indemnification agreement in a form
reasonably acceptable to Agent Bank. Agent Bank may also require a certificate
of compliance with the Access Laws from an architect, engineer, or other third
party acceptable to Agent Bank.
b. Notwithstanding any provisions set forth herein or in any other
document, Borrower shall not alter or permit any tenant or other person to
alter the Hotel/Casino Facility in any manner which would increase Borrower's
responsibilities for compliance with the Access Laws without the prior written
approval of Agent Bank. In connection with such approval, Agent Bank may
require a certificate of compliance with the Access Laws from an architect,
engineer or other person acceptable to Agent Bank.
c. Borrower agrees to give prompt written notice to Agent Bank of the
receipt by Borrower of any claims of violation of any of the Access Laws and of
the commencement of any proceedings or investigations which relate to
compliance with any of the Access Laws.
d. Borrower shall indemnify, defend and hold harmless Indemnified Parties
from and against any and all claims, demands, damages, costs, expenses, losses,
liabilities, penalties, fines and other proceedings including, without
limitation, reasonable attorneys' fees and expenses arising directly or
indirectly from or out of or in any way connected with any failure of the
Hotel/Casino Facility to comply with any of the Access Laws. The obligations
and liabilities of Borrower under this section shall survive Bank Facility
Termination, any satisfaction, assignment, judicial or nonjudicial foreclosure
proceeding, or delivery of a deed in lieu of foreclosure.
Section 5.22 - Release of V/P Property as Collateral. Upon the prior
written consent of each of the Lenders, Agent Bank shall promptly release the
V/P Property (or that portion thereof which is not an integral part of the
Hotel/Casino Facility) as Collateral upon the occurrence of each of the
following conditions, so long as no Default or Event of Default has occurred
and remains continuing:
a. Borrower delivers a written request to Agent Bank requesting the
release of the V/P Property or applicable portion thereof, including a
description of the property to be released and a statement and explanation of
why the V/P Property or applicable portion thereof is not an integral,
-61-
necessary or required part of the business operation conducted at the
Hotel/Casino Facility. In this regard, provision must be made for the
retention as Collateral of the entrance to the Hotel/Casino Facility presently
located on the V/P Property and the bridge over Virginia Street;
b. Borrower shall provide such substitute Collateral as may be deemed
necessary by Lenders;
c. If previously released, as provided above, and the V/P Property, or
applicable portion thereof, has been retaken as Collateral under Section 5.06
of this Credit Agreement, the V/P Property, or applicable portion thereof,
shall be re-released as Collateral on the same basis as set forth above.
Section 5.23 - Compliance with Pedestrian Crossing Air Space License.
Until Bank Facilities Termination, Borrower shall fully perform and comply with
or cause to be performed and complied with all of the respective material
covenants, material terms and material conditions imposed or assumed by it as
licensee under the Pedestrian Crossing Air Space License. Borrower shall not
amend, modify or terminate, or enter into any agreement to amend, modify or
terminate the Pedestrian Crossing Air Space License without the prior written
consent of Agent Bank, which consent shall not be unreasonably withheld or
delayed, or if in the opinion of Agent Bank such amendment, modification or
termination is materially adverse to Borrower or the Banks, without the prior
written consent of Requisite Lenders.
Section 5.24 - Compliance with Adjacent Driveway Lease. Until Bank
Facilities Termination, Borrower shall fully perform and comply with or cause
to be performed and complied with all of the respective material covenants,
material terms and material conditions imposed or assumed by it as lessee under
the Adjacent Driveway Lease. Borrower shall not enter into any material
amendment or modification or terminate, or enter into any agreement to enter
into any material amendment or modification or terminate the Adjacent Driveway
Lease without the prior written consent of Agent Bank, which consent shall not
be unreasonably withheld or delayed, or if in the opinion of Agent Bank such
amendment, modification or termination is materially adverse to Borrower or the
Banks, without the prior written consent of Requisite Lenders. In this regard
it is understood that "material" amendment or modification shall include,
without limitation, any modification to the Term as set forth in Article 1,
amount of Rent, as set forth in Article 2, the provisions concerning "Use of
Property" as set forth in Section 4.2 and "Option to Purchase" in Article 7 of
the Adjacent Driveway Lease.
ARTICLE VI
FINANCIAL COVENANTS
Until payment in full of all sums owing hereunder and under the Revolving
Credit Note and the occurrence of Bank Facility Termination, Borrower and MCRI
agree, as set forth below, to comply or cause compliance with the following
Financial Covenants.
Section 6.01 - Leverage Ratio. Commencing with the Fiscal Quarter ending
March 31, 2004 and continuing as of each Fiscal Quarter end until Bank Facility
Termination, the Borrower shall maintain a Leverage Ratio no greater than 2.25
to 1.00. Provided, however, in the event of the Stock Repurchase Limitation
Release, commencing with the next occurring Fiscal Quarter end and
-62-
continuing as of each Fiscal Quarter end until Bank Facility Termination, the
Borrower shall maintain a Leverage Ratio no greater than 2.00 to 1.00.
Section 6.02 - Adjusted Fixed Charge Coverage Ratio. Commencing as of the
first Fiscal Quarter ending subsequent to the Closing Date and continuing as of
each Fiscal Quarter end until Bank Facility Termination, the Borrower shall
maintain an Adjusted Fixed Charge Coverage Ratio no less than (i) 1.20 to 1.00
during each fiscal period for which the Leverage Ratio as determined above for
such period is equal to or greater than 1.60 to 1.00, and (ii) 1.10 to 1.00
during each fiscal period for which the Leverage Ratio as determined above for
such period is less than 1.60 to 1.00.
Section 6.03 - Minimum Tangible Net Worth. The Borrower shall maintain as
of the last day of each Fiscal Quarter a Tangible Net Worth equal to or greater
than the sum of (a) eighty-five percent (85.0%) of the Tangible Net Worth of
the Borrower calculated as of September 30, 2003, plus (b) fifty percent
(50.0%) of Net Income after taxes realized by the Borrower as of each Fiscal
Quarter end occurring on and after September 30, 2003, without deduction for
any net losses, plus (c) one hundred percent (100.0%) of the Net Proceeds
received by the Borrower all Equity Offerings made subsequent to the Closing
Date, less (d) the aggregate amount of Distributions made by Borrower to MCRI
following the Stock Repurchase Limitation Release which are used exclusively by
MCRI for Share Repurchases.
Section 6.04 - Restriction on Share Repurchases. Except as provided
hereinbelow, the MCRI shall not make Share Repurchases in excess of the
cumulative aggregate amount of Five Million Dollars ($5,000,000.00) during the
period commencing on the Closing Date and continuing through Bank Facility
Termination. Notwithstanding the foregoing, however, in the event Borrower
achieves a Leverage Ratio determined as of any Fiscal Quarter end following the
Closing Date, less than 1.75 to 1.00, the Restriction on Share Repurchases set
forth above shall be released and of no further force or effect (the "Stock
Repurchase Limitation Release").
Section 6.05 - Investment Restrictions. Other than Investments permitted
herein or approved in writing by Requisite Lenders, the Borrower shall not make
any Investments (whether by way of loan, stock purchase, capital contribution,
or otherwise) other than the following:
a. Cash, Cash Equivalents and direct obligations of the United States
Government;
b. Prime commercial paper (AA rated or better);
c. Certificates of Deposit or Repurchase Agreement issued by a commercial
bank having capital surplus in excess of One Hundred Million Dollars
($100,000,000.00);
d. Money market or other funds of nationally recognized institutions
investing solely in obligations described in (a), (b) and (c) above;
e. Loans and advances to employees in the ordinary course of business not
exceeding One Million Dollars ($1,000,000.00) in the aggregate at any one time;
f. Capital Expenditures for the Hotel/Casino Facility; and
-63-
g. Share Repurchases to the extent permitted under Section 6.04.
Section 6.06 - Limitation on Subsidiaries. Borrower shall not create any
Subsidiaries without the prior written consent of Requisite Lenders.
Section 6.07 - Indebtedness. Borrower shall not incur any Indebtedness,
except as specifically permitted hereinbelow as follows:
a. Incurrence of secured purchase money Indebtedness and Capital Lease
Liabilities relating to FF&E to be used in connection with the Hotel/Casino
Facility not in excess of the aggregate amount of Four Million Dollars
($4,000,000.00) at any time outstanding;
b. Unsecured Indebtedness, not in excess of Five Million Dollars
($5,000,000.00) at any time outstanding, that is not subject to financial and
other covenants and events of default more onerous or restrictive on Borrower
than the terms and provisions of this Credit Agreement;
c. Accrued expenses, tax liability, deferred taxes, and trade accounts
payable less than ninety (90) days past due and other accrued or deferred
liabilities incurred in the ordinary course of business; and
d. Indebtedness that is evidenced by a Permitted Encumbrance; and
e. Indebtedness evidenced by the Credit Facility.
Section 6.08 - Total Liens. The Borrower shall not directly or
indirectly, create, incur, assume or permit to exist any Lien on or with
respect to any of the Collateral, whether now owned or hereafter acquired, or
any income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any of the Collateral, except:
a. Permitted Encumbrances;
b. Liens granted or permitted pursuant to the Security Documentation;
c. Liens on the FF&E and other goods securing Indebtedness to finance the
purchase price thereof; provided that (i) such Liens shall extend only to the
equipment and other goods so financed and the proceeds thereof, and (ii) such
Liens shall not secure Indebtedness in excess of the amounts permitted under
Section 6.07(a) hereinabove; and
d. Liens described on Schedule 6.08 annexed hereto.
Section 6.09 - Sale of Assets, Consolidation, Merger, or Liquidation.
Other than as approved in writing by Requisite Lenders, Borrower shall not wind
up, liquidate or dissolve its affairs or enter into any transaction of merger
or consolidation, or convey, sell, lease or otherwise dispose of (or make an
agreement to do any of the foregoing at any time prior to Bank Facility
Termination) all or any material part of its respective property or assets,
except that the following shall be permitted:
a. the Borrower may make sales of inventory and other assets in the
ordinary course of business;
-64-
b. so long as no Default or Event of Default shall have occurred and
remains continuing the Borrower may, in the ordinary course of business and
subject to the provisions of subsection (c) hereinbelow, sell FF&E and other
items of Collateral that are, in Borrower's prudent business judgment, obsolete
or no longer necessary for the Borrower's business objectives;
c. If the Borrower should sell, transfer, convey or otherwise dispose
("Disposition") of any FF&E and not within ninety (90) days of such Disposition
replace such FF&E with purchased items of equivalent value and utility or
replace said FF&E with leased FF&E of equivalent value and utility, within the
permissible leasing and purchase agreement limitation set forth in Section
6.07(a) herein, to the extent the Net Proceeds from Dispositions which are not
used to replace FF&E exceed the cumulative aggregate amount of Two Million Five
Hundred Thousand Dollars ($2,500,000.00) during the Revolving Credit Period
(the "Excess Capital Proceeds"), the Borrower shall be required to, prior to
ninety (90) days following each Disposition of FF&E resulting in Excess Capital
Proceeds, permanently reduce the Aggregate Commitment by a Mandatory Commitment
Reduction in the amount of the Excess Capital Proceeds, subject, however, to
the right of Agent Bank to verify to its reasonable satisfaction the amount of
said Excess Capital Proceeds.
