AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.01

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of January 20, 2009

among

GOLDEN ROAD MOTOR INN, INC.,

a Nevada corporation,

as Borrower

MONARCH CASINO & RESORT, INC.,

a Nevada corporation,

as Guarantor

the LENDERS herein named

WELLS FARGO BANK, National Association,

as Swingline Lender, L/C Issuer and Agent Bank

 

 

TABLE OF CONTENTS

 

 

 

 

 

 

 

	Schedule 2.01(a)	-	Schedule of Lenders' Proportions in Credit Facility
	Schedule 2.01(c)	-	Aggregate Commitment Reduction Schedule
	Schedule 2.01(c)	-
	Alternate One		Aggregate Commitment Reduction Schedule - Alternate One
	Schedule 3.18	-	Schedule of Significant Litigation
	Schedule 4.15	-	Schedule of Spaceleases
	Schedule 4.16	-	Schedule of Equipment Leases and Contracts
	Schedule 4.22	-	Schedule of Trademarks, Patents, Licenses, Franchises, Formulas and Copyrights
	Schedule 4.23	-	Schedule of Contingent Liabilities
	Schedule 6.04	-	Schedule of Remodel Projects
	Schedule 6.08	-	Schedules of Liens
	Schedule A	-	Hotel/Casino Property - Description
	Schedule B	-	V/P Property - Description

 

 

AMENDED AND RESTATED

CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Credit Agreement") is made and entered into as of the 20 ^th day of January, 2009, by and among GOLDEN ROAD MOTOR INN, INC., a Nevada corporation (the "Borrower"), and MONARCH CASINO & RESORT, INC., a Nevada corporation ("Guarantor") and each of the Lenders, as hereinafter defined, WELLS FARGO BANK, National Association, as the swingline lender (herein in such capacity, together with its successors and assigns, the "Swingline Lender"), and WELLS FARGO BANK, National Association, as the issuer of letters of credit following the Restatement Effective Date (in such capacity, together with its successors and assigns, the "L/C Issuer") and WELLS FARGO BANK, National Association, as administrative and collateral agent for the Lenders, Swingline Lender and L/C Issuer (herein, in such capacity, called the "Agent Bank" and, together with the Lenders, Swingline Lender and L/C Issuer collectively referred to as the "Banks").

R E C I T A L S:

WHEREAS:

 

 

NOW, THEREFORE, in consideration of the foregoing, and other valuable considerations as hereinafter described, the parties hereto do promise, covenant and agree as follows:

1.

DEFINITIONS

"Acquisition" means any transaction, or any series of related transactions, consummated after the Restatement Effective Date, by which the Borrower directly or indirectly acquires (i) any real property, (ii) any New Venture or any ongoing business, or (iii) all or substantially all of the assets of any firm, partnership, joint venture, limited liability company, corporation or division thereof, whether through purchase of assets, merger or otherwise.

"Adjacent Driveway Property" shall mean the leasehold interest of Borrower in that portion of the Hotel/Casino Property which is designated as Parcel 2 on Schedule A attached hereto and incorporated by reference herein, which leasehold interest is evidenced by the Adjacent Driveway Lease.

"Adjacent Driveway Lease" shall mean that certain Lease Agreement and Option to Purchase dated January 29, 2004, by and between BLILP, as lessor, and Borrower, as lessee, pursuant to which, among other things, Borrower is granted a leasehold interest in, and an option to purchase, the Adjacent Driveway Property.

 

 

"Adjacent Driveway Estoppel" shall mean the Estoppel Certificate executed as of the Closing Date, by Biggest Little City Investments L.P., a Delaware limited partnership, and recorded on February 20, 2004 in the Official Records of Washoe County, Nevada, as Document No. 2996371, pursuant to which: (a) it certified and represented to Agent Bank that the Adjacent Driveway Lease represents the entire agreement between the parties thereto with respect to the Adjacent Driveway Property and supercedes all other previous documents and agreements between them, that the Adjacent Driveway Lease had not been modified, supplemented or amended except as set forth therein and that there are no defaults existing or continuing under any of the provisions of the Adjacent Driveway Lease; and (b) other agreements are made regarding notice to Agent Bank in the event of a default under this Adjacent Driveway Lease, Agent Bank's right to cure and the rights of the Banks and their successors to continue in possession of the Adjacent Driveway Property.

"Adjusted EBITDA" shall mean EBITDA less MCRI Corporate Overhead Allocation for the period under review to the extent not deducted from Net Income in the determination of EBITDA.

"Affiliate", as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

"Agent Bank" shall mean WFB in its capacity as administrative and collateral agent for Lenders, Swingline Lender and L/C Issuer.

"Aggregate Commitment" shall mean reference to the aggregate amount committed by Lenders for advance to or on behalf of the Borrower as Borrowings under the Credit Facility in the initial principal amount of Sixty Million Dollars ($60,000,000.00), subject to increase in the amount of up to an additional Fifteen Million Dollars ($15,000,000.00) as provided in Section 2.01(e), in each case as may be reduced from time to time by (i) Scheduled Reductions, (ii) Voluntary Permanent Reductions, and/or (iii) Mandatory Commitment Reductions.

"Aggregate Commitment Reduction Schedule" shall mean the schedule setting forth the amount of the Scheduled Reductions as of each Reduction Date under the Credit Facility, which schedule shall be: (i) the Aggregate Commitment Reduction Schedule marked "Schedule 2.01(c)", affixed hereto and by this reference incorporated herein and made a part hereof, or (ii) in the event of occurrence of a Commitment Increase, the Aggregate Commitment Reduction Schedule - Alternate One marked "Schedule 2.01(c) - Alternate One", affixed hereto and by this reference incorporated herein and made part hereof to be completed by Agent Bank and distributed to Borrower and each of the Lenders, evidencing the amount of each Scheduled Reduction following the applicable Commitment Increase Effective Date.  In each instance of a Commitment Increase, the amount of the level Scheduled Reductions shall be proportionately adjusted so that the unpaid balance of principal at the Maturity Date is no greater than 62.5% of the sum of the Commitment Increase, plus the amount of any prior Commitment Increase, plus Sixty Million Dollars ($60,000,000.00).

 

 

"Aggregate Outstandings" shall mean collective reference to the sum of the Funded Outstandings, Swingline Outstandings and L/C Exposure as of any given date of determination.

"Applicable Margin" means for any Base Rate Loan or LIBOR Loan, the applicable percentage amount to be added to the Base Rate or LIBO Rate, as the case may be, as follows: (i) commencing on the Restatement Effective Date and continuing until June 1, 2009, the Applicable Margins as calculated on the Closing Pricing Certificate to be delivered by Borrower to Agent Bank on the Restatement Effective Date pursuant to Section 3.17(b); provided that in no event shall the Base Rate Margin or the LIBO Rate Margin be less than 3.125% during the period commencing on the Restatement Effective Date and continuing until June 1, 2009; and (ii) commencing on June 1, 2009 and continuing on each Rate Adjustment Date until Bank Facility Termination, the margin rates as set forth in Table One below in each instance based on the Total Leverage Ratio calculated with regard to the Borrower as of each Fiscal Quarter end, commencing with the Fiscal Quarter ending March 31, 2009, together with the immediately preceding three (3) Fiscal Quarters on a four (4) Fiscal Quarter basis:

"Assets" shall mean the total assets of the Borrower determined in accordance with GAAP.

 

 

"Assignment and Assumption Agreement" shall mean the document evidencing an assignment of a Syndication Interest by any Lender to an Eligible Assignee in the form of the Assignment, Assumption and Consent Agreement marked "Exhibit M", affixed hereto and by this reference incorporated herein and made a part hereof.

"Assignment of Rents" shall mean collective reference to the Existing Assignment of Rents as amended by the First Amendment to Assignment of Rents, as it may be further amended, modified, extended, renewed or restated from time to time.

"Assumption and Consent Agreement" shall mean the document evidencing an increase of the Aggregate Commitment and assumption of such increase by a Lender or Eligible Assignee pursuant to Section 2.01(e) in the form of the Assumption and Consent Agreement marked "Exhibit L", affixed hereto and by this reference incorporated herein and made a part hereof.

