PARTICIPATION AGREEMENT
dated as of May 10, 1996
among
BL DEVELOPMENT CORP.,
as Lessee and Construction Agent,
GRAND CASINOS, INC.
AND ITS SUBSIDIARIES LISTED ON SCHEDULE I,
as Guarantors,
HANCOCK BANK,
not in its individual capacity except as
expressly stated herein, but solely
as Lessor, Borrower and Trustee
THE PERSONS LISTED ON SCHEDULE II,
as Lenders,
BANK OF SCOTLAND,
FIRST INTERSTATE BANK OF NEVADA, and
SOCIETE GENERALE,
as Co-Agents,
CREDIT LYONNAIS, LOS ANGELES BRANCH,
as Lead Manager
and
BA LEASING & CAPITAL CORPORATION,
as Arranger and Agent
---------------------------------------------
Construction and Acquisition Financing
For a Hotel and Equipment Associated with
Grand Casino Tunica in Tunica County, Mississippi
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS
ARTICLE II
EFFECTIVENESS; ACQUISITION AND LEASE; GENERAL PROVISIONS
2.1. Effectiveness of Agreement.................................... 2
2.2. Advances...................................................... 5
2.3. Notes......................................................... 8
2.4. Procedures for Advances; Use of Proceeds...................... 8
2.5. Postponement of Advance.......................................10
2.6. The Account...................................................10
2.7. Obligations Several...........................................11
2.8. Timing of Advances to the Trustee and Payments to
the Lenders...............................................11
2.9. Lenders' Instructions to Agent................................12
2.10. Computations..................................................12
2.11. Commitment Fee................................................13
2.12. Fees..........................................................13
2.13. Legal and Tax Representation..................................13
2.14. Replacement of Equipment......................................13
ARTICLE III
CONDITIONS TO
ADVANCES AND COMPLETION
3.1. Initial Advance Date..........................................14
3.2. Conditions Precedent to All Advances..........................15
3.3. Conditions to the Initial Advance for Hotel Costs.............17
3.4. Conditions to all Advances for Hotel Costs....................21
3.5. Deliveries with Respect to the Advances for Hotel
Costs After a Default.....................................22
3.6. Conditions to Advances for Equipment Costs....................24
3.7. Conditions to Completion Date of Hotel........................26
3.8. Amortization Schedule.........................................27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of Lessee,
Construction Agent and Guarantors.........................28
4.2. Representations and Warranties of Each Lender.................38
4.3. Representations and Warranties of the Trustee.................40
4.4. Representations and Warranties of the Agent...................42
ARTICLE V
COVENANTS OF LESSEE, CONSTRUCTION AGENT AND PARENT
5.1. Further Assurances............................................43
5.2. Consolidation, Merger, Sale, etc..............................44
5.3. Corporate Existence...........................................47
5.4. Ownership of Lessee...........................................47
5.5. Liens.........................................................48
5.6. Financial Covenant Compliance Certificates....................48
5.7. Investigation by Governmental Authorities.....................49
5.8. Books and Records.............................................50
5.9. Payment of Taxes, Etc.........................................50
5.10. Inspection....................................................50
5.11. Maintenance of Property, etc..................................51
5.12. Maintenance of Insurance......................................51
5.13. Change of Name or Principal Place of Business.................51
5.14. Financial and Other Information...............................51
5.15. Securities....................................................54
5.16. Financial Covenants...........................................54
5.17. Ship Mortgage.................................................55
5.18. Searches and Estoppel Certificates............................56
5.19. Amendment of Levee Board Lease................................56
5.20. Changes to Contracts for a System.............................56
5.21. Compliance with Laws..........................................57
5.22. No Vessel Redocumentation.....................................57
ARTICLE VI
COVENANTS OF TRUSTEE, AGENTS AND LENDERS
6.1. Covenants of Trustee, Agents and the Lenders..................57
6.2. Restrictions On and Effect of Transfer........................60
6.3. Participations................................................62
6.4. Required Transfers............................................63
ARTICLE VII
GENERAL INDEMNITY
7.1. General Indemnification.......................................64
7.2. Environmental Indemnity.......................................67
ARTICLE VIII
GENERAL TAX INDEMNITY
8.1. General Tax Indemnity.........................................69
8.2. Exclusions from General Tax Indemnity.........................70
8.3. Contests......................................................71
8.4. Payments......................................................73
8.5. Reports.......................................................73
8.6. Withholding Tax Exemption.....................................74
ARTICLE IX
MISCELLANEOUS
9.1. Survival of Agreements........................................74
9.2. No Broker, etc................................................74
9.3. Notices.......................................................75
9.4. Counterparts..................................................75
9.5. Amendments....................................................75
9.6. Headings, etc.................................................76
9.7. Governing Law.................................................76
9.8. Transaction Costs.............................................76
9.9. Severability..................................................77
9.10. Successors and Assigns........................................77
9.11. Final Agreement...............................................77
9.12. No Third-Party Beneficiaries..................................77
9.13. Release of Lien; Termination of Ground Lease..................78
9.14. Reproduction of Documents.....................................80
9.15. Submission to Jurisdiction....................................80
9.16. Jury Trial....................................................81
9.17. Payments Set Aside............................................81
9.18. Trust Agreement...............................................81
9.19. Consent to Conflict of Interest...............................81
Schedule I -- List of Subsidiary Guarantors
Schedule II -- Lender Commitments
Schedule III -- Notice Information, Funding Offices and Wire
Instructions
Schedule IV -- Recordings, Filings and Registrations
Schedule V -- Required Licenses
Schedule VI -- Amortization Schedule
Schedule VII -- Description of Gaming and Non-Gaming
Equipment
Schedule VIII -- Disclosure Schedule
Schedule IX -- Description of Land
Appendix 1 -- Definitions
Exhibit A -- Form of Lease
Exhibit B -- Form of Loan Agreement
Exhibit C -- Form of Trust Agreement
Exhibit D -- Form of Security Agreement
Exhibit E -- Form of Construction Agency Agreement
Exhibit F -- Form of Guaranty
Exhibit G-1-A -- Form of Deed of Trust (Resort Hotel)
Exhibit G-1-B -- Form of Deed of Trust
(Equipment on Casino Barges)
Exhibit G-2 -- Form of Ship Mortgage
Exhibit G-3 -- Form of Ground Lease
Exhibit H -- Form of Landlord's Waiver and Consent
Exhibit I -- Form of Advance Request
Exhibit J -- Form of Bill of Sale
Exhibit K -- Form of Certificate of Acceptance
Exhibit L -- Form of Investor's Letter
Exhibit M -- Form of Purchase Order Assignment
Exhibit N-1 -- Form of Opinion of Counsel to Lessee,
Construction Agent and Guarantors
Exhibit N-2 -- Form of Opinion of Mississippi Counsel to
Lessee
Exhibit N-3 -- Form of Opinion of Maritime Counsel to Lessee
Exhibit N-4 -- Form of Opinion of Special New York Counsel
to Agent
Exhibit N-5 -- Form of Opinion of Maritime Counsel to Agent
Exhibit O -- Form of Architect's Certificate
Exhibit P -- Form of Prime Contractor's Certificate
Exhibit Q -- Form of Financial Covenant Compliance
Certificate
Exhibit R -- Form of Pricing Ratio Certificate
Exhibit S -- Form of Intercreditor Agreement
Exhibit T -- Form of Improvements Deed
Exhibit U -- Form of Officer's Certificate of Parent
Exhibit V -- Form of Construction Certificate
Exhibit W -- Form of Master Vessel Trust Agreement
Exhibit X -- Form of Officer's Certificate of Lessee
PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT (this "Agreement"), dated as of May 10,
1996, is entered into by and among BL DEVELOPMENT CORP., a Minnesota
corporation, as Lessee and Construction Agent; GRAND CASINOS, INC., a Minnesota
corporation, and each of its Subsidiaries listed on Schedule I hereto, as
Guarantors; HANCOCK BANK, not in its individual capacity, except as expressly
stated herein, but solely as Lessor, Borrower and Trustee; the persons listed on
Schedule II hereto, as Lenders; BANK OF SCOTLAND, FIRST INTERSTATE BANK OF
NEVADA, and SOCIETE GENERALE, as Co-Agents; CREDIT LYONNAIS, LOS ANGELES BRANCH,
as Lead Manager and BA LEASING & CAPITAL CORPORATION, a California corporation,
as Arranger and Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Lease, Lessor will lease to
Lessee, and the Lessee will lease from Lessor, the Leased Property; and
WHEREAS, pursuant to the Trust Agreement, Lessee will apply Advances
from the Trust to finance the construction of the Hotel and the acquisition of
the Equipment subject to the terms of the Lease; and
WHEREAS, the Lenders are willing, on the terms and conditions
hereinafter set forth (including Article III), to provide financing to Lessor in
an aggregate principal amount not to exceed the Commitment Amount to fund
payment of Hotel Costs and Equipment Costs; and
WHEREAS, to secure such financing by the Lenders, Agent, on behalf of
the Lenders, will have the benefit of a Lien from Lessor on all of Lessor's
right, title and interest in and to the Leased Property and other Collateral and
an assignment of Lessor's rights in the Operative Documents; and
WHEREAS, Lessee's obligations under the Operative Documents
will be guaranteed pursuant to the terms of the Guaranty;
NOW, THEREFORE, in consideration of the mutual terms and conditions
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Unless the context shall otherwise require, capitalized terms used but
not defined herein (including those used in the foregoing recitals) shall have
the meanings specified in Appendix 1 hereto for all purposes hereof; and the
rules of interpretation set forth in Appendix 1 hereto shall apply to this
Agreement.
ARTICLE II
EFFECTIVENESS; ACQUISITION AND LEASE; GENERAL PROVISIONS
SECTION 2.1. Effectiveness of Agreement. This Agreement shall become
effective upon the occurrence of each of the following conditions (the "Closing
Date"):
(a) Authorization, Execution and Delivery of the Operative
Documents. Subject to the requirements of Section 5.17, each of the
Operative Documents shall have been duly authorized, executed and
delivered by each of the parties thereto, and shall be in full force
and effect. No Default or Event of Default shall exist under any of the
Operative Documents to which Lessee is a party (either before or after
giving effect to the transactions contemplated by the Operative
Documents).
(b) Articles of Incorporation, Bylaws, Corporate
Resolutions and Certificates of Good Standing. Agent shall
have received from each of Lessee and each Guarantor:
(i) certificates of existence and good standing
issued by the Secretary of State of the State of Minnesota
with respect to Lessee and the Secretary of State of the state
of its incorporation with respect to each Guarantor,
respectively, each dated within thirty Business Days of the
Closing Date;
(ii) copies of the respective articles of incorporation
and by-laws certified to be true and correct by a Responsible
Officer of Lessee and each Guarantor, respectively; and
(iii) certificates of a Responsible Officer of
each of Lessee and each Guarantor certifying as to (A)
the resolutions of the Board of Directors duly authorizing the
execution, delivery and performance by Lessee and each
Guarantor, respectively, of each Operative Document to which
they are or will be a party, (B) the incumbency and signature
of Persons authorized to execute and deliver such documents
and agreements on behalf of Lessee and Guarantor, respectively
and (C) the accuracy of all representations and warranties and
absence of Defaults.
(c) No Material Adverse Effect. Since December 31,
1995, there shall not have occurred any Material Adverse
Effect.
(d) Opinions of Counsel. Agents, Trustee and each Lender shall
have received the legal opinions set forth below, each dated as of
Closing Date and addressed to Agents, Trustee and each Lender:
(i) from Maslon Edelman Borman Brand PLLP, counsel to
Lessee, Construction Agent and Guarantors, as to the matters
set forth in the form of Exhibit N-1;
(ii) from Watkins Ludlam & Stennis, P.A., Mississippi
counsel to Lessee, as to the matters set forth in the form of
Exhibit N-2;
(iii) from Mayer, Brown & Platt, special New York
counsel to Agent, as to the matters set forth in the form of
Exhibit N-4; and
(iv) from Haight, Gardner, Poor & Havens, maritime
counsel to Lenders, as to the matters set forth in the form of
Exhibit N-5.
(e) Environmental Report. Agent shall have received (with
copies for Trustee and each Lender) and the Lenders shall have approved
(i) the existing studies, reports, surveys and analyses in the
possession of Lessee with respect to environmental matters relating to
the Property and (ii) except as otherwise described on the Disclosure
Schedule, the existing Environmental Assessment for the Resort,
prepared and certified by the Environmental Engineer, in form and
substance satisfactory to the Lenders, certifying that no toxic or
hazardous substance, waste, pollutant or contaminant (as those terms
are defined or described in federal or Mississippi state laws) are
presently stored or contained on, in or under any portion of
the Property in violation of Environmental Laws. Together with delivery
of such reports, Agent shall have also received a letter from the
Environmental Engineer indicating that Agent, Trustee and the Lenders
may rely on such report.
(f) Financial Statements. Agent shall have received (with
copies for Trustee and each Lender) copies of the audited consolidated
financial statements of the Parent and its Consolidated Subsidiaries
for the last Fiscal Year ended December 31, 1995, together with a
statement or certificate from the controller, treasurer or chief
financial officer of the Parent to the effect that (i) such financial
statements are true, complete and correct, (ii) the financial condition
of the Parent and its Consolidated Subsidiaries has not materially
adversely changed since the date of such financial statements and (iii)
no other event affecting the Parent and its Consolidated Subsidiaries
shall have occurred since the date of such financial statements which
could reasonably be expected to have a Material Adverse Effect.
(g) Indenture. Agent shall have received (with copies for
Trustee and each Lender) a true and correct copy of (i) the Indenture,
(ii) the Notes Completion Guaranty and (iii) the Standby Equity
Commitment Agreement, together with all exhibits and schedules and all
amendments and modifications to each of the foregoing documents.
(h) Levee Board Lease. Agent shall have received (with copies
for Trustee and each Lender) a true and correct copy of the Levee Board
Lease (with all exhibits and schedules thereto) and of all amendments
and modifications thereto.
(i) Purchase Order Assignment. Agent shall have
received (with copies for Trustee and each Lender) a
Purchase Order Assignment, fully executed by Lessee and
Lessor.
(j) Recordation. Agent shall have received evidence
satisfactory to the Lenders that each of the Deeds of Trust on the
Trustee's leasehold estate in the Hotel Site and on the Casino Barges
in respect of the Equipment, the Ground Lease or a memorandum thereof
and the Lease or a memorandum thereof shall have been or are being
recorded with the appropriate Governmental Authorities, and the UCC
Financing Statements with respect to the Collateral shall have been or
are being filed with the appropriate Governmental Authorities.
(k) Recognition of Assignment. Agent shall have received
executed written instruments satisfactory to Agent, Trustee and the
Lenders pursuant to which each of the Architect and the Prime
Contractor shall have agreed to perform its obligations under the
Construction Documents to which it is a party for the benefit of
Trustee and the Lenders, when and if the Trustee and the Lenders shall
exercise their rights under the Construction Documents Assignment.
(l) Payment of Fees. Trustee and each Lender shall have
received payment of all fees (including the Trustee's acceptance fee
set forth in a letter agreement between the Bank and Lessee, dated May
10, 1996) which are due and payable on the Closing Date pursuant to
this Agreement, the Arranger Fee Letter and the Co-Agents Fee Letter.
Arranger shall have received payment of the Arrangement Fee. Arranger
shall have received, for the account of each Co- Agent, payment of the
Co-Agents Fee. Lessee shall pay all Transaction Costs for which payment
has been requested as evidenced by an invoice or other acceptable
documentation.
SECTION 2.2. Advances.
(a) Subject to the terms and conditions hereinafter
set forth, and in reliance on the representations and
warranties contained herein or made pursuant hereto, upon
receipt of an Advance Request, on the Advance Date specified
therein, each Lender shall finance a portion of the
applicable Advance by making a Loan to the Trustee (in
accordance with the Trustee's payment instructions set forth
on Schedule III) in an amount in immediately available funds
equal to such Lender's Commitment Percentage of the aggregate
amount of the Advance being funded on such Advance Date.
Notwithstanding any other provision hereof, no Lender shall
be permitted or required to fund any Loan to the extent that,
after giving effect thereto, the aggregate amount advanced
would exceed such Lender's Commitment, or the aggregate
original principal amount of all Loans made since the Closing
Date would exceed the Commitment Amount. No amounts paid or
prepaid with respect to the Loans may be readvanced.
(b) Subject to Section 2.2(a), the aggregate amount
disbursed by the Lenders through the Trustee hereunder and
under the Loan Agreement with respect to each of the
categories of Leased Property described below shall not be
more than and not less than the amounts set forth opposite
such category below:
Maximum Minimum
Category Amount Amount
Gaming Equipment $25,000,000 $20,000,000
Non-Gaming Equipment $80,000,000 $70,000,000
The aggregate amount disbursed with respect to the Hotel Costs shall
not exceed the lesser of (i) the Fair Market Sales Value of the Hotel
as determined by the Appraisal delivered pursuant to Section 3.3(i) and
(ii) $30,000,000.
(c) Failure of Lender to Fund. If Agent determines that any
Lender (a "Defaulting Lender") will not make available the amount (the
"Defaulted Amount") which would constitute its portion of the Advance
specified in an Advance Request, Agent shall promptly notify each other
Lender (each, a "Non-Defaulting Lender") and specify the additional
amounts required to be funded by each Non-Defaulting Lender. Each
Non-Defaulting Lender, as soon as practical after receipt of notice but
not before the Advance Date, shall transfer to Bank, in immediately
available funds, its pro rata share of the Defaulted Amount, determined
in the same proportion that such Non-Defaulting Lender's Commitment
bears to the aggregate Commitments of all Non-Defaulting Lenders;
provided that such amount, together with all amounts previously funded
by each Non-Defaulting Lender, shall not exceed the Non-Defaulting
Lender's Commitment and provided further that if and to the extent that
the Defaulted Amount is not funded by the Non-Defaulting Lenders, Agent
shall reduce the amount of the Advance Request so that the total
Advance specified in the Advance Request equals the aggregate revised
fundings for the Advance Date.
If the Defaulted Amount cannot be fully funded by the
Non-Defaulting Lenders, Agent shall so notify the Non-Defaulting
Lenders and give to all Non-Defaulting Lenders the opportunity to
increase their respective Commitments by notice in writing to Agent;
provided that should the aggregate proposed increased Commitments by
one or more Non-Defaulting Lenders exceed the Defaulted Amount, Agent
shall increase the Commitments of the participating Non-Defaulting
Lenders on a pro-rata basis in accordance with the respective amounts
by which such Non-Defaulting Lenders have offered to participate, it
being understood that in no event shall the aggregate amount funded by
any Lender exceed the amount of such Lender's Commitment, after giving
effect to any increase in such Commitment pursuant to this sentence.
In the event of any funding of all or a portion of the Defaulted Amount
by the Non-Defaulting Lenders, the following rules shall apply notwithstanding
any other provision in any Operative Document:
(i) The Commitment of the Defaulting Lender shall be
decreased in an amount equal to the total aggregate
increase, if any, in the Commitments of the
Non-Defaulting Lenders pursuant to this Section
2.2(c) and the Commitment Percentages of the
Lenders shall be revised accordingly;
(ii) A Defaulting Lender shall be obligated to fund
any Advances occurring after its default based
upon its revised Commitment Percentage, if the
Commitment Percentages are revised in accordance
with the immediately preceding clause (i); and
to the extent that the Commitment Percentage of
any Defaulting Lender shall not be so revised,
Agent may thereafter call upon such Defaulting
Lender to fund a share of one or more future
Advances in an amount greater than such
Defaulting Lender's Commitment Percentage so
that the aggregate amount disbursed by such
Defaulting Lender shall equal (after giving
effect to such Advance or Advances) its
Commitment Percentage of the aggregate amount of
all Advances then and theretofore made by all
Lenders;
(iii) A Defaulting Lender shall not have the right to
fund its Defaulted Amount without the written
consent of the Agents and Lessee and then only to
the extent such Defaulted Amount has not been
funded by the Non-Defaulting Lenders in a manner
that resulted in a decrease in the Defaulting
Lender's Commitment Percentage; and
(iv) The Defaulting Lender shall not be responsible for
any incidental or consequential damages suffered by
Lessee or any of Lessee's Affiliates as a result of
its failure to so fund.
(d) Continuation Notice. Upon a timely request of any Lender,
Trustee shall deliver to the Agents and the Lender making such request,
not more than five and not less than three Business Days prior to the
commencement of each Interest Period an irrevocable written notice
confirming that all Loans outstanding at such time (subject to
prepayment or partial prepayment as provided in the Operative
Documents) shall be continued as LIBO Rate Loans (subject to such rate
changing to the Alternate Base Rate as provided in the Operative
Documents) at the Interest Rate to be determined by the Agent two
Business Days prior to the commencement of the Interest Period.