Section 6.10 - No Transfer of Ownership. MCRI shall not transfer or
hypothecate its ownership interests in Borrower except in connection with the
Security Documentation. This provision shall not be effective as to MCRI until
it is approved by the Nevada Gaming Authorities.
Section 6.11 - Contingent Liability(ies). Borrower shall not directly or
indirectly incur any Contingent Liabilities on the Indebtedness of any other
Person, including, without limitation, MCRI or any Affiliate or Subsidiary
thereof, in excess of the cumulative aggregate principal amount of Five Million
Dollars ($5,000,000.00) at any time outstanding, without the prior written
consent of Requisite Lenders. In no event shall any Contingent Liabilities be
secured by a Lien on any property or assets of the Borrower.
Section 6.12 - Transactions with Members of MCRI Consolidation. Other
than with respect to payments of the MCRI Corporate Overhead Allocation and
Distributions, no transactions shall be made by Borrower with any member of the
MCRI Consolidation other than arms length transactions for fair market value.
Section 6.13 - Limitation on Consolidated Tax Liability. Borrower shall
not be liable to the MCRI Consolidation, or any member thereof, for federal
income taxes in excess of the amount of federal income taxes it would pay if
reporting as a separate entity.
Section 6.14 - ERISA. Borrower shall not:
a. At any time, permit any Pension Plan which is maintained by Borrower or
to which Borrower is obligated to contribute on behalf of its employees, in
such case if to do so would constitute a Material Adverse Change, to:
(i) engage in any non-exempt "prohibited transaction", as such
term is defined in Section 4975 of the Code;
(ii) incur any material "accumulated funding deficiency", as that
term is defined in Section 302 of ERISA; or
-65-
(iii) suffer a termination event to occur which may reasonably be
expected to result in liability of Borrower to the Pension Plan or to
the Pension Benefit Guaranty Corporation or the imposition of a lien on
the Collateral pursuant to Section 4068 of ERISA.
b. Fail, upon Borrower becoming aware thereof, promptly to notify the
Agent Bank of the occurrence of any Reportable Event with respect to any
Pension Plan or of any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code) with respect to any Pension Plan which is maintained
by Borrower or to which Borrower is obligated to contribute on behalf of its
employees or any trust created thereunder which Reportable Event or prohibited
transaction would constitute a Material Adverse Change.
c. At any time, permit any Pension Plan which is maintained by Borrower or
to which Borrower is obligated to contribute on behalf of its employees to fail
to comply with ERISA or other applicable laws in any respect that would result
in a Material Adverse Change.
Section 6.15 - Margin Regulations. No part of the proceeds of the Credit
Facility will be used by Borrower to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock. Neither the making of such loans, nor the use of the proceeds of such
loans will violate or be inconsistent with the provisions of Regulations G, T,
U or X of the Board of Governors of the Federal Reserve System.
Section 6.16 - Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent Bank
pursuant to the terms hereof are hereinafter required or permitted by the
rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Borrower with the agreement of its independent certified public accountants and
such changes result in a change in the method of calculation of any of the
financial covenants, standards or terms found herein, the parties hereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
the financial condition of Borrower shall be the same after such changes as if
such changes had not been made; provided, however, that no change in GAAP that
would affect the method of calculation of any of the financial covenants,
standards or terms shall be given effect in such calculations until such
provisions are amended, in a manner satisfactory to Agent Bank and Requisite
Lenders, to so reflect such change in accounting principles.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 - Events of Default. Any of the following events and the
passage of any applicable notice and cure periods shall constitute an Event of
Default hereunder:
a. Any representation or warranty made by Borrower or MCRI pursuant to or
in connection with this Credit Agreement, the Notes, the Environmental
-66-
Certificate, or any other Loan Document or in any report, certificate,
financial statement or other writing furnished by Borrower or Guarantor in
connection herewith, shall prove to be false, incorrect or misleading in any
materially adverse aspect as of the date when made;
b. Borrower shall have defaulted in the payment of any interest on the
Notes when due, and such default continues for a period of more than five (5)
days or Borrower shall have defaulted in the payment of any principal when due;
c. Borrower shall have defaulted under the terms of any other obligation
owing Agent Bank, which default continues beyond any applicable grace period
therein contained;
d. Borrower shall have defaulted in the payment of any fees required to be
paid under the Fee Side Letter, late charge, Commitment Fees, L/C Fees,
expenses, indemnities or any other amount owing under any Loan Document for a
period of five (5) days after notice thereof to Borrower from Agent Bank;
e. Borrower shall fail duly and punctually to perform or comply with: (i)
any term, covenant, condition or promise contained in Sections 6.01, 6.02,
6.03, 6.04, 6.05, 6.06, 6.07, 6.08, 6.09 or 6.10, or (ii) any other term,
covenant, condition or promise contained in this Credit Agreement, the Notes,
the Deed of Trust or any other Loan Document and, in the case of any term,
covenant, condition or promise covered by this clause (ii), such failure shall
continue thirty (30) days after written notice thereof is delivered to Borrower
by Agent Bank or any Lender of such failure;
f. Any of the Security Documentation or any provision thereof: (i) shall
cease to be in full force and effect in any material respect as a result of any
action of the Borrower and such cessation results in a Material Adverse Change,
or (ii) shall cease to give the Agent Bank in any material respect the liens,
rights, powers and privileges purported to be created thereby as a result of
any action of the Borrower, or (iii) the Borrower shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Security Documentation for a period of
thirty (30) days after written notice thereof is delivered to Borrower by Agent
Bank of such failure (or such shorter period following such notice as may be
specifically required in any Loan Document);
g. Borrower or MCRI shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to it or its
debts under the Bankruptcy Code or any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official, for all or
substantially all of its property, or shall consent to any such relief or to
the appointment or taking possession by any such official in any involuntary
case or other proceeding against it;
h. An involuntary case or other proceeding shall be commenced against
Borrower or MCRI seeking liquidation, reorganization or other relief with
respect to itself or its debts under the Bankruptcy Code or any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official, for all or substantially all of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
ninety (90) days;
-67-
i. Borrower or MCRI makes an assignment for the benefit of its creditors
or admits in writing its inability to pay its debts generally as they become
due;
j. Borrower shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, offer to purchase, redemption, acceleration,
demand or otherwise, in each case beyond the grace period provided with respect
to such Indebtedness) on any Indebtedness (other than any Indebtedness under
this Credit Agreement), if the aggregate amount of such Indebtedness is One
Million Dollars ($1,000,000.00), or more, or any breach, default or event of
default shall occur, or any other event shall occur or condition shall exist,
under any instrument, agreement or indenture pertaining thereto if the effect
thereof is to accelerate, the maturity of any such Indebtedness; or any such
Indebtedness shall be declared to be due and payable or shall be required to be
prepaid, purchased or redeemed (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof, or the holder of any lien in
any amount, shall commence foreclosure of such lien upon property of Borrower
having a value in excess of One Million Dollars ($1,000,000.00) and such
foreclosure shall continue against such property to a date less than thirty
(30) days prior to the date of the proposed foreclosure sale;
k. The occurrence of any event of default, beyond any applicable grace
period, under the terms of any agreement with any Lender in connection with a
Secured Interest Rate Hedge relating to the Credit Facility;
l. Borrower shall be voluntarily or involuntarily divested of title or
possession of any portion of the Real Property or shall lease or in any other
manner, voluntarily or involuntarily alienate any of its interest in any
portion of the Real Property or Hotel/Casino Facility, other than the Permitted
Encumbrances and as permitted in Sections 5.01 and 5.22;
m. The occurrence of any Reportable Event with respect to a Pension Plan
which Agent Bank determines in good faith constitutes proper grounds for the
termination of any Pension Plan by the Pension Benefit Guaranty Corporation or
for the appointment by an appropriate United States District Court of a trustee
to administer any such plan that would constitute a Material Adverse Change,
should occur and should continue for thirty (30) days after written notice of
such determination shall have been given to Borrower by Agent Bank;
n. Commencement against Borrower, any time after the execution of this
Credit Agreement, of any litigation which is not stayed, bonded, dismissed,
terminated or disposed of to the satisfaction of Agent Bank within ninety (90)
days after its commencement, and which (i) has a reasonable probability of
success, and could, if successful, in the reasonable opinion of Agent Bank,
materially and adversely affect the priority of the Liens granted Agent Bank by
the Deed of Trust in the Real Property, or (ii) results in the issuance of a
preliminary or permanent injunction which is not dissolved or stayed pending
appeal within sixty (60) days of its issuance and which preliminary or
permanent injunction materially adversely affects Borrower's right to use the
Real Property as the Hotel/Casino Facility;
o. The loss or suspension, other than on account of forces majeure, of
Borrower's unrestricted Gaming Permits or the failure of Borrower to maintain
gaming activities at the Hotel/Casino Facility other than on account of forces
majeure at least to the same general extent as is presently conducted thereon;
-68-
p. Any money judgment, writ or warrant of attachment or similar process in
excess of Three Million Dollars ($3,000,000.00) in the aggregate not adequately
covered by insurance as to which a solvent and unaffiliated insurance company
has acknowledged coverage, shall be entered or filed against Borrower or any of
its assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of sixty (60) days (or in any event later than five (5) days prior to
the date of any proposed sale thereunder);
q. Any order, judgment or decree shall be entered against Borrower
decreeing its involuntary dissolution or split up and such order shall remain
undischarged and unstayed for a period in excess of thirty (30) days, or
Borrower shall otherwise dissolve or cease to exist;
r.The occurrence of any Change of Control;
s. MCRI sells, transfers, assigns, hypothecates or otherwise alienates its
interest in all or any portion of the common voting stock of Borrower (subject
to this provision being first approved by all necessary Gaming Authorities); or
t. The occurrence of any default under the Guaranty or the revocation,
termination or repudiation of any of the Guarantor's promises, obligations or
covenants under the Guaranty.
Section 7.02 - Default Remedies.
a. Upon the occurrence and during the continuance of any Event of Default,
Agent Bank may and, upon the consent of Requisite Lenders shall: (i) declare
all of the outstanding unpaid Indebtedness hereunder and under the Notes and
the other Loan Documents, together with all accrued interest thereon, to be
fully due and payable without presentation, demand, protest or notice of any
kind, and, in the event of such declaration; (ii) shall terminate the
obligation of Lenders to make any advances for Borrowings; and (iii) shall
terminate the obligation of the Swingline Lender to make any advances under the
Swingline Facility; provided, that, the remedies set forth in clauses (i)
through (iii) above will be deemed to have been automatically exercised on the
occurrence of any event set out in Sections 7.01(g), (h) or (i).
b. Additionally, while any Event of Default has occurred and remains
continuing, the Banks and/or Agent Bank may (i) exercise any and all remedies
available to Banks or Agent Bank under the Loan Documents; and/or (ii) exercise
any other remedies available to Banks or Agent Bank at law or in equity,
including requesting the appointment of a receiver to perform any acts required
of Borrower under this Credit Agreement.
c. In the event Borrower has failed to provide any insurance required
under Section 5.09, Agent Bank may elect at its discretion to purchase such
insurance. All payments made by Agent Bank for the purpose of providing the
insurance coverages required under Section 5.09 shall be deemed amounts
advanced under Section 5.12 of this Credit Agreement.
d. The Banks and/or Agent Bank may exercise any other remedies available
to Banks or Agent Bank at law or in equity, including requesting the
appointment of a receiver to perform any acts required of Borrower under this
Credit Agreement, and Borrower hereby specifically consents to any such request
by Banks.