"Authorized Officer(s)" shall mean those of the respective officers of Borrower whose signatures and incumbency shall have been certified to Agent Bank and the Banks as required in Section 3.05(iv) of the Credit Agreement with the authority and responsibility to deliver Notices of Borrowing, Continuation/Conversion Notices, Pricing Certificates, Compliance Certificates and all other requests, notices, reports, consents, certifications and authorizations on behalf of Borrower.

"Authorized Officer Certificate" shall have the meaning set forth in Section 3.05.

"Available Borrowings" shall mean, at any time, and from time to time, the aggregate amount available to Borrower for a Borrowing, a Swingline Advance or issuance of a Letter of Credit not exceeding the amount of the Maximum Availability, as of each date of determination.

"Bank Facilities" shall mean collective reference to the Credit Facility, Swingline Facility and L/C Facility.

"Bank Facility Termination" shall mean indefeasible payment in full of all sums owing under the Bank Facilities and each of the Loan Documents, the occurrence of the Stated Expiry Date or other termination of all outstanding Letters of Credit, and the irrevocable termination of: (i) the obligation of Lenders to advance Borrowings under the Credit Facility, (ii) the obligation of Swingline Lender to advance Swingline Advances under the Swingline Facility, and (iii) the obligation of L/C Issuer to issue Letters of Credit under the L/C Facility.

"Banking Business Day" means (a) with respect to any Borrowing, payment or rate determination of LIBOR Loans, a day, other than a Saturday or Sunday, on which Agent Bank is open for business in San Francisco and on which dealings in Dollars are carried on in the London interbank market, and (b) for all other purposes any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the States of California and/or Nevada, or is a day on which banking institutions located in California and/or Nevada are required or authorized by law or other governmental action to close.

 

 

"Bankruptcy Code" shall mean the United States Bankruptcy Code, as amended, 11 U.S.C. Section 101, et seq .

"Banks" shall have the meaning set forth in the Preamble to this Credit Agreement.

"Base Rate" shall mean, on any day, the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate for such day plus one and one-half percent (1.50%) and (c) one (1) month LIBO Rate for such day (determined on a daily basis as set forth below) plus one and one-half percent (1.50%).  As used in this definition, "One Month LIBOR Rate" shall mean, with respect to any interest rate calculation for a Base Rate Loan or other Obligation bearing interest at the Base Rate, a rate per annum equal to the quotient (rounded upward if necessary to the nearest 1/16 of one percent) of (a) the rate per annum referred to as the BBA (British Bankers Association) LIBO RATE as reported on Reuters LIBOR Page 1, or if not reported by Reuters, as reported by any service selected by the Agent Bank, on the applicable day (provided that if such day is not a Banking Business Day for which a LIBO Rate is quoted, the next preceding Banking Business Day for which a LIBO Rate is quoted) at or about 11:00 a.m., London time (or as soon thereafter as practicable), for Dollar deposits being delivered in the London interbank eurodollar currency market for a term of one month commencing on such date of determination, divided by (b) one (1) minus the LIBOR Reserve Percentage in effect on such day.  If for any reason rates are not available as provided in clause (a) of the preceding sentence, the rate to be used in clause (a) shall be, at the Agent Bank’s discretion (in each case, rounded upward if necessary to the nearest 1/16 of one percent), (i) the rate per annum at which Dollar deposits are offered to the Agent Bank in the London interbank eurodollar currency market or (ii) the rate at which Dollar deposits are offered to the Agent Bank in, or by the Agent Bank to major banks in, any offshore interbank eurodollar market selected by the Agent Bank, in each case on the applicable day (provided that if such day is not a Banking Business Day for which Dollar deposits are offered to the Agent Bank in the London interbank eurodollar currency market, the next preceding Banking Business Day for which Dollar deposits are offered to the Agent Bank in the London interbank eurodollar currency market) at or about 11:00 a.m., London time (or as soon thereafter as practicable) (for delivery on such date of determination) for a one (1) month term.

"Base Rate Loan" shall mean reference to that portion of the unpaid principal balance of the Credit Facility bearing interest with reference to the Base Rate plus the Applicable Margin.

"BLILP" shall mean Biggest Little Investments L.P., a Delaware limited partnership.

 

 

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

"Borrowing(s)" shall mean such amounts as Borrower may request from Agent Bank from time to time to be advanced under the Credit Facility by Notice of Borrowing in the manner provided in Section 2.03 or at the request of Agent Bank pursuant to Section 2.08 or Section 2.09.

"Breakage Charges" shall have the meaning set forth in Section 2.07(c) of the Credit Agreement.

"Capital Expenditures" shall mean, for any period, without duplication, the aggregate of all expenditures (whether paid in cash or accrued as liabilities during that period and including Capitalized Lease Liabilities) by Borrower during such period that, in conformity with GAAP, are required to be included in or reflected by the property, plant or equipment or similar fixed or capital asset accounts reflected in the balance sheet of Borrower (including equipment which is purchased simultaneously with the trade-in of existing equipment owned by Borrower to the extent of (a) the gross amount of such purchase price less (b) the cash proceeds of trade-in credit of the equipment being traded in at such time), but excluding capital expenditures made in connection with the replacement or restoration of assets, to the extent reimbursed or refinanced from insurance proceeds paid on account of the loss of or damage to the assets being replaced or restored, or from awards of compensation arising from the taking by condemnation of or the exercise of the power of eminent domain with respect to such assets being replaced or restored.

"Capital Proceeds" shall mean the Net Proceeds available to Borrower from (i) partial or total condemnation, eminent domain or destruction of any part of the Collateral or by settlement in lieu of condemnation or eminent domain proceedings, (ii) insurance proceeds (other than rent insurance and business interruption insurance) received in connection with damage to or destruction of the Collateral, (iii) the sale or other disposition of any portion of the Collateral in accordance with the provisions of this Credit Agreement (not including, however, any proceeds received by Borrower from a sale, condemnation, damage or destruction of FF&E or other personal property if such FF&E or other personal property is replaced by items of equivalent value or utility, in each case such exclusion to apply only during any period in which no Default in the payment of any principal or interest owing under the terms of the Bank Facilities or an Event of Default has occurred and is continuing), and (iv) any other extraordinary receipt of proceeds not in the ordinary course of business and treated, for accounting purposes, as capital in nature, other than capital contributions made by MCRI to the Borrower.

"Capitalized Lease Liabilities" means all monetary obligations of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Credit Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.

 

 

"Cash" shall mean, when used in connection with any Person, all monetary and non-monetary items owned by that Person that are treated as cash in accordance with GAAP.

"Cash Collateral Account" shall mean the restricted depository savings account to be established by Borrower or Agent Bank on behalf of Borrower with Agent Bank at its offices located at 5340 Kietzke Lane, Suite 201, Reno, Nevada, or at such other office located in the United States as may be designated from time to time by Agent Bank, for the purpose of depositing Cash collateral for (i) the aggregate L/C Exposure upon the occurrence of any Event of Default, or (ii) all or a portion of a Deteriorating Lender's obligation to fund under Section 2.09(c) or (d) with respect to its Pro Rata Share of L/C Exposure, or (iii) all or a portion of a Deteriorating Lender's Pro Rata Share of risk participation in Swingline Advances under Section 2.08(d) or (e).

"Cash Collateral Pledge Agreement" shall mean the Pledge and Assignment of Savings Account Agreement to be executed by Borrower as of the Restatement Effective Date in favor of Agent Bank on behalf of the L/C Issuer and Swingline Lender as the same may be amended or modified from time to time under the terms of which all sums held from time to time in the Cash Collateral Account are pledged in favor of Agent Bank to secure repayment of (i) any funding required under any outstanding Letters of Credit following an Event of Default, or (ii) all or a portion of a Deteriorating Lender's obligation to fund under Section 2.09(c) or (d) with respect to its Pro Rata Share of L/C Exposure, or (iii) all or a portion of a Deteriorating Lender's Pro Rata Share of risk participation in Swingline Advances under Section 2.08(d) or (e), a copy of the form of which Cash Collateral Pledge Agreement is marked "Exhibit N", affixed hereto and by this reference incorporated herein and made a part hereof.

"Cash Equivalents" shall mean, when used in connection with any Person, that Person's Investments in:

 

 

"CC Skybridge" shall mean a collective reference to: (i) the elevated pedestrian walkway which extends, from Parcel 1 of the Hotel/Casino Property to the CC Skybridge Tower, over and across Peckham Lane and the north parking lot of the Convention Center Property to the Reno Sparks Convention Center; (ii) the CC Skybridge Tower; and (iii) all elevators, escalators, support columns, landscaping, paving and other facilities and fixtures which are related to the foregoing, all as particularly set forth by the CC Skybridge Agreement.  