SECTION 2.3. Notes. Each amount made available by a Lender pursuant to
Section 2.2 shall be evidenced by one or more Notes issued by the Trustee
payable to the order of such Lender in a maximum principal amount equal to such
Lender's Commitment and shall be repayable in accordance with the terms of the
Loan Agreement.
SECTION 2.4. Procedures for Advances; Use of Proceeds.
(a) Request. With respect to each funding of an Advance,
Lessee shall deliver to Trustee, Agent and the Lenders, not later than
12:00 noon, Gulfport, Mississippi time, three Business Days prior to
the proposed Advance Date, an irrevocable written notice substantially
in the form of Exhibit I (an "Advance Request"), specifying (i) the
proposed Advance Date, (ii) the amount of the Advance requested, which
shall be made in an amount not less than $5,000,000, or in the unused
amount of the applicable Commitments, (iii) the portion of such Advance
to be applied to pay to Persons unaffiliated with Lessee for Hotel
Costs and Equipment Costs, including any payments applied towards the
purchase price or invoice cost of Systems or other items of Equipment
described on Schedule VII hereto, in each case in sufficient detail to
identify the types of Hotel Costs, items of Equipment or Systems that
are being funded with the proceeds of the Advance, as the case may be,
and (iv) the portion of such Advance to be applied to reimburse Lessee
or an Affiliate of Lessee for Hotel Costs and Equipment Costs,
including progress payments made by such Person on account of Systems
or other items of Equipment described on Schedule VII hereto, in each
case in sufficient detail to identify the types of Hotel Costs
previously paid or the items of Equipment or Systems for which payments
have been made.
(b) Funding. All amounts to be paid by the Lenders pursuant to
Section 2.2 shall be paid to the Bank. Upon satisfaction or waiver of
each of the applicable conditions set forth in Sections 3.1, 3.2, 3.3,
3.4, 3.5 or 3.6, as applicable, the Bank shall make such funds
available to the Trustee. On the scheduled Advance Date, upon (i)
receipt by Trustee of all amounts to be paid by the Lenders pursuant to
Section 2.2 and (ii) satisfaction or waiver of each of the applicable
conditions set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5 or 3.6, as
applicable, (A) Lessor shall purchase, and Lessee, Construction Agent
or a vendor shall deliver a bill of sale or deed, as applicable,
conveying to Lessor, as collateral security, all of such Person's
right, title and interest in the Leased Property described in the
Advance Request, and (B) in consideration therefor, Trustee shall
deposit, from funds made available by the Lenders pursuant to Section
2.2 and the Loan Agreement, the amount specified in the Advance Request
in immediately available funds remitted by wire transfer to the
Account. Deposits in the Account representing proceeds from Advances
shall be disbursed in accordance with Section 2.6.
(c) Number and Dates of Advances. During the Construction
Period, there may not be more than one Advance in any calendar month.
No Advances shall be made after March 31, 1997.
(d) Termination of Commitments. Notwithstanding anything in
this Agreement or any other Operative Document to the contrary, no
party hereto shall be obligated to make any Advances after 12:00 noon,
Gulfport, Mississippi time, on the Commitment Termination Date, or such
earlier date as the Commitments are terminated, and no Advance Date may
occur following such dates or when the Commitments are suspended.
(e) Use of Proceeds. All Advances shall be used
solely for the purpose of funding Equipment Costs and Hotel
Costs.
(f) Interest Rate. Each determination of an Interest
Rate pursuant to any provision of the Loan Agreement shall
be conclusive and binding on the Trustee, the Lessee and the
Lenders in the absence of manifest error.
SECTION 2.5. Postponement of Advance. If the Lenders make a Loan
requested pursuant to an Advance Request and the conditions precedent to such
Advance have not been satisfied on the date specified in the Advance Request,
the Lessee shall pay to the Bank, for the benefit of each Lender, interest on
the amount funded by each Lender at a rate equal to the Assumed Rate for the
period from the date of each such Advance to the date such Advance is returned
to such Lender or such Advance Date shall have occurred, less any interest
earned by the Bank on behalf of the Lenders by investing such funded amounts.
Bank (or its assignee) shall not be required to invest such funds in
interest-bearing investments, but Bank (or its assignee) shall upon direction of
Lessee (or, if an Event of Default exists, the Required Lenders) invest such
funds in Cash Equivalents to the extent it is practicably able to do so. Such
interest shall be due and payable by the Lessee upon the occurrence of such
Advance Date or upon return of such funds to the Lenders. Such payment of
interest shall be an additional condition precedent to such Advance Date. If any
Advance Date shall not have occurred by the third Business Day following the
proposed Advance Date in respect thereof, then all such interest shall be due
and payable on such date, and the Bank shall refund to each Lender all amounts
funded by such Lender and all accrued interest allocable to such Lender. No
additional Advance Request shall be required if an Advance Date is postponed and
thereafter consummated.
SECTION 2.6. The Account. Trustee shall establish and maintain (or
cause to be established and maintained) with Trustee a deposit account (the
"Account") in its name in favor of Agent into which (i) proceeds of Loans on
each Advance Date shall be remitted upon satisfaction of the applicable
provisions of Section 3.1, 3.2, 3.3, 3.4, 3.5 or 3.6 and (ii) amounts expressly
required to be deposited by any Operative Document shall be remitted. Lessee is
hereby granted a power of attorney to make withdrawals from the Account, so long
as on any date of withdrawal no Default or Event of Default exists. Lessee shall
apply any monies withdrawn from the Account in accordance with any Advance
Request previously delivered (in the case of monies deposited pursuant to clause
(i) above) and in all events in accordance with the Operative Documents. The
power of attorney granted in the preceding sentence shall be automatically
revoked at any time when a Default or Event of Default exists and shall be
automatically reinstated when any such Default or Event of Default is cured or
waived by the Required Lenders. Trustee shall not allow the Lessee to make
withdrawals from the Account at any time after it is notified a Default or Event
of Default exists, either by the Lessee or any Lender, unless and until any such
Default or Event of Default is cured or waived pursuant to Section 6.2 of the
Loan Agreement and Section 10.2 of the Lease.
SECTION 2.7. Obligations Several. The obligations of the Lenders hereto
or elsewhere in the Operative Documents shall be several and not joint; and,
except with respect to Lessee and Guarantors in connection with the Guaranty and
the other Operative Documents, no party shall be liable or responsible for the
acts or defaults of any other party hereunder or under any other Operative
Document.
SECTION 2.8. Timing of Advances to the Trustee and Payments
to the Lenders.
(a) Timing of Advances to Trustee. Any Advance Request
delivered by the Lessee to the Trustee, Agent and the Lenders later
than 12:00 noon, Gulfport, Mississippi time, on any day shall be deemed
to have been delivered on the next Business Day. Subject to timely
delivery of an Advance Request pursuant to Section 2.4(a) and the other
terms and conditions of the Operative Documents, each Lender shall make
its Commitment Percentage of the requested Advance available to the
Bank by 1:00 p.m., Gulfport, Mississippi time, on the requested Advance
Date, and the Bank will deposit any such amounts so received into the
Account as soon after receipt as practicable, but not later than 3:00
p.m., Gulfport, Mississippi time, on such Advance Date.
(b) Payments to Lenders. So long as there are obligations
outstanding under the Operative Documents, Trustee has assigned all
payments of Rent to the Agent pursuant to Section 2.1 of the Security
Agreement, and Agent has appointed the Bank as its agent to receive
such payments of Rent under Section 7.12 of the Loan Agreement. Any
payments received by the Agent (or the Bank as agent to the Agent) from
or on behalf of the Lessee or Trustee not later than 11:00 a.m.,
Gulfport, Mississippi time, shall be paid by the Agent (or the Bank) to
the Lenders in immediately available funds no later than 2:00 p.m.,
Gulfport, Mississippi time, on the same day, and any payments received
by the Agent (or the Bank) from or on behalf of the Lessee or Trustee
or the Construction Agent after 11:00 a.m., Gulfport, Mississippi time,
shall be paid by the Agent or the Bank to the Lenders as soon after
receipt as practicable, but not later than 11:00 a.m., Gulfport,
Mississippi time, on the next succeeding Business Day. Rent and all
other payments due to Trustee, Agent or any Lender under the Operative
Documents shall be paid in immediately available funds, at its
respective office specified in Schedule III or at such other office as
it may from time to time specify to the Trustee, Agent and Lessee in a
notice pursuant hereto. All such payments shall be received by the
Trustee (in its individual or trust capacity), the Agent or such
Lender, as applicable, not later than 11:00 a.m., Gulfport, Mississippi
time, on the date due. Funds received after such time shall for all
purposes of the Operative Documents be deemed to have been received on
the next succeeding Business Day.
(c) Agency. So long as the Notes remain outstanding, Rent
shall be paid by Lessee to the Bank as agent for the Agent and as
Trustee's assignee under the Operative Documents.
SECTION 2.9. Lenders' Instructions to Agent. By making its Advance
pursuant to Section 2.2, each Lender agrees that such act shall constitute,
without further act, (i) evidence that the applicable conditions precedent set
forth in Article III have been satisfied or waived; provided that any Lender's
failure to raise the issue of noncompliance with respect to any such condition
as to any third party shall not be deemed to be a waiver of such condition
unless such Lender shall have acknowledged such waiver in writing, (ii)
authorization and direction by such Lender to Agent to make a Loan pursuant to
Section 2.3 of the Loan Agreement, (iii) authorization and direction by such
Lender to Bank (as agent for the Agent) to deposit the amount so loaned into the
Account in reliance upon the Lessee's certificate delivered pursuant to Section
3.2(j) confirming that all conditions precedent to the relevant Advance have
been satisfied and (iv) authorization and direction to Trustee to permit Lessee
to withdraw funds from the Account, subject to Sections 2.4 and 2.6. Bank and
each Lender agree that any monies advanced to Bank prior to deposit into the
Account shall be returned to a Lender if such Lender so requests.
SECTION 2.10. Computations.
(a) Determination of the Interest Rate. All computations of
accrued amounts pursuant to the Operative Documents shall be made on
the basis of actual number of days elapsed in a 360-day year or, in the
case of the Alternate Base Rate or commitment fee, on the basis of
actual number of days elapsed in a 365-day or 366-day year.
(b) Dollars. All payments required to be made by the Lessee,
the Trustee, or the Agent, including any Advance or payment of Rent,
shall be made only in Dollars in immediately available funds.
SECTION 2.11. Commitment Fee. Lessee shall pay to the Agent, for the
account of each Lender, for the period (including any portion thereof when any
of its Commitments are suspended by reason of the Lessee's inability to satisfy
any condition of Article III) commencing on the Closing Date and continuing
through the Commitment Termination Date, a nonrefundable, fully- earned
commitment fee (the "Commitment Fee") at the Applicable Commitment Fee Rate on
the average daily unused portion of each such Lender's Commitment during such
period, payable quarterly in arrears on the last Business Day of each calendar
quarter and on the Commitment Termination Date.
SECTION 2.12. Fees. Lessee shall pay to the Agent, for the account of
each Lender, a nonrefundable upfront fee in an amount equal to the fee set forth
opposite such Lender's name on Schedule II, payable upon the Closing Date.
Lessee shall pay to Agent, for the account of each Co-Agent, the Co-Agents Fee.
SECTION 2.13. Legal and Tax Representation. Lessee acknowledges and
agrees that neither Agent, Arranger, Trustee, Bank nor any Lender has made any
representation or warranty concerning the tax, accounting or legal
characteristics of the Lease or any of the other Operative Documents, and that
Lessee has obtained and relied on such tax, accounting and legal advice
regarding the Lease and the other Operative Documents as it deems appropriate.
Each of Trustee and each Lender acknowledges and agrees that it has obtained and
relied on the Operative Documents and the various items delivered in connection
therewith, and on such tax, accounting and legal advice regarding the Lease and
the other Operative Documents as it deems appropriate.
SECTION 2.14. Replacement of Equipment. Trustee and Agent shall release
from the lien of the Security Documents and the Lease items of Equipment which
Lessee has elected to replace under Sections 7.3 or 9.1 of the Lease, upon
satisfaction by Lessee of the conditions contained in Section 9.1(b) of the
Lease.
ARTICLE III
CONDITIONS TO
ADVANCES AND COMPLETION
SECTION 3.1. Initial Advance Date. The obligation of the Trustee and
each Lender to perform their respective obligations on the Initial Advance Date
shall be subject to the fulfillment to the satisfaction of, or the waiver in
writing by, each Lender of the conditions precedent set forth in this Section
3.1 on or before the Initial Advance Date (except that the obligation of any
party hereto shall not be subject to such party's own performance or
compliance).
(a) Filings and Recordings. All filings, registrations and
recordings set forth on Schedule IV shall have been made in the
appropriate places or offices and all fees and taxes with respect to
any recordings, filings or registrations made pursuant to this Section
3.1(a) shall have been paid in full, and satisfactory evidence thereof
shall have been delivered to Trustee and Agent, or arrangements for
such payment shall have been made to the satisfaction of Trustee and
the Agents.
(b) Searches. Agent shall have received a report, as of a
current date, prepared by a search company reasonably satisfactory to
the Agents, of judgment liens, tax liens, Uniform Commercial Code
filings and other encumbrances of record with respect to Lessee, the
Hotel Site and the Leased Property with the applicable filing offices
in the States of Minnesota and Mississippi, and such report shall show
no Liens other than Permitted Liens or Liens with respect to which a
release has been filed subsequent to the date of such report.
(c) Insurance. Agent shall have received (with copies for
Trustee and each Lender) evidence of each of the insurance policies
required to be maintained pursuant to the Lease, setting forth the
respective coverages, limits of liability, carrier, policy number and
period of coverage, accompanied by affidavits, certificates, paid bills
or other documents evidencing that all premium payments are current.
(d) Governmental Approvals, Permits, Consents, etc. Agent
shall have received copies of all material permits, approvals or
consents by all Governmental Authorities required for the construction,
use and operation of the Hotel and the transactions provided for in
this Agreement which can be obtained as of the Initial Advance Date,
together with all supporting documents and materials reasonably
requested by the Agent, the Trustee or any Lender, including a copy of
each order or license issued by a Gaming Authority and a Liquor
Authority, as then available or required by Applicable Law, evidencing
approval of the Lessee as the licensed operator of the Casino and the
Hotel and a copy of the letter or other evidence that the Parent has
been registered as the publicly traded holding company of the Lessee.
(e) Partial Release of Indenture Lien. Agent shall have
received a fully-executed release of lien in recordable form relating
to any and all deeds of trust or other instruments executed with
respect to the Indenture affecting the Hotel Site, the Hotel and the
items of Equipment identified on Schedule VII hereto, together with
executed copies of Uniform Commercial Code partial release statements
(Form UCC-3) sufficient to release the Hotel Site, the Hotel and the
items of Equipment identified on Schedule VII hereto and evidence of
the filing of such releases.
SECTION 3.2. Conditions Precedent to All Advances. In addition to the
conditions precedent set forth in Section 3.3 and Section 3.6 of this Agreement,
the obligation of each Lender hereunder on any Advance Date shall be subject to
the fulfillment to the satisfaction of, or the waiver in writing by, each Lender
(or by the Agents) of the conditions precedent (including, with respect to
writings, such writings being in form and substance reasonably satisfactory to
the Agents) set forth in this Section 3.2 on or prior to such Advance Date
(except that the obligation of any party hereto shall not be subject to such
party's own performance or compliance):
(a) Advance Request. With respect to any Advance, Agent,
Trustee and each Lender shall have received, at least three Business
Days before each Advance Date, a fully executed Advance Request duly
executed by Lessee in accordance with Section 2.4(a). Each of the
delivery of an Advance Request and the acceptance by Lessee of the
proceeds of such Advance shall constitute a representation and warranty
by the Lessee that on the date of such Advance (both immediately before
and after giving effect to such Advance and the application of the
proceeds thereof) the statements made in Section 2.2(b), Section 3.2(b)
and in such Advance Request, are true and correct.
(b) Accuracy of Representations and Warranties, No
Default, etc. On the applicable Advance Date, the following
statements shall be true and correct:
(i) All of the representations and warranties of
Lessee, Trustee and each Guarantor contained herein and in
each of the other Operative Documents are true and correct in
all material respects on and as of such Advance Date as though
made on and as of that date, except to the extent that such
representations and warranties relate solely to an earlier
date, in which case such representations and warranties shall
have been true and correct in all material respects on and as
of such earlier date;
(ii) No Event of Default exists; and
(iii) Except as set forth in the Disclosure
Schedule, no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or,
to the knowledge of the Lessee and/or the Parent, threatened
against the Lessee and/or the Parent or any other Guarantor
which might have a Material Adverse Effect.
(c) Officer's Certificate of the Parent. Agent shall have
received (with copies for Trustee and each Lender) a certificate of a
Responsible Officer of Parent with respect to Parent and each
Subsidiary of Parent which is a Guarantor, substantially in the form of
Exhibit U, stating that all of the representations and warranties of
such Person contained herein and in each of the other Operative
Documents are true and correct on and as of such Advance Date in all
material respects as though made on and as of that date, except to the
extent that such representations and warranties relate solely to an
earlier date, in which case such representations and warranties shall
have been true and correct in all material respects on and as of such
earlier date.
(d) Gaming Permits. Lessee and Parent shall have obtained all
Gaming Permits as required for or in connection with the conduct of its
gaming business and the conduct of games of chance, each as conducted
as of the date of such Advance, at the Casino and such Gaming Permits
shall not then be suspended, enjoined or prohibited (for any length of
time) by any Gaming Authority or any other Governmental Authority.
(e) Liquor Permits. Lessee and Parent shall have obtained all
Liquor Permits as required for or in connection with the operation and
use of the Casino and the Hotel, each as operated and used as of the
date of such Advance, and the Liquor Permits shall not then be
suspended, enjoined or prohibited (for any length of time) by any
Governmental Authority having or asserting jurisdiction over the Casino
and/or the Hotel.
(f) Taxes. All Taxes other than Charges due and payable by
Lessee on or prior to such Advance Date in connection with the
execution, delivery, recording and filing of any of the Operative
Documents, in connection with the filing of any of the financing
statements or in connection with the consummation of any of the
transactions contemplated hereby or by the Operative Documents shall
have been paid in full.
(g) Further Assurances, etc. Agents shall have received such
other and further instruments, duly executed, acknowledged (if
appropriate) and delivered, as Agents reasonably shall have requested
in connection with each Advance and this Agreement.
(h) Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Lessee and Parent
shall be satisfactory in form and substance to Agents and their
counsel; Agents and their counsel shall have received all information,
approvals, opinions, documents or instruments as Agent or its counsel
may reasonably request.
(i) Litigation. No law or regulation shall prohibit, and no
order, judgement or decree of any Governmental Authority shall, and no
action or proceeding shall be pending or threatened which in the
reasonable judgement of the Agent would or might, enjoin, prohibit,
limit or restrain the making of the initial Advance.
(j) Officer's Certificate of Lessee. Agents, Trustee and each
Lender shall have received a certificate of a Responsible Officer of
Lessee, substantially in the form of Exhibit X, confirming the
satisfaction of, or the waiver in writing by, each Lender (or by the
Agents) of the applicable conditions precedent to the relevant Advance
on or prior to such Advance Date.
SECTION 3.3. Conditions to the Initial Advance for Hotel Costs. In
addition to the conditions precedent set forth in Section 3.1, Section 3.2 and
Section 3.4 of this Agreement, the obligation of each Lender hereunder to make
the initial Advance for the payment of Hotel Costs shall be subject to the
fulfillment to the satisfaction of, or the waiver in writing by, each Lender (or
by Agents) of the conditions precedent (including, with respect to writings,
such writings being in form and substance reasonably satisfactory to the Agents)
set forth in this Section 3.3 on or prior to such Advance Date (except that the
obligation of any party hereto shall not be subject to such party's own
performance or compliance):
(a) Contracts. Agent shall have received true copies of the
Prime Construction Contract and the Architect's Agreement, which
agreements shall be (i) in form and substance acceptable to Agents,
(ii) in full force and effect, and (iii) free from material default by
the parties thereto and the Lessee shall so certify to the Agents.