-69-
e. The Swingline Lender shall, upon receipt of written notice of the
occurrence of an Event of Default, terminate its obligation to make any
advances under the Swingline Facility and may declare all outstanding unpaid
Indebtedness hereunder and under the Swingline Note, together with all accrued
interest thereon immediately due and payable without presentation, demand,
protest or notice of any kind. This remedy will be deemed to have been
automatically exercised on the occurrence of any event set out in Sections
7.01(g), (h) or (i).
f. The L/C Issuer shall, upon receipt of written notice of the occurrence
of an Event of Default, terminate its obligation to issue Letters of Credit
and/or any Letter of Credit which may be terminated in accordance with its
terms. This remedy will be deemed to have been automatically exercised on the
occurrence of any event set out in Sections 7.01(g), (h) or (i).
g. Agent Bank and/or L/C Issuer may, or at the direction of the Requisite
Lenders will, direct the Borrower to pay (and Borrower hereby agrees upon
receipt of such notice to pay) to the L/C Issuer an amount in Cash equal to the
then outstanding L/C Exposure, such Cash to be held by L/C Issuer in the Cash
Collateral Account as security for the repayment of all L/C Reimbursement
Obligations thereafter occurring.
For the purpose of carrying out this section and exercising these rights,
powers and privileges, Borrower hereby irrevocably constitutes and appoints
Agent Bank as its true and lawful attorney-in-fact to execute, acknowledge and
deliver any instruments and do and perform any acts such as are referred to in
this paragraph in the name and on behalf of Borrower. Agent Bank on behalf of
Lenders may exercise one or more of Lenders' remedies simultaneously and all
its remedies are nonexclusive and cumulative. Agent Bank and Lenders shall not
be required to pursue or exhaust any Collateral or remedy before pursuing any
other Collateral or remedy. Agent Bank and Lenders' failure to exercise any
remedy for a particular default shall not be deemed a waiver of (i) such
remedy, nor their rights to exercise any other remedy for that default, nor
(ii) their right to exercise that remedy for any subsequent default.
Section 7.03 - Application of Proceeds. All payments and proceeds
received and all amounts held or realized from the sale or other disposition of
the Collateral, which are to be applied hereunder towards satisfaction of
Borrower's obligations under the Credit Facility, shall be applied in the
following order of priority:
a. First, to the payment of all reasonable fees, costs and expenses
(including reasonable attorney's fees and expenses) incurred by Agent Bank and
Banks, their agents or representatives in connection with the realization upon
any of the Collateral;
b. Next, to the payment in full of any other amounts due under this Credit
Agreement, the Deed of Trust, or any other Loan Documents (other than the
Notes);
c. Next, to the balance of interest remaining unpaid on the Notes;
d. Next, to the balance of principal remaining unpaid on the Notes;
-70-
e. Next, to the payment of any other amounts owing to Banks which is
necessary to cause Bank Facility Termination, including, without limitation,
any amounts owing with respect to the Secured Interest Rate Xxxxxx; and
f. Next, the balance, if any, of such payments or proceeds to whomever may
be legally entitled thereto.
Section 7.04 - Notices. In order to entitle Agent Bank and/or Banks to
exercise any remedy available hereunder, it shall not be necessary for Agent
Bank and/or Banks to give any notice, other than such notice as may be required
expressly herein or by applicable law.
Section 7.05 - Agreement to Pay Attorney's Fees and Expenses. Subject to
the provisions of Section 10.14, upon the occurrence of an Event of Default, as
a result of which Agent Bank shall require and employ attorneys or incur other
expenses for the collection of payments due or to become due or the enforcement
or performance or observance of any obligation or agreement on the part of
Borrower contained herein, Borrower shall, on demand, pay to Agent Bank the
reasonable fees of such attorneys and such other reasonable expenses so
incurred by Agent Bank.
Section 7.06 - No Additional Waiver Implied by One Waiver. In the event
any agreement contained in this Credit Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder.
Section 7.07 - Licensing of Agent Bank and Lenders. In the event of the
occurrence of an Event of Default hereunder or under any of the Loan Documents
and it shall become necessary, or in the opinion of Requisite Lenders
advisable, for an agent, supervisor, receiver or other representative of Agent
Bank and Banks to become licensed under the provisions of the laws and/or
regulations of any applicable Gaming Authority as a condition to receiving the
benefit of any Collateral encumbered by the Deed of Trust or other Loan
Documents for the benefit of Lenders or otherwise to enforce their rights
hereunder, Borrower hereby gives its consent to the granting of such license or
licenses and agrees to execute such further documents as may be required in
connection with the evidencing of such consent.
Section 7.08 - Exercise of Rights Subject to Applicable Law. All rights,
remedies and powers provided by this Article VII may be exercised only to the
extent that the exercise thereof does not violate any applicable provision of
the laws of any Governmental Authority and all of the provisions of this
Article VII are intended to be subject to all applicable mandatory provisions
of law that may be controlling and to be limited to the extent necessary so
that they will not render this Credit Agreement invalid, unenforceable or not
entitled to be recorded or filed under the provisions of any applicable law.
Section 7.09 - Discontinuance of Proceedings. In case Agent Bank and/or
Banks shall have proceeded to enforce any right, power or remedy under this
Credit Agreement, the Notes, the Deed of Trust or any other Loan Document by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to Banks, then and in every such case Borrower, Agent Bank and/or
Banks shall be restored to their former positions and rights hereunder with
-71-
respect to the Collateral, and all rights, remedies and powers of Agent Bank
and Banks shall continue as if such proceedings had not been taken, subject to
any binding rule by the applicable court or other tribunal in any such
proceeding.
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 8.01 - No Abatement of Payments. If all or any part of the
Hotel/Casino Facility shall be materially damaged or destroyed, or if title to
or the temporary use of the whole or any part of the Hotel/Casino Facility
shall be taken or condemned by a competent authority for any public use or
purpose, there shall be no abatement or reduction in the amounts payable by
Borrower hereunder or under the Revolving Credit Note, and Borrower shall
continue to be obligated to make such payments.
Section 8.02 - Distribution of Capital Proceeds Upon Occurrence of Fire,
Casualty, Other Perils or Condemnation. All Capital Proceeds received from
insurance policies under Section 5.09, including flood and earthquake, covering
any of the Collateral or from condemnation, eminent domain or similar actions
or by settlement in lieu of eminent domain proceedings in regard to said
Collateral, shall be paid directly to Agent Bank. In the event the amount of
Capital Proceeds paid to Agent Bank is equal to or less than Two Million
Dollars ($2,000,000.00), such Capital Proceeds shall be paid to Borrower,
unless a Default in the payment of any principal or interest owing under the
terms of the Bank Facilities or an Event of Default (other than non-monetary
Events of Default occurring as a direct consequence of each casualty loss or
condemnation) shall have occurred hereunder and is continuing. In the event
the amount of Capital Proceeds paid to Agent Bank is greater than Two Million
Dollars ($2,000,000.00), then, unless a Default or Event of Default (other than
non-monetary Events of Default occurring as a direct consequence of each
casualty loss or condemnation) has occurred hereunder and is then continuing,
the entire amount so collected or so much thereof as may be required (any
excess to be returned to Borrower) to repair or replace the destroyed or
condemned property, shall, subject to the conditions set forth below, be
released to Borrower for repair or replacement of the property destroyed or
condemned or to reimburse Borrower for the costs of such repair or replacement
incurred prior to the date of such release. If a Default or Event of Default
(other than non-monetary Events of Default occurring as a direct consequence of
such casualty loss or condemnation) has occurred hereunder and is then
continuing, such amount may, at the option of Requisite Lenders, be applied as
a Mandatory Commitment Reduction. In the event Banks are required to release
all or a portion of the collected funds to Borrower for such repair or re-
placement of the property destroyed or condemned, such release of funds shall
be made in accordance with the following terms and conditions:
a. The repairs, replacements and rebuilding shall be made in accordance
with plans and specifications approved by Requisite Lenders and in accordance
with all applicable Laws, ordinances, rules, regulations and requirements of
Governmental Authorities;
b. Borrower shall provide Agent Bank with a detailed estimate of the costs
of such repairs or restorations;
-72-
c. Borrower shall satisfy the Requisite Lenders that after the
reconstruction is completed, the value of the Hotel/Casino Facility as
determined by the Requisite Lenders in their reasonable discretion, will not be
less than the value of the Hotel/Casino Facility prior to such destruction or
condemnation as determined by the Requisite Lenders pursuant to this Credit
Agreement;
d. In the Requisite Lenders' sole reasonable opinion, any undisbursed
portion of the Available Borrowings contemplated hereunder, after deposit of
such proceeds, is sufficient to pay all costs of reconstruction of the
Hotel/Casino Facility or other Collateral damaged, destroyed or condemned; or
if the undisbursed portion of such Credit Facility is not sufficient, Borrower
shall deposit additional funds with the Agent Bank, sufficient to pay such
additional costs of reconstructing the Hotel/Casino Facility;
e. Borrower has delivered to the Agent Bank a construction contract for
the work of reconstruction in form and content, including insurance
requirements, acceptable to the Agent Bank with a contractor acceptable to the
Agent Bank;
f. The Requisite Lenders in their reasonable discretion have determined
that after the work of reconstruction is completed, the Hotel/Casino Facility
or Collateral damaged, destroyed or condemned will produce income sufficient to
pay all costs of operations and maintenance of the Hotel/Casino Facility with a
reasonable reserve for repairs, and service all debts secured by the
Hotel/Casino Facility;
g. No Default or Event of Default (other than non-monetary Events of
Default occurring as a direct consequence of such casualty loss or
condemnation) has occurred and is continuing hereunder;
h. Borrower has deposited with the Agent Bank that amount reasonably
determined by the Requisite Lenders (taking into consideration the amount of
Borrowings available and the amount of proceeds, if any, of insurance policies
covering property damage and business interruption, loss or rental income in
connection with the Hotel/Casino Facility or Collateral damaged, destroyed or
condemned accruing and immediately forthcoming to the Agent Bank and reasonable
projections of income of Borrower to be realized during the period of
reconstruction) to be sufficient to service the Indebtedness secured hereby
during the period of reconstruction, as reasonably estimated by the Requisite
Lenders;
i. Before commencing any such work, Borrower shall, at its own cost and
expense, furnish Agent Bank with appropriate endorsements, if needed, to the
"All Risk" insurance policy which Borrower is then presently maintaining, and
course of construction insurance to cover all of the risks during the course of
such work;
j. Such work shall be commenced by Borrower within one hundred twenty
(120) days after (i) settlement shall have been made with the insurance
companies or condemnation proceeds shall have been received, and (ii) all the
necessary governmental approvals shall have been obtained, and such work shall
be completed within a reasonable time, free and clear of all liens and
encumbrances so as not to interfere with the lien of the Deed of Trust;
k. Disbursements of such insurance or condemnation proceeds shall be made
in the customary manner used by Agent Bank for the disbursement of construction
loans.