"CC Skybridge Agreement" shall mean that certain Atlantis Convention Center Skybridge Agreement and Easement, dated May 9, 2007, between RSCVA and Borrower, which was recorded in the Official Records of Washoe County, Nevada on May 10, 2007, as Document No. 3530942, pursuant to which, among other things:  (i) RSCVA granted the CC Skybridge Easements to Borrower; (ii) Borrower granted, to RSCVA, certain access easements over Parcels 3 through 5 of the Hotel/Casino Property; (iii) Borrower agreed to construct and operate the CC Skybridge within the applicable CC Skybridge Easements; and (iv) Borrower agreed that RSCVA would be entitled to reserve blocks of rooms at the Hotel/Casino Facility for certain types of events being conducted by RSCVA; all in accordance with the terms and conditions set forth therein.

 

 

"CC Skybridge Documentation" shall mean a collective reference to: (i) the CC Skybridge Agreement; and (ii) the CC Skybridge Peckham Lane Entitlements.

"CC Skybridge Easements" shall mean certain permanent and temporary easements over the Convention Center Property which are granted to Borrower by RSCVA, pursuant to the CC Skybridge Agreement, in order to facilitate Borrower’s construction and operation of the CC Skybridge, all as more particularly set forth therein.

"CC Skybridge Estoppel" shall mean an estoppel statement, in a form and substance acceptable to Agent Bank, to be executed by RSCVA: (i) consenting to encumbrance of Borrower’s interest in the CC Skybridge, and in the CC Skybridge Agreement, with the lien and security agreement of the Deed of Trust; (ii) acknowledging that the CC Skybridge Agreement is in full force and effect and that Borrower is not in default of any of its material obligations thereunder; and (iii) providing such other assurances as may be required by Agent Bank.

"CC Skybridge Peckham Lane Entitlements" shall mean the documentation which sets forth the agreement, by all appropriate Governmental Authorities, authorizing and entitling Borrower to construct and maintain the CC Skybridge over Peckham Lane in accordance with the CC Skybridge Agreement.

"CC Skybridge Tower" shall mean the pedestrian dispersal site for the CC Skybridge, which is situate on the Convention Center Property, including the dispersal tower, lobby, escalators, elevators and stairs.

"Change in Control" shall mean the occurrence of any of the following:

"Closing Certificate" shall have the meaning ascribed to such term in Section 3.05(v).

"Closing Date" shall mean February 20, 2004, the date upon which the Existing Bank Loan closed.

"Closing Disbursements" shall have the meaning set forth in Section 2.02(a).

 

 

"Closing Instructions" shall mean the Closing Instructions to be given by Agent Bank to the Title Insurance Company on or before the Restatement Effective Date setting forth the requirement of Lenders for issuance of the Title Policy Endorsements and other conditions for the occurrence of the Restatement Effective Date.

"Closing Pricing Certificate" shall have the meaning set forth in Section 3.17(b).

"Collateral" shall mean collective reference to: (i) all of the Real Property, and all presently owned, or hereafter acquired, personal property of Borrower (including, without limitation, the FF&E), and the contract rights, leases, intangibles and other interests of Borrower, which are subject to the liens and security interests of the Security Documents; (ii) all rights of Borrower assigned as additional security pursuant to the terms of the Security Documents; and (iii) any and all other property and/or intangible rights, interest or benefits inuring to or in favor of Borrower, which are in any manner assigned, pledged, encumbered or otherwise hypothecated in favor of Agent Bank on behalf of Lenders to secure payment of the Bank Facilities.

"Commercial Letter(s) of Credit" shall mean a letter or letters of credit issued by L/C Issuer pursuant to Section 2.09 of the Credit Agreement for the purpose of assuring payment for goods, equipment or materials supplied to Borrower.

"Commitment Fee" shall have the meaning ascribed to such term in Section 2.10(b) of this Credit Agreement.

"Commitment Increase" shall have the meaning ascribed to such term in Section 2.01(e).

"Commitment Increase Effective Date" shall mean the date upon which each of the requirements and conditions precedent for the effectiveness and funding of a Commitment Increase as set forth in Section 2.01(e) and in Article III C shall have been fully satisfied.

"Commitment Percentage" shall mean the per annum percentage to be used in the calculation of the Commitment Fee based on the Total Leverage Ratio of the Borrower determined as set forth in Table Two of the definition of Applicable Margin.

"Communications" shall have the meaning ascribed to such term in Section 10.03.

"Compliance Certificate" shall mean a compliance certificate as described in Section 5.08(f) which is more particularly described on "Exhibit E", affixed hereto and by this reference incorporated herein and made a part hereof.

"Contingent Liability(ies)" shall mean, as to any Person any obligation of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness, leases or dividends ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, (d) to make payment in respect of any net liability arising in connection with any Interest Rate Hedges, foreign currency exchange agreement, commodity hedging agreement or any similar agreement or arrangement in any such case if the purpose or intent of such agreement is to provide assurance that such primary obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such primary obligation will be protected (in whole or in part) against loss in respect thereof or (e) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Liability shall not include endorsements of instruments for deposit or collection in the ordinary course of business or player points programs awarded in connection with gaming operations at the Hotel/Casino Facility in the ordinary course of business, in the event such player points programs are determined to constitute Contingent Liabilities.  The amount of any Contingent Liability shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Liability is made or, if not stated or determinable, the reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

 

"Continuation/Conversion Notice" shall mean a notice of continuation of or conversion to a LIBOR Loan and certificate duly executed by an Authorized Officer of Borrower, substantially in the form of that certain exhibit marked "Exhibit D", affixed hereto and by this reference incorporated herein and made a part hereof.

"Convention Center Property" shall mean that certain real property owned by RSCVA, which is designated by Washoe County Assessor’s Parcel No. 025-011-19 and upon which Reno Sparks Convention Center is situate.

"Convert, Conversion and Converted" shall refer to a Borrowing at or continuation of a particular interest rate basis or conversion of one interest rate basis to another pursuant to Section 2.05(c).

"Credit Agreement" shall mean this Amended and Restated Credit Agreement together with all Schedules and Exhibits attached thereto, executed by and among Borrower, MCRI and Banks setting forth the terms and conditions of the Bank Facilities, which shall fully amend and restate the Existing Credit Agreement, as may be further amended, modified, extended, renewed or restated from time to time.

 

 

"Credit Facility" shall mean the agreement of Lenders to fund a reducing revolving line of credit, subject to the terms and conditions set forth in this Credit Agreement and the Revolving Credit Note, up to the Aggregate Commitment as reduced from time to time in accordance with the terms of this Credit Agreement and the Revolving Credit Note.

"Deed of Trust" shall mean collective reference to the Existing Deed of Trust as amended by the First Amendment to Deed of Trust, as it may be further amended, modified, extended, renewed or restated from time to time.

"Default" shall mean the occurrence or non-occurrence, as the case may be, of any event that with the giving of notice or passage of time, or both, would become an Event of Default.

"Default Rate" shall have the meaning set forth in Section 2.11(b).

"Defaulting Lender" means any Lender which fails or refuses to perform its obligations under this Credit Agreement within the time period specified for performance of such obligation or, if no time frame is specified, if such failure or refusal continues for a period of five (5) Banking Business Days after notice from Agent Bank.

"Designated Deposit Account" shall mean a deposit account to be maintained by Borrower with Agent Bank, as from time to time designated in writing by an Authorized Officer of Borrower.

"Deteriorating Lender" shall mean (a) a Defaulting Lender or (b) an Unsuitable Lender or (c) a Lender as to which (i) the L/C Issuer or Swingline Lender (as applicable) has a good faith belief that such Lender has defaulted in fulfilling its obligations under one or more other syndicated credit facilities or (ii) an entity that controls such Lender has been deemed insolvent or becomes subject to a receivership, bankruptcy or other similar proceeding. For the purpose of this definition, "control" of a Lender shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.

"Disposition" shall have the meaning ascribed to such term in Section 6.09(c).

"Dispute" shall have the meaning set forth in Section 10.14(a).

"Distribution Carryover" shall have the meaning ascribed to such term in Section 6.06(b).