(b) Survey. Agent shall have received a boundary and location
survey of the Land, dated November 15, 1995, recertified to the Agent
and the Trustee and a current boundary and location survey of the Hotel
Site thereon, each dated not earlier than thirty (30) days prior to the
date of the initial Advance, prepared in accordance with the current
Minimum Standard Detail Requirements for Land Title Surveys, as adopted
by the American Land Title Association and American Congress on
Surveying and Mapping in 1992, which shall (i) be certified to Agents,
Trustee, Lessee, and the Title Insurance Company by a surveyor or
engineer licensed by the State of Mississippi, (ii) be satisfactory in
all respects to Agents and their counsel and to the Title Insurance
Company, (iii) show the Hotel Site to be free of encroachments,
overlaps, and other survey defects unless otherwise approved by the
Agents in writing, (iv) show the courses and distances of the lot lines
for the Hotel Site, (v) show that all existing improvements are located
within said lot and building lines, and (vi) show the location of all
above and below ground easements, proposed improvements, appurtenances,
rights-of-way, water rights and ingress and egress, by reference to
book and page numbers and/or filed map reference. Such survey shall
include a certification by the surveyor that the Hotel Site is not
located in an area designated by the Secretary of Housing and Urban
Development as a special flood area.
(c) Title Insurance Policy. Agent shall have received (with
copies for Agents, Trustee and each Lender) a mortgagee's construction
loan title insurance policy in favor of Agent as the agent for the
Lenders and the Trustee, in an amount equal to $37,000,000, which
policy shall contain customary pending disbursement provisions and
which shall otherwise be in form and substance and issued by the Title
Insurance Company satisfactory to Agents, with respect to the Hotel
Site, insuring that title to the Hotel Site is marketable and that the
interests created by the Deed of Trust relating to the Hotel Site and
the Lease constitute valid first Liens on the Hotel Site and the
leasehold interest free and clear of all defects and encumbrances
unless otherwise approved by Agents and its counsel in writing. Such
policy shall also include a comprehensive endorsement, variable rate
endorsement, access and utilities endorsements, a mechanic's lien
endorsement, an environmental and zoning endorsement (which shall
insure that the contemplated use of the Hotel by Lessee will comply in
all material respects with all applicable zoning and land use laws), an
endorsement protecting against forfeiture or reversion due to
covenants, restrictions or encroachments, last-dollar endorsement and
such other endorsements as Agents shall request. All premiums, title
examination, survey, departmental violations, judgment and Uniform
Commercial Code search charges and other charges and fees shall have
been paid in full and the Agent shall have received satisfactory
evidence of such payment. For purposes of reinsurance, the share of
liability assumed by each such company shall be satisfactory to Agents.
(d) Leases. Agent shall have received certified true and
complete copies, and approved the form and substance, of each of the
leases, licenses, occupancy and use agreements, concessions and other
arrangements, oral or written, entered into as of the date of such
Advance whereby any Person agrees to pay money or any other
consideration for the use, possession or occupancy of the Hotel or any
portion thereof, and, in addition, shall have received such
subordination agreements, subordination, non-disturbance and attornment
agreements, estoppel certificates, and other instruments as Agent may
request.
(e) Architect's Statement of Professional Opinion. Agent shall
have received (with copies for Agents, Trustee, and each Lender) a
statement of professional opinion from Architect, substantially in the
form of Exhibit O, stating that upon completion of the Hotel in
accordance with the Plans and Specifications, the Hotel will comply in
all material respects with the applicable design and building codes of
Tunica County, Mississippi.
(f) Plans and Specifications, Construction Contracts,
Architect's Agreements, etc. Agent shall have received (i) detailed
Plans and Specifications for the Hotel which have been signed by
Construction Agent and the Architect which shall show the design of a
first-class Hotel which can accommodate at least 575 rooms, with
sufficient parking therefor pursuant to applicable zoning regulations,
and (ii) a detailed construction schedule for the Hotel (the "Hotel
Schedule"), together with a detailed breakdown of the estimated costs
of constructing the Hotel (the "Hotel Cost Analysis").
(g) Evidence of Availability of Utilities. Agent shall have
received evidence in form and substance satisfactory to the Agents of
the availability of water, sewer, electric, gas and telephone service
to the Hotel adequate for the use and occupancy of the Hotel Site for
its intended purpose.
(h) Building Permits. All building permits required by any
Governmental Authority in connection with the then current phase of
construction for which the applicable Advance is being made shall have
been obtained.
(i) Appraisal. Agent shall have received (with copies for
Trustee and each Lender) and the Lenders shall have approved an
appraisal report with respect to the Hotel on an as-built basis in
accordance with the Plans and Specifications, prepared by a qualified
appraiser satisfactory to the Lenders in compliance with the
requirements of FIRREA establishing the aggregate Fair Market Sales
Value of the Hotel as of the Completion Date. Such appraisal shall be
prepared at the cost and expense of Lessee.
(j) Environmental Reports. Agent shall have received (with
copies for Trustee and each Lender) and the Lender shall have approved
an update of the Environmental Assessment as it relates to the Hotel
and the Hotel Site delivered pursuant to Section 2.1(e) addressed to
the Agent, the Trustee and the Lenders. Such update shall include a
statement by the Environmental Engineer (1) more clearly identifying
the location of certain above-ground storage tanks, (2) detailing the
Environmental Engineer's recommendations, if any, for remediation with
respect to such above-ground storage tanks and (3) if remediation is
recommended, describing the nature and scope of the remediation
procedures.
SECTION 3.4. Conditions to all Advances for Hotel Costs. In addition to
the conditions precedent set forth in Section 3.1, Section 3.2 and Section 3.3
of this Agreement, the obligation of each Lender hereunder to make any Advance
for the payment of Hotel Costs shall be subject to the fulfillment to the
satisfaction of, or the waiver in writing by, each Lender (or by the Agents) of
the conditions precedent (including, with respect to writings, such writings
being in form and substance reasonably satisfactory to Agent) set forth in this
Section 3.4 on or prior to such Advance Date (except that the obligation of any
party hereto shall not be subject to such party's own performance or
compliance):
(a) Construction Certificate. With respect to the Hotel Costs
to be paid or reimbursed using the proceeds of such Advance, Agent
shall have received, at least three (3) Business Days prior to the
applicable Advance Date, a certificate, dated the date of such Advance,
substantially in the form of Exhibit V, from Construction Agent (i) to
the effect that the Hotel has, as of the date of such certificate, been
constructed in accordance with the Plans and Specifications (as amended
in conformity with Section 2.4(c) of the Construction Agency
Agreement), and that the contemplated use thereof by the Lessee will
comply with all Requirements of Law, (ii) to the effect that an amount
not less than the requested amount of such Advance is then due in
respect of Hotel Costs, which amount has not been included in any
previous certificate delivered hereunder, (iii) specifies in reasonable
detail the Hotel Costs to which such Advance relates, and (iv) as to
such other matters as Agents may reasonably request.
(b) Title Insurance Policy Endorsement. Agent shall have
received on the applicable Advance Date, a date-down endorsement, dated
the date of such Advance, to the title insurance policy delivered by
the Title Insurance Company pursuant to Section 3.3(c) (or such other
evidence of the lack of recorded and unrecorded mechanics' liens
affecting (or inchoate rights thereto which could affect) the Hotel
Site as Agents shall request). Upon each Advance, such title policy
shall protect the Lenders through the date of such Advance against
mechanics' lien Claims for all Advances with respect to the Hotel up to
and including the date of such Advance.
(c) Cost of Completion. Agent shall have received and approved
a certificate from the Prime Contractor, substantially in the form of
Exhibit P, certifying the estimated cost of completing the Hotel
pursuant to the Plans and Specifications and evidencing that such
estimated cost does not then exceed the Available Commitments allocable
to the Hotel under Section 2.2(b).
(d) Certificate of Acceptance. Lessee shall have delivered to
Agent a fully-executed Certificate of Acceptance substantially in the
form of Exhibit K with respect to each portion of the Hotel identified
in an Advance Request.
SECTION 3.5. Deliveries with Respect to the Advances for Hotel Costs
After a Default. If Agents, at the direction of the Lenders, elect to make any
Advance for the payment of Hotel Costs during the existence of a Default or an
Event of Default, Lessee, in addition to the conditions precedent set forth in
Section 3.1, Section 3.2 and Section 3.4 of this Agreement, shall deliver the
following items with respect to each such Advance:
(a) Construction Certificate. In addition to the certificate
delivered by Construction Agent pursuant to Section 3.4(a), Agent shall
have received, at least three (3) Business Days prior to the applicable
Advance Date, a certificate, dated the date of such Advance, from
Construction Agent (i) to the effect that the Available Commitments
allocable to the Hotel pursuant to Section 2.2(b) are adequate to pay
for all Hotel Costs yet to be paid for to complete the Hotel, and (ii)
the progress of the construction is such that completion of the Hotel
can occur on or prior to the Construction Termination Date (and
specifying the stage and percentage of completion which has been
achieved by each of the various trades engaged in the construction of
the Hotel), and the amount of such Advance is not greater than the
actual value of the materials incorporated into the Hotel and the work
and labor performed in connection therewith.
(b) In Balance; Deposit of Additional Funds. If the Lenders
and/or Inspecting Engineer shall determine in their sole discretion at
the time that the costs to complete the Hotel are greater than the
amount of the Available Commitments allocable to the Hotel, Lessee
shall deposit all funds with Trustee necessary to remove any such
deficiency within ten (10) days of receipt of notice from Agent. Any
such funds not used by Lessee to pay the costs of completing
construction of the Hotel shall be held by Trustee in the Account until
no Event of Default or Default exists.
(c) Inspecting Engineer Approvals and Report. The independent
firm of professional engineers or consulting architects approved by
Agents (the "Inspecting Engineer") shall have received and approved in
its sole discretion (i) all detailed Plans and Specifications (together
with all Change Orders) for the Hotel, (ii) confirmation that the Hotel
Schedule is accurate and complete, a detailed breakdown of the
estimated costs of completing the Hotel, and (iii) each subcontract
(involving an expenditure of $1,000,000 or more) relating to work to be
performed and materials to be supplied in connection with the Hotel.
Agents shall have received a report satisfactory to Agent in their sole
discretion prepared by Inspecting Engineer with respect to the Hotel
Site and the Hotel and all relevant aspects thereof and other
satisfactory evidence, in Agents' reasonable discretion, that the Hotel
can be completed in accordance with the costs set forth in the Hotel
Cost Analysis pursuant to the Hotel Schedule and when completed in
accordance with the Plans and Specifications, will comply in all
respects with all applicable Requirements of Law and insurance
requirements and that all structural elements and other systems and
components of the facilities will be in good working order and
condition, free from any latent or patent defects and conditions
requiring extraordinary maintenance or remedial action.
(d) Contracts. Agent shall have received a complete list and
summary (including the parties, term, general subject matter,
compensation and cancellation terms), together with certified true
copies of all Primary Construction Contracts necessary or appropriate
as of such date for the construction of the work in respect of the
Hotel, which Primary Construction Contracts shall be (i) in form and
substance acceptable to Agents, (ii) in full force and effect, and
(iii) free from material default by the parties thereto (or if not,
specifying the material defaults thereunder) and the Lessee shall so
certify to Agents.
(e) Architect's Statement of Professional Opinion. Agent shall
have received (with copies for Agents, Trustee, and each Lender) a
statement of professional opinion from Architect, in form and scope
satisfactory to Agents stating that (i) the contemplated use of the
Hotel by Lessee will comply in all material respects with the
applicable design and building codes of Tunica County, Mississippi and
(ii) the Hotel is being improved in a good and workmanlike manner and
in accordance with the Plans and Specifications and applicable design
and building codes of Tunica County, Mississippi.
(f) Cost of Completion. Agent shall have received a
certificate from Prime Contractor approved by Inspecting Engineer, in
form and scope satisfactory to Agents, certifying that (i) after giving
effect to the applicable Advance and, if required, the deposits made by
Lessee pursuant to Section 3.5(b), the estimated as yet unpaid cost of
completing the Hotel pursuant to the Plans and Specifications and such
estimated cost shall not exceed the Available Commitments allocable to
the Hotel under Section 2.2(b) and (ii) the estimated completion date
for construction of the Hotel and that such estimation is in accordance
with the Hotel Schedule.
(g) Change Orders. Inspecting Engineer shall have received all
Change Orders to the Plans and Specifications requested during the
existence of a Default or Event of Default and Agents shall have
approved and consented to each such Change Order (or any number of
related Change Orders) the result of which is to increase or decrease
the cost of the Hotel by $500,000 or more or otherwise have a material
adverse effect on the scope or quality of the Hotel, issued from the
date of the last Advance.
(h) Contractor Receipts. On or prior to the date of such
Advance, Agent shall have received (i) receipts with respect to any
invoice which is the subject of such Advance and which is in excess of
$50,000 from Prime Contractor and all subcontractors engaged in the
construction of the Hotel evidencing that all sums previously advanced
for Hotel Costs have been expended for such Hotel Costs and that no
further amounts are owing with respect to such previously invoiced
Hotel Costs and (ii) copies of all documents required to be submitted
by the Prime Contractor or Lessee as of such date pursuant to the terms
of the Construction Contracts have been submitted.
SECTION 3.6. Conditions to Advances for Equipment Costs. The obligation
of each Lender to perform its obligations on any Advance Date for the payment of
costs associated with any item of Equipment shall be subject to the fulfillment
to the satisfaction of each Lender (including, with respect to writings, such
writings being in form and substance reasonably satisfactory to, or the waiver
in writing by, Agents) of the conditions precedent set forth in this Section 3.6
(in addition to the conditions precedent set forth in Section 3.1 and Section
3.2) on or prior to such Advance Date (except that the obligation of any party
hereto shall not be subject to such party's own performance or compliance).
(a) Bill of Sale. Lessee shall have delivered to Agent a
fully-executed Bill of Sale substantially in the form of Exhibit J with
respect to the items of Equipment identified in an Advance Request.
(b) Certificates of Acceptance. Lessee shall have delivered to
Agent a fully-executed Certificate of Acceptance substantially in the
form of Exhibit K with respect to each item of Equipment or completed
System identified in such Advance Request (it being understood that no
Certificate of Acceptance shall be required for any System prior to the
earlier of the System being placed in service or payment in full of the
purchase price therefor).
(c) Third Party Approvals. To the extent not previously
delivered all third party approvals necessary in the reasonable opinion
of Agents for the operation and use of the Equipment and for Lessee to
perform its obligations with respect to the applicable Lease Supplement
shall have been obtained.
(d) Financing Statements. To the extent not previously filed,
Agent shall have received acknowledgment copies of properly filed UCC
Financing Statements (Form UCC-1), dated a date reasonably near to the
Advance Date, or such other evidence of filing as may be acceptable to
Agent, naming Lessee as the debtor and Trustee as the secured party,
and assigning to Agent, for the benefit of the Lenders, all of
Trustee's interest in the Collateral, and any other similar instruments
or documents, filed under the Uniform Commercial Code of all
jurisdictions as may be necessary or, in the opinion of Agent,
desirable to perfect the security interest of Agent pursuant to the
Security Documents.
(e) Additional Items. Agents and each Lender shall have
received such other documents as they may reasonably request and which
are consistent with the terms hereof including any third party
approvals.
(f) Equipment Costs. In respect of any funding of any System,
Agent shall have received an Application and Certificate for payment
AIA Document G702 with attached continuation sheet AIA Document G703
executed by a Responsible Officer of Lessee and the Prime Contractor.
SECTION 3.7. Conditions to Completion Date of Hotel. The date upon
which the Hotel shall be deemed to have been constructed and completed pursuant
to the Construction Agency Agreement (the "Completion Date") shall be deemed to
have occurred upon the date that each of the following conditions has been
satisfied:
(a) Construction Agent shall have delivered to Agent an AIA
Certificate of Completion, signed by the Architect, Prime Contractor
and Construction Agent, evidencing that the construction of the Hotel
shall have been completed substantially in accordance with the
Construction Contract, the Plans and Specifications and Change Orders
and applicable design and building codes of Tunica County, Mississippi.
(b) Construction Agent shall have delivered to Agent a
Certificate of Acceptance, or if construction of the Hotel is not
completed under the Construction Contract, then other comparable
certificates reasonably satisfactory to Trustee, Agents and the
Lenders.
(c) Construction Agent shall have furnished to Trustee and
Agent a certificate from a Responsible Officer of Construction Agent
which will indicate that it is made in favor of and for the benefit of
Trustee, Agent and each of the Lenders certifying, representing and
warranting that:
(i) the Hotel has been constructed and installed on
the Hotel Site in accordance with the Plans and Specifications
(as amended in accordance with Section 2.4(c) of the
Construction Agency Agreement) and the Primary Construction
Contract;
(ii) the Hotel is in compliance with all Applicable
Laws, except for such violations which, individually or in the
aggregate, would not have a Material Adverse Effect on Lessee;
(iii) the representations and warranties with
respect to the Hotel set forth at Sections 4.1(x), 4.1(y),
4.1(z) and 4.1(aa) through (jj) are true and correct as of the
date of such certificate;
(iv) all amounts then due or owing to third parties
for the construction of the Hotel have been paid in full and
the Construction Agent has made adequate reserves for any
contingent obligations arising out of the construction of the
Hotel); and
(v) Trustee has good and marketable title to the
Hotel free and clear of all Liens, other than Permitted Liens.
(d) Agent shall have received (a) a final "as built" survey
showing the completed Hotel which shall be reasonably satisfactory to
the Lenders and (b) final Plans and Specifications and as-built
mechanical drawings of underground site work and of interior utility
and other building systems.
SECTION 3.8. Amortization Schedule.
(a) Schedule VI sets forth four separate Group Amortization
Schedules. Mandatory principal payments are required on each Scheduled
Payment Date in an amount equal to the sum of the principal maturities
due on such date on each Group Amortization Schedule, plus any other
amounts due on such date under Section 3.8(b). The amount of a
principal payment due on any Scheduled Payment Date in respect of a
Group Amortization Schedule is the product of (u) the percentage set
forth opposite each Scheduled Payment Date on the Group Amortization
Schedule and (v) the Specific Advances relating to the Group
Amortization Schedule as calculated immediately before the Initial
Principal Payment Date (subject to Section 3.8(b) below). Each Note or
Notes evidencing a Lender's Commitment will reflect mandatory principal
amortization equal to the product of (w) such Lender's Commitment
Percentage and (x) the aggregate amount payable to the Lenders on such
Payment Date pursuant to the preceding sentence.
(b) Should there occur one or more Advances in respect of the
Loans on or after the Initial Principal Payment Date, each such Advance
shall be amortized as follows: each Specific Advance made on or after
the Initial Principal Payment Date shall be amortized in level
principal payments to the Specific Balloon Amount over the Base Period
of the Lease Supplement for which the Specific Advance was made,
commencing on the first Scheduled Payment Date and each Scheduled
Payment Date thereafter until the end of the related Base Period. For
example, Hotel Advances made on or after the Initial Principal Payment
Date will commence amortization on the first Scheduled Payment Date
after the date of such Advance occurring during the Base Period for the
Lease Supplement related to the Hotel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of Lessee, Construction
Agent and Guarantors. Lessee, Construction Agent and each Guarantor jointly and
severally represent and warrant to each of the other parties hereto as follows:
(a) Due Organization, etc. Lessee, Construction Agent and
Guarantors are corporations duly organized, validly existing and in
good standing under the laws of the State of Minnesota and are duly
qualified or licensed and in good standing as foreign corporations
authorized to do business in all jurisdictions where failure to so
qualify could reasonably be expected to have a Material Adverse Effect,
and each has the requisite power and authority to execute, deliver and
perform its respective obligations under each of the Operative
Documents to which it is a party and each other agreement, instrument
and document executed and delivered by it on each Advance Date in
connection with or as contemplated by each such Operative Document. The
"principal place of business" and "chief executive office" (as such
terms are used in Section 9-103(3) of the UCC) of the Lessee,
Construction Agent, and each Guarantor is located at 13705 First Avenue
North; Plymouth, Minnesota 55441.
(b) Authorization; No Conflict; No Approvals, Etc. The
execution and delivery by each of the Lessee, the Construction Agent
and the Guarantors of each of the Operative Documents to which it is a
party, and the performance by each such Person of its respective
obligations under such Operative Documents, have been duly authorized
by all necessary corporate action (including any necessary stockholder
action) on its part, and do not and will not: (i) contravene any
Applicable Laws currently in effect applicable to or binding on it or
the Leased Property; (ii) violate any provision of its respective
charter or bylaws; (iii) result in a breach of or constitute a default
under (with or without the giving of notice or lapse of time or both)
any indenture, mortgage, deed of trust, lease, loan or credit
agreement, or any other agreement or instrument to which the Lessee,
the Construction Agent or the Guarantors is a party or by which the
Lessee, the Construction Agent or the Guarantors or their respective
properties may be bound or affected, except for such breaches or
defaults which, individually or in the aggregate, would not have a
Material Adverse Effect; or (iv) require any Governmental Approval by
any Governmental Authority, except for (x) the filings and recordings
listed on Schedule IV to perfect the rights of the Trustee, the Lenders
and the Agent intended to be created by the Operative Documents and (y)
the required licenses and approvals listed on Schedule V; and neither
the Lessee, the Construction Agent nor the Guarantors is in default
under or in violation of its respective charters or bylaws.