-73-
ARTICLE IX
AGENCY PROVISIONS
Section 9.01 - Appointment.
a. Each Lender hereby (i) designates and appoints WFB as the Agent Bank of
such Lender under this Credit Agreement and the Loan Documents, (ii) authorizes
and directs Agent Bank to enter into the Loan Documents other than this Credit
Agreement for the benefit of Lenders, and (iii) authorizes Agent Bank to take
such action on its behalf under the provisions of this Credit Agreement and the
Loan Documents and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably incidental thereto, subject
to the limitations referred to in Sections 9.10(a) and 9.10(b). Agent Bank
agrees to act as such on the express conditions contained in this Article IX.
b. The provisions of this Article IX are solely for the benefit of Agent
Bank and Lenders, and Borrower and Guarantor shall not have any rights to rely
on or enforce any of the provisions hereof (other than as set forth in the
provisions of Section 9.03, 9.09 and 10.10), provided, however, that the
foregoing shall in no way limit Borrower's or Guarantor's obligations under
this Article IX nor limit Lenders' obligations to Borrower as provided in this
Credit Agreement. In performing its functions and duties under this Credit
Agreement, Agent Bank shall act solely as Agent Bank of Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower, Guarantor or any other
Person.
Section 9.02 - Nature of Duties. Agent Bank shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement or
in the Loan Documents. The duties of Agent Bank shall be administrative in
nature. Subject to the provisions of Sections 9.05 and 9.07, Agent Bank shall
administer the Credit Facility in the same manner as it administers its own
loans. Promptly following the effectiveness of this Credit Agreement, Agent
Bank shall send to each Lender a duplicate executed original, to the extent the
same are available in sufficient numbers, of the Credit Agreement and a copy of
each other Loan Document in favor of Lenders and a copy of the filed or
recorded Security Documentation, with the originals of the latter to be held
and retained by Agent Bank for the benefit of all Lenders. Agent Bank shall
not have by reason of this Credit Agreement a fiduciary relationship in respect
of any Lender. Nothing in this Credit Agreement or any of the Loan Documents,
expressed or implied, is intended or shall be construed to impose upon Agent
Bank any obligation in respect of this Credit Agreement or any of the Loan
Documents except as expressly set forth herein or therein. Each Lender shall
make its own independent investigation of the financial condition and affairs
of the Borrower, Guarantor and the Collateral in connection with the making and
the continuance of the Credit Facility hereunder and shall make its own
appraisal of the creditworthiness of the Borrower, Guarantor and the
Collateral, and, except as specifically provided herein, Agent Bank shall not
have any duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the Closing Date or at any time or
times thereafter.
-74-
Section 9.03 - Disbursement of Borrowings.
a. Not later than the next Banking Business Day following receipt of a
Notice of Borrowing, Agent Bank shall send a copy thereof by facsimile to each
other Lender and shall otherwise notify each Lender of the proposed Borrowing
and the Funding Date. Each Lender shall make available to Agent Bank (or the
funding bank or entity designated by Agent Bank), the amount of such Lender's
Pro Rata Share of such Borrowing in immediately available funds not later than
the times designated in Section 9.03(b). Unless Agent Bank shall have been
notified by any Lender not later than the close of business (San Francisco
time) on the Banking Business Day immediately preceding the Funding Date in
respect of any Borrowing that such Lender does not intend to make available to
Agent Bank such Lender's Pro Rata Share of such Borrowing, Agent Bank may
assume that such Lender shall make such amount available to Agent Bank. If any
Lender does not notify Agent Bank of its intention not to make available its
Pro Rata Share of such Borrowing as described above, but does not for any
reason make available to Agent Bank such Lender's Pro Rata Share of such
Borrowing, such Lender shall pay to Agent Bank forthwith on demand such amount,
together with interest thereon at the Federal Funds Rate. In any case where a
Lender does not for any reason make available to Agent Bank such Lender's Pro
Rata Share of such Borrowing, Agent Bank, in its sole discretion, may, but
shall not be obligated to, fund to Borrower such Lender's Pro Rata Share of
such Borrowing. If Agent Bank funds to Borrower such Lender's Pro Rata Share
of such Borrowing and if such Lender subsequently pays to Agent Bank such
corresponding amount, such amount so paid shall constitute such Lender's Pro
Rata Share of such Borrowing. Nothing in this Section 9.03(a) shall alter the
respective rights and obligations of the parties hereunder in respect of a
Defaulting Lender or a Non-Pro Rata Borrowing.
b. Requests by Agent Bank for funding by Lenders of Borrowings will be
made by telecopy. Each Lender shall make the amount of its Pro Rata Share of
such Borrowing available to Agent Bank in Dollars and in immediately available
funds, to such bank and account, in San Francisco, California as Agent Bank may
designate, not later than 11:00 a.m. on the Funding Date designated in the
Notice of Borrowing with respect to such Borrowing.
c. Nothing in this Section 9.03 shall be deemed to relieve any Lender of
its obligation hereunder to make its Pro Rata Share of Borrowings on any
Funding Date, nor shall any Lender be responsible for the failure of any other
Lender to perform its obligations to advance its Pro Rata Share of any
Borrowing hereunder, and the Pro Rata Share of the Aggregate Commitment of any
Lender shall not be increased or decreased as a result of the failure by any
other Lender to perform its obligation to advance its Pro Rata Share of any
Borrowing.
Section 9.04 - Distribution and Apportionment of Payments.
a. Subject to Section 9.04(b), payments actually received by Agent Bank
for the account of Lenders shall be paid to them promptly after receipt thereof
by Agent Bank, but in any event within one (1) Banking Business Day, provided
that Agent Bank shall pay to Lenders interest thereon, at the Federal Funds
Rate from the Banking Business Day following receipt of such funds by Agent
Bank until such funds are paid in immediately available funds to Lenders.
Subject to Section 9.04(b), all payments of principal and interest in respect
of Funded Outstandings, all payments of the fees described in this Credit
Agreement, and all payments in respect of any other
-75-
Obligations shall be allocated among such other Lenders as are entitled
thereto, in proportion to their respective Pro Rata Shares or otherwise as
provided herein. Agent Bank shall promptly distribute, but in any event within
one (1) Banking Business Day, to each Lender at its primary address set forth
on the appropriate signature page hereof or on the applicable Assignment and
Assumption Agreement, or at such other address as a Lender may request in
writing, such funds as it may be entitled to receive, provided that Agent Bank
shall in any event not be bound to inquire into or determine the validity,
scope or priority of any interest or entitlement of any Lender and may suspend
all payments and seek appropriate relief (including, without limitation,
instructions from Requisite Lenders or all Lenders, as applicable, or an action
in the nature of interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby. The order of priority
herein is set forth solely to determine the rights and priorities of Lenders as
among themselves and may at any time or from time to time be changed by Lenders
as they may elect, in writing in accordance with Section 10.01, without
necessity of notice to or consent of or approval by Borrower, Guarantor or any
other Person. All payments or other sums received by Agent Bank for the
account of Lenders (including, without limitation, principal and interest
payments, the proceeds of any and all insurance maintained with respect to any
of the Collateral, and any and all condemnation proceeds with respect to any of
the Collateral) shall not constitute property or assets of the Agent Bank and
shall be held by Agent Bank, solely in its capacity as administrative and
collateral agent for itself and the other Lenders, subject to the Loan
Documents.
b. Notwithstanding any provision hereof to the contrary, until such time
as a Defaulting Lender has funded its Pro Rata Share of Borrowing which was
previously a Non Pro Rata Borrowing, or all other Lenders have received payment
in full (whether by repayment or prepayment) of the principal due in respect of
such Non Pro Rata Borrowing, all principal sums owing to such Defaulting Lender
hereunder shall be subordinated in right of payment to the prior payment in
full of all principal, in respect of all Non Pro Rata Borrowing in which the
Defaulting Lender has not funded its Pro Rata Share. This provision governs
only the relationship among Agent Bank, each Defaulting Lender, and the other
Lenders; nothing hereunder shall limit the obligation of Borrower to repay all
Borrowings in accordance with the terms of this Credit Agreement. The
provisions of this section shall apply and be effective regardless of whether
an Event of Default occurs and is then continuing, and notwithstanding (i) any
other provision of this Credit Agreement to the contrary, (ii) any instruction
of Borrower as to its desired application of payments or (iii) the suspension
of such Defaulting Lender's right to vote on matters which are subject to the
consent or approval of Requisite Lenders or all Lenders. No Nonusage Fee or
L/C Fees shall accrue in favor of, or be payable to, such Defaulting Lender
from the date of any failure to fund Borrowings or reimburse Agent Bank for any
Liabilities and Costs as herein provided until such failure has been cured, and
Agent Bank shall be entitled to (A) withhold or setoff, and to apply to the
payment of the defaulted amount and any related interest, any amounts to be
paid to such Defaulting Lender under this Credit Agreement, and (B) bring an
action or suit against such Defaulting Lender in a court of competent
jurisdiction to recover the defaulted amount and any related interest. In
addition, the Defaulting Lender shall indemnify, defend and hold Agent Bank and
each of the other Lenders harmless from and against any and all Liabilities and
Costs, plus interest thereon at the Default Rate, which they may sustain or
incur by reason of or as a direct consequence of the Defaulting Lender's
failure or refusal to abide by its obligations under this Credit Agreement.
-76-
Section 9.05 - Rights, Exculpation, Etc. Neither Agent Bank, any
Affiliate of Agent Bank, nor any of their respective officers, directors,
employees, agents, attorneys or consultants, shall be liable to any Lender for
any action taken or omitted by them hereunder or under any of the Loan
Documents, or in connection herewith or therewith, except that Agent Bank shall
be liable for its gross negligence or willful misconduct. In the absence of
gross negligence or willful misconduct, Agent Bank shall not be liable for any
apportionment or distribution of payments made by it in good faith pursuant to
Section 9.04, and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Person to whom
payment was due, but not made, shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled. Agent Bank shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, enforceability, collectibility
or sufficiency of this Credit Agreement, any of the Security Documentation or
any of the other Loan Documents, or any of the transactions contemplated hereby
and thereby; or for the financial condition of the Borrower or any of its
Affiliates. Agent Bank shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Credit Agreement or any of the Loan Documents or the
financial condition of the Borrower, Guarantor or any of their Affiliates, or
the existence or possible existence of any Default or Event of Default.
Section 9.06 - Reliance. Agent Bank shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents,
telecopies or any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person, and
with respect to all matters pertaining to this Credit Agreement or any of the
Loan Documents and its duties hereunder or thereunder, upon advice of legal
counsel (including counsel for Borrower), independent public accountant and
other experts selected by it.