"Distributions" shall mean and collectively refer to any and all cash dividends, loans, management fees, payments, advances or other distributions, fees or compensation of any kind or character whatsoever made by Borrower to or for the benefit of MCRI, any Subsidiary or Affiliate thereof or any member of the Farahi Family Group, but shall not include consideration paid for tangible and intangible assets in an arms length exchange for fair market value, trade payments made and other payments for liabilities incurred in the ordinary course of business or compensation to officers, directors and employees of Borrower in the ordinary course of business.

 

 

"Documents" shall have the meaning set forth in Section 10.14(a).

"Dollars" and "$" means the lawful money of the United States of America.

"EBITDA" shall mean with reference to any Person, for any fiscal period under review, the sum of (i) Net Income for that period, less (ii) interest income reflected in such Net Income, less (iii) any extraordinary one-time non-Cash gain reflected in such Net Income, plus (iv) any extraordinary losses on sales of assets and other extraordinary losses and one-time non-Cash charges, plus (v) Interest Expense (including expensed and capitalized) for that period, plus (vi) the aggregate amount of federal and state taxes on or measured by income for that period (whether or not payable during that period), plus (vii) depreciation, amortization and all other non-cash expenses for that period, including, without limitation, non-cash stock option expenses, in each case determined in accordance with GAAP and, in the case of items (iv), (v), (vi) and (vii), only to the extent deducted in the determination of Net Income for that period.

"Eligible Assignee" means (a) another Lender, (b) with respect to any Lender, any Affiliate of that Lender and (c) any commercial bank having a combined capital and surplus of One Hundred Fifty Million Dollars ($150,000,000.00) or more that is (i) organized under the Laws of the United States of America, any State thereof or the District of Columbia or (ii) organized under the Laws of any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of such a country, provided that (A) such bank is acting through a branch or agency located in the United States of America and (B) is otherwise exempt from withholding of tax on interest and delivers Form 1001 or Form 4224 at the time of any assignment, (d) a financial institution which is an accredited investor as defined by the Securities Act of 1934 and is otherwise exempt from withholding tax on interest at the time of any assignment, (e) any other financial institution that meets the requirements set forth in subclauses (c)(i) or (c)(ii) above that (i) has a net worth of One Hundred Fifty Million Dollars ($150,000,000.00) or more, (ii) is engaged in the business of lending money and extending credit under credit facilities substantially similar to those extended under this Credit Agreement, and (iii) is operationally and procedurally able to meet the obligations of a Lender hereunder to the same degree as a commercial bank, and (f) with respect to such commercial bank or financial institution as described in (a) through (e) above, no finding of unsuitability has been made or determined by any Gaming Authority or the gaming authorities of any other States of the United States of America.

 

 

"Environmental Certificate" shall mean the Certificate and Indemnification Regarding Hazardous Substances to be executed by Borrower on or before the Restatement Effective Date as a further inducement to the Banks to establish the Credit Facility, as it may be amended, modified, extended, renewed or restated from time to time.

"Equipment Leases and Contracts" shall mean the executed leases and purchase contracts pertaining to the FF&E wherein Borrower is the lessee or vendee, as the case may be, as set forth on that certain schedule marked "Schedule 4.16", affixed hereto and by this reference incorporated herein and made a part hereof.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

"Event of Default" shall mean any event of default as defined in Section 7.01 hereof.

"Excess Capital Proceeds" shall have the meaning ascribed to such term in Section 6.09(c) of this Credit Agreement.

"Existing Assignment of Rents" shall mean the Assignment of Entitlements, Contracts, Rents and Revenues executed by Borrower as of February 20, 2004 and recorded February 20, 2004, in the Official Records of Washoe County, Nevada, as Document No. 2996369, whereby Borrower presently assigned to Agent Bank in consideration of the Existing Bank Loan, as it may be amended, modified, extended, renewed or restated from time to time, (reserving a revocable license to retain use and enjoy):  (a) all of its right, title and interest under all Spaceleases and Equipment Leases and Contracts relating to the Hotel/Casino Facility, (b) all of its right, title and interest in and to all permits, licenses and contracts relating to the Hotel/Casino Facility, except Gaming Permits and those permits, licenses and contracts which are unassignable, and (c) all rents, issues, profits, revenues and income from the Real Property and the Hotel/Casino Facility and any other business activity conducted on the Real Property, together with any and all future expansions thereof, related thereto or used in connection therewith.

"Existing Bank Loan" shall have the meaning ascribed to such term in Recital Paragraph B.

"Existing Bank Loan Security Documents" shall mean collective reference to all pledges, security agreements, mortgages, deeds of trust, financing statements and other documents and instruments securing repayment of the Existing Bank Loan.

"Existing Credit Agreement" shall have the meaning ascribed to such term in Recital Paragraph B.

 

 

"Existing Deed of Trust" shall mean the Deed of Trust, Fixture Filing and Security Agreement with Assignment of Rents executed as of the Closing Date by Borrower in favor of Agent Bank and recorded on February 20, 2004, in the Official Records of Washoe County, Nevada as Document No. 2996368, encumbering the Real Property, the FF&E and other Collateral therein described, for the purpose, among other things, of securing the Existing Bank Loan, as it may be amended, modified, extended, renewed or restated from time to time.

"Existing Lender(s)" shall have the meaning ascribed to such term in Recital Paragraph B.

"Existing Note" shall have the meaning ascribed to such term in Recital Paragraph B.

"Existing Title Insurance Policy" shall mean the ALTA Loan Policy of Title Insurance issued by the Title Insurance Company, as Policy No. G47-2406164, dated as of February 20, 2004, together with the endorsements which were issued concurrently therewith, with such policy and endorsements providing coverage in the aggregate amount of Fifty Million Dollars ($50,000,000.00), insuring the Existing Deed of Trust as a first priority mortgage lien encumbering the Real Property subject only to the exceptions shown therein.

"Existing Trademark Security Agreement" shall mean the Trademark Security Agreement which was executed by Borrower under date of February 20, 2004 for the purpose, among other things, of granting a security interest in favor of Agent Bank in all trademarks, tradenames, copyrights, servicemarks, and interests therein (including, without limitation, licenses) used in connection with the Hotel/Casino Facility, as security for, among other things, Borrower’s payment and performance under the Existing Bank Loan.

"Farahi" shall mean collective reference to John Farahi, Bahram (Bob) Farahi and Behrouz (Ben) Farahi.

"Farahi Family Group" shall mean collective reference to Farahi, Jila Farahi Trust created by agreement dated May 20, 2002, and their respective children, grandchildren, executors, administrators, testamentary trustees, heirs, legatees and beneficiaries.

"Federal Funds Rate" means, as of any date of determination, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Board (including any such successor, "H.15(519)") for such date opposite the caption "Federal Funds (Effective)".  If for any relevant date such rate is not yet published in H.15(519), the rate for such date will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m., New York City Time, Quotations for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any successor, the "Composite 3:30 p.m., New York City Time, Quotation") for such date under the caption "Federal Funds Effective Rate".  If on any relevant date the appropriate rate for such date is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such date will be the arithmetic mean of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that date by each of three leading brokers of Federal funds transactions in New York City selected by the Agent Bank.  For purposes of the Credit Agreement, any change in the Base Rate due to a change in the Federal Funds Rate shall be effective as of the opening of business on the effective date of such change.

 

 

"Fee Side Letter" shall mean the Side Letter of Understanding Regarding Fees to be executed by and between Borrower and Agent Bank on or before the Restatement Effective Date concerning payment of the Agent Fees more particularly therein described.

"FF&E" shall mean collective reference to any and all furnishings, fixtures and equipment, including, without limitation, all Gaming Devices and associated equipment, which have been installed or are to be installed and used in connection with the operation of the Hotel/Casino Facility and in connection with any other business operation conducted on the Real Property and those items of furniture, fixtures and equipment which have been purchased or leased or are hereafter purchased or leased by Borrower in connection with the Hotel/Casino Facility and in connection with any other business operation conducted on the Real Property.

"Financial Covenants" shall mean collective reference to the financial covenants set forth in Article VI of this Credit Agreement.