(c) Enforceability. Each Operative Document to which the
Lessee, the Construction Agent or any Guarantor is a party constitutes
the legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with the terms thereof, except as
such enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) Litigation. Except as set forth on Schedule VIII, there is
no action, suit or proceeding, or any governmental investigation or any
arbitration, in each case pending or, to the knowledge of the Lessee,
the Construction Agent or any Guarantor, threatened against such Person
or the Leased Property or before any Governmental Authority (i) which
challenges the validity of the Operative Documents to which such Person
is a party or any action taken or to be taken pursuant to the Operative
Documents to which such Person is a party, or (ii) which if adversely
determined would have, individually or in the aggregate, a Material
Adverse Effect.
(e) Ownership. Parent has sole beneficial and record
ownership, directly or indirectly, of 100% of the issued and
outstanding capital stock of each of the Lessee, the Construction Agent
and each other Guarantor. Except as set forth on the Schedule VIII,
there are no outstanding subscriptions, options, warrants, calls,
rights (including preemptive rights) or other arrangements or
commitments of any nature relating to any capital stock of the Lessee,
the Construction Agent or any other Guarantor.
(f) Financial Statements. The audited consolidated financial
statements of the Parent and its Consolidated Subsidiaries for the
Fiscal Year ended December 31, 1995 fairly present the financial
condition of the Parent and its Consolidated Subsidiaries on such date,
and the results of its consolidated operations for the period then
ended, and there has been no Material Adverse Effect with respect to
the Parent and its Consolidated Subsidiaries since such date.
(g) No Other Agreements. Neither the Lessee, the Construction
Agent nor any Guarantor is a party to any agreement to sell any
interest in the Leased Property or the Hotel Site or any portion
thereof, whether under construction pursuant to the Construction Agency
Agreement or subject to the Lease (except as otherwise contemplated in
the Operative Documents).
(h) Compliance With Law. With respect to the Leased Property
and the operation of the Hotel, the Lessee, the Construction Agent and
the Guarantors have at all times complied and is in compliance with all
Applicable Laws, except for any violations which, individually or in
the aggregate, would not have a Material Adverse Effect.
(i) Investment Company Act. Neither Lessee, Construction Agent
nor any Guarantor is an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
(j) Public Utility Holding Company. Neither Lessee,
Construction Agent nor any Guarantor is subject to regulation as a
"holding company," an "affiliate" of a "holding company", or a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(k) Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and
the Code with respect to each Plan. No member of the ERISA Group has
(i) sought a waiver of the minimum funding standard under Section 412
of the Code in respect of any Plan, (ii) failed to make any
contribution or payment due any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement, or made any amendment to any Plan
or Benefit Arrangement, which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security under
ERISA or the Code or (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA. No Plan Termination Event has occurred with respect to
any Plan or Multiemployer Plan. No member of the ERISA Group has any
knowledge of any event that could result in a liability of any such
member to the PBGC, whether under a Plan, a Multiemployer Plan or
otherwise. There have not been any nor are there now existing any
events or conditions that would permit any Plan to be terminated under
circumstances that would cause the lien provided under Section 4068 of
ERISA to attach to the material assets of the Lessee or its ERISA
Affiliates. The value of the Plans' benefits guaranteed under Title IV
of ERISA on the date hereof does not exceed the value of such Plans'
assets allocable to such benefits as of the date of this Agreement. No
"Prohibited Transaction" within the meaning of Section 406 of ERISA
exists or will exist upon the execution and delivery of this Agreement
or any Operative Document with respect to any Plan or Benefit
Arrangement.
(l) Environmental Matters. (i) There are no conditions
existing currently which would be likely to subject the Trustee, the
Agent, the Lenders or the Lessee, the Construction Agent or any
Guarantor to damages, penalties, injunctive relief or cleanup costs
under any Environmental Laws or assertions thereof, or which require or
are likely to require cleanup, removal, remedial action or other
response at or with respect to the Leased Property or the Land pursuant
to Environmental Laws; (ii) neither the Lessee, the Construction Agent
nor any Guarantor is a party to any litigation or administrative
proceeding for which it has received service of process or other
similar notification, and to the knowledge of the Lessee, the
Construction Agent and any Guarantor, any litigation or administrative
proceeding threatened against any of them, which asserts or alleges
that the Lessee, the Construction Agent or any Guarantor, the Leased
Property or the Project has violated or is violating Environmental Laws
with respect to the Leased Property or the Project or that the Lessee,
the Construction Agent or any Guarantor is required to clean up, remove
or take any remedial or other responsive action due to the disposal,
depositing, discharge, leaking or other release of any Hazardous
Materials at or from the Leased Property, or the Project; (iii) neither
the Lessee, the Construction Agent nor any Guarantor is subject to any
judgment, decree or order or citation arising out of Environmental Laws
which relates to the Leased Property or the Land (or any interest
therein); and (iv) neither the Lessee, the Construction Agent nor any
Guarantor has been named or listed as a potentially responsible party
by any governmental body in a manner arising under any Environmental
Laws with respect to or which affects the Leased Property, the Hotel or
the Project.
(m) Subjection to Government Regulation. Except in the case of
the ownership of, or the holding of an interest in, the Leased Property
following the exercise of remedies under the Lease, no Agent or Lender
will become subject to ongoing regulation of its operations by a
Governmental Authority (excluding foreign Governmental Authorities)
solely by reason of entering into the Operative Documents or the
consummation of the transactions contemplated thereby; provided,
however, that the Mississippi Gaming Commission may at any time require
the Trustee, any Agent or any Lender to file an application, at
Lessee's expense, for a finding of suitability to be affiliated with
the Lessee. The exercise of remedies by the Trustee, any Agent or any
Lender under any of the Operative Documents with respect to the
Collateral will not require the approval of or filing with any Gaming
Authority except as otherwise disclosed on Schedule V hereto.
(n) Securities Act. Neither the Lessee nor anyone authorized
to act on its behalf has, directly or indirectly, offered or sold any
interest in the Notes, the Leased Property, the Lease or any of the
Operative Documents in violation of Section 5 of the Securities Act or
any state securities laws.
(o) Federal Reserve Regulations. Neither the Parent nor any of
its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying any margin stock (within the meaning of
Regulation U of the Board). No part of any Advance will be used
directly or indirectly for the purpose of purchasing or carrying any
such margin stock, to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any other purpose
violative of or inconsistent with any of the provisions of Regulation
G, T, U or X of the Board.
(p) Taxes. Lessee, Construction Agent and the Guarantors have
filed all tax returns and reports required by law to have been filed by
each of them and have paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set
aside on their books.
(q) Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the
Lessee, the Construction Agent and any Guarantor in writing to the
Agent, the Trustee and the Lenders for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
other such factual information hereafter furnished by or on behalf of
the Lessee, the Construction Agent and any Guarantor to the Agent, the
Trustee and the Lenders will be, true and accurate in every material
respect on the date as of which such information is dated or certified
and as of the date of execution and delivery of this Agreement by the
Agent, the Trustee and the Lenders, and such information is not, or
shall not be, as the case may be, incomplete by omitting to state any
material fact necessary to make such information not misleading.
(r) Licenses, Registrations and Permits. As of any date on
which this representation is made, all licenses, registrations and
permits (other than Gaming Permits and Liquor Permits) required of
Lessee as of such date by any Governmental Authority having
jurisdiction shall have been obtained for (i) the use and occupancy of
the Land, (ii) the operation of the facilities (including the Hotel) on
the Land, including certificates of occupancy for the Hotel or other
legally equivalent permission to occupy the Hotel, and (iii) the
construction and installation of the Hotel, except where the failure to
obtain the same would not have, individually or the aggregate, a
Material Adverse Effect.
(s) Title to Property. Parent has good and marketable title to
all of its material assets reflected on the financial statements
delivered pursuant to Section 2.1(f), except for such material assets
as have been disposed of in the ordinary course of business, and all
such material assets are free and clear of any Lien, except as
reflected in the financial statements and/or notes thereto or as
otherwise permitted by the provisions hereof or under the Operative
Documents, and except for Permitted Liens. Parent has such trademarks,
trademark rights, trade names, trade name rights, franchises,
copyrights, patents, patent rights and licenses as to allow it to
conduct its business as now operated, without known conflict with the
rights of others.
(t) Insurance. Lessee has obtained or caused to be obtained
insurance coverage covering the Leased Property which meets in all
respects the requirements of the Lease, and such coverage is in full
force and effect. Lessee carries insurance with reputable insurers, or
self-insures, in respect of its material assets, in such manner, in
such amounts and against such risks as is customarily maintained by
other Persons of similar size engaged in similar business.
(u) Defaults. Neither the Lessee, the Parent nor any other
Guarantor is in default under any Operative Document, instrument
evidencing any Debt, or under any material agreement relating thereto
or any indenture, mortgage, deed of trust, security agreement, lease,
franchise or other agreement or other instrument to which any such
Person is a party or by which any such Person or any of its material
assets is subject to or bound including the Indenture which would
result in a Material Adverse Effect.
(v) Solvency. The consummation by the Lessee or any Guarantor
of the transactions contemplated by the Operative Documents did not and
will not render the Lessee or any Guarantor insolvent, nor was it made
in contemplation of the Lessee's or any Guarantor's insolvency; the
value of the assets and properties of each of the Lessee and each
Guarantor at fair valuation and at their then present fair salable
value is and, after the transactions, will be greater than the
respective total liabilities, including contingent liabilities, as they
become due of the Lessee and each Guarantor; the property remaining in
the hands of the Lessee and of each Guarantor was not and will not be
an unreasonably small amount of capital.
(w) Appraisal Data. The information provided by the Lessee and
its Affiliates to the Appraiser and forming the basis for the
conclusions set forth in the Appraisal, taken as a whole, was true and
correct in all material respects and did not omit any information known
and available to the Lessee or any of its Affiliates necessary to make
the information provided not materially misleading.
(x) Zoning. The Hotel and the Hotel Site complies in all
material respects with all applicable zoning and subdivision laws,
ordinances, regulations and restrictive covenants, and all requirements
thereof necessary for the use, occupancy and operation of the Hotel and
the Hotel Site as operated and used on each date this representation is
made have been satisfied in all material respects, and the current use
and intended use under the Lease of the Hotel and the Hotel Site is a
conforming use.
(y) Perfection of Security Interests. Upon (i) execution and
delivery of the Intercreditor Agreement, (ii) the partial release of
Liens described in Section 3.1(e), (iii) execution and delivery of the
Landlord Consent and Waiver, and (iv) the filing of appropriate UCC
Financing Statements with the Secretary of State of Minnesota, the
Secretary of State of Mississippi and the office of the Chancery Clerk
of Tunica County, Mississippi and, together with a fixture filing or
deed of trust on the Hotel Site (if necessary) in the office of the
Chancery Clerk of Tunica County, Mississippi, Agent, for the benefit of
the Lenders, will have an enforceable, perfected first priority Lien of
record in the Collateral granted pursuant to the Lease as against all
Persons, including Lessee and its creditors.
(z) Use and Operation of Leased Property. To the best
knowledge of the Parent, and the Lessee after due inquiry, on and after
the Completion Date (i) all material agreements, easements and other
rights, public or private, which are necessary to permit the lawful use
and operation of the Hotel and the Hotel Site as the Lessee intends to
use the Hotel and the Hotel Site under the Lease and which are
necessary to permit the lawful intended use and operation of all
presently intended utilities, driveways, roads and other means of
egress and ingress to and from the same (including certificates of
occupancy) have been obtained and are in full force and effect and the
Lessee has no actual knowledge of any pending modification or
cancellation of any of the same; (ii) the use of the Hotel and the
Hotel Site does not (and the intended use of the Hotel and the Hotel
Site by Lessee under the Lease will not) depend on any variance,
special exception or other municipal approval, permit or consent that
has not been obtained for its continuing legal use; and (iii) all
required building and use related permits, approvals and consents
material to the use and operation of the Hotel and the Hotel Site have
been issued and will be in full force and effect and all utilities
required for the operation of the Hotel and the Hotel Site, as the
Lessee intends to use the Hotel and the Hotel Site under the Lease,
will be available as of such date.
(aa) Gaming Permits; Liquor Permits. All Gaming Permits and
Liquor Permits required to be held by Lessee as of each date this
representation is made for the conduct of its business as then
conducted are current and in good standing and upon opening of the
Casino the Lessee will hold all Gaming Permits and Liquor Permits
necessary for the operation of the Casino and the sale of alcoholic
beverages at the Resort.
(bb) Location of Gaming Activities. No gaming activities
requiring a Gaming Permit will be maintained at any location at the
Resort other than at a location that has obtained all requisite Gaming
Permits.
(cc) Leased Property. Upon substantial completion of the
Hotel, the Hotel Site as improved and the contemplated use thereof by
Lessee and its agents, assignees, employees, lessees, licensees and
tenants will comply in all material respects with all Requirements of
Law (including all zoning and land use laws and Environmental Laws) and
the requirements of all insurance policies required to be maintained
under the Lease and the Construction Agency Agreement.
(dd) Plans and Specifications. Except as set forth on the
Disclosure Schedule, there is no action, suit or proceeding (including
any proceeding in condemnation or eminent domain or under any
Environmental Law) pending or threatened with respect to Lessee, Casino
or the Hotel which adversely affects the title to, or the use,
operation or value of the Hotel or Casino. No fire or other casualty
with respect to the Hotel or Casino has occurred which fire or other
casualty has had a material adverse effect on the Hotel or Casino. Upon
substantial completion of each of the Hotel and Casino, each such
facility will have available all material services, public facilities
and other utilities necessary for use and operation of the Hotel and
Casino for their primary intended purposes including adequate water,
gas and electrical supply, storm and sanitary sewerage facilities,
telephone, other required public utilities and means of access between
the Hotel and Casino and public highways for motor vehicles. All
utilities serving the Hotel, or proposed to serve the Hotel in
accordance with the related Plans and Specifications, are located in,
and vehicular access to the Hotel is provided by, either public
rights-of-way abutting the Hotel or Appurtenant Rights. All
Requirements of Law, easements and rights-of-way, including proof and
dedication, required for (x) the use, treatment, storage, transport,
disposal or disposition of any Hazardous Substance on, at, under or
from the Hotel Site during the construction of the Hotel and Casino,
and (y) construction of the Hotel and the Casino in accordance with the
Plans and Specifications, and the Construction Agency Agreement have
either been irrevocably obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties, as the case
may be, or will be irrevocably obtained from the appropriate
Governmental Authorities having jurisdiction or from private parties,
as the case may be, prior to commencing any such construction or use
and operation, as applicable.
(ee) Title. The Deed of Trust and the Lease are in form and
substance sufficient to grant a valid first priority Lien in the Hotel
Site to Agent, for the benefit of the Lenders, subject only to
Permitted Liens. The Ground Lease is in form and substance sufficient
to convey a valid leasehold estate in the Hotel Site to the Lessor,
subject only to Permitted Liens. Lessor will at all times during the
Lease Term have a valid leasehold estate in the Hotel Site pursuant to
the Ground Lease and good and marketable title in fee simple to the
Hotel pursuant to the Improvements Deed, subject only to Permitted
Liens. Lessee will at all times during the Lease Term have marketable
title in fee simple to the Hotel Site subject only to Permitted Liens.
The Deed of Trust relating to the Barge Equipment is in form and
substance sufficient to grant a valid, first priority Lien in the Barge
Equipment to the Agent, for the benefit of the Lenders, subject only to
Permitted Liens.
(ff) Flood Hazard Areas. Except as otherwise identified on the
survey delivered pursuant to Section 3.3(b), no portion of the Hotel
Site is located in an area identified as a special flood hazard area by
the Federal Emergency Management Agency or other applicable agency. If
the Hotel Site is located in an area identified as a special flood
hazard area by the Federal Emergency Management Agency or other
applicable agency, then flood insurance has been obtained for the Hotel
Site in accordance with the Lease and in accordance with the National
Flood Insurance Act of 1968, as amended.
(gg) Condition and Use of Leased Property. To the best
knowledge of Parent and the Lessee after due inquiry, the present
condition and use of the Leased Property conforms in all material
respects with all conditions or requirements of all existing permits
and approvals issued with respect to the Leased Property, and the
present use of the Leased Property and each Lessee's future intended
use of the Leased Property under the Lease does not, in any material
respect, violate any Applicable Laws. To the best knowledge of Parent
and the Lessee after due inquiry, (i) no notices, complaints or orders
of violation or non-compliance or liability of any nature whatsoever
have been issued or threatened by any Person with respect to the Land
or any Leased Property or any present or intended future use thereof,
except for such violations and instances of non-compliance as could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and it is not aware of any circumstances which
could give rise to the issuance of any such notices, complaints or
orders, and (ii) the Land complies in all material respects with
Applicable Laws to the extent that non-compliance would not have a
Material Adverse Effect.
(hh) Burdensome Agreements. Lessee is not (i) a party to any
agreement, indenture, lease or instrument, or (ii) subject to any
organizational document restriction or any judgment, order, writ,
injunction, decree, rule or regulation that presently, or in the future
may, so far as Lessee can now foresee, have a Material Adverse Effect
on Lessee.
(ii) No Change in Name or Entity. Lessee has not prior to the
date of this Agreement, changed its name, or been the surviving entity
of a merger or consolidation, except for the merger of GCI Acquisition
Subsidiary, Inc. and Grand Gaming Corporation into Lessee (with Lessee
as the surviving entity) in connection with the transactions
contemplated by the Indenture.
(jj) Purchase Price. The Fair Market Value of the items of
Equipment accepted on the Advance Date is approximately equal to the
invoice cost for the items of Equipment identified in such Advance
Request plus the Charges properly attributable thereto.
SECTION 4.2. Representations and Warranties of Each Lender. Each Lender
represents and warrants, severally and only as to itself, to each of the other
parties hereto as follows:
(a) Due Organization, etc. It is duly organized and validly
existing under the laws of the jurisdiction of its organization and has
the requisite power and authority to enter into and perform its
obligations as a Lender under each Operative Document to which it is or
will be a party and each other agreement, instrument and document to be
executed and delivered by it in connection therewith.
(b) Authorization; No Conflict. The execution and delivery by
it of, the consummation by it of the transactions provided for in, and
the compliance by it with all the provisions of, each Operative
Document to which it is or is to be a party as Lender have been duly
authorized by all necessary corporate action on its part; and neither
the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it as Lender with
any of the terms and provisions thereof (i) requires any approval of
its stockholders or approval or consent of any trustee or holders of
any of its indebtedness or obligations, (ii) contravenes or will
contravene any Applicable Laws currently in effect applicable to or
binding on it (except no representation or warranty is made as to any
Applicable Laws to which it or the Leased Property, directly or
indirectly, may be subject because of the lines of business or other
activities of the Lessee) or (iii) results in any breach of or
constitutes any default under, any indenture, mortgage, chattel
mortgage, deed of trust, lease, conditional sales contract, loan or
credit arrangement, other material agreement or instrument, corporate
charter, by-laws or other agreement or instrument to which it is a
party or by which it or its properties may be bound or affected.
(c) ERISA. It is purchasing its interest in the Note with
assets that are either (i) not assets of any Plan or Benefit
Arrangement (or its related trust) that is subject to Title I of ERISA
or Section 4975 of the Code, or (ii) assets of any Plan or Benefit
Arrangement (or its related trust) that is subject to Title I of ERISA
or Section 4975 of the Code, but for which there is available an
exemption from the prohibited transaction rules under Section 406(a) of
ERISA and Section 4975 of the Code and such exemption is immediately
applicable to each transaction contemplated by the Operative Documents
to the extent that any other party to such transaction is a "party in
interest" as defined in Section 3(14) of ERISA, or a "disqualified
person" as defined in Section 4975(e)(2) of the Code, with respect to
such plan assets.
(d) Investment in Notes. It is acquiring the Note for its own
account for investment and not with a view to any distribution (as such
term is used in Section 2(11) of the Securities Act) thereof, and if in
the future it should decide to dispose of all or any portion its
interest in its Note or other Operative Documents, it understands that
it may do so only in compliance with the Securities Act and the rules
and regulations of the SEC thereunder and any applicable state
securities laws. Neither it nor anyone authorized to act on its behalf
has taken or will take any action which would subject the issuance or
sale of any Note, the Trust Estate (including the Leased Property
constituting a part thereof), the Collateral or the Lease to the
registration requirements of Section 5 of the Securities Act. Subject
to the foregoing, it is understood among the parties that the
disposition of each Lender's property shall be at all times within its
control.