Section 9.07 - Indemnification. To the extent that Agent Bank is not
reimbursed and indemnified by Borrower or Guarantor, Lenders will reimburse,
within ten (10) Banking Business Days after notice from Agent Bank, and
indemnify and defend Agent Bank for and against any and all Liabilities and
Costs which may be imposed on, incurred by, or asserted against it in any way
relating to or arising out of this Credit Agreement, the Security Documentation
or any of the other Loan Documents or any action taken or omitted by Agent Bank
or under this Credit Agreement, the Security Documentation or any of the other
Loan Documents, in proportion to each Lender's Pro Rata Share; provided that no
Lender shall be liable for any portion of such Liabilities and Costs resulting
from Agent Bank's gross negligence or willful misconduct. The obligations of
Lenders under this Section 9.07 shall survive the payment in full of all
Obligations and the termination of this Credit Agreement. In the event that
after payment and distribution of any amount by Agent Bank to Lenders, any
Lender or third party, including Borrower, any creditor of Borrower or
Guarantor or a trustee in bankruptcy, recovers from Agent Bank any amount found
to have been wrongfully paid to Agent Bank or disbursed by Agent Bank to
Lenders, then Lenders, in proportion to their respective Pro Rata Shares, shall
reimburse Agent Bank for all such amounts. Notwithstanding the foregoing,
Agent Bank shall not be obligated to advance Liabilities and Costs and may
require the deposit by each Lender of its Pro Rata Share of any material
Liabilities and Costs anticipated by Agent Bank before they are incurred or
made payable.
-77-
Section 9.08 - Agent Individually. With respect to its Pro Rata Share of
the Aggregate Commitment hereunder and the Borrowings made by it, Agent Bank
shall have and may exercise the same rights and powers hereunder and is subject
to the same obligations and liabilities as and to the extent set forth herein
for any other Lender. The terms "Lenders", "Requisite Lenders" or any similar
terms may include Agent Bank in its individual capacity as a Lender or one of
the Requisite Lenders, but Requisite Lenders shall not include Agent Bank
solely in its capacity as Agent Bank and need not necessarily include Agent
Bank in its capacity as a Lender. Agent Bank and any Lender and its Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with Borrower or any of its Affiliates as if
it were not acting as Agent Bank or Lender pursuant hereto.
Section 9.09 - Successor Agent Bank; Resignation of Agent Bank; Removal of
Agent Bank.
a. Agent Bank may resign from the performance of all its functions and
duties hereunder at any time by giving at least thirty (30) Banking Business
Days' prior written notice to Lenders and Borrower, and shall automatically
cease to be Agent Bank hereunder in the event a petition in bankruptcy shall be
filed by or against Agent Bank or the Federal Deposit Insurance Corporation or
any other Governmental Authority shall assume control of Agent Bank or Agent
Bank's interests under the Bank Facilities. Further, Lenders (other than Agent
Bank) may unanimously remove Agent Bank at any time upon the occurrence of
gross negligence or wilful misconduct by Agent Bank by giving at least thirty
(30) Banking Business Days' prior written notice to Agent Bank, Borrower and
all other Lenders. Such resignation or removal shall take effect upon the
acceptance by a successor Agent Bank of appointment pursuant to clause (b) or
(c).
b. Upon any such notice of resignation by or removal of Agent Bank,
Requisite Lenders shall appoint a successor Agent Bank which appointment shall
be subject to Borrower's consent (other than upon the occurrence and during the
continuance of any Event of Default), which shall not be unreasonably withheld
or delayed. Any successor Agent Bank must be a bank (i) the senior debt
obligations of which (or such bank's parent's senior unsecured debt
obligations) are rated not less than Baa-2 by Xxxxx'x Investors Services, Inc.
or a comparable rating by a rating agency acceptable to Requisite Lenders and
(ii) which has total assets in excess of Ten Billion Dollars
($10,000,000,000.00).
c. If a successor Agent Bank shall not have been so appointed within said
thirty (30) Banking Business Day period, the retiring or removed Agent Bank,
with the consent of Borrower (other than upon the occurrence and during the
continuance of any Event of Default) (which may not be unreasonably withheld or
delayed), shall then appoint a successor Agent Bank who shall meet the
requirements described in subsection (b) above and who shall serve as Agent
Bank until such time, if any, as Requisite Lenders, with the consent of
Borrower (other than upon the occurrence and during the continuance of any
Event of Default), appoint a successor Agent Bank as provided above.
-78-
Section 9.10 - Consent and Approvals.
a. Each consent, approval, amendment, modification or waiver specifically
enumerated in this Section 9.10(a) shall require the consent of Requisite
Lenders:
(i) Approval of Borrowings with less than full compliance with
requirements of Article IIIB (Section 2.04);
(ii) Consent to modification to financial reporting requirements
or production of additional financial or other information (Section
5.08);
(iii) Approval of Investments (Section 6.05);
(iv) Approval of a change in the method of calculation of any
financial covenants, standards or terms as a result of a change in
accounting principle (Section 6.16);
(v) Direct Agent Bank to declare the unpaid balance of the
Credit Facility fully due and payable (Section 7.02);
(vi) Direct the disposition of insurance proceeds or condemnation
awards under certain circumstances (Section 8.02);
(vii) Approval of appointment of successor Agent Bank
(Section 9.09);
(viii) Approval of certain Protective Advances (Section 9.11(a));
(ix) Approval of a Post-Foreclosure Plan and related matters
(Section 9.11(e));
(x) Consent to action or proceeding against Borrower or the
Collateral by any Lender (Section 9.12);
(xi) Except as referred to in subsection (b) below, approval of
any amendment, modification or termination of this Credit Agreement, or
waiver of any provision herein (Section 10.01).
b. Each consent, approval, amendment, modification or waiver specifically
enumerated in Section 10.01 shall require the consent of all Lenders.
c. In addition to the required consents or approvals referred to in
subsection (a) above, Agent Bank may at any time request instructions from
Requisite Lenders with respect to any actions or approvals which, by the terms
of this Credit Agreement or of any of the Loan Documents, Agent Bank is
permitted or required to take or to grant without instructions from any
Lenders, and if such instructions are promptly requested, Agent Bank shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from taking any action or withholding any approval under any of the
Loan Documents until it shall have received such instructions from Requisite
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent Bank as a result of Agent Bank acting or
refraining from acting under this Credit Agreement, the Security
-79-
Documentation or any of the other Loan Documents in accordance with the
instructions of Requisite Lenders or, where applicable, all Lenders. Agent
Bank shall promptly notify each Lender at any time that the Requisite Lenders
have instructed Agent Bank to act or refrain from acting pursuant hereto.
d. Each Lender agrees that any action taken by Agent Bank at the direction
or with the consent of Requisite Lenders in accordance with the provisions of
this Credit Agreement or any Loan Document, and the exercise by Agent Bank at
the direction or with the consent of Requisite Lenders of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all Lenders, except for actions
specifically requiring the approval of all Lenders. Funding requests hereunder
shall be made in the manner set forth in Article II herein. All other
communications from Agent Bank to Lenders requesting Lenders' determination,
consent, approval or disapproval (i) shall be given in the form of a written
notice to each Lender, (ii) shall be accompanied by a description of the matter
or thing as to which such determination, approval, consent or disapproval is
requested, or shall advise each Lender where such matter or thing may be
inspected, or shall otherwise describe the matter or issue to be resolved,
(iii) shall include, if reasonably requested by a Lender and to the extent not
previously provided to such Lender, written materials and a summary of all oral
information provided to Agent Bank by Borrower in respect of the matter or
issue to be resolved, and (iv) shall include Agent Bank's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event within ten (10) Banking Business Days (the "Lender Reply
Period"). Unless a Lender shall give written notice to Agent Bank that it
objects to the recommendation or determination of Agent Bank (together with a
written explanation of the reasons behind such objection) within the Lender
Reply Period, such Lender shall be deemed to have approved of or consented to
such recommendation or determination. With respect to decisions requiring the
approval of Requisite Lenders or all Lenders, Agent Bank shall submit its
recommendation or determination for approval of or consent to such
recommendation or determination to all Lenders and upon receiving the required
approval or consent shall follow the course of action or determination
recommended to Lenders by Agent Bank or such other course of action recommended
by Requisite Lenders, and each non-responding Lender shall be deemed to have
concurred with such recommended course of action.
Section 9.11 - Agency Provisions Relating to Collateral.
a. Agent Bank is hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any
Collateral or Loan Document which may be necessary to perfect and maintain
Liens of the Security Documentation upon the Collateral granted pursuant to the
Loan Documents. Agent Bank may make, and shall be reimbursed by Lenders (in
accordance with their Pro Rata Shares), to the extent not reimbursed by
Borrower or Guarantor, for, Protective Advance(s) during any one (1) calendar
year with respect to the Collateral up to the sum of (i) amounts expended to
pay real estate taxes, assessments and governmental charges or levies imposed
upon such Collateral, (ii) amounts expended to pay insurance premiums for
policies of insurance related to such Collateral, and (iii) One Hundred
Thousand Dollars ($100,000.00). Protective Advances in excess of said sum
during any calendar year for any Collateral shall require the consent of
Requisite Lenders. In addition, Agent Bank is hereby authorized on behalf of
all Lenders, without the necessity of any notice to or further consent from
-80-
any Lender, to: (i) waive the imposition of the late fees provided for in
Section 2.11 up to a maximum of two (2) times per calendar year, including any
extensions, and (ii) release the V/P Property as Collateral subject to the
satisfaction of each of the conditions set forth in Section 5.22.
b. Lenders hereby irrevocably authorize Agent Bank, at its option and in
its discretion, to release any Security Documentation granted to or held by
Agent Bank upon any Collateral (i) upon Bank Facility Termination and repayment
and satisfaction of all Borrowings, and all other Obligations and the
termination of this Credit Agreement, or (ii) if approved, authorized or
ratified in writing by Agent Bank at the direction of all Lenders. Agent Bank
shall not be required to execute any document to evidence the release of the
Security Documentation granted to Agent Bank for the benefit of Lenders herein
or pursuant hereto upon any Collateral if, in Agent Bank's opinion, such
document would expose Agent Bank to liability or create any obligation or
entail any consequence other than the release of such Security Documentation
without recourse or warranty, and such release shall not in any manner
discharge, affect or impair the Obligations or any Security Documentation upon
(or obligations of Borrower in respect of) any property which shall continue to
constitute part of the Collateral.
c. Except as provided in this Credit Agreement, Agent Bank shall have no
obligation whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by Borrower or is cared for, protected or insured
or has been encumbered or that the Security Documentation granted to Agent Bank
herein or in any of the other Loan Documents or pursuant hereto or thereto have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority.
d. Should Agent Bank (i) employ counsel for advice or other representation
(whether or not any suit has been or shall be filed) with respect to any
Collateral or any part thereof, or any of the Loan Documents, or the attempt to
enforce any security interest or Security Documentation on any of the
Collateral, or (ii) commence any proceeding or in any way seek to enforce its
rights or remedies under the Loan Documents, irrespective of whether as a
result thereof Agent Bank shall acquire title to any Collateral, either through
foreclosure, deed in lieu of foreclosure or otherwise, each Lender, upon demand
therefor from time to time, shall contribute its share (based on its Pro Rata
Share) of the reasonable costs and/or expenses of any such advice or other
representation, enforcement or acquisition, including, but not limited to, fees
of receivers or trustees, court costs, title company charges, filing and
recording fees, appraisers' fees and fees and expenses of attorneys to the
extent not otherwise reimbursed by Borrower; provided that Agent Bank shall not
be entitled to reimbursement of its attorneys' fees and expenses incurred in
connection with the resolution of disputes between Agent Bank and other Lenders
unless Agent Bank shall be the prevailing party in any such dispute. Any loss
of principal and interest resulting from any Event of Default shall be shared
by Lenders in accordance with their respective Pro Rata Shares. It is
understood and agreed that in the event Agent Bank determines it is necessary
to engage counsel for Lenders from and after the occurrence of an Event of
Default, said counsel shall be selected by Agent Bank.