"Financing Statements" shall mean a collective reference to: (i) the UCC-1 Financing Statement filed in the Official Records of Washoe County, Nevada on February 20, 2004, as Document No. 2996370, for the purpose of perfecting the security interest in applicable collateral which was initially granted by the Existing Deed of Trust, together with the UCC Amendment Statement to be filed substantially concurrent with the Restatement Effective Date; and (ii) the UCC-1 Financing Statement filed in the Office of the Nevada Secretary of State on December 17, 2004 under File No. 2004005323-9, together with the UCC Amendment Statement to be filed substantially concurrent with the Restatement Effective Date; all of which perfect the security interest granted to Agent Bank under the Deed of Trust and other Security Documentation in accordance with requirements of the Nevada Uniform Commercial Code, as such financing statements may be amended, modified, extended, renewed or restated from time to time.

"FIRREA" shall mean the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

"First Amendment to Assignment of Rents" shall mean that certain First Amendment to Assignment of Entitlements, Contracts, Rents and Revenues which is to be executed by Borrower and by Agent Bank, on or before the Restatement Effective Date, and is to be recorded in the Official Records of Washoe County, Nevada, concurrently, or substantially concurrent, with the Restatement Effective Date in order to amend the Existing Assignment of Entitlements, Contracts, Rents and Revenues for the purpose, among other things, of reflecting: (i) Borrower's acquisition of the CC Skybridge Easements; and (ii) the restatement of the Existing Bank Loan and increase in the amount of the Credit Facility as set forth in the Credit Agreement.

 

 

"First Amendment to Deed of Trust" shall mean that certain First Amendment to Deed of Trust, Fixture Filing and Security Agreement with Assignment of Rents and Notice of Additional Commitment which is to be executed by Borrower and by Agent Bank, on or before the Restatement Effective Date, and is to be recorded in the Official Records of Washoe County, Nevada, concurrently, or substantially concurrent, with the Restatement Effective Date in order to amend the Existing Deed of Trust for the purpose, among other things, of causing it to additionally encumber the CC Skybridge Easements and confirming that it secures Borrower’s payment and performance under the Credit Facility.

"First Amendment to Trademark Security Agreement" shall mean the First Amendment to Trademark Security Agreement to be executed by Borrower as of the Restatement Effective Date in order to amend the Existing Trademark Security Agreement for the purpose, among other things, of confirming its security for payment and performance of the Bank Facilities and reflecting the increase in the amount of the Credit Facility as set forth in the Credit Agreement.

"Fiscal Quarter" shall mean the consecutive three (3) month periods during each Fiscal Year beginning on January 1, April 1, July 1 and October 1 and ending on March 31, June 30, September 30 and December 31, respectively.

"Fiscal Year" shall mean the fiscal year period beginning January 1 of each calendar year and ending on the following December 31.

"Fiscal Year End" shall mean December 31 of each calendar year.

"Fixed Charge Coverage Ratio" as of the end of any Fiscal Quarter shall mean with reference to the Borrower:

 

 

"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.

 

 

"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.

"Hedge Termination Value" shall mean, in respect of any one or more Interest Rate Hedges, after taking into account the effect of any legally enforceable netting agreement relating to such Interest Rate Hedges, (a) for any date on or after the date such Interest Rate Hedges have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Interest Rate Hedges, as determined by the Agent Bank based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Interest Rate Hedges which may include any Lender.

 

 

"Hotel/Casino Facility" shall mean collective reference to the Real Property, the improvements located thereon and the hotel and casino business and related activities conducted on the Real Property.

"Hotel/Casino Property" shall mean that certain real property more particularly described on that certain schedule marked "Schedule A", affixed hereto and by this reference incorporated herein and made a part hereof, and the CC Skybridge Peckham Lane Entitlements.

"Indebtedness" of any Person includes all obliga­tions, contingent or otherwise, which in accordance with GAAP should be classified upon such Person's balance sheet as liabilities, but in any event including liabilities for borrowed money or other liabilities secured by any lien existing on property owned or acquired by such Person, or a Subsidiary thereof (whether or not the liability secured thereby shall have been assumed), obligations which have been or under GAAP should be capitalized for financial reporting purposes, the face amount of all Letters of Credit issued for the account of such Person, the Hedge Termination Value (if negative) with respect to all Interest Rate Hedges of such Person and all guaranties, endorse­ments, and other contingent obligations with respect to Indebtedness of others, including, but not limited to, any obligations to acquire any of such Indebtedness, to purchase, sell, or furnish property or services primarily for the purpose of enabling such other Person to make payment of any of such Indebtedness, or otherwise to assure the owner of any of such Indebtedness against loss with respect thereto.

"Intangibles" shall mean the aggregate goodwill, trademarks, patents, organizational expense and other similar intangible items of the Borrower determined in accordance with GAAP.

"Interest Expense" shall mean with respect to any Person, as of the last day of any fiscal period under review, the sum of (i) all interest, fees, charges and related expenses paid or payable (without duplication but including capitalized interest) for that fiscal period by such Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered "interest expense" under GAAP, plus (ii) the portion of the up front costs and expenses for Interest Rate Hedges (to the extent not included in (i)) fairly allocated to such interest rate hedges as expenses for such period, plus (iii) the portions of Capital Lease Liabilities paid or payable with respect to such period that should be treated as interest in accordance with GAAP.

"Interest Period(s)" shall have the meaning set forth in Section 2.05(d) of the Credit Agreement.

"Interest Rate Hedges" shall mean, with respect to any Person, all liabilities of such Person under interest rate swap agreements, interest rate cap agreements, basis swap, forward rate agreement and interest collar or floor agreements and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

 

 

"Interest Rate Option" shall have the meaning ascribed to such term in Section 2.05(b) of the Credit Agreement.

"Investment" shall mean, when used in connection with any Person: (i) any investment by or of that Person, whether by means of purchase or other acquisition of stock or other securities of any other Person or by means of a loan, advance creating a debt, capital contribution, guaranty or other debt or equity participation or interest in any other Person, including any partnership and joint venture interests of such Person, (ii) any Acquisition, and (iii) any other item that is or would be classified as an investment on a balance sheet of such Person prepared in accordance with GAAP, as in effect as of the Restatement Effective Date.  The amount of any Investment shall be the amount actually invested without adjustment for subsequent increases or decreases in the value of such Investment.

"Laws" means, collectively, all international, foreign, federal, state and local statutes, rules, regulations, ordinances, codes and administrative or judicial precedents.

"L/C Agreement(s)" shall mean collective reference to the Application and Agreement for Standby Letter of Credit and Application for Commercial Letter of Credit and addendum(s) thereto executed by an Authorized Officer of Borrower in favor of L/C Issuer in L/C Issuer's standard form, setting forth the terms and conditions upon which L/C Issuer shall issue a Letter(s) of Credit, as the same may be amended or modified from time to time.

"L/C Exposure" shall mean the aggregate amount which L/C Issuer may be required to fund or is contingently liable for disbursement under all issued and outstanding Letter(s) of Credit, which amount shall be determined by subtracting from the aggregate of the Stated Amount of each such Letter(s) of Credit (to the extent such Letter of Credit is not secured by Cash deposited into the Cash Collateral Account and subject to the Cash Collateral Pledge Agreement), the principal amount of all L/C Reimbursement Obligations which have accrued and have been fully satisfied as of each date of determination.

"L/C Facility" shall mean the agreement of L/C Issuer to issue Letters of Credit subject to the terms and conditions and up to the maximum amounts and duration as set forth in Section 2.09 of the Credit Agreement.

"L/C Fee" shall have the meaning set forth in Section 2.10(c) of the Credit Agreement.

"L/C Issuer" shall mean WFB in its capacity as the issuer of Letters of Credit under the L/C Facility.

 

 

"L/C Reimbursement Obligation(s)" shall mean the obligation of Borrower to reimburse L/C Issuer for amounts funded or disbursed under a Letter(s) of Credit, together with accrued interest thereon.

"Lender" shall mean individual reference and "Lenders" shall mean collective reference to WFB and any other bank, finance company, insurance company or other financial institution which is or becomes a party to this Credit Agreement by execution of a counterpart signature page hereto or an Assignment and Assumption Agreement, as assignee.  At all times that there are no Lenders other than WFB, the terms "Lender" and "Lenders" means WFB in its individual capacity.  With respect to matters requiring the consent to or approval of all Lenders at any given time, all then existing Defaulting Lenders will be disregarded and excluded, and, for voting purposes only, "all Lenders" shall be deemed to mean "all Lenders other than Defaulting Lenders".