(e) Lessor Liens. The Leased Property is free and clear of all
Lessor Liens attributable to it.
SECTION 4.3. Representations and Warranties of the Trustee. Bank, in
its individual capacity, represents and warrants to each of the other parties
hereto as follows:
(a) Chief Executive Office. Bank's "chief executive office"
and "principal place of business" as such terms are used in Section
9-103(3) of the UCC and the place where the documents, accounts and
records relating to the transactions contemplated by the Operative
Documents are kept is located at One Hancock Plaza; Gulfport,
Mississippi 39502.
(b) Due Organization, etc. Bank is a duly organized and
validly existing banking corporation in good standing under the laws of
the State of Mississippi and has full power and authority to execute,
deliver and perform its obligations (i) in its individual capacity
under the Trust Agreement and, to the extent it is a party hereto in
its individual capacity, this Agreement, and (ii) as Trustee under the
Trust Agreement, under this Agreement and each other Operative Document
to which it is or will be a party as Trustee.
(c) Due Authorization; Enforceability. The Operative Documents
to which the Bank is or will be a party have been or will be, on the
date required to be delivered hereby, duly authorized, executed and
delivered by or on behalf of the Bank (in its individual capacity) and
are, or upon execution and delivery by the Bank will be, legal, valid
and binding obligations of the Bank (in its individual capacity),
enforceable against it in accordance with their respective terms,
except as such enforcement may be limited by applicable bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and
by general equitable principles.
(d) No Conflict. The execution and delivery by (i) the Bank,
in its individual capacity, of the Trust Agreement and, to the extent
it is a party hereto in its individual capacity, this Agreement, and
(ii) the Bank, in its capacity as Trustee, of each Operative Document
to which Trustee is or will be a party, are not and will not be, and
the performance by the Bank, in its individual capacity or as Trustee,
as the case may be, of its obligations under each are not and will not
be inconsistent with the articles of association or by-laws of the
Bank, do not and will not contravene any Applicable Laws of the United
States of America or the State of Mississippi relating to the banking
or trust powers of the Bank, and do not and will not result in a breach
of or constitute a default under (with or without the giving of notice
or lapse of time or both) any indenture, mortgage, deed of trust,
lease, loan or credit agreement or any other agreement or instrument to
which the Bank is a party or by which it or its properties may be bound
or affected.
(e) No Approvals, etc. Neither the execution and delivery by
Trustee in its individual capacity or as Trustee, as the case may be,
of any of the Operative Documents to which it is a party requires any
Governmental Approval by any Governmental Authority under any
Applicable Laws of the United States of America or the State of
Mississippi relating to the banking or trust powers of the Bank.
(f) Litigation. There is no action, proceeding or
investigation pending or threatened against the Bank (in its individual
capacity or as Trustee) which questions the validity of the Operative
Documents or which is reasonably likely to result, individually or in
the aggregate, in any material adverse effect on the ability of the
Bank (in its individual capacity or as Trustee) to perform its
obligations (in either capacity) under the Operative Documents to which
it is a party.
(g) Lessor Liens. The Leased Property is free and
clear of all Lessor Liens attributable to the Bank (in its
individual capacity).
(h) Securities Act. Neither the Bank (in its individual
capacity or as Trustee) nor anyone authorized to act on its behalf has,
directly or indirectly, in violation of Section 5 of the Securities Act
or any state securities laws, offered or sold any interest in the
Notes, the Leased Property or the Lease, or in any security or lease
the offering of which, for purposes of the Securities Act or any state
securities laws, would be deemed to be part of the same offering as the
offering of the aforementioned securities or leases, or solicited any
offer to acquire any of the aforementioned securities or leases.
SECTION 4.4. Representations and Warranties of the Agent. BA Leasing &
Capital Corporation, in its individual capacity, hereby represents and warrants
to each of the other parties hereto as follows:
(a) Due Organization, etc. Agent is duly organized and validly
existing under the laws of the jurisdiction of its organization and has
the requisite power and authority to execute, deliver and perform its
obligations under the Operative Documents to which it is or will be a
party.
(b) Due Authorization; Enforceability. The Operative Documents
to which the Agent is or will be a party have been or will be, on the
date required to be delivered hereby, duly authorized, executed and
delivered by the Agent, and are, or, upon execution and delivery will
be, legal, valid and binding obligations of the Agent, enforceable
against it in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by general
equitable principles.
(c) No Conflict. Neither the execution and delivery by the
Agent of the Operative Documents to which it is or will be a party,
either in its individual capacity or as the Agent, or both, nor
performance of its obligations thereunder in either such capacity,
results in a breach of, or constitutes a default under (with or without
the giving of notice or lapse of time or both), or violates the terms,
conditions or provisions of: (i) the articles of incorporation of the
Agent; (ii) any agreement, to which the Agent, either in its individual
capacity, as Agent, or both, is now a party or by which it or its
property, either in its individual capacity, as Agent, or both, is
bound or affected, where such breach, default or violation would be
reasonably likely to materially and adversely affect the ability of the
Agent, either in its individual capacity or as Agent or both, to
perform its obligations under any Operative Document to which it is or
will be a party, either in its individual capacity or as Agent, or
both; or (iii) any Applicable Laws of the United States of America or
the State of New York relating to the banking or trust powers of the
Agent, where such conflict, breach, default or violation would be
reasonably likely to materially and adversely affect the ability of the
Agent, either in its individual capacity, as Agent or both, to perform
its obligations under any Operative Document to which it is or will be
a party.
(d) No Approvals, etc. No Governmental Approval by any
Governmental Authority under any Applicable Laws of the United States
of America or the State of New York relating to the banking or trust
powers of the Agent is or will be required in connection with the
execution and delivery by the Agent of the Operative Documents to which
it is party or the performance by the Agent of its obligations under
such Operative Documents.
ARTICLE V
COVENANTS OF LESSEE, CONSTRUCTION AGENT AND PARENT
SECTION 5.1. Further Assurances. Each of the Lessee and the
Construction Agent, at its own cost and expense, will cause to be promptly and
duly taken, executed, acknowledged and delivered all such further acts,
documents and assurances as any Lender, the Trustee or the Agent reasonably may
request from time to time in order to carry out more effectively the intent and
purposes of this Agreement and the other Operative Documents to which it is a
party and the transactions contemplated thereby. Parent, at its own cost and
expense, will cause all financing statements (including precautionary financing
statements), fixture filings, Deeds of Trust and other documents, to be recorded
or filed at such places and times in such manner, and will take all such other
actions or cause such actions to be taken, as may be necessary or as may be
reasonably requested by any Lender, the Trustee or the Agent in order to
establish, preserve, protect and perfect the title of the Trustee to the Leased
Property and the Trustee's rights under this Agreement and the other Operative
Documents and to perfect, preserve and protect the first and prior Lien of the
Security Agreement on the Trust Estate in favor of the Agent for the benefit of
the Lenders. Without limiting the foregoing, the Parent shall furnish to each
Lender, the Trustee and the Agent, annually commencing on the fifth anniversary
of the Closing Date, an opinion of counsel with respect to the continued
perfection of the security interests created pursuant to the Operative
Documents.
SECTION 5.2. Consolidation, Merger, Sale, etc.
(a) Subject to Section 5.4, Lessee shall not consolidate with
any Person, merge with or into any Person or convey, transfer or lease
to any Person all or substantially all of its assets in any single
transaction (or series of related transactions), unless, immediately
after giving effect to such transaction, the conditions set forth in
clauses (i) through (vii) shall have been satisfied:
(i) the Person formed by such consolidation with or
into which Lessee shall be merged or the Person which shall
acquire by conveyance, transfer or lease all or substantially
all of the assets of Lessee (the "Surviving Company") shall be
a corporation, partnership, association or other business
entity that is organized under the laws of the United States
of America, a state thereof or the District of Columbia;
(ii) the Surviving Company (if other than Lessee)
shall execute and deliver to each of the parties hereto an
agreement, in form and substance reasonably satisfactory to
the Lenders, the Trustee and the Agent, containing the
assumption by the Surviving Company of the due and punctual
payment, performance and observation of each obligation,
covenant and agreement of Lessee under this Agreement and each
other Operative Document to which, immediately prior to such
transaction, Lessee was a party;
(iii) each Guarantor shall execute and deliver to
each of the parties hereto a reaffirmation, in form and
substance satisfactory to the Lenders, the Trustee and the
Agent, that each and all of the obligations of such Guarantor
under this Agreement and the Guaranty remain, and will remain,
in full force and effect, notwithstanding the transaction or
transactions giving rise to the requirement that such
reaffirmation be delivered hereunder;
(iv) no Lease Default, Lease Event of Default,
Event of Loss or Construction Agency Event of Default shall
have occurred or would occur as a result thereof;
(v) the title of the Trustee to the Leased Property
and the Trustee's rights under this Agreement and the other
Operative Documents and the first and prior Lien granted to
the Trustee in the Lease shall not be adversely affected;
(vi) the Surviving Company (if other than Lessee)
shall have obtained all Gaming Permits and Liquor Permits
necessary for the continued operation of the Casino and the
Resort; and
(vii) Lessee shall have delivered to the Lenders,
the Trustee and the Agent a certificate of a Responsible
Officer of the Lessee and an opinion of counsel reasonably
satisfactory to each such Person stating that such transaction
complies with this Section 5.2(a), that all conditions to the
consummation of such transaction have been fulfilled and that
all Governmental Action required in connection with such
transaction has been obtained, given or made.
Upon the consummation of such transaction, the Surviving
Company shall succeed to, and be substituted for, and may exercise
every right and power of, Lessee immediately prior to such transaction
under this Agreement and each other Operative Document to which Lessee
was a party immediately prior to such transaction, with the same effect
as if the Surviving Company had been named herein and therein.
Notwithstanding the foregoing provisions of this Section 5.2(a), no
conveyance, transfer or lease of all or substantially all of the assets
of Lessee shall release the Lessee, the Construction Agent or any
Guarantor from its respective payment or other obligations under this
Agreement or any other Operative Document without the written consent
of the Trustee, the Agent and each Lender.
(b) Each Guarantor shall not consolidate with any Person,
merge with or into any Person or convey, transfer or lease to any
Person all or substantially all of its assets in any single transaction
(or series of related transactions), unless, immediately after giving
effect to such transaction, the conditions set forth in clauses (i)
through (vii) shall have been satisfied:
(i) the Person formed by such consolidation with or
into which the Guarantor shall be merged or the Person which
shall acquire by conveyance, transfer or lease all or
substantially all of the assets of the Guarantor (the
"Surviving Company"), if other than the Guarantor immediately
prior to such transaction, shall be a corporation,
partnership, association or other business entity that is
organized under the laws of the United States of America, a
state thereof or the District of Columbia;
(ii) the Surviving Company (if other than the
Guarantor) immediately prior to such transaction, shall
execute and deliver to each of the parties hereto an
agreement, in form and substance reasonably satisfactory to
the Lenders, the Trustee and the Agent, containing the
assumption by the Surviving Company of the due and punctual
payment, performance and observation of each obligation,
covenant and agreement of the Guarantor under this Agreement
and each other Operative Document to which, immediately prior
to such transaction, the Guarantor was a party;
(iii) Such Guarantor shall execute and deliver to
each of the parties hereto a reaffirmation, in form and
substance satisfactory to the Lenders, the Trustee and the
Agent, that each and all of the obligations of such Guarantor
under this Agreement and the Guaranty remain, and will remain,
in full force and effect, notwithstanding the transaction or
transactions giving rise to the requirement that such
reaffirmation be delivered hereunder;
(iv) no Lease Default, Lease Event of Default,
Event of Loss or Construction Agency Event of Default shall
have occurred or would occur as a result thereof;
(v) the Surviving Company (if other than the
Guarantor) shall have obtained all Gaming Permits and Liquor
Permits, including a finding that if the Guarantor is the
Parent that it is suitable to own the capital stock of Lessee,
as then required by Applicable Law;
(vi) the Parent and such Guarantor shall have
delivered to the Lenders, the Trustee and the Agent a
certificate of a Responsible Officer of the Parent and such
Guarantor and an opinion of counsel reasonably satisfactory to
each such Person stating that such transaction complies with
this Section 5.2(b), that all conditions to the consummation
of such transaction have been fulfilled and that all
Governmental Action required in connection with such
transaction has been obtained, given or made; and
(vii) immediately after the consummation of such
transaction, no Change of Control shall have occurred.
Upon the consummation of such transaction, the Surviving
Company shall succeed to, and be substituted for, and may exercise
every right and power of, the Parent immediately prior to such
transaction under this Agreement and each other Operative Document to
which the Parent was a party immediately prior to such transaction,
with the same effect as if the Surviving Company had been named herein
and therein. Notwithstanding the foregoing provisions of this Section
5.2(b), no conveyance, transfer or lease of all or substantially all of
the assets of the Parent shall release the Lessee or the Construction
Agent or any Guarantor from its payment or other obligations under this
Agreement or any other Operative Document without the written consent
of the Trustee, the Agent, and each Lender.
SECTION 5.3. Corporate Existence. Subject to Section 5.2, each
Guarantor, the Lessee and the Construction Agent shall at all times maintain its
existence as a corporation in good standing under the laws of its respective
jurisdiction of incorporation and shall use commercially reasonable efforts to
preserve and keep in full force and effect its franchises material to its
business.
SECTION 5.4. Ownership of Lessee. Parent shall at all times maintain
ownership of 100% of the issued and outstanding capital stock of the Lessee and
the Construction Agent (including all rights to subscribe for, purchase
(including by conversion of any other security) or otherwise acquire any such
capital stock), free and clear of all Liens other than a pledge of the all of
the issued and outstanding shares of capital stock of Lessee to the Indenture
Trustee.
SECTION 5.5. Liens. Neither the Lessee, the Construction Agent, any
Guarantor nor the Parent shall incur or suffer to exist any Lien on any of the
Leased Property or the Collateral other than (i) Permitted Liens, (ii) Liens
created under a ship mortgage in respect of the Barge Equipment and Casino
Barges that collateralize Pari Passu Indebtedness (as defined in the Indenture)
only, but only if the lender or lenders of the Pari Passu Indebtedness are bound
by the Intercreditor Agreement, (iii) Liens in respect of the Casino Barges
securing Pari Passu Indebtedness (as defined in the Indenture) in compliance
with Section 9.13(g) and (iv) security interests created or purported to be
created under the Uniform Commercial Code on Financed Property (as defined in
Section 9.13(f)) to be located on the Casino Barges, Levee Land, the Hotel or
the Hotel Site; it being understood that Lessee will not secure such Financed
Property (as defined in Section 9.13(f)) by granting a ship mortgage under the
Ship Mortgage Act contained in Chapter 313 of Title 46 United States Code with
respect thereto.
SECTION 5.6. Financial Covenant Compliance Certificates.
(a) Annual Certificate. Within 90 days after the close of each
Fiscal Year, the Lessee shall deliver to the Trustee, the Agent, and
each Lender a certificate of the Lessee signed by a Responsible Officer
of the Lessee to the effect that the signer is familiar with or has
reviewed the relevant terms of this Agreement, the Lease and each other
Operative Document to which the Lessee is a party and has made, or
caused to be made under his or her supervision, a review of the
transactions contemplated hereby and thereby and the condition of the
Leased Property during the preceding Fiscal Year, and that such review
has not disclosed the existence during such Fiscal Year of any
condition or event which constitutes a Lease Event of Default or
Casualty (except as described therein), nor does the signer have
knowledge, after due inquiry, of the existence as at the date of such
certificate, of any condition or event which constitutes a Lease
Default, a Lease Event of Default or Casualty or, if any such condition
or event existed or exists, specifying the nature and period of
existence thereof and what action such Lessee has taken or is taking or
proposes to take with respect thereto.
(b) Financial Covenant Compliance Certificate. Within 45 days
after the end of each Fiscal Quarter, Lessee shall deliver or cause to
be delivered to Agent and Trustee a Financial Covenant Compliance
Certificate (with appropriate insertions) of the Parent signed by a
Responsible Officer of the Parent showing (in reasonable detail and
with appropriate calculations and computations in all respects
satisfactory to Agent) compliance with the financial covenants set
forth in Section 5.16 and any other related information requested by
Agent.
(c) Pricing Ratio Certificate. Within 15 Business Days after
the end of each Fiscal Quarter, the Lessee shall deliver or cause to be
delivered to Agent and Trustee a Pricing Ratio Certificate of the
Parent signed by a Responsible Officer of the Parent (in reasonable
detail and with appropriate calculations and computations in all
respects satisfactory to Agent). Except as otherwise set forth below,
the Applicable Commitment Fee Rate for any Fiscal Quarter and
Applicable Margin for any Interest Period commencing in any Fiscal
Quarter shall be based on the Pricing Ratio determined as of the end of
the immediately preceding Fiscal Quarter. If Lessee fails to deliver or
cause to be delivered such Pricing Ratio Certificate on or before the
date such information is required to be delivered, then (i) for the
purposes of Section 2.6 of the Loan Agreement and Section 2.11, the
Applicable Commitment Fee Rate shall be .500% for the period commencing
on the first date of the Fiscal Quarter in which such Pricing Ratio
Certificate was supposed to be delivered and ending on the date of
delivery of the Pricing Ratio Certificate (at which time the Applicable
Commitment Fee Rate shall be calculated based on the Pricing Ratio
Certificate), and (ii) the Applicable Margin shall be 2.50% for each
Interest Period occurring during each month of the Fiscal Quarter in
which the Pricing Ratio Certificate was supposed to be delivered (and
upon delivery of the Pricing Ratio Certificate, the next commencing
Interest Period shall be based upon such Pricing Ratio Certificate
unless a more current Pricing Ratio Certificate has been delivered in
respect of a new Fiscal Quarter).
SECTION 5.7. Investigation by Governmental Authorities. Lessee shall
deliver to the Trustee, each Lender and to the Agent promptly upon the Lessee's
receiving written notice of the intent by a Governmental Authority to (w)
revoke, suspend, enjoin, restrict or modify any Gaming Permit or Liquor Permit
necessary for the ownership or operation of the Casino or gaming operations in
respect thereof, or the Hotel, (x) take an action which would constitute a
requisition of title to any of the Leased Property, (y) investigate the Leased
Property for a material violation of any Applicable Laws with respect to the
Leased Property, including any Environmental Law, under which liability may be
imposed upon the Trustee, any Lender, the Agent or the Lessee, or (z)
investigate the Leased Property (other than routine fire, life-safety and
similar inspections) for any violation of Applicable Laws under which criminal
liability may be imposed upon the Trustee, any Lender, Agent or the Lessee.
SECTION 5.8. Books and Records. Lessee will, at all times maintain
corporate books and records separate from those of any other Person in
accordance with GAAP.
SECTION 5.9. Payment of Taxes, Etc. Lessee shall pay and discharge
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property (including
the Leased Property), and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property, other than those arising from Permitted Liens.
SECTION 5.10. Inspection. Lessee shall permit the Agent, the Trustee
and the Lenders or any agents or representatives thereof annually (or upon
demand during an Event of Default) to (upon reasonable notice) examine and make
copies of and abstracts from the records and books of account of, the Lessee
(except for any proprietary information which involves trade secrets of the
Lessee) and to discuss the affairs, finances and accounts of the Lessee with any
of its officers. Agent, Trustee, the Lenders and any agents or representatives
thereof shall keep confidential and not disclose any confidential written
information received from Lessee in connection with such inspections, subject to
the Agent's, Trustee's or the Lenders' (a) obligation to disclose such
information pursuant to an order under Applicable Laws and regulations or
pursuant to a subpoena or other legal process, (b) right to disclose any such
information to its bank examiners, Affiliates, auditors, counsel and other
professional advisors but only on a need to know basis in connection with the
Operative Documents and only if such Persons are similarly bound in a separate
writing to the provisions of this Section 5.10, (c) right to disclose any such
information in connection with any litigation or dispute involving the Parent
and the Lessee or any of its Subsidiaries and Affiliates and (d) right to
provide such information to participants to which sales of participating
interests are permitted pursuant to this Participation Agreement and prospective
assignees to which assignments of interest are permitted pursuant to this
Participation Agreement, but only if such participant or prospective assignee
agrees in writing to maintain the confidentiality of such information on terms
substantially similar to those of this Section as if it were a "Lender" party
hereto. Notwithstanding the foregoing, any such information supplied to a
participant or prospective assignee under this Participation Agreement shall
cease to be confidential information if it is or becomes known to such Person by
other than unauthorized disclosure, or if it becomes a matter of public
knowledge. Lessee shall upon reasonable notice from the Agent (except that no
notice shall be required if an Event of Default has occurred and is continuing)
permit the Agent, the Trustee and the Lenders and their respective authorized
representatives to inspect the Leased Property during normal business hours,
provided that such inspections shall not unreasonably interfere with the
Lessee's business operations at the Leased Property. Annual inspections by the
Agent and all inspections following the occurrence of an Event of Default shall
be conducted at the cost and expense of Lessee.