e. In the event that all or any portion of the Collateral is acquired by
Agent Bank as the result of a foreclosure or the acceptance of a deed or
assignment in lieu of foreclosure, or is retained in satisfaction of all or any
part of Borrower's obligations, title to any such Collateral or any
-81-
portion thereof shall be held in the name of Agent Bank or a nominee or
subsidiary of Agent Bank, as agent, for the ratable benefit of Agent Bank and
Lenders. Agent Bank shall prepare a recommended course of action for such
Collateral (the "Post-Foreclosure Plan"), which shall be subject to the
approval of the Requisite Lenders. Unless a Lender shall give written notice
to Agent Bank that it objects to the recommended Post-Foreclosure Plan or any
alternative Post-Foreclosure Plan as set forth below, within the Lender Reply
Period, such Lender shall be deemed to have approved such Post-Foreclosure
Plan. In the event that Requisite Lenders do not approve such Post-Foreclosure
Plan, any Lender shall be permitted to submit an alternative Post-Foreclosure
Plan to Agent Bank, and Agent Bank shall submit any and all such additional
Post-Foreclosure Plans to the Lenders for evaluation and the approval of
Requisite Lenders. In accordance with the approved Post-Foreclosure Plan,
Agent Bank shall manage, operate, repair, administer, complete, construct,
restore or otherwise deal with the Collateral acquired and administer all
transactions relating thereto, including, without limitation, employing a
management agent, leasing agent and other agents, contractors and employees,
including agents of the sale of such Collateral, and the collecting of rents
and other sums from such Collateral and paying the expenses of such Collateral;
actions taken by Agent Bank with respect to the Collateral, which are not
provided for in the approved Post-Foreclosure Plan or reasonably incidental
thereto, shall require the consent of Requisite Lenders by way of supplement to
such Post-Foreclosure Plan. Upon demand therefor from time to time, each
Lender will contribute its share (based on its Pro Rata Share) of all
reasonable costs and expenses incurred by Agent Bank pursuant to the Post-
Foreclosure Plan in connection with the construction, operation, management,
maintenance, leasing and sale of such Collateral. In addition, Agent Bank
shall render or cause to be rendered by the managing agent, to each of the
Lenders, monthly, an income and expense statement for such Collateral, and each
of the Lenders shall promptly contribute its Pro Rata Share of any operating
loss for such Collateral, and such other expenses and operating reserves as
Agent Bank shall deem reasonably necessary pursuant to and in accordance with
the Post-Foreclosure Plan. To the extent there is net operating income from
such Collateral, Agent Bank shall, in accordance with all applicable Gaming
Laws and the Post-Foreclosure Plan, determine the amount and timing of
distributions to Lenders. All such distributions shall be made to Lenders in
accordance with their respective Pro Rata Shares. Lenders acknowledge that if
title to any Collateral is obtained by Agent Bank or its nominee, such
Collateral will not be held as a permanent investment but will be liquidated as
soon as practicable. Agent Bank shall undertake to sell such Collateral, at
such price and upon such terms and conditions as the Requisite Lenders shall
reasonably determine to be most advantageous. Any purchase money mortgage or
deed of trust taken in connection with the disposition of such Collateral in
accordance with the immediately preceding sentence shall name Agent Bank, as
agent for Lenders, as the beneficiary or mortgagee. In such case, Agent Bank
and Lenders shall enter into an agreement with respect to such purchase money
mortgage defining the rights of Lenders in the same Pro Rata Shares as provided
hereunder, which agreement shall be in all material respects similar to this
Article X insofar as the same is appropriate or applicable.
Section 9.12 - Lender Actions Against Collateral. Each Lender agrees that
it will not take any action, nor institute any actions or proceedings, against
Borrower, Guarantor or any other obligor hereunder, under the Security
Documentation or under any other Loan Documents with respect to exercising
claims against or rights in any Collateral without the consent of Requisite
Lenders.
-82-
Section 9.13 - Ratable Sharing. Subject to Section 9.03 and 9.04, Lenders
agree among themselves that (i) with respect to all amounts received by them
which are applicable to the payment of the Obligations, equitable adjustment
will be made so that, in effect, all such amounts will be shared among them
ratably in accordance with their Pro Rata Shares, whether received by voluntary
payment, by counterclaim or cross action or by the enforcement of any or all of
the Obligations, or the Collateral, (ii) if any of them shall by voluntary
payment or by the exercise of any right of counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it
which is greater than its Pro Rata Share of the payments on account of the
Obligations, the one receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall
be deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that
party to the extent necessary to adjust for such recovery, but without interest
except to the extent the purchasing party is required to pay interest in
connection with such recovery. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 9.13 may, to the
fullest extent permitted by law, exercise all its rights of payment with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation. No Lender shall
exercise any setoff, banker's lien or other similar right in respect to any
Obligations without the prior written approval by Agent Bank.
Section 9.14 - Delivery of Documents. Agent Bank shall as soon as
reasonably practicable distribute to each Lender at its primary address set
forth on the appropriate counterpart signature page hereof, or at such other
address as a Lender may request in writing, (i) copies of all documents to
which such Lender is a party or of which is executed or held by Agent Bank on
behalf of such Lender, (ii) all documents of which Agent Bank receives copies
from Borrower pursuant to Article VI and Section 10.03, (iii) all other
documents or information which Agent Bank is required to send to Lenders
pursuant to the terms of this Credit Agreement, (iv) other information or
documents received by Agent Bank at the request of any Lender, and (v) all
notices received by Agent Bank pursuant to Section 5.20. In addition, within
fifteen (15) Banking Business Days after receipt of a request in writing from a
Lender for written information or documents provided by or prepared by
Borrower, Agent Bank shall deliver such written information or documents to
such requesting Lender if Agent Bank has possession of such written information
or documents in its capacity as Agent Bank or as a Lender.
Section 9.15 - Notice of Events of Default. Agent Bank shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default (other than nonpayment of principal of or interest on the Credit
Facility) unless Agent Bank has received notice in writing from a Lender or
Borrower referring to this Credit Agreement or the other Loan Documents,
describing such event or condition and expressly stating that such notice is a
notice of a Default or Event of Default. Should Agent Bank receive such notice
of the occurrence of a Default or Event of Default, or should Agent Bank send
Borrower or Guarantor a notice of Default or Event of Default, Agent Bank shall
promptly give notice thereof to each Lender.
-83-
ARTICLE X
GENERAL TERMS AND CONDITIONS
The following terms and conditions shall be applicable throughout the term
of this Credit Agreement:
Section 10.01 - Amendments and Waivers. (a) No amendment or modification
of any provision of this Credit Agreement shall be effective without the
written agreement of Requisite Lenders (after notice to all Lenders), Borrower
and Guarantor (except for rights and priorities of Lenders as amongst
themselves as provided in Section 9.04(a) which do not require the consent of
Borrower or Guarantor), and (b) no termination or waiver of any provision of
this Credit Agreement, or consent to any departure by Borrower and/or Guarantor
therefrom (except as expressly provided in Section 9.11(a) with respect to
waivers of late fees), shall in any event be effective without the written
concurrence of Requisite Lenders (after notice to all Lenders), which Requisite
Lenders shall have the right to grant or withhold at their sole discretion,
except that the following amendments, modifications or waivers shall require
the consent of all Lenders:
a. modify any requirement hereunder that any particular action be taken by
all the Lenders or by the Requisite Lenders, modify this Section 10.01 or
change the definition of "Requisite Lenders", or remove Agent Bank under
Section 9.09(a), shall be effective unless consented to by all of the Lenders,
without regard to the vote of Agent Bank as a Lender;
b. increase the Aggregate Commitment (other than with respect to the
Commitment Increase) or increase the Syndication Interest of any Lender,
release any Collateral except as specifically provided in the Credit Agreement,
extend the Maturity Date or change any provision expressly requiring the
consent of all Lenders shall be made without the consent of each Lender; or
c. reduce any fees described in Section 2.10 or extend the due date for,
or reduce or postpone the amount of, any Scheduled Reductions on the Credit
Facility, or reduce the rate of interest or postpone the payment of interest on
the Credit Facility, shall be made without the consent of all of the Lenders.
No amendment, modification, termination or waiver of any provision of Article X
or any other provision referring to Agent Bank shall be effective without the
written concurrence of Agent Bank, but only if such amendment, modification,
termination or waiver alters the obligations or rights of Agent Bank. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on Borrower or
Guarantor in any case shall entitle Borrower to any other further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.01
shall be binding on each assignee, transferee or recipient of Agent Bank's or
any Lender's Syndication Interest under this Credit Agreement or the Credit
Facility at the time outstanding. No modification of Section 2.08 or the
Swingline Note shall be made without the consent of the Swingline Lender. No
modification of Section 2.09 shall be made without the consent of the L/C
Issuer.
-84-
Section 10.02 - Failure to Exercise Rights. Nothing herein contained
shall impose upon Banks, Borrower or Guarantor any obligation to enforce any
terms, covenants or conditions contained herein. Failure of Banks, Borrower or
Guarantor, in any one or more instances, to insist upon strict performance by
Borrower, Guarantor or Banks of any terms, covenants or conditions of this
Credit Agreement or the other Loan Documents, shall not be considered or taken
as a waiver or relinquishment by Banks, Borrower or Guarantor of their right to
insist upon and to enforce in the future, by injunction or other appropriate
legal or equitable remedy, strict compliance by Borrower, Guarantor or Banks
with all the terms, covenants and conditions of this Credit Agreement and the
other Loan Documents. The consent of Banks, Guarantor or Borrower to any act
or omission by Borrower, Guarantor or Banks shall not be construed to be a
consent to any other or subsequent act or omission or to waive the requirement
for Banks', Guarantor's or Borrower's consent to be obtained in any future or
other instance.
Section 10.03 - Notices and Delivery. Unless otherwise specifically
provided herein, any consent, notice or other communication herein required or
permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or United States mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telecopy (or on the next Banking Business Day if such telecopy is received
on a non-Banking Business Day or after 5:00 p.m. on a Banking Business Day) or
four (4) Banking Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly addressed).
Notices to Agent Bank pursuant to Article II shall not be effective until
received by Agent Bank. For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this
Section 10.03) shall be as set forth below each party's name on the signature
pages hereof, or, as to each party, at such other address as may be designated
by such party in an Assignment and Assumption Agreement or in a written notice
to all of the other parties. All deliveries to be made to Agent Bank for
distribution to the Lenders shall be made to Agent Bank at the addresses
specified for notice on the signature page hereto and in addition, a sufficient
number of copies of each such delivery shall be delivered to Agent Bank for
delivery to each Lender at the address specified for deliveries on the
signature page hereto or such other address as may be designated by Agent Bank
in a written notice.