"Lender Reply Period" shall have the meaning set forth in Section 9.10(d).

"Letter(s) of Credit" shall mean collective reference to the Standby Letter(s) of Credit and/or Commercial Letter(s) of Credit, as the case may be, issued by L/C Issuer on behalf of Borrower, as the same may be extended, renewed or reissued from time to time.

"Liabilities" shall mean the total liabilities of the Borrower in accordance with GAAP.

"Liabilities and Costs" means all claims, judgments, liabilities, obligations, responsibilities, losses, damages (including lost profits), punitive or treble damages, costs, disbursements and expenses (including, without limitation, reasonable attorneys', experts' and consulting fees and costs of investigation and feasibility studies), fines, penalties and monetary sanctions, interest, direct or indirect, absolute or contingent, past, present or future.

"LIBO Rate" means, relative to any LIBOR Loan Interest Period for any LIBOR Loan included in any Borrowing, the per annum rate (reserve adjusted as hereinbelow provided) of interest quoted by Agent Bank, at which Dollar deposits in immediately available funds are offered to Agent Bank by leading banks in the London interbank market at approximately 11:00 a.m. London, England time two (2) Banking Business Days prior to the beginning of such Interest Period, for delivery on the first day of such Interest Period for a period approximately equal to such Interest Period and in an amount equal or comparable to the LIBOR Loan to which such Interest Period relates.  The foregoing rate of interest shall be reserve adjusted by dividing the applicable LIBO Rate by one (1.00) minus the LIBOR Reserve Percentage, with such quotient to be rounded upward to the nearest whole multiple of one-hundredth of one percent (0.01%).  All references in this Credit Agreement or other Loan Documents to a LIBO Rate include the aforesaid reserve adjustment.

 

 

"LIBOR Loan" shall mean each portion of the total unpaid principal under the Credit Facility which bears interest at a rate determined by reference to the LIBO Rate plus the Applicable Margin.

"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBOR Loans made by any Lender, the reserve percentage (expressed as a decimal) equal to the actual aggregate reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transactional adjustments or other scheduled changes in reserve requirements) announced within Agent Bank as the reserve percentage applicable to Agent Bank as specified under regulations issued from time to time by the Federal Reserve Board.  The LIBOR Reserve Percentage shall be based on Regulation D of the Federal Reserve Board or other regulations from time to time in effect concerning reserves for "Eurocurrency Liabilities" from related institutions as though Agent Bank were in a net borrowing position.

"Lien" means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

"Loan Documents" shall mean collective reference to the Credit Agreement, the Revolving Credit Note, the Swingline Note, Notices of Borrowing, Continuation/Conversion Notices, Notices of Swingline Advance, L/C Agreements, the Security Documentation, Cash Collateral Pledge Agreement, the Environmental Certificate and all other documents and instruments which may hereafter be executed and delivered by or on behalf of Borrower or any other Person in connection with the Credit Facility for the benefit of Banks or Agent Bank on behalf of the Lenders, the Swingline Lender and/or the L/C Issuer, as the same may be amended, modified, supplemented, replaced, renewed or restated from time to time.

"Maintenance Capital Expenditures" shall mean collective reference to Capital Expenditures made to or for the benefit of or for use in connection with the Hotel/Casino Facility which are for the purpose of maintaining, repairing and/or replacing existing assets of the Borrower; provided, however, that Maintenance Capital Expenditures shall not include Fourteen Million Two Hundred Seventy-Five Thousand Dollars ($14,275,000.00) in remodel expenses during the 2008 and 2009 Fiscal Years, up to and including the Two Million Five Hundred Thousand Dollars ($2,500,000.00) for demolition of the motor lodge, which may take place in either the 2009 or in the 2010 Fiscal Year as shown on the Schedule of Remodel Projects, Schedule 6.04 affixed hereto.

"Mandatory Commitment Reduction(s)" shall mean a permanent reduction of the Aggregate Commitment which shall be made from time to time as may be required under Sections 5.12, 6.07(h), 6.09(c) and/or 8.02.

 

 

"Margin Stock" shall have the meaning provided in Regulation U of the Board of Governors of the Federal Reserve System.

"Material Adverse Change" shall mean: (i) any set of circumstances of events which, other than with respect to the Representations and Warranties set forth in Article IV of the Credit Agreement which shall be construed to be applicable to circumstances and events existing both as of the Restatement Effective Date (or such earlier date as may be referenced in each particular provision) and subsequent to the Restatement Effective Date, are not in existence as of the Restatement Effective Date, which are material and adverse to (a) the Collateral or (b) the condition (financial or otherwise) or business operations of the Borrower taken as a whole, or (c) the ability of any of the Lenders to enforce any of their material rights or remedies under any of the Loan Documents, or (ii) any events or changes, which, other than with respect to the Representations and Warranties set forth in Article IV of the Credit Agreement which shall be construed to be applicable to events and changes existing both as of the Restatement Effective Date (or such earlier date as may be referenced in each particular provision) and subsequent to the Restatement Effective Date, are not in existence as of the Restatement Effective Date and which have or result in a material adverse effect upon (a) the priority of the security interests granted to Agent Bank, (b) the validity of any of the Loan Documents, which is not promptly cured or corrected to the reasonable satisfaction of Agent Bank, as provided in Section 5.13 or (c) the use, occupancy or operation of the Hotel/Casino Facility taken as a whole, except during periods of repair or replacement as provided under Section 8.02.

"Maturity Date" shall mean January 20, 2012.

"Maximum Availability" shall mean the Aggregate Commitment less the Aggregate Outstandings.

"MCRI" shall mean Monarch Casino & Resort, Inc., a Nevada corporation, without regard to any of its Subsidiaries unless otherwise specifically indicated.

"MCRI Consolidation" shall mean MCRI and its Subsidiaries on a consolidated basis.

"MCRI Corporate Overhead Allocation" shall mean for any fiscal period, all costs and expenses of MCRI or any Affiliate of MCRI which are paid by Borrower or which are paid by Distributions made by Borrower to MCRI or such Affiliate of MCRI.

"Net Income" shall mean with respect to any Person for any fiscal period, the net income of such Person during such fiscal period determined in accordance with GAAP.

"Net Proceeds" shall mean the aggregate Capital Proceeds received by the Borrower in Cash or Cash Equivalent in respect of any partial or total condemnation or destruction of any part of the Collateral or any sale, transfer, conveyance or disposition of FF&E, net of: (i) the direct costs relating to such sale, transfer, conveyance or disposition of FF&E, (ii) amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such sale, transfer, conveyance or disposition of FF&E, and (iii) any reserve for adjustment in respect of the sale price of such FF&E or liabilities associated with such sale, transfer, conveyance or disposition of FF&E and retained by the Borrower.

 

 

"Nevada Gaming Authorities" shall mean, without limitation, the Nevada Gaming Commission and the State Gaming Control Board and any other applicable governmental or administrative state or local agency involved in the regulation of gaming and gaming activities conducted by the Borrower in the State of Nevada.

"Non-Consenting Lender" shall have the meaning ascribed to such term in Section 10.01.

"Non Pro Rata Borrowing" means a Borrowing with respect to which fewer than all Lenders have funded their respective Pro Rata Shares of such Borrowing and the failure of the non-funding Lender or Lenders to fund its or their respective Pro Rata Shares of such Borrowing constitutes a breach of this Credit Agreement.

"Notes" shall mean collective reference to the Revolving Credit Note and the Swingline Note.

"Notice of Borrowing" shall have the meaning set forth in Section 2.03.

"Notice of Swingline Advance" shall have the meaning set forth in Section 2.08(b).

"Obligations" means, from time to time, all Indebtedness of Borrower owing to Agent Bank, any Lender or any Person entitled to indemnification pursuant to Section 5.14, or any of their respective successors, transferees or assigns, of every type and description, whether or not evidenced by any note, guaranty or other instrument, arising under or in connection with this Credit Agreement or any other Loan Document, whether or not for the payment of money, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired.  The term includes, without limitation, all interest, charges, expenses, fees, reasonable attorneys' fees and disbursements, reasonable fees and disbursements of expert witnesses and other consultants, and any other sum now or hereinafter chargeable to Borrower under or in connection with Credit Agreement or any other Loan Document.  Notwithstanding the foregoing definition of "Obligations", Borrower's obligations under any environmental indemnity agreement constituting a Loan Document, or any environmental representation, warranty, covenant, indemnity or similar provision in this Credit Agreement or any other Loan Document, shall be secured by the Collateral only to the extent, if any, specifically provided in the Security Documentation.