SECTION 5.11. Maintenance of Property, etc. Lessee shall maintain and
preserve all material assets used or useful in the conduct of its business in
good working order and condition.
SECTION 5.12. Maintenance of Insurance. Lessee shall maintain insurance
coverage covering the Leased Property which meets in all respects the
requirements of Article IX of the Lease, and such coverage shall remain in full
force and effect. Without limiting the foregoing, Lessee shall carry insurance
with reputable insurers, or self-insure, in respect of its material assets, in
such manner, in such amounts and against such risks as is customarily maintained
by other Persons of similar size engaged in similar business.
SECTION 5.13. Change of Name or Principal Place of Business. Lessee
shall furnish to the Trustee, the Agent and the Lenders notice on or before the
thirtieth day before any relocation of its chief executive office, principal
place of business or the office where it keeps its records concerning its
accounts or contract rights relating to the Leased Property or the Property or
Lessee changes its name, identity or corporate structure.
SECTION 5.14. Financial and Other Information. Parent and
the Lessee shall deliver to the Trustee, each Lender and the
Agent the following financial and other information:
(a) Audited Statements. As soon as available and in any event
within 90 days after the end of each Fiscal Year of the Parent, a
consolidated balance sheet of the Parent and its Consolidated
Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of operations, cash flows and common
shareholders' equity for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous Fiscal Year, with such
consolidated financial statements audited by independent public
accountants of nationally recognized standing acceptable to the Agent,
which such report shall be without qualifications other than
qualifications acceptable to all Lenders, together with a certificate
from such accountant containing a computation of, and showing
compliance with, each of the financial ratios and levels contained in
Section 5.16 and to the effect that, in making the examination
necessary for the signing of such annual report by such accountants,
they have not become aware of any Default or Event of Default that has
occurred and is continuing, or, if they have become aware of such
Default or Event of Default, describing such Default or Event of
Default and the steps, if any, being taken to cure it.
(b) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each of the first three quarters
of each Fiscal Year of the Parent, the consolidated balance sheet of
the Parent and its Consolidated Subsidiaries as of the end of such
quarter and the related consolidated statement of operations and cash
flows of the Parent and its Consolidated Subsidiaries for the portion
of the Parent's Fiscal Year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the
corresponding quarter of, and the corresponding portion of the Parent's
preceding Fiscal Year, all certified (subject, in the case of such
quarterly financial statements, to normal year-end auditing
adjustments) by the chief financial officer of Parent as to fairness of
presentation and preparation in accordance with GAAP applied on a basis
consistent with those used in preparing the financial statements
referred to in Section 5.14(a) (subject to such changes in accounting
principles as shall be described in such certificate and shall have
been approved in writing attached to such certificate by the Parent's
independent accountants).
(c) Pension Plan. If and when any member of the ERISA Group
(1) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be
given to the PBGC; (2) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (3) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer any Plan, a copy of such notice; (4)
applies for a waiver of the minimum funding standard under Section 412
of the Code, a copy of such application; (5) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (6) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (7) fails to make any payment or contribution due any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of
a bond or other security, a certificate of the chief financial officer
or the chief accounting officer of the Parent setting forth details as
to such occurrence and action, if any, which the Parent or applicable
member of the ERISA Group is required or proposes to take.
(d) Default. As soon as possible and in any event within three
Business Days after the occurrence of each Default or Event of Default
under any Operative Document a statement of an officer of the Parent
setting forth details of such Default or Event of Default and the
action that the Parent proposes to take with respect thereto.
(e) Condition. Promptly upon becoming aware thereof,
written notice of any Material Adverse Effect.
(f) Proceedings. Promptly upon becoming aware thereof, written
notice of the commencement or existence of any proceeding against the
Parent or any Affiliate of the Parent by or before any Governmental
Authority that might, in the reasonable judgment of the Parent, result
in a Material Adverse Effect.
(g) Environmental. As soon as possible and in any event within
ten days after the occurrence of any Environmental Violation or alleged
Environmental Violation, a statement of an authorized officer setting
forth the details of such violation or alleged violation and the action
which the Parent proposes to take with respect thereto.
(h) Security Reports. As soon as available and in any event
within 60 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year of Parent, Form 10Qs of Parent shall have been
delivered to Trustee (with copies for each Lender) and within 105 days
after the end of each Fiscal Year of Parent, Form 10K of Parent shall
have been delivered to the Trustee (with copies for each Lender).
(i) Other Information. Promptly upon written
request therefore, any other information in respect of the
Parent or Lessee reasonably requested by the Agent.
SECTION 5.15. Securities. Neither the Lessee nor the Parent, nor anyone
authorized to act on behalf of any of them, will take any action which would
subject the issuance or sale of the Notes, the Leased Property or the Lease, or
in any security or lease the offering of which, for purposes of the Securities
Act or any state securities laws, would be deemed to be part of the same
offering as the offering of the aforementioned securities or leases to the
registration requirements of Section 5 of the Securities Act or any state
securities laws.
SECTION 5.16. Financial Covenants.
(a) Fixed Charge Coverage. Parent shall maintain a ratio of
Consolidated Adjusted EBITDA to Consolidated Fixed Charges, calculated
as of the last day of each Computation Period, of not less than the
ratio set forth below:
Period Ratio
Closing Date through 12/30/97 1.15:1.0
12/31/97 and thereafter 1.25:1.0
(b) Consolidated Net Worth. The Consolidated Net Worth of the
Parent shall not at any time be less than an amount equal to the sum of
(x) the Consolidated Net Worth of the Parent for the Fiscal Year ended
December 31, 1995 plus (1) 75% of Consolidated Net Income of the Parent
beginning with the first Fiscal Quarter of the 1996 Fiscal Year, and
calculated quarterly thereafter for each subsequent Fiscal Quarter,
plus (2) 100% of the proceeds from the issuance by the Parent of an
equity interest in the Parent or a Subsidiary (other than Stratosphere
Corporation and its Subsidiaries) to one or more Persons unaffiliated
with Parent, or the Ownership Percentage Interest of the proceeds from
the issuance by a Subsidiary (other than Stratosphere Corporation and
its Subsidiaries) of an equity interest in such Subsidiary to one or
more Persons unaffiliated with the Parent. Any Consolidated Net Losses
of Parent incurred in the 1996 Fiscal Year and thereafter shall not be
subtracted in computing Consolidated Net Worth of Parent.
(c) Consolidated Adjusted Senior Funded Debt/Consolidated
Adjusted EBITDA Ratio. Parent shall maintain a ratio of Consolidated
Adjusted Senior Funded Debt to Consolidated Adjusted EBITDA, calculated
as of the last day of each Computation Period, of not greater than the
ratio set forth below:
Period Ratio
Closing Date through 12/30/96 4.25:1.0
12/31/96 through 6/29/97 3.75:1.0
6/30/97 through 12/30/97 3.50:1.0
12/31/97 and thereafter 3.00:1.0
(d) Consolidated Adjusted Total Funded Debt/Consolidated
Adjusted EBITDA Ratio. Parent shall maintain a ratio of Consolidated
Adjusted Total Funded Debt to Consolidated Adjusted EBITDA, calculated
as of the last day of each Computation Period, of not greater than the
ratio set forth below:
Closing Date through 12/30/96 4.25:1.0
12/31/96 and thereafter 4.00:1.0
(e) For purposes of computing the financial covenants set
forth in Sections 5.16(a), (c) and (d), acquisitions, dispositions and
discontinued operations that have been made by Parent or any of its
Consolidated Subsidiaries, including all mergers, consolidations and
dispositions, during the Computation Period, shall be calculated on a
pro forma basis assuming that all such acquisitions, dispositions,
discontinued operations, mergers and consolidations (and the reduction
of any associated fixed charge obligations resulting therefrom) had
occurred on the first day of the Computation Period in question.
SECTION 5.17. Ship Mortgage. Subject to the terms of the Intercreditor
Agreement, immediately following the filing of the first priority ship mortgage
with respect to the Casino Barge pursuant to Section 4.20(c) of the Indenture,
Lessee shall file and record in the appropriate United States Coast Guard
offices an executed Ship Mortgage, substantially in the form of Exhibit G-2, and
take or cause to be taken all further action required to cause the Equipment
subject to the Lease and located on the Casino Barges to become subject to a
Lien in favor of the Agent and the Lenders and shall deliver or cause to be
delivered to Agent such legal opinions, certificates or other documents with
respect to such Ship Mortgage as the Agent may reasonably request, including a
legal opinion from Terriberry, Carroll & Yancy, LLP, maritime counsel to Lessee,
as to the matters set forth in the form of Exhibit N-3. Immediately prior to the
date of filing the Ship Mortgage, Lessee shall deliver to Agent a report, as of
a date immediately prior to such filing, of Liens and other encumbrances of
record with respect to the Casino Barge with the United States Coast Guard.
SECTION 5.18. Searches and Estoppel Certificates. Within 30 days after
the earlier to occur of (i) the Completion Date and (ii) June 30, 1997, Lessee
shall deliver to Agent (a) a report prepared by a search company reasonably
acceptable to Agent, of judgment liens, lis pendens, tax liens and UCC filings
with respect to Lease Supplements, which are filed of record with the applicable
state and local filing offices in the jurisdictions or jurisdictions in which
such Leased Property is located and the state in which Lessee has its "principal
place of business" and "chief executive office" (as such terms are used in
Section 9- 103(c) of the UCC), (b) an estoppel certificate addressed to the
Agent and the Trustee from each vendor listed on the Disclosure Schedule to the
effect that the purchase price for the items of Equipment sold to the Lessee by
the vendor pursuant to the purchase orders or purchase contracts listed on the
Disclosure Schedule opposite its name have been paid in full and (c) a revised
Schedule VII indicating the total Equipment Cost for all items of Equipment then
subject to the Lease. Such revised Schedule VII shall be based upon the purchase
orders and purchase contracts, as modified from time to time after the Closing
Date, in accordance with the Operative Documents.
SECTION 5.19. Amendment of Levee Board Lease. Lessee agrees that it
shall at all times comply with and diligently perform its obligations under the
Levee Board Lease. No amendment, modification, change or supplement to the Levee
Board Lease shall be entered into by the Lessee that is adverse to the interests
of the Trustee, the Agents or the Lenders, unless the Lessee has obtained the
prior consent of the Lenders. Lessee shall deliver to the Trustee, (with
sufficient copies for the Lenders) copies of all amendments, modifications,
changes or supplements to the Levee Board Lease.
SECTION 5.20. Changes to Contracts for a System. Lessee may enter into
modifications of the contracts for the System, provided that any modifications,
when taken together with any previous modifications to any System, that would
reduce the fair market value or economic useful life or utility of any System
shall not be made without the Agents' prior written consent.
SECTION 5.21. Compliance with Laws. With respect to the Leased Property
and the operation of the Hotel, Lessee, Construction Agent and Guarantors shall
comply with Applicable Laws, except for any violations which, individually or in
the aggregate, would not have a Material Adverse Effect.
SECTION 5.22. No Vessel Redocumentation. Lessee will not attach a barge
or vessel to a Casino Barge in such a manner that would cause the Casino Barge
or the Casino Barges to need to be redocumented under the maritime laws.
ARTICLE VI
COVENANTS OF TRUSTEE, AGENTS AND LENDERS
SECTION 6.1. Covenants of Trustee, Agents and the Lenders.
(a) Discharge of Liens. Each of the Lenders and the Trustee
covenants as to itself, and not jointly with any other Lender, that it
will not, directly or indirectly, create, incur, assume or permit to
exist at any time, and will, at its own cost and expense, take such
action as may be necessary to promptly discharge, or to cause to be
discharged, any Lessor Liens attributable to it, and will indemnify the
Trust Estate in the amount of any diminution of the value thereof and
any costs and expenses associated therewith as a result of its failure
to comply with its obligations under this Section 6.1(a).
Notwithstanding the foregoing, none of the Lenders or the Trustee, as
the case may be, shall be required to so discharge any such Lessor Lien
while the same is being contested in good faith by appropriate
proceedings diligently prosecuted so long as such proceedings shall not
involve any risk of invalidity or the loss of priority of the Lien of
the Deed of Trust or any risk of the sale, forfeiture, foreclosure or
loss of, and shall not interfere with the use or disposition of, any
part of the Leased Property, the Lease or the Trust Estate or title
thereto or any interest therein or the payment of Rent; provided,
however, that each Lender and the Trustee shall discharge any such
Lessor Lien, whether or not subject to contest as provided above, upon
the purchase of the Leased Property by the Lessee pursuant to the
Lease.
(b) Trust Agreement. Without prejudice to any right under the
Trust Agreement of the Trustee to resign, or the Lenders' or Lessee's
right under the Trust Agreement to remove the Trustee, the Trustee
hereby agrees with the Lessee, the Lenders and the Agent (i) not to
terminate or revoke the trust created by the Trust Agreement except as
permitted by Article IV of the Trust Agreement prior to the later of
the Lease Termination Date or the payment in full of the obligations
under the Notes, (ii) not to amend, supplement or otherwise modify or
consent to any amendment, supplement or modification of any provision
of the Trust Agreement prior to the Lease Termination Date in any
manner which would have a Material Adverse Effect on the rights of any
such party thereto, and (iii) to comply with all of the terms of the
Trust Agreement applicable to it except for such nonperformance which
would adversely affect the Trustee in its individual capacity.
(c) Successor Trustee. Trustee or any successor may resign or
be removed by the Lenders or Lessee as Trustee, a successor Trustee may
be appointed, and a corporation may become the Trustee under the Trust
Agreement, only in accordance with the provisions of Article III of the
Trust Agreement. Notwithstanding anything to the contrary contained in
this Agreement or the Trust Agreement, so long as no Event of Default
shall be continuing, the appointment of a successor Trustee shall be
subject to the consent of the Lessee (such consent is not to be
unreasonably withheld or delayed).
(d) Indebtedness; Other Business. Trustee on behalf of the
Trust shall not contract for, create, incur or assume any indebtedness,
or enter into any business or other activity, other than pursuant to or
under the Operative Documents and, for the benefit of the Lessee, the
Agent and the Lenders, agrees to be bound by Section 1.2(b) of the
Trust Agreement.
(e) Change of Principal Place of Business. Trustee shall give
prompt notice to the Lenders, the Lessee and the Agent if the Trustee's
principal place of business or chief executive office, or the office
where the records concerning the accounts or contract rights relating
to the Hotel or the transactions contemplated by the Operative
Documents are kept, shall cease to be located at One Hancock Plaza;
Gulfport, Mississippi 39502, or if it shall change its name, identity
or corporate structure.
(f) Loan Agreement. Trustee, Agent, Lessee and each Lender
hereby agree that, so long as the Lease is in effect, the Trustee shall
not consent to or permit any amendment of the terms and provisions of
the Loan Agreement, the Deed of Trust, the Ship Mortgage, the Ground
Lease or any Note, whether or not any Lease Event of Default shall have
occurred and be continuing, if any such amendment or action would have
the effect of increasing the obligations of the Lessee or decreasing
the rights of the Lessee, in each case without the prior written
consent of the Lessee, except that without such consent, the Trustee
may waive performance by the Agent of obligations to the Trustee the
non-performance of which does not adversely affect the Lessee. Each
Lender agrees to comply with Section 7.7 of the Loan Agreement.
(g) Funding. Trustee shall give prompt notice to the Lenders,
the Lessee and the Agent in the event any Lender does not fund the full
amount to be funded by such Lender on any Advance Date as described in
Article II.
(h) Lessee Financing Party Removal. If any of the Lessor, the
Trustee, the Lenders, the Co-Agents, the Lead Manager, the Arranger or
Agent (and any successors thereto) (each a "Lease Financing Party") is
found by any Gaming Authority to be unsuitable or unqualified for any
license, registration, approval or finding of suitability to serve as
Lessor, Trustee, Lender, Co-Agent, Lead Manager, Arranger or Agent, or
otherwise to be associated with the Lessee or any Guarantor, or the
Board of Directors of the Parent determines in its reasonable judgment
that such Lease Financing Party's continued association with the Lessee
or any Guarantor may result in (i) the disapproval, modification, or
non-renewal of any contract under which the Parent or any Subsidiary
thereof has sole or shared authority to manage any gaming operations,
or (ii) the loss or non-reinstatement of any license, registration,
approval, finding of suitability or franchise from any Gaming Authority
held by the Parent or any Subsidiary thereof to conduct any portion of
the business of the Parent or any Subsidiary thereof, such Lease
Financing Party agrees, upon receiving payment in cash in full of all
outstanding principal amounts, accrued interest, fees and all other
amounts payable to it under the Operative Documents, to cooperate with
the Parent with respect to the assignment, sale or transfer of such
Lease Financing Party's interest in the Operative Documents as Lessor,
Trustee, Lender, Co- Agent, Lead Manager, Arranger or Agent, as
appropriate, to a suitable party and complete such assignment, sale or
transfer within thirty (30) days of a request by the Parent to do so
(or such lesser period of time as required by any Gaming Authority).
SECTION 6.2. Restrictions On and Effect of Transfer. No Lender shall
assign and delegate all or any portion of its right, title or interest in, to or
under any of the Operative Documents, its Commitment, the Loans or any Note,
except that (x) any Lender may pledge, assign or grant a security interest in
its interest to any Federal Reserve Board or any other central bank authority
with respect to such Lender, (y) upon satisfaction of the conditions set forth
in clauses (a) through (e) of this Section 6.2 any Lender may transfer all or
any ratable portion of its interest to an Affiliate or to any other existing
Lender or any Affiliate of such Lender and, upon compliance with any applicable
provisions of Section 6.3(a), may sell, assign or otherwise transfer a
participation in its interest in any of the foregoing; provided, that no
Participating Entity (as hereinafter defined) shall become, by means of such
transfer, a Lender under the Operative Documents, and the Lessee shall be
entitled to continue to deal for all purposes under the Operative Documents
exclusively with the Lender who has transferred such participation, and (z) any
Lender may assign and delegate any ratable portion or all of such right, title
and interest upon the satisfaction of each of the following conditions (which
conditions will not be applicable to a transfer pursuant to clause (x) or (y) of
this Section 6.2):
(a) Required Notice and Effective Date. Any Lender desiring to
effect a transfer of its interest shall give written notice of each
such proposed transfer to Parent, Lessee and Agent at least seven (7)
Business Days prior to such proposed transfer, setting forth the name
of such proposed transferee, the percentage of interest to be retained
by such Lender, if any, and the date on which such transfer is proposed
to become effective. All reasonable out-of-pocket costs incurred by
Trustee or Agent in connection with any such disposition by a Lender
under this Section 6.2 shall be borne by such Lender. In the event of a
transfer under this Section 6.2(a), any expenses incurred by the
transferee in connection with its review of the Operative Documents and
its investigation of the transactions contemplated thereby shall be
borne by such transferee or the relevant Lender, as they may determine,
but shall not be considered costs and expenses which the Lessee is
obligated to pay or reimburse under Section 9.8.
(b) Assumption of Obligations. Any transferee pursuant to this
Section 6.2 shall have executed and delivered to the Agent and the Bank
a letter in substantially the form of the Investor's Letter attached
hereto as Exhibit L, and thereupon the obligations of the transferring
Lender under the Operative Documents shall be proportionately released
and reduced to the extent of such transfer. Upon any such transfer as
above provided, (i) the transferring Lender shall still be entitled to
the benefit of Article VII, and (ii) the transferee shall be deemed to
be bound by all obligations (whether or not yet accrued) under, and to
have become a party to, all Operative Documents to which its transferor
was a party, shall be deemed the pertinent "Lender" for all purposes of
the Operative Documents and shall be deemed to have made that portion
of the payments pursuant to this Agreement previously made or deemed to
have been made by the transferor represented by the interest being
conveyed; and each reference herein and in the other Operative
Documents to the pertinent "Lender" shall thereafter be deemed a
reference to the transferee, to the extent of such transfer, for all
purposes. Upon any such transfer, Schedules I, II, and III to this
Agreement, as applicable, shall be deemed to be revised to reflect the
relevant information for such new Lender and the Commitment of such new
Lender (and the revised Commitment of the transferor Lender if it shall
not have transferred its entire interest).
(c) Employee Benefit Plans. No Lender may make any such
assignment, conveyance or transfer to or in connection with any
arrangement or understanding in any way involving any Plan or Benefit
Arrangement (or its related trust), or with the assets of any such Plan
or Benefit Arrangement (or its related trust), within the meaning of
Section 4975(e)(1) of the Code (other than a governmental plan, as
defined in Section 3(32) of ERISA), with respect to which the Lessee or
such Lender or any of their Affiliates is a party in interest within
the meaning of ERISA Section 3(14) or a "disqualified person" within
the meaning of Section 4975(e)(2) of the Code.