Section 10.04 - Modification in Writing. This Credit Agreement and the
other Loan Documents constitute the entire agreement between the parties and
supersede all prior agreements whether written or oral with respect to the
subject matter hereof, including, but not limited to, any term sheets furnished
by any of the Banks to Borrower or Guarantor. Neither this Credit Agreement,
nor any other Loan Documents, nor any provision herein, or therein, may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
Section 10.05 - Other Agreements. If the terms of any documents,
certificates or agreements delivered in connection with this Credit Agreement
are inconsistent with the terms of the Loan Documents, Borrower or Guarantor,
as applicable, shall use their best efforts to amend such document, certificate
or agreement to the satisfaction of Agent Bank to remove such inconsistency.
-85-
Section 10.06 - Counterparts. This Credit Agreement may be executed by
the parties hereto in any number of separate counterparts with the same effect
as if the signatures hereto and hereby were upon the same instrument. All such
counterparts shall together constitute but one and the same document.
Section 10.07 - Rights, Powers and Remedies are Cumulative. None of the
rights, powers and remedies conferred upon or reserved to Agent Bank, Banks,
Borrower or Guarantor in this Credit Agreement are intended to be exclusive of
any other available right, power or remedy, but each and every such right,
power and remedy shall be cumulative and not alternative, and shall be in
addition to every right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute. Any forbearance, delay or
omission by Agent Bank, Banks, Borrower or Guarantor in the exercise of any
right, power or remedy shall not impair any such right, power or remedy or be
considered or taken as a waiver or relinquishment of the right to insist upon
and to enforce in the future, by injunction or other appropriate legal or
equitable remedy, any of said rights, powers and remedies given to Agent Bank,
Banks, Borrower or Guarantor herein. The exercise of any right or partial
exercise thereof by Agent Bank, Banks, Borrower or Guarantor shall not preclude
the further exercise thereof and the same shall continue in full force and
effect until specifically waived by an instrument in writing executed by Agent
Bank or Banks, as the case may be.
Section 10.08 - Continuing Representations. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Credit Agreement, the making of the Credit Facility hereunder
and the execution and delivery of each other Loan Document until and final
payment of all sums owing under the Credit Facility and the Credit Facility has
been irrevocably terminated.
Section 10.09 - Successors and Assigns. All of the terms, covenants,
warranties and conditions contained in this Credit Agreement shall be binding
upon and inure to the sole and exclusive benefit of the parties hereto and
their respective successors and assigns.
Section 10.10 - Assignment of Loan Documents by Borrower, Guarantor or
Syndication Interests by Lenders.
a. This Credit Agreement and the other Loan Documents to which Borrower or
Guarantor is a party will be binding upon and inure to the benefit of Borrower,
Guarantor, the Agent Bank, each of the Banks, and their respective successors
and assigns, except that, Borrower and Guarantor may not assign their rights
hereunder or thereunder or any interest herein or therein without the prior
written consent of all the Lenders. Any attempted assignment or delegation in
contravention of the foregoing shall be null and void. Any Lender may at any
time pledge its Syndication Interest in the Credit Facility, the Credit
Agreement and the Loan Documents to a Federal Reserve Bank, but no such pledge
shall release that Lender from its obligations hereunder or grant to such
Federal Reserve Bank the rights of a Lender hereunder absent foreclosure of
such pledge.
b. Each Lender may assign all or any part of its Syndication Interest in
the Credit Facility to one or more financial institutions that are Eligible
Assignees with the prior consent of the Agent Bank and, so long as no Event of
Default has occurred and remains continuing, Borrower (which consents shall not
be unreasonably withheld or delayed); provided, however, that the
-86-
minimum amount of each such assignment shall be Five Million Dollars
($5,000,000.00), or such lesser amount as constitutes the remaining amount of a
Lender's Syndication Interest in the Credit Facility (except that there shall
be no minimum assignment among the Lenders or to their Affiliates), and each
assignee Lender (or assignor if so agreed between the assignee Lender and such
assignor) shall pay to the Agent Bank an assignment fee of Three Thousand Five
Hundred Dollars ($3,500.00) with respect to each such assignment. Each such
assignment shall be evidenced by an assignment substantially in the form of the
Assignment and Assumption Agreement or other form reasonably acceptable to
Agent Bank and Borrower. Concurrently with each such assignment, each assignee
Lender shall certify that as of the date of such assignment no amounts are
payable to such assignee Lender under Sections 2.12 or 2.13 of the Credit
Agreement other than to the extent amounts thereunder are payable to all of the
Lenders. Upon any such assignment, the assignee financial institution shall
become a Lender for all purposes under the Credit Agreement and each of the
Loan Documents and the assigning Lender shall be released from its further
obligations hereunder to the extent of such assignment. Agent Bank agrees to
give prompt notice to Borrower of each assignment made under this Section
10.10(b) and to deliver to Borrower each revision to the Schedule of Lenders'
Proportions in Credit Facility made as a consequence of each such assignment.
c. Each Lender may sell participations for all or any part of its
Syndication Interest in the Credit Facility; provided, however, that (i) such
Lender shall promptly give written notice of such participation to Agent Bank,
(ii) such Lender shall remain responsible for its total obligations under the
Credit Agreement and each of the Loan Documents, (iii) the Borrower and the
Agent Bank shall continue to deal solely with such Lender in connection with
such Lender's rights and obligations under the Credit Agreement and each of the
Loan Documents, (iv) such Lender shall not sell any participation to any
competitor of Borrower or any Person engaged in the business of owning or
operating a casino, and (v) such Lender shall not sell any participation under
which the participant would have rights to approve any amendment or waiver
relating to the Credit Agreement or any Loan Document except to the extent any
such amendment or waiver would (w) extend the final Maturity Date or the date
for the payment or any installments of fees, principal or interest due in
respect of the Credit Facility, (x) reduce the amount of any Scheduled
Reduction in respect to the Credit Facility, (y) reduce the interest rates or
fees applicable to the Credit Facility or (z) release any material portion of
the Collateral. Notwithstanding the foregoing, the rights of the Lenders to
make assignments and to grant participations shall be subject to the approval
by the Gaming Authorities of the assignee or participant, to the extent
required by applicable Gaming Laws, and to applicable securities laws.
d. In the event any Lender is found unsuitable as a Lender under the
Credit Facility by the Nevada Gaming Authorities or the Governmental
Authorities of any other State of the United States ("Unsuitable Lender"): (i)
Agent Bank shall use its reasonable efforts to find a replacement Lender, (ii)
Borrower shall have the right, in Borrower's discretion, to make a Voluntary
Permanent Reduction in the amount necessary to reduce the Aggregate Commitment
by the amount of the Syndication Interest held by the Unsuitable Lender until a
replacement Lender, if any, commits to acquire the Syndication Interest of the
Unsuitable Lender, at which time the Aggregate Commitment shall be increased by
the amount of the Voluntary Permanent Reduction, and (iii) upon full payment of
all outstanding amounts of principal and interest
-87-
owing it, such Unsuitable Lender shall execute such documents as may be
required by Agent Bank, Borrower or the Nevada Gaming Authorities to evidence
the assignment or termination, as the case may be, of its Syndication Interest
in the Credit Facility.
e. In the event any Lender fails to consent ("Non-Consenting Lender") to
any amendment, modification, waiver or other matter requiring the consent of
all Lenders under Sections 5.22 or 10.01 of the Credit Agreement, Borrower may
designate an Eligible Assignee that is reasonably acceptable to the Agent Bank
to replace such Non-Consenting Lender ("Replacement Lender"). Following the
designation of the Replacement Lender as provided above, such Non-Consenting
Lender agrees to promptly assign its Syndication Interest in the Credit
Facility to such Replacement Lender in accordance with the requirements set
forth in Section 10.10(b) so long as the Replacement Lender assumes the entire
Syndication Interest held by such Non-Consenting Lender and such Non-Consenting
Lender is fully paid for its Pro Rata Share of the Funded Outstandings,
together with all accrued but unpaid interest and fees, as applicable, in Cash
on the effective date of such assignment.
Section 10.11 - Action by Lenders. Whenever Banks shall have the right to
make an election, or to exercise any right, or their consent shall be required
for any action under this Credit Agreement or the Loan Documents, then such
election, exercise or consent shall be given or made for all Banks by Agent
Bank in accordance with the provisions of Section 10.01. Notices, reports and
other documents required to be given by Borrower and/or Guarantor to Banks
hereunder may be given to Agent Bank on behalf of Banks, with sufficient copies
for distribution to each of the Banks, and the delivery to Agent Bank shall
constitute delivery to Banks. In the event any payment or payments are
received by a Lender other than Agent Bank, Borrower consents to such payments
being shared and distributed as provided herein.
Section 10.12 - Time of Essence. Time shall be of the essence of this
Credit Agreement.
Section 10.13 - Choice of Law and Forum. This Credit Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Nevada without regard to principles of conflicts of law. Borrower and
Guarantor further agree that the full and exclusive forum for the determination
of any action relating to this Credit Agreement, the Loan Documents, or any
other document or instrument delivered in favor of Banks pursuant to the terms
hereof shall be either an appropriate Court of the State of Nevada or the
United States District Court or United States Bankruptcy Court for the District
of Nevada.
Section 10.14 - Arbitration.
a. Upon the request of any party, whether made before or after the
institution of any legal proceeding, any action, dispute, claim or controversy
of any kind (e.g., whether in contract or in tort, statutory or common law,
legal or equitable) ("Dispute") now existing or hereafter arising between the
parties in any way arising out of, pertaining to or in connection with the
Credit Agreement, Loan Documents or any related agreements, documents, or
instruments (collectively the "Documents"), may, by summary proceedings (e.g.,
a plea in abatement or motion to stay further proceedings), bring an action in
court to compel arbitration of any Dispute.
-88-
b. All Disputes between the parties shall be resolved by binding
arbitration governed by the Commercial Arbitration Rules of the American
Arbitration Association. Judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction.
c. No provision of, nor the exercise of any rights under this arbitration
clause shall limit the rights of any party, and the parties shall have the
right during any Dispute, to seek, use and employ ancillary or preliminary
remedies, judicial or otherwise, for the purposes of realizing upon,
preserving, protecting or foreclosing upon any property, real or personal,
which is involved in a Dispute, or which is subject to, or described in, the
Documents, including, without limitation, rights and remedies relating to: (i)
foreclosing against any real or personal property collateral or other security
by the exercise of a power of sale under the Security Documentation or other
security agreement or instrument, or applicable law, (ii) exercising self-help
remedies (including setoff rights) or (iii) obtaining provisional or ancillary
remedies such as injunctive relief, sequestration, attachment, garnishment or
the appointment of a receiver from a court having jurisdiction before, during
or after the pendency of any arbitration. The institution and maintenance of
an action for judicial relief or pursuit of provisional or ancillary remedies
or exercise of self-help remedies shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the Dispute to arbitration nor
render inapplicable the compulsory arbitration provision hereof.