 

 

"Participant Cash Collateralization" shall mean to pledge and deposit with or deliver to the Agent Bank Cash or deposit account balances, for the benefit of the L/C Issuer and/or the Swingline Lender, as applicable, as collateral subject to a first priority, perfected security interest securing the obligations of a Deteriorating Lender, in an amount equal to all or a portion of such Deteriorating Lender's Pro Rata Share of risk participation in Swingline Advances or all or a portion of a Deteriorating Lender's Pro Rata Share of L/C Exposure, in each case pursuant to documentation in form and substance satisfactory to the Agent Bank and the L/C Issuer or Swingline Lender, as applicable (which documents are hereby consented to by the Lenders.)

"Pedestrian Crossing" shall mean the elevated pedestrian crossing which is constructed between the Hotel/Casino Property and the V/P Property which includes, among other things, a restaurant, bar, gaming space and other public areas.  

"Pedestrian Crossing Air Space" shall mean that portion of the airspace between the Hotel/Casino Property and the V/P Property within which the Pedestrian Crossing is constructed.

"Pedestrian Crossing Air Space License" shall mean that certain Application and Permit for Occupancy of Nevada Department of Transportation Right of Way, which was issued to Borrower by the State of Nevada Department of Transportation, under Permit Number 2-28-97, for the purpose of authorizing Borrower's construction and use of the Pedestrian Crossing within the Pedestrian Crossing Air Space.

"Pension Plan" means any "employee pension benefit plan" that is subject to Title IV of ERISA and which is maintained for employees of Borrower or any of its ERISA Affiliates.

"Permitted Encumbrances" shall mean, at any particular time, (i) liens for taxes, assessments or governmental charges not then due and payable or not then delinquent, (ii) statutory liens for labor and/or materials and liens for taxes, assessments or governmental charges the validity of which, in either instance, are being contested in good faith by Borrower by appropriate proceedings, and as provided in Sections 5.03 and 5.10 hereof, respectively, provided that, Borrower shall have maintained adequate reserves in accordance with GAAP for payment of same, (iii) liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (iv) leases or subleases granted to others (including, without limitation, any Subsidiary) not interfering in any material respect with the ordinary conduct of the business of the Hotel/Casino Facility; (v) liens created or contemplated by the Security Documents, (vi) the liens, encumbrances and restrictions on the Real Property, FF&E and existing improvements which are shown as exceptions on Schedule B of the Title Policy to be issued by Title Insurance Company as of the Restatement Effective Date, (vii) liens consented to in writing by Agent Bank upon the approval of Requisite Lenders, (viii) liens of legally valid capital leases and purchase money security interests for FF&E to the extent permitted by Section 6.08(c), and (ix) each and every easement, license, restriction or right-of-way that (A) is hereafter granted to any Governmental Authority or public utility providing services to the Real Property or (B) does not interfere in any material respect with the business operation of the Hotel/Casino Facility; and (x) judgment liens, writs, warrants, levies, distraints, attachments and other similar process which do not constitute an Event of Default.

 

 

"Person" means an individual, firm, corporation, limited liability company, trust, association, partnership, joint venture, tribunal or other entity.

"Platform" shall have the meaning ascribed to such term in Section 10.03(a).

"Policies of Insurance" shall mean the insurance to be obtained and maintained by Borrower throughout the term of this Credit Agreement as provided by Section 5.09 herein.

"Prime Rate" means at any time, and from time to time, the rate of interest most recently announced within WFB at its principal office in San Francisco, California, as its "Prime Rate", with the understanding that WFB's "Prime Rate" is one of its base rates and serves as the basis upon which effective rates of interest are calculated for those loans and extensions of credit making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as WFB may designate.  Each change in the Prime Rate shall be effective on the day the change is announced within WFB.

"Principal Prepayments" shall have the meaning set forth in Section 2.07(a) of this Credit Agreement.

"Pro Rata" or "Pro Rata Share" shall mean, with respect to any Lender, a percentage equal to such Lender's Syndication Interest in the Credit Facility as set forth on the Schedule of Lenders' Proportions in Credit Facility.

"Protective Advance" means all sums expended as reasonably determined by Agent Bank to be necessary to: (a) protect the priority, validity and enforceability of the Security Documentation on, and security interests in, any Collateral and the instruments evidencing or securing the Obligations, or (b) prevent the value of any Collateral from being materially diminished (assuming the lack of such a payment within the necessary time frame could potentially cause such Collateral to lose value), or (c) protect any of the Collateral from being materially damaged, impaired, mismanaged or taken, including, without limitation, any amounts expended in accordance with Section 10.20 or post-foreclosure ownership, maintenance, operation or marketing of any Collateral.

"Purchasing Lender" shall have the meaning ascribed to such term in Section 10.01.

 

 

"Qualified Appraisal" shall mean reference to an appraisal or appraisals of the Hotel/Casino Facility and Collateral, or any portion thereof, acceptable to Agent Bank, prepared at Borrower's expense in compliance with FIRREA by an appraiser acceptable to Agent Bank, with sufficient copies delivered to Agent Bank for distribution to each of the Lenders.

"Rate Adjustment Date" shall mean June 1, 2009 and thereafter the first (1st) day of the third (3rd) month immediately following each Fiscal Quarter end.

"Real Property" shall mean collective reference to the Hotel/Casino Property, the Pedestrian Crossing Airspace, the V/P Property and the CC Skybridge Easements; provided, however, that in the event the V/P Property, or any portion thereof, is released as Collateral pursuant to the provisions of Section 5.22 of this Credit Agreement, the term "Real Property" shall thereafter mean only the Hotel/Casino Property, the Pedestrian Crossing Airspace, CC Skybridge Easements and that portion of the V/P Property not released.

"Reduction Date(s)" shall mean, subject to the effect of Section 2.01(e), reference to each date or the dates, as the context may require, upon which the Aggregate Commitment is reduced by a Scheduled Reduction as set forth on the Aggregate Commitment Reduction Schedule.

"Related Entities" shall mean collective reference to all stockholders, Affiliates and Subsidiaries of the Borrower.

"Remodel Projects" shall mean the Remodel Projects shown on the Schedule of Remodel Projects.

"Replacement Note(s)" shall have the meaning set forth in Section 2.05(i) of the Credit Agreement.

"Reportable Event" shall mean any of the events described in Section 4043(b) of ERISA, other than an event for which the thirty (30) day notice requirement is waived by regulations.

"Requisite Lenders" means, as of any date of determination prior to the occurrence of an Event of Default, Lenders holding Syndication Interests equal to or in excess of fifty percent (50.0%) of the Credit Facility; and at all times during which an Event of Default has occurred and remains continuing, Lenders holding a percentage in excess of fifty percent (50.0%) of the Funded Outstandings; provided that , (i) in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded and the Pro Rata Shares of Lenders shall be redetermined, for voting purposes only, to exclude the Pro Rata Shares of such Defaulting Lenders, and (ii) notwithstanding the foregoing, at all times when two or more Lenders are party to this Credit Agreement, the term Requisite Lenders shall in no event mean less than two (2) Lenders.

 

 

"Restatement Effective Date" shall mean the date upon which: (i) each condition precedent required under Article IIIA of this Credit Agreement has been satisfied by Borrower or waived by Agent Bank and (ii) the Security Documentation Amendments have been filed and/or recorded in accordance with and in the manner required by the Closing Instructions, or such other date as to which Agent Bank and Borrower agree in writing.

"Revolving Credit Note" shall mean the Amended and Restated Revolving Credit Note, a copy of which is marked "Exhibit A", affixed hereto and by this reference incorporated herein and made a part hereof, to be executed by Borrower on the Restatement Effective Date, payable to the order of Agent Bank on behalf of the Lenders, evidencing the Credit Facility, as may be amended, modified, extended, renewed, restated or replaced in whole or in part from time to time, including, without limitation, each Replacement Note or Replacement Notes issued to one or more of the Lenders on or after the Restatement Effective Date pursuant to Section 2.05(i) evidencing the respective Syndication Interest of such Lender or Lenders.