(d) Representations and Warranties. Notwithstanding anything
to the contrary set forth above, no Lender may assign, convey or
transfer its interest to any Person unless such Person shall have
delivered to the Agent and the Lessee a certificate confirming the
accuracy of the representations and warranties set forth in Section 4.2
with respect to such Person (other than as such representation or
warranty relates to the execution and delivery of Operative Documents).
(e) Amounts. Any transfer of Notes shall be in a principal
amount which is equal to or greater than $5,000,000, or, if less, the
full amount of such Lender's Loan or Commitment.
(f) Financial Condition of Transferee. So long as the
Commitments are outstanding, no transfer by a Lender shall be effective
against the other parties to this Agreement unless the transferee is
(A) a bank or other financial institution with a combined capital,
surplus and undivided profits of at least $100,000,000, or (B) any
subsidiary of such a bank or financial institution, provided that such
bank or financial institution furnishes a guaranty with respect to the
transferee's obligations as a Lender, or (C) any other entity, provided
the transferee's obligations as a Lender are guaranteed by the
transferor Lender.
(g) Effect. From and after any transfer of its Notes, the
transferring Lender shall be released, to the extent assumed by the
transferee, from its liability and obligations hereunder and under the
other Operative Documents relating to the Leased Property to which such
transferor is a party in respect of obligations to be performed on or
after the date of such transfer. Upon any transfer by a Lender as above
provided, any such transferee shall be deemed a "Lender" for all
purposes of such documents and each reference herein to a Lender shall
thereafter be deemed a reference to such transferee for all purposes,
except as the context may otherwise require.
(h) Lessee Consent. So long as the Commitments are
outstanding, the transferees of an interest transferred pursuant to
this Section 6.2(h) shall have obtained the prior written consent of
the Lessee (so long as Lessee is not in Default under the terms of any
Operative Document), which consent may not be unreasonably withheld or
delayed by the Lessee.
Notwithstanding any transfer pursuant to this Section 6.2, the transferor shall
continue to be entitled to all benefits accrued and all rights vested prior to
such transfer, including rights to indemnification under this Agreement or any
other Operative Document.
SECTION 6.3. Participations.
(a) Participations. Each Lender covenants and agrees that it
will not grant participations in its Notes to any Person (a
"Participating Entity") unless such Person (i) is a bank or other
financial institution and (ii) represents and warrants, in writing, to
such Lender for the benefit of the Lenders and the Lessee that no part
of the funds used by it to acquire an interest in the Notes constitutes
assets of any Employee Benefit Plan or its related trust. Any such
transferor Lender shall require any transferee of its interest in the
Notes to make the representations and warranties set forth in the
preceding sentence, in writing, to such Person for its benefit and the
benefit of the Lenders and the Lessee. In the event of any such sale by
a Lender of a participating interest to a Participating Entity such
Lender's obligations under this Agreement and under the other Operative
Documents shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of its Note for all purposes under this Agreement and under the
other Operative Documents, and the Trustee, the Agent and, except as
set forth in Section 6.3(b), the Lessee shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement and under the other Operative
Documents, and such Lender shall retain the sole right to enforce the
obligations of the Lessee and the Guarantors under the Operative
Documents and to approve any amendment, modification or waiver of any
provision of any Operative Document. Any Lender selling a participation
shall give notice thereof to the Lessee and the Parent within ten (10)
Business Days after such sale.
(b) Transferee Indemnities. Each Participating Entity shall be
entitled to the benefits of Sections 2.9, 2.10, 2.11 and 2.12 of the
Loan Agreement and Articles VII and VIII with respect to its
participation in the Notes and Advances outstanding from time to time;
provided, that no Participating Entity in respect of its participation
shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive
in respect of the amount of the participation in the Notes transferred
by such transferor Lender to such Participating Entity had no such
transfer of a participation occurred.
SECTION 6.4. Required Transfers. If at any time during the Lease Term
any Lender shall request from the Trustee or the Lessee reimbursement for any
costs pursuant to Section 2.9, 2.10 or 2.11 of the Loan Agreement (which cost
Lessee is obligated to pay as Supplemental Rent under Section 3.2 of the Lease),
such Lender shall, upon request of the Lessee or the Agent, attempt in good
faith to promptly sell to a Person who would qualify under Section 6.3(a) the
Notes held by such Lender, the Commitment of such Lender and any other interests
of such Lender hereunder and under the other Operative Documents, in accordance
with this Section 6.4, in exchange for an amount equal to the outstanding
principal amount of such Lender's Notes together with all interest accrued
thereon and unpaid to the date of such purchase and all other amounts then due
and payable hereunder or under the other Operative Documents to such Lender
(including any requested reimbursement amounts).
ARTICLE VII
GENERAL INDEMNITY
SECTION 7.1. General Indemnification. Lessee and the Parent agree,
whether or not any of the transactions contemplated hereby shall be consummated,
to assume liability for, and to indemnify, protect, defend, save and keep
harmless each Indemnitee on an After-Tax Basis from and against any and all
Claims that may be imposed on, incurred by or asserted against such Indemnitee
(whether because of action or omission by such Indemnitee or otherwise), whether
or not such Indemnitee shall also be indemnified as to any such Claim by any
other Person and whether or not such Claim arises or accrues prior to the
Closing Date or after the Lease Termination Date, in any way relating to or
arising out of (a) any of the Operative Documents or any of the transactions
contemplated thereby or any investigation, litigation or proceeding in
connection therewith, and any amendment, modification or waiver in respect
thereof; or (b) the Land or any part thereof or interest therein; or (c) the
acquisition, mortgaging, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, purchase, ownership,
possession, rental, lease, sublease, repossession, maintenance, repair,
alteration, modification, addition or substitution, storage, transfer of title,
redelivery, use, financing, refinancing, operation, condition, sale (including
any transfer pursuant to Section 5.2 of the Lease or any sale pursuant to
Section 5.1 of the Lease), return or other disposition of all or any part of any
interest in the Leased Property or the imposition of any Lien (or incurring of
any liability to refund or pay over any amount as a result of any Lien) thereon,
including: (i) Claims or penalties arising from any violation of law or in tort
(strict liability or otherwise), (ii) latent or other defects, whether or not
discoverable, and (iii) any Claim for patent, trademark or copyright
infringement, provided that the matters in this clause (c) shall be without
duplication of any matter for which indemnification is provided pursuant to the
Environmental Indemnity contained in Section 7.2; (d) the offer, issuance, sale
or delivery of the Notes; (e) the breach or alleged breach by the Lessee of any
representation or warranty made by it or deemed made by it in any Operative
Document; (f) the transactions contemplated hereby or by any other Operative
Document (except for any violation of Section 4.2(c), in respect of the
application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any
prohibited transaction described in Section 4975(c) of the Code or (g) any other
agreement entered into or assumed by the Lessee in connection with the Leased
Property; provided, however, neither Lessee nor Parent shall be required to
indemnify under this Section 7.1 for any of the following: (1) as to an
Indemnitee, any Claim to the extent resulting from the willful misconduct or
gross negligence of such Indemnitee or, if such Indemnitee is the Bank, ordinary
negligence for the handling of funds (other than willful misconduct or gross
negligence imputed to such Indemnitee by reason of its participation in the
transactions contemplated hereby) or the breach by such Indemnitee of any
representation, warranty or covenant of such Indemnitee set forth in any
Operative Document, (2) as to an Indemnitee, any Claim resulting from a transfer
by such Indemnitee of all or any part of its interest in the Lease, the other
Operative Documents or the Leased Property, other than any such transfer either
required by the Lease (including a transfer as a result of a Casualty or a
transfer pursuant to Section 5.1 or 5.2 of the Lease) or any other Operative
Document or while a Lease Event of Default shall have occurred and be
continuing, (3) any Claims in respect of Taxes (such Claims to be subject to
Article VIII), other than a payment necessary to make payments under this
Section 7.1 on an After-Tax Basis, provided, that this exclusion does not apply
to any taxes or penalties included in Claims against which the Indemnitee is
provided an indemnification under subsection (f) of this Section 7.1 and (4) as
to an Indemnitee, any Claim resulting from Lessor Liens which such Indemnitee is
responsible for discharging under the Operative Documents. Lessee shall be
entitled to credit against any payments due under this Section 7.1 any insurance
recoveries received by an Indemnitee in respect of the related Claim under or
from insurance paid for by the Lessee or assigned to the Trustee by the Lessee.
If the Lessee shall obtain actual knowledge of any Claim indemnified
against under this Section 7.1, the Lessee shall give prompt notice thereof to
the appropriate Indemnitee or Indemnitees, and if any Indemnitee shall obtain
actual knowledge of any Claim indemnified under this Section 7.1, such
Indemnitee shall give prompt notice thereof to the Lessee, provided that failure
to so notify the Lessee shall release the Lessee from its obligations to
indemnify hereunder only if and to the extent that such failure results in a
forfeiture by the Lessee of substantive rights and defenses. With respect to any
amount that the Lessee is requested by an Indemnitee to pay by reason of this
Section 7.1, such Indemnitee shall, if so requested by the Lessee and prior to
any payment, submit such additional information to the Lessee as the Lessee may
reasonably request and which is reasonably available to such Indemnitee to
substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee for which the Indemnitee is indemnified under this Section 7.1 or
7.2, such Indemnitee shall notify the Lessee of the commencement thereof, and
the Lessee shall be entitled, at its expense, acting through counsel reasonably
acceptable to such Indemnitee, to participate in, and, to the extent that the
Lessee desires to, assume and control the defense thereof; provided, however,
that the Lessee shall have acknowledged in writing its obligation to fully
indemnify such Indemnitee in respect of such action, suit or proceeding; and
provided, further, that the Lessee shall not be entitled to assume and control
the defense of any such action, suit or proceeding if and to the extent that,
(A) in the reasonable opinion of such Indemnitee, (x)(i) such action, suit or
proceeding involves any risk of imposition of criminal liability or (ii) such
action, suit or proceeding involves any material risk of material civil
liability on such Indemnitee or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien)
on the Leased Property, the Trust Estate or any part thereof, unless, in the
case of this clause (x)(ii), the Lessee shall have posted a bond or other
security satisfactory to the relevant Indemnitees in respect to such risk or (y)
the control of such action, suit or proceeding would involve a bona fide
conflict of interest, (B) such proceeding involves Claims not fully indemnified
by the Lessee which the Lessee and the Indemnitee have been unable to sever from
the indemnified Claim(s), (C) a Default or a Lease Event of Default has occurred
and is continuing or (D) such action, suit or proceeding involves matters which
extend beyond or are unrelated to the transactions contemplated by the Operative
Documents and if determined adversely could be materially detrimental to the
interests of such Indemnitee notwithstanding indemnification by the Lessee.
Indemnitee, on the one hand, and Lessee and Parent, on the other hand, may
participate in a reasonable manner at its own expense and with its own counsel
in any proceeding conducted by the other in accordance with the foregoing.
Each Indemnitee shall at the Lessee's expense supply the Lessee with
such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by this Section 7.1 or 7.2. Unless a Lease
Event of Default shall have occurred and be continuing, no Indemnitee shall
enter into any settlement or other compromise with respect to any Claim which is
entitled to be indemnified under this Section 7.1 or 7.2 without the prior
written consent of the Lessee, which consent shall not be unreasonably withheld
or delayed, unless such Indemnitee waives its right to be indemnified under this
Section 7.1 or 7.2 with respect to such Claim. In addition, if an Indemnitee, in
violation of Lessee's right to assume and control the defense of any Claim,
refuses to permit Lessee to control the defense after written demand by Lessee
for such control, such Indemnitee waives its right to be indemnified under
Section 7.1 or 7.2 with respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to this
Section 7.1 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.
Any amount payable to an Indemnitee pursuant to this Section 7.1 shall
be paid to such Indemnitee promptly upon receipt of a written demand therefor
from such Indemnitee, accompanied by a written statement describing the basis
for such indemnity and the computation of the amount so payable and, if
requested by the Lessee, such determination shall be verified by a nationally
recognized independent accounting firm mutually acceptable to the Lessee and the
Indemnitee at the Lessee's expense.
SECTION 7.2. Environmental Indemnity. Without limitation of the other
provisions of this Article VII, Lessee hereby agrees to indemnify, hold harmless
and defend each Indemnitee on an After-Tax Basis from and against any and all
Claims (including third party Claims for personal injury or real or personal
property damage), all costs incurred in connection with any investigation or
monitoring of site conditions or any clean-up, remedial, removal or restoration
work by any federal, state or local government agency, arising in whole or in
part, out of or in any way relating to
(i) the presence or alleged presence on or under the Land of
any Hazardous Material, or any releases or discharges of any Hazardous
Material on, under, from or onto the Land,
(ii) any activity, including construction, carried on or
undertaken on or off the Land, whether by Lessee or any predecessor in
title or any employees, agents, contractors or subcontractors of Lessee
or any predecessor in title, or any other Persons (including such
Indemnitee), in connection with the handling, treatment, removal,
storage, decontamination, clean-up, transport or disposal of any
Hazardous Material that are located or present on or under or that
migrate, flow, percolate, diffuse or in any way move onto or under the
Land,
(iii) loss of or damage to any property or the environment
(including clean-up costs, response costs, remediation and removal
costs, costs of corrective action, costs of financial assurance, fines
and penalties and natural resource damages), or death or injury to any
Person, and all expenses associated with the protection of wildlife,
aquatic species, vegetation, flora and fauna, and any mitigative action
required by or under Environmental Laws, in connection with the Land,
any activities undertaken thereon or the actions of Lessee or
Construction Agent,
(iv) in connection with the Land, any activities undertaken
thereon or the actions of Lessee or Construction Agent, any claim
concerning lack of compliance with Environmental Laws, or any act or
omission causing an environmental condition that requires remediation
or would allow any Governmental Authority to record a Lien on the land
records, or
(v) any residual contamination on or under the Land, including
any such contamination affecting any natural resources, and any
contamination of any property or natural resources arising in
connection with the generation, use, handling, storage, transport or
disposal of any Hazardous Substances on the Land or by Lessee or
Construction Agent, and irrespective of whether any of such activities
were or will be undertaken in accordance with applicable laws,
regulations, codes and ordinances;
but Lessee shall not be required to indemnify any Indemnitee under this Section
7.2 for (1) any Claim to the extent resulting from the willful misconduct or
gross negligence of such Indemnitee, or any Affiliate of such Indemnitee (it
being understood that, unless the applicable Indemnitee was in possession of the
Land and caused the Claim, Lessee shall be required to indemnify an Indemnitee
even if the ordinary (but not gross) negligence of such Indemnitee, or any
Affiliate of such Indemnitee, caused or contributed to such Claim) or (2) except
with respect to the Trustee, any Claim to the extent attributable to acts or
events occurring after the expiration of the Lease Term so long as Trustee and
the Lenders are not exercising remedies against Lessee in respect of the
Operative Documents. The indemnity provided for herein shall not include any
matters with respect to Taxes. The indemnity provided for herein shall survive
the expiration or termination of and shall be separate and independent from any
remedy under the Lease or any other Operative Document.
ARTICLE VIII
GENERAL TAX INDEMNITY
SECTION 8.1. General Tax Indemnity. Except as otherwise provided in
this Section 8.1, the Lessee shall pay on an After- Tax Basis, and on written
demand shall indemnify and hold each Indemnitee harmless from and against, any
and all fees (including documentation, recording, license and registration
fees), taxes (including income (whether net, gross or adjusted gross, whether
domestic or foreign), gross receipts, sales, rental, use, turnover, value-added,
property, excise and stamp taxes), levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever, together with any penalties, fines or
interest thereon or additions thereto (any of the foregoing being referred to
herein as "Taxes" and individually as a "Tax") imposed on or with respect to any
Indemnitee, the Land, the Leased Property or any portion thereof, any Operative
Document or the Lessee or any sublessee or user of the Leased Property, by any
foreign authority, the United States or by any state or local government or
other taxing authority in the United States in connection with or in any way
relating to (i) the acquisition, mortgaging, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
purchase, ownership, possession, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition or substitution,
storage, transfer of title, redelivery, use, financing, refinancing, operation,
condition, sale, return or other application or disposition of all or any part
of the Land or the Leased Property or the imposition of any Lien (or incurrence
of any liability to refund or pay over any amount as a result of any Lien)
thereon, (ii) Rent or the receipts or earnings arising from or received with
respect to the Leased Property or any part thereof, or any interest therein or
any applications or dispositions thereof, (iii) any other amount paid or payable
pursuant to the Notes, or any other Operative Documents, the property or the
income or other proceeds with respect to the property held in the Trust Estate,
(iv) the Leased Property or any part thereof or any interest therein, (v) all or
any of the Operative Documents, any other documents contemplated thereby and any
amendments and supplements thereto, and (vi) otherwise with respect to or in
connection with the transactions contemplated by the Operative Documents;
provided, that the Lessee's indemnification obligation hereunder in respect of
any Tax shall be net of any foreign, federal,state or local income tax benefits
which are recognized by the relevant Tax Indemnitee as a result of the
imposition of such Tax).
SECTION 8.2. Exclusions from General Tax Indemnity. Section 8.1 shall
not apply to:
(a) Taxes on, based on, or measured by or with respect to the
net income of an Indemnitee (including minimum Taxes, capital gains
Taxes, Taxes on or measured by items of tax preference or alternative
minimum Taxes) other than (A) any such Taxes that are, or are in the
nature of, sales, use, rental (other than Taxes imposed on net rental
income) or property Taxes, (B) withholding Taxes imposed by the United
States or Mississippi (I) on payments with respect to the Notes, or
(II) on Rent, to the extent the net payment of Rent after deduction of
such withholding Taxes would be less than amounts currently payable
with respect to the Notes and (C) any such Taxes imposed on such
Indemnitee by any state (other than Mississippi) or local taxing
authority in such state to the extent such Taxes are imposed as a
result of the Lessee moving the Leased Property or any part thereof to
such state;
(b) Taxes that are based on, measured by or imposed with
respect to the fees or other compensation received by a Person acting
as Trustee or Agent (in their respective individual capacities) or any
Affiliate of any thereof for acting as trustees under the Trust
Agreement or the Loan Agreement, respectively;
(c) Taxes that result from any act, event or omission, or are
attributable to any period of time, that occurs after the earliest of
(A) the expiration of the Lease Term with respect to the Leased
Property and, if the Leased Property is required to be returned to the
Trustee in accordance with the Lease, such return and (B) the discharge
in full of the Lessee's obligations to pay the Lease Balance, or any
amount determined by reference thereto, with respect to the Leased
Property and all other amounts due under the Lease and other Operative
Documents, unless such Taxes (and interest, penalties and late charges
related thereto) relate to acts, events or matters occurring prior to
the earliest of such times or are imposed on or with respect to any
payments due or actions required under the Operative Documents after
such expiration or discharge; or
(d) Taxes imposed on an Indemnitee that result from any
voluntary sale, assignment, transfer or other disposition by such
Indemnitee or any related Indemnitee of any interest in the Leased
Property or any part thereof, or any interest therein or any interest
or obligation arising under the Operative Documents or any Notes, or
from any sale, assignment, transfer or other disposition of any
interest in such Indemnitee or any related Indemnitee, it being
understood that each of the following shall not be considered a
voluntary sale, assignment, transfer or other disposition: (A) any
substitution, replacement or removal of any of the Leased Property by
Lessee, (B) any sale or transfer resulting from the exercise by Lessee
of any early termination option, (C) any transfer under Section 5.2 of
the Lease or Section 3.11 of the Trust Agreement and (D) any sale or
transfer while a Lease Event of Default shall have occurred and be
continuing under the Lease.