Section 10.15 - Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, BORROWER, GUARANTOR AND EACH OF THE BANKS EACH MUTUALLY HEREBY EXPRESSLY
WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND,
OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS CREDIT AGREEMENT, THE
REVOLVING CREDIT NOTE OR ANY OF THE LOAN DOCUMENTS, OR IN ANY WAY CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF BORROWER, GUARANTOR AND
BANKS WITH RESPECT TO THIS CREDIT AGREEMENT, THE REVOLVING CREDIT NOTE OR ANY
OF THE LOAN DOCUMENTS, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
BORROWER, GUARANTOR AND EACH OF THE BANKS EACH MUTUALLY AGREE THAT ANY SUCH
ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDINGS SHALL BE DECIDED BY A
COURT TRIAL WITHOUT A JURY AND THAT THE DEFENDING PARTY MAY FILE AN ORIGINAL
COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN
EVIDENCE OF THE CONSENT OF THE COMPLAINING PARTY TO THE WAIVER OF ITS RIGHT TO
TRIAL BY JURY.
Section 10.16 - Scope of Approval and Review. Any inspection of the
Hotel/Casino Facility or other documents shall be deemed to be made solely for
Banks' internal purposes and shall not be relied upon by the Borrower,
Guarantor or any third party. In no event shall Lenders be deemed or construed
to be joint venturers or partners of Borrower or Guarantor.
Section 10.17 - Severability of Provisions. In the event any one or more
of the provisions contained in this Credit Agreement shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
Section 10.18 - Cumulative Nature of Covenants. All covenants contained
herein are cumulative and not exclusive of each other covenant. Any action
allowed by any covenant shall be allowed only if such action is not prohibited
by any other covenant.
-89-
Section 10.19 - Costs to Prevailing Party. If any action or arbitration
proceeding is brought by any party against any other party under this Credit
Agreement or any of the Loan Documents, the prevailing party shall be entitled
to recover such costs and attorney's fees as the court in such action or
proceeding may adjudge reasonable.
Section 10.20 - Expenses.
a. Generally. Borrower agrees upon demand to pay, or reimburse Agent Bank
for, all of Agent Bank's documented reasonable out-of-pocket costs and expenses
of every type and nature incurred by Agent Bank at any time (whether prior to,
on or after the date of this Credit Agreement) in connection with (i) any
requests for consent, waiver or other modification of any Loan Document made by
Borrower, other than to correct errors attributable to the Banks; (ii) the
negotiation, preparation and execution of this Credit Agreement (including,
without limitation, the satisfaction or attempted satisfaction of any of the
conditions set forth in Article III), the Security Documentation and the other
Loan Documents and the advance of Borrowings; (iii) the subordination or
release of any Collateral, including title charges, recording fees and
reasonable attorneys' fees and costs incurred in connection therewith; (iv) the
creation, perfection or protection of the Security Documentation on the
Collateral (including, without limitation, any fees and expenses for title and
lien searches, filing and recording fees and taxes, duplication costs and
corporate search fees); and (v) the protection, collection or enforcement of
any of the Obligations or the Collateral, including Protective Advances.
b. After Event of Default. Borrower further agrees to pay, or reimburse
Agent Bank and Lenders, for all reasonable out-of-pocket costs and expenses,
including without limitation reasonable attorneys' fees and disbursements
incurred by Agent Bank or Lenders after the occurrence of an Event of Default
(i) in enforcing any Obligation or in foreclosing against the Collateral or
exercising or enforcing any other right or remedy available by reason of such
Event of Default; (ii) in connection with any refinancing or restructuring of
the credit arrangements provided under this Credit Agreement or in any
insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating to Borrower and
related to or arising out of the transactions contemplated hereby; (iv) in
taking any other action in or with respect to any suit or proceeding (whether
in bankruptcy or otherwise); (v) in protecting, preserving, collecting,
leasing, selling, taking possession of, or liquidating any of the Collateral;
or (vi) in attempting to enforce or enforcing any lien in any of the Collateral
or any other rights under the Security Documentation.
Section 10.21 - Setoff. In addition to any rights and remedies of the
Agent Bank provided by law, if any Event of Default exists, Agent Bank is
authorized at any time and from time to time, without prior notice to any
Borrower, any such notice being waived by the Borrower to the fullest extent
permitted by law, to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by Agent Bank
to or for the credit or the account of Borrower against any and all obligations
of Borrower under the Credit Facility, now or hereafter existing, irrespective
of whether or not the Agent Bank shall have made demand under this Credit
Agreement or any Loan Document and although such amounts owed may be contingent
or unmatured. Agent Bank agrees promptly to notify the Borrower (and Agent
Bank shall promptly notify each other Lender) after any
-90-
such setoff and application made by Agent Bank; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of Agent Bank under this Section 10.21 are in addition
to the other rights and remedies which Agent Bank may have.
Section 10.22 - Schedules Attached. Schedules are attached hereto and
incorporated herein and made a part hereof as follows:
Schedule 2.01(a) - Schedule of Lenders' Proportions in Credit Facility
Schedule 2.01(c) - Aggregate Commitment Reduction Schedule
Schedule 2.01(c) - Alternate One Aggregate Commitment Reduction
Schedule - Alternate One
Schedule 3.18 - Schedule of Significant Litigation
Schedule 4.15 - Schedules of Spaceleases
Schedule 4.16 - Schedule of Equipment Leases and Contracts
Schedule 4.22 - Schedule of Trademarks, Patents, Licenses, Franchises,
Formulas and Copyrights
Schedule 4.23 - Schedule of Contingent Liabilities
Schedule 6.08 - Schedule of Liens
Schedule A - Hotel/Casino Property - Description
Schedule B - V/P Property - Description
Section 10.23 - Exhibits Attached. Exhibits are attached hereto and
incorporated herein and made a part hereof as follows:
Exhibit A - Revolving Credit Note - Form
Exhibit B - Swingline Note - Form
Exhibit C - Notice of Borrowing - Form
Exhibit D - Continuation/Conversion Notice -Form
Exhibit E - Compliance Certificate - Form
Exhibit F - Pricing Certificate - Form
Exhibit G - Authorized Officer Certificate -Form
Exhibit H - Closing Certificate
Exhibit I - Guaranty - Form
Exhibit J - Legal Opinion - Form
Exhibit K - Notice of Swingline Advance - Form
Exhibit L - Assumption and Consent Agreement - Form
-91-
Exhibit M - Assignment and Assumption Agreement - Form
Exhibit N - Cash Collateral Pledge Agreement - Form
-92-
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be executed as of the day and year first above written.
BORROWER:
GOLDEN ROAD MOTOR INN, INC.
a Nevada corporation
By: /s/ Xxx Xxxxxx
--------------
Xxx Xxxxxx
Secretary
Address:
0000 Xxxx Xxxxx Xxxx
Xxxxx 000
Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
MCRI:
MONARCH CASINO & RESORT, INC.,
a Nevada corporation
By: /s/ Xxx Xxxxxx
--------------
Xxx Xxxxxx
Secretary
Address:
0000 Xxxx Xxxxx Xxxx
Xxxxx 000
Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-1
BANKS:
XXXXX FARGO BANK,
National Association,
Agent Bank, Lender and Swingline Lender
BY: /s/ Xxxxxxxx Xxxxxxx
--------------------
Xxxxxxxx Xxxxxxx
Vice President
Address:
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-2
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Vice President
Address:
Xxx Xxxx Xxxxxxx
Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-3
COMERICA WEST
By:/s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx
Corporate Banking Representative
Address:
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-4
THE CIT GROUP/EQUIPMENT FINANCING, INC.
By: /s/ X. Xxxxxxxx
---------------
X. Xxxxxxxx
EVP/CCO
Address:
0000 X. Xxxxxxxxxxxx Xxxxxxx
Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-5
BANK OF THE WEST
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Address:
One California Plaza
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
X-0
XXXX XX XXXXXXX, N.A.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Address:
NV1-119-02-01
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-7
SCHEDULE OF LENDERS' PROPORTIONS IN
CREDIT FACILITY
AS OF CLOSING DATE
PROPORTIONATE
MAXIMUM AMOUNT OF SYNDICATION INTEREST IN
NAME OF LENDER PRINCIPAL CREDIT FACILITY
-------------- ----------------- -----------------------
Xxxxx Fargo Bank, National
Association $11,000,000.00 22.0%
U.S. Bank National
Association 10,000,000.00 20.0%
Comerica West 8,500,000.00 17.0%
The CIT Group/Equipment
Financing, Inc. 8,500,000.00 17.0%
Bank of the West 6,000,000.00 12.0%
Bank of America, N.A. 6,000,000.00 12.0%
SCHEDULE 2.01(a)
AGGREGATE COMMITMENT REDUCTION SCHEDULE
(At Closing)
REDUCTION DATE* SCHEDULED REDUCTION
-------------- -------------------
Closing Date -0-
June 30, 2004 $1,625,000.00
September 30, 2004 $1,625,000.00
December 31, 2004 $1,625,000.00
March 31, 2005 $1,625,000.00
June 30, 2005 $1,625,000.00
September 30, 2005 $1,625,000.00
December 31, 2005 $1,625,000.00
March 31, 2006 $1,625,000.00
June 30, 2006 $1,625,000.00
September 30, 2006 $1,625,000.00
December 31, 2006 $1,625,000.00
March 31, 2007 $1,625,000.00
June 30, 2007 $1,625,000.00
September 30, 2007 $1,625,000.00
December 31, 2007 $1,625,000.00
March 31, 2008 $1,625,000.00
June 30, 2008 $1,625,000.00
September 30, 2008 $1,625,000.00
December 31, 2008 $1,625,000.00
February 23, 2009
(Maturity Date) Remaining unpaid principal balance
*Subject to waiver under Section 2.01(f).
SCHEDULE 2.01(c)
AGGREGATE COMMITMENT REDUCTION SCHEDULE
(ALTERNATE ONE IN EVENT OF COMMITMENT INCREASE)
To be completed by Agent Bank as of the Commitment Increase Effective Date in
accordance with the calculations set forth below:
REDUCTION DATE* SCHEDULED REDUCTION
-------------- -------------------
Commitment Increase Effective Date -0-
[insert the last day of each
subsequent Fiscal Quarter]
March 31, 2006
June 30, 2006
September 30, 2006
December 31, 2006
March 31, 2007
June 30, 2007
September 30, 2007
December 31, 2007
March 31, 2008
June 30, 2008
September 30, 2008
December 31, 2008
February 23, 2009
(Maturity Date) Remaining unpaid principal balance
*Subject to waiver under Section 2.01(f).
SCHEDULE 2.01(c) - ALTERNATE ONE
Calculation of Scheduled Reduction Amount
a. Add the amount of the Commitment Increase $
to the Aggregate Commitment on the ---------------
Commitment Increase Effective Date +
$
---------------
Total = $
---------------
b. Add the amount of the Commitment Increase $
to $50,000,000 then multiply the sum by 35% ---------------
to arrive at maximum principal at maturity + 50,000,000.00
X 35%
---------------
Maximum Principal at Maturity $
---------------
c. Deduct (b) from (a) $(a)
---------------
- (b)
---------------
Total amount of Scheduled Reductions $
---------------
d. Set forth number of Fiscal Quarters ending
subsequent to Commitment Increase Effective
Date through Maturity ---------------
e. Divide (c) by (d) to arrive at amount of each $(c)
quarterly Scheduled Reduction ---------------
/ (d)
---------------
= $
---------------
-2-