"Revolving Credit Period" shall mean the period commencing on the Restatement Effective Date and terminating on the Maturity Date.

"RSCVA" shall mean the Reno Sparks Convention and Visitors Authority, a political subdivision of the County of Washoe, State of Nevada.

"Schedule of Lenders' Proportions in Credit Facility" shall mean the Schedule of Lenders' Proportions in Credit Facility, a copy of which is marked "Schedule 2.01(a)", affixed hereto and by this reference incorporated herein and made a part hereof, setting forth the respective Syndication Interest and maximum amount to be funded under the Credit Facility by each Lender, as the same may be amended, modified or restated from time to time in connection with an Assignment and Assumption Agreement.

"Schedule of Remodel Projects" shall mean the Schedule of Remodel Projects, a copy of which is set forth as Schedule 6.04, affixed hereto and by this reference incorporated herein and made a part hereof, setting forth a line item breakdown and cost estimate for each of the remodel projects components.

"Schedule of Significant Litigation" shall mean the Schedule of Significant Litigation, a copy of which is set forth as Schedule 3.18, affixed hereto and by this reference incorporated herein and made a part hereof, setting forth the information described in Section 3.18 with respect to each Significant Litigation.

"Scheduled Reduction Payment" shall mean for any Fiscal Quarter, the amount, if any, by which the highest amount of Aggregate Outstandings during such Fiscal Quarter exceeds the amount of the Aggregate Commitment as reduced by any Scheduled Reduction required to be made to such Aggregate Commitment at the end of such Fiscal Quarter.

 

 

"Scheduled Reductions" shall mean, subject to the effect of Section 2.01(e), the amount by which the Aggregate Commitment is reduced on each Reduction Date as set forth on the Aggregate Commitment Reduction Schedule.

"Secured Interest Rate Hedge(s)" shall mean any Interest Rate Hedge entered into between Borrower and any Lender, or Affiliate of any Lender, which is secured by the Security Documentation.

"Security Documentation" shall mean collective reference to the Deed of Trust, Assignment of Rents and all other documents, instruments or agreements which are executed or delivered by or on behalf of Borrower and accepted by Agent Bank, on behalf of the Lenders, as security for payment of the Bank Facilities.

"Security Documentation Amendments" shall mean collective reference to the First Amendment to Deed of Trust, the First Amendment to Assignment of Entitlements, Contracts, Rents and Revenues and the First Amendment to Trademark Security Agreement.

"Share Repurchases" shall mean the purchase of shares of any class of stock, option, right or other equity interest, whether voting or non-voting of MCRI by MCRI.

"Significant Litigation" shall mean each action, suit, proceeding, litigation and controversy involving Borrower involving claims in excess of Two Million Dollars ($2,000,000.00) or which if determined adverse to the interests of Borrower could result in a Material Adverse Change.

"Spaceleases" shall mean the executed leases and concession agreements pertaining to the Hotel/Casino Facility, or any portion thereof, wherein Borrower is the lessor, as set forth on that certain schedule marked "Schedule 4.15", affixed hereto and by this reference incorporated herein and made a part hereof.

"Standby Letter(s) of Credit" shall mean a letter or letters of credit issued by L/C Issuer pursuant to Section 2.09 of the Credit Agreement for the purpose of securing payment or performance of a financial obligation of Borrower, other than in connection with the payment for goods, equipment or materials.

"Stated Amount" shall mean the maximum amount which L/C Issuer may be required to disburse to the beneficiary(ies) of a Letter(s) of Credit under the terms thereof.

"Stated Expiry Date(s)" shall mean the date set forth on the face of a Letter(s) of Credit as the date when all obligations of L/C Issuer to advance funds thereunder will terminate, as the same may be extended from time to time.

 

 

"Subsidiary" shall mean, on the date in question, any Person of which an aggregate of 50% or more of the stock of any class or classes (or equivalent interests) is owned of record or beneficially, directly or indirectly, by another Person and/or any of its Subsidiaries, if the holders of the stock of such class or classes (or equivalent interests) (a) are ordinarily, in the absence of contin­gencies, entitled to vote for the election of a majority of the directors (or individuals performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency, or (b) are entitled, as such holders, to vote for the election of a majority of the directors (or individuals performing similar functions) of such Person, whether or not the right so to vote exists by reason of the happening of a contingency.

"Swingline Advance" shall mean each advance made by Swingline Lender to Borrower under the Swingline Facility.

"Swingline Facility" shall mean the agreement of Swingline Lender to make Swingline Advances to Borrower subject to the terms and conditions and up to the maximum amounts and for the duration as set forth in Section 2.08 of this Credit Agreement.

"Swingline Lender" shall have the meaning set forth in the Preamble of this Credit Agreement.

"Swingline Note" shall mean the Swingline Note, a copy of which is marked "Exhibit B", affixed hereto and by this reference incorporated herein and made a part hereof, to be executed by Borrower on the Restatement Effective Date, payable to the order of Swingline Lender evidencing the Swingline Facility.

"Swingline Outstandings" shall mean the aggregate amount of all outstanding and unpaid Swingline Advances as of each date of determination.

"Swingline Settlement Date" shall mean the second (2 ^nd ) Thursday following each Swingline Advance, or if such date is not a Banking Business Day, the next occurring Banking Business Day.

"Syndication Interest" shall mean the proportionate interest of each Lender in the Aggregate Commitment as set forth on the Schedule of Lenders' Proportions in Credit Facility, as the same may be amended or restated from time to time.

"Tangible Net Worth" shall mean Assets, excluding Intangibles, less Liabilities.

"Title Endorsements" shall mean collective reference to the following endorsements, which shall be issued to the Existing Title Insurance Policy by the Title Insurance Company, as of the Restatement Effective Date, in accordance with the Closing Instructions: (i) Modification and Additional Advance Endorsement (Commonwealth Special 254) increasing coverage under the Existing Title Insurance Policy to Sixty Million Dollars ($60,000,000.00) and providing assurances that, among other things, the Existing Deed of Trust has been validly amended by the First Amendment to Deed of Trust; and (ii) such other endorsements as may be requested by Agent Bank; all of which shall be in a form and substance acceptable to Agent Bank.

 

 

"Title Insurance Company" shall mean Lawyers Title Insurance Company, and its issuing agent, Western Title Company, Inc., with offices located at 241 Ridge Street, Reno, Nevada, together with such reinsurers with direct access as are requested by Agent Bank or other title insurance company or companies as may be acceptable to Agent Bank.

"Total Funded Debt" shall mean with reference to the Borrower for any period the Aggregate Outstandings as of the last day of the period under review, plus the total as of the last day of such period of both the long-term and current portions (without duplication) of all other interest bearing Indebtedness, Contingent Liabilities and Capitalized Lease Liabilities.

"Total Leverage Ratio" as of the end of any Fiscal Quarter shall mean the ratio resulting by dividing (a) Total Funded Debt as of the end of the Fiscal Quarter under review by (b) the sum of Adjusted EBITDA for the Fiscal Quarter under review plus Adjusted EBITDA for each of the most recently ended three (3) preceding Fiscal Quarters.

"Trademark Security Agreement" shall mean collective reference to the Existing Trademark Security Agreement as amended by the First Amendment to Trademark Security Agreement, as it may be further amended, modified, extended, renewed or restated from time to time.

"UCC Amendment Statements" shall mean UCC Financing Statement Amendment forms to be filed in the office of the Nevada Secretary of State and in the office of the Washoe County Recorder for the purpose of causing Exhibit B to each of the Financing Statements to additionally include the air space and real property within, and upon, which the CC Skybridge is situate.

"Unsuitable Lender" shall have the meaning set forth in Section 10.10(d).

"Village Shopping Center" shall mean the shopping center known as "The Village" and formerly known as the Sierra Marketplace Shopping Center, located at the southeast corner of Virginia Street and Moana Lane, Reno, Nevada, that is owned by BLILP, a portion of which is the subject of the Adjacent Driveway Lease.

"Voluntary Permanent Reduction" shall have the meaning set forth in Section 2.01(c).

"V/P Property" shall mean the real property more particularly described on that certain schedule marked "Schedule B", affixed hereto and by this reference incorporated herein and made a part hereof.

 

 

"WFB" shall mean Wells Fargo Bank, National Association.

 

 

2.

AMOUNT, TERMS AND SECURITY OF THE BANK FACILITIES