SECTION 8.3. Contests. If any Claim shall be made against any
Indemnitee or if any proceeding shall be commenced against any Indemnitee
(including a written notice of such proceeding) for any Taxes as to which Lessee
may have an indemnity obligation pursuant to Section 8.1, or if any Indemnitee
shall determine that any Taxes as to which Lessee may have an indemnity
obligation pursuant to Section 8.1 may be payable, such Indemnitee shall
promptly notify Lessee. Lessee shall be entitled, at its expense, acting through
counsel reasonably acceptable to such Indemnitee, to participate in, and, to the
extent that Lessee desires to, assume and control the defense thereof; provided,
however, that Lessee shall have acknowledged in writing its obligation to
indemnify fully such Indemnitee in respect of such action, suit or proceeding;
and, provided, further, that Lessee shall not be entitled to assume and control
the defense of any such action, suit or proceeding if and to the extent that (A)
Lessee is not able to provide such Indemnitee with a legal opinion of counsel
reasonably acceptable to such Indemnitee that such action, suit or proceeding
does not involve (x) a risk of imposition of criminal liability or (y) any
material risk of material civil liability on such Indemnitee and will not
involve a material risk of the sale, forfeiture or loss of, or the creation of
any Lien (other than a Permitted Lien) on the Leased Property, the Deed of Trust
Estate, the Trust Estate or any part thereof, unless, in the case of this clause
(y), Lessee contemporaneously with such opinion shall have posted a bond or
other security satisfactory to the relevant Indemnitee in respect to such risk,
(B) the control of such action, suit or proceeding would involve a bona fide
conflict of interest, (C) such proceeding involves Claims not fully indemnified
by Lessee which Lessee and the Indemnitee have been unable to sever from the
indemnified claim(s), (D) a Lease Event of Default has occurred and is
continuing or (E) such action, suit or proceeding involves matters which extend
beyond or are unrelated to the transaction contemplated by the Operative
Documents and if determined adversely could be materially detrimental to the
interests of such Indemnitee notwithstanding indemnification by Lessee. The
Indemnitee, on the one hand, and Lessee and Parent, on the other hand, may
participate in a reasonable manner at its own expense and with its own counsel
in any proceeding conducted by each other in accordance with the foregoing.
Each Indemnitee shall at Lessee's expense supply Lessee with such
information and documents reasonably requested by Lessee as are necessary or
advisable for Lessee to participate in any action, suit or proceeding to the
extent permitted by this Section 8.3. Unless a Lease Event of Default shall have
occurred and be continuing, no Indemnitee shall enter into any settlement or
other compromise with respect to any Claim which is entitled to be indemnified
under this Section 8.3 without the prior written consent of Lessee, which
consent shall not be unreasonably withheld, unless such Indemnitee waives its
right to be indemnified under this Section 8.3 with respect to such Claim. In
addition, if an Indemnitee, in violation of Lessee's right to assume and control
the defense of any Claim, refuses to permit Lessee to control the defense, such
Indemnitee waives its right to be indemnified under Section 8.1 with respect to
such Claim.
Notwithstanding anything contained herein to the contrary, an
Indemnitee will not be required to contest (and Lessee shall not be permitted to
contest) (a) a Claim with respect to the imposition of any Tax if such
Indemnitee shall waive its right to indemnification under this Section 8.3 with
respect to such claim (and any related claim with respect to other taxable years
the contest of which is precluded or otherwise adversely affected as a result of
such waiver) and (b) any Claim if the subject matter thereof shall be of a
continuing nature and shall have previously been decided adversely. Each
Indemnitee and Lessee shall consult in good faith with each other concerning
each step and decision regarding the conduct of such contest controlled by
either, including the forum in which the claim is most likely to be favorably
resolved.
SECTION 8.4. Payments. Any Tax indemnifiable under this Article VIII
shall be paid directly when due to the applicable taxing authority if direct
payment is practicable and permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to an
Indemnitee pursuant to Section 8.1 shall be paid within thirty days after
receipt of a written demand therefor from such Indemnitee accompanied by a
written statement describing in reasonable detail the amount so payable, but not
before the date that the relevant Taxes are due. Any payments made pursuant to
Section 8.1 directly to the Indemnitee entitled thereto or Lessee, as the case
may be, shall be made in immediately available funds at such bank or to such
account as specified by the payee in written directions to the payor, or, if no
such direction shall have been given, by check of the payor payable to the order
of the payee by certified mail, postage prepaid at its address as set forth in
this Agreement. Upon the request of any Indemnitee with respect to a Tax that
Lessee is required to pay, Lessee shall furnish to such Indemnitee the original
or a certified copy of a receipt for Lessee's payment of such Tax or such other
evidence of payment as is reasonably acceptable to such Indemnitee.
SECTION 8.5. Reports. If any report, return or statement is required to
be filed with respect to any Taxes that are subject to indemnification under
this Article VIII, Lessee shall, if Lessee is permitted by Applicable Laws,
timely prepare and file such report, return or statement; provided, however,
that if Lessee is not permitted by Applicable Laws to file any such report
Lessee will promptly so notify the appropriate Indemnitee, in which case the
Indemnitee will file any such report after preparation thereof by Lessee.
SECTION 8.6. Withholding Tax Exemption. At least ten Business Days
prior to the first date on which any payment is due under any Note for the
account of any Lender which is a "foreign" corporation or partnership or
"foreign" trust" within the meaning of the Code and such Lender claims exemption
from, or a reduction of U.S. withholding tax under Section 1441 or 1442 of the
Code, such Lender agrees that it will have delivered to each of the Lessee, the
Trustee and the Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under the Operative Documents without deduction or
withholding of any United States Federal income taxes in accordance with Section
7.10 of the Loan Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Agreement and any of the Operative Documents, the transfer of the interest
in the Land and the Hotel to or by the Trustee as provided herein or in any
other Operative Documents (and shall not be merged into the Deed of Trust or any
other conveyance or transfer document), any disposition of any interest of the
Trustee in the Leased Property, the purchase and sale of the Notes, payment
therefor and any disposition thereof and shall be and continue in effect
notwithstanding any investigation made by any party hereto or to any of the
other Operative Documents and the fact that any such party may waive compliance
with any of the other terms, provisions or conditions of any of the Operative
Documents.
SECTION 9.2. No Broker, etc. Except for the Lessee's engagement of BA
Leasing & Capital Corporation as Arranger in connection with the transactions
contemplated hereby, none of the Lenders has retained or employed any broker,
finder or financial advisor to act on its behalf in connection with this
Agreement, nor authorized any broker, finder or financial advisor retained or
employed by any other Person so to act, nor incurred any fees or commissions to
which Trustee or any Lender might be subjected by virtue of their entering into
the transactions contemplated by this Agreement. BA Leasing & Capital
Corporation's compensation for acting hereunder other than as a Lender is the
receipt of the amounts provided for in the Operative Documents and in the
Arranger Fee Letter. Any party who is in breach of this representation shall
indemnify and hold the other parties harmless from and against any liability
arising out of such breach of this representation.
SECTION 9.3. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been given (i) in the case of notice by letter,
the earlier of when delivered to the addressee by hand or courier if delivered
on a Business Day and, if not delivered on a Business Day, the first Business
Day thereafter or on the fourth Business Day after depositing the same in the
mails, registered or certified mail, postage prepaid, return receipt requested,
and (ii) in the case of notice by facsimile or bank wire, when receipt is
confirmed if delivered on a Business Day and, if not delivered on a Business
Day, the first Business Day thereafter, addressed as provided in Schedule III,
or to such other address as any of the parties hereto may designate by written
notice.
SECTION 9.4. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 9.5. Amendments. Neither this Agreement nor any of the other
Operative Documents nor any of the terms hereof or thereof may be terminated,
amended, supplemented, waived or modified orally, but only by an instrument in
writing signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification shall be sought and consented to
by the Required Lenders; and no such termination, amendment, supplement, waiver
or modification shall be effective unless a signed copy thereof shall have been
delivered to the Trustee, the Lessee and the Agent. Trustee and the Lessee shall
not be permitted to amend, modify or supplement the Lease without the written
consent of the Required Lenders; provided, that without the prior written
consent of each Lender, the Trustee shall not:
(a) modify any of the provisions of this Section 9.5, change
the definition of "Required Lenders", or modify or waive any provision
of any Operative Document requiring action by any of the foregoing, or
release any Collateral (except as otherwise specifically provided in
any Operative Document);
(b) reduce the amount or change the time of payment of any
amount of principal owing or payable under any Note or interest owing
or payable on any Note, reduce the amount or change the time of payment
of any fee, or modify any of the provisions of Section 2.2 of the Trust
Agreement;
(c) modify, amend, waive or supplement any of the provisions
of Sections 3.1, 3.2, 3.4, 4, 5.1, 5.2, Article VII and Article X of
the Lease;
(d) reduce, modify, amend or waive any indemnities in favor of
any Lender;
(e) reduce the amount or change the time of payment of Rent or
the Lease Balance, or reduce the amount or change the time of payment
of any such payment under any Guaranty with respect to any such
payment;
(f) consent to any assignment of Lease releasing Lessee from
its obligations to pay Rent or the Lease Balance or changing the
absolute and unconditional character of such obligations;
(g) modify, amend, waive or supplement the Guaranty,
consent to any amendment thereof or release any of the
guarantees of any Guarantor; or
(h) permit the creation of any Lien on the Trust Estate or any
part thereof except as contemplated by the Operative Documents, or
deprive any Lender of the benefit of the security interest and Lien
secured by the Trust Estate.
SECTION 9.6. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Agreement are for convenience of reference
only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
SECTION 9.7. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN, AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF
SUCH STATE, EXCEPT TO THE EXTENT THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES
HEREUNDER OR UNDER THE OTHER OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH THE
GAMING LAWS.
SECTION 9.8. Transaction Costs. Lessee shall pay all Transaction Costs
whether or not the transactions contemplated hereby are consummated. In
addition, the Lessee agrees to pay or reimburse the Indemnitees on demand for
all other out-of-pocket costs and expenses, including attorneys' fees (and the
reasonable charges of in-house counsel of Arranger), reasonably incurred in
connection with: (a) entering into, or the giving or withholding of, any future
amendments, supplements, waivers or consents with respect to the Operative
Documents; (b) any Casualty or termination of the Lease or any other Operative
Documents; (c) the negotiation and documentation of any restructuring or
"workout," whether or not consummated, of any Operative Document; (d) the
enforcement or attempted enforcement, or preservation of any rights or remedies
under the Operative Documents; (e) any transfer by an Indemnitee of any interest
in the Loan or the Notes during the continuance of an Event of Default; and (f)
any transfer by the Trustee to a successor Trustee.
SECTION 9.9. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law; but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
SECTION 9.10. Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and permitted assigns,
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
SECTION 9.11. Final Agreement. THIS AGREEMENT, TOGETHER WITH THE
OPERATIVE DOCUMENTS, REPRESENT THE ENTIRE FINAL AGREEMENT BETWEEN THE PARTIES
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND THE OTHER OPERATIVE
DOCUMENTS. THIS AGREEMENT CANNOT BE MODIFIED, SUPPLEMENTED, AMENDED, RESCINDED
OR CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 9.12. No Third-Party Beneficiaries. Nothing in this Agreement
or the other Operative Documents shall be deemed to create any right in any
Person not a party hereto or thereto (other than the permitted successors and
assigns of Lessee, and Parent), and such agreements shall not be construed in
any respect to be a contract in whole or in part for the benefit of any third
party except as aforesaid.
SECTION 9.13. Release of Lien; Termination of Ground Lease. (a) Each
Lender hereby instructs the Trustee to release, and Agent shall also release,
(i) the Liens created by the Lease and Security Documents, respectively, against
the Leased Property promptly upon Lessee's payment in full in immediately
available funds of the Lease Balance and of all other amounts then due and owing
under the Operative Documents, and (ii) the Liens created by the Lease and
Security Documents, respectively, against the Gaming Equipment only, promptly
upon Lessee's payment in full in immediately available funds of the Allocated
Share of the Lease Balance related to the Gaming Equipment Lease Supplement, if
no Default or Event of Default has occurred and is continuing.
(b) If Lessee elects to purchase the Hotel and the Hotel Equipment
pursuant to Section 5.1 of the Lease, each Lender hereby instructs the Trustee
upon receipt of all amounts due under the Operative Documents to release, and
Agent shall also release, the Liens created by the Lease and the Security
Documents, respectively, against the Hotel and the Hotel Equipment.
(c) No sooner than the later of (i) the end of the Commitment Period
and (ii) the delivery by Lessee to Agent of the search reports required under
Section 5.18, and then only if no Default or Event of Default exists, Lessee may
deliver to Trustee (with sufficient copies for the Agents and the other Lenders)
a request to release the Liens created by the Lease and the Security Documents
against the items of Equipment (but not Systems) described in the request,
together with a certificate to the effect that (A) all vendors of items of
Equipment (including Systems) that are to remain subject to the Lease have been
paid in full, (B) Agent, for the benefit of the Lenders, has a first priority
lien of record on the Equipment (including Systems) that remains subject to the
Lease (other than the released Equipment) as against all Persons, including
Lessee and its creditors, (C) after taking into account the releases of the
liens in respect of the items of Equipment, there is at least $20,000,000 and
$70,000,000 respectively, (by cost of such Equipment) of Gaming Equipment and
Non-Gaming Equipment that remains subject to the Lease, (D) no Default or Event
of Default exists and (E) Trustee has made Advances for Hotel Costs, which when
added to the Equipment Costs for items of Equipment that are to remain subject
to the Lease, shall equal $120,001,000. Each Lender hereby instructs the Trustee
to release upon receipt of the request and a conformed certificate of release,
and Agent shall also release, their respective Liens against the items of
Equipment described in the request.
(d) Each Lender, Agent and Trustee, at the expense of the Lessee, will
promptly and duly execute and deliver all documents and take such further action
as may be necessary to release the Liens in accordance with Section 9.13(a), (b)
or (c), including if requested by Lessee the recording or filing of any document
evidencing the release of such Liens in accordance with the laws of the
appropriate jurisdictions.
(e) If the Lessee elects to purchase the Hotel and the Hotel Equipment
pursuant to Section 5.1 of the Lease or upon Lessee's payment in full in
immediately available funds of the Lease Balance and of all other amounts due
and owing under the Operative Documents, each Lender hereby instructs the
Trustee upon receipt of all amounts due under the Operative Documents to execute
a termination statement in recordable form in respect of the Ground Lease.
(f) Each Lender, Agent and Trustee shall at any time and from time to
time during the Lease Term, promptly, but in no event later than twenty (20)
Business Days after the request by the Lessee or Parent, execute and deliver to
Lessee, Parent and any prospective lessor, lender, mortgagee or assignee of Debt
(if (i) such financing party has signed a commitment letter to lease or lend to
Lessee or Parent, (ii) the real or personal property (the "Financed Property")
that is to be leased or encumbered thereby does not constitute any Leased
Property, and (iii) the Financed Property is to be located on or at the Casino
Barges, the Levee Land, the Hotel and/or the Hotel Site) (1) a certificate
stating that neither the Lenders, Agents nor the Trustee has any right, title or
interest in the Financed Property, and (2) if requested by any such financing
party, partial releases covering the Financed Property mutually acceptable to
such financing party, Lessee and the Lenders to confirm such interests and to
provide for the respective rights of such financing party and the Lenders in
their respective collateral securing any such Debt. The certificate delivered
pursuant to this Section 9.13(f) is rendered only to such financing party and
may not be relied upon by any other Person.
(g) Notwithstanding anything in the Operative Documents to the
contrary, the Lenders shall also permit the prospective lessor, lender,
mortgagee or assignee of Pari Passu Indebtedness (as defined in the Indenture)
to file a ship mortgage in respect of the Casino Barges and the Barge Equipment
subject to the Lease and the equipment to be financed, so long as such lessor,
lender, mortgagee or assignee of Pari Passu Indebtedness (as defined in the
Indenture) concurrently agrees to be bound by the Intercreditor Agreement and
acknowledges that it has no right, title or interest in or to the Barge
Equipment subject to the Lease or any proceeds therefrom other than pursuant to
a preferred ship mortgage in its favor.
SECTION 9.14. Reproduction of Documents. This Agreement, all documents
constituting Schedules or Exhibits hereto, and all documents relating hereto
received by a party hereto, including: (a) consents, waivers and modifications
that may hereafter be executed; (b) documents received by Lessor in connection
with Lessor's receipt and/or acquisition of the Equipment; and (c) financial
statements, certificates, and other information previously or hereafter
furnished to Lessor may be reproduced by Lessor by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. Each of the Lenders agrees and stipulates that, to the extent permitted
by law, any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not such reproduction was made by Lessor in the
regular course of business) and that, to the extent permitted by law, any
enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence; provided, however, that no such reproduction
shall be presented or accepted in lieu of the original of such reproduction for
purposes of Article 9 of the U.C.C. or any other applicable laws regarding
chattel paper.
SECTION 9.15. Submission to Jurisdiction. Lessor may bring suit to
enforce any claim arising out of the Operative Documents in any state or Federal
court located in New York, New York having subject matter jurisdiction, and with
respect to any such claim. Each of Lessee and each Guarantor hereby irrevocably:
(a) submits to the jurisdiction of such courts; and (b) consents to the service
of process out of said courts by mailing a copy thereof, by registered mail,
postage prepaid, to Lessee or any Guarantor at their respective addresses
specified in this Agreement, and agrees that such service, to the fullest extent
permitted by law: (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding; and (ii) shall be taken
and held to be valid personal service upon and personal delivery to it. Each of
Lessee and any Guarantor irrevocably waives, to the fullest extent permitted by
law: (A) any claim, or any objection, that it now or hereafter may have, that
venue is not proper with respect to any such suit, action or proceeding brought
in such a court located in New York, New York, including any claim that any such
suit, action or proceeding brought in such court has been brought in an
inconvenient forum; and (B) any claim that any of Lessee or any Guarantor is not
subject to personal jurisdiction or service of process in such forum. Nothing
herein contained shall preclude Trustee, Lessor or any Lender from bringing an
action or proceeding in respect hereof in any other state or federal court
within the United States having subject matter jurisdiction with respect to such
action and personal jurisdiction over the parties to such action. Lessee and
each Guarantor agree that a final judgment in any action or proceeding in a
state or Federal court within the United States may be enforced in any other
jurisdiction by suit on the judgment or in any other manner provided by law.
SECTION 9.16. Jury Trial. LESSEE AND EACH GUARANTOR WAIVE ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR ANY OPERATIVE DOCUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OPERATIVE DOCUMENT AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
SECTION 9.17. Payments Set Aside. To the extent that Lessee makes a
payment to Trustee, Agent or the Lenders, or Trustee, Agent or the Lenders
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any insolvency of Lessee, any Guarantor or any Subsidiary that
is a sublessee, assignee or transferee of any Leased Property or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to Agent upon demand its pro rata share of
any amount so recovered for distribution by Agent in accordance with the Loan
Agreement.
SECTION 9.18. Trust Agreement. The provisions of Section 5.1 of the
Trust Agreement limiting the reimbursement and indemnification obligations of
the Lenders are incorporated by reference into this Agreement.
SECTION 9.19. Consent to Conflict of Interest. The parties hereto
acknowledge that the Bank is entering into and will be bound by the Operative
Documents in multiple capacities, including individually, as Trustee, as Lessor,
as Borrower, as Lender and as agent to the Agent. Each party hereto consents to
the same and hereby waives any conflict of interest which may exist or arise as
a result thereof.
SECTION 9.20. No Marshalling/Other Loans and Set-Off. Notwithstanding
any provisions in documents related to other credit facilities or other
agreements between any Lender and the Lessee or any Guarantor, no Lender
hereunder may be compelled to marshall any collateral or other assets it may
hold from or for the benefit of any such Lessee or Guarantor. Any Lender may
make other extensions of credit, or renew or extend any existing extensions of
credit to Lessee or any Guarantor or have other relationships with Lessee or any
Guarantor. No Lender shall have any right or interest in any property taken as
collateral for such other extensions of credit or in any property or deposit in
the possession or control of any other Lender that may be or become collateral
for or otherwise available for payment of the obligations hereunder by reason of
the inclusion of any "cross-reference" provisions in the documentation
associated with such other extensions of credit, provided, however, if any
Lender with such rights elects to exercise any such right of cross-
collateralization or set-off, all Lenders shall be entitled to a pro rata share
of such proceeds realized as a result of such exercise.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
BL DEVELOPMENT CORP., as Lessee
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GRAND CASINOS, INC., as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GRAND CASINOS RESORTS, INC.,
as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GRAND CASINOS OF MISSISSIPPI, INC.
- GULFPORT, as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GRAND CASINOS OF MISSISSIPPI, INC.
- BILOXI, as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GRAND CASINOS OF BILOXI THEATER,
INC., as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GCI BILOXI HOTEL ACQUISITION
CORPORATION, as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GCI GULFPORT HOTEL ACQUISITION
CORPORATION, as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
MILLE LACS GAMING CORPORATION,
as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GRAND CASINOS OF LOUISIANA, INC.
TUNICA - BILOXI, as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GRAND CASINOS OF LOUISIANA, INC. -
COUSHATTA, as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
GCA ACQUISITION SUBSIDIARY, INC.,
as Guarantor
By: /s/ Timothy J. Cope
Name: Timothy J. Cope
Title: Chief Financial Officer
HANCOCK BANK, not in its individual
capacity except as expressly stated
herein, but solely as Lessor,
Borrower and Trustee
By: /s/ C.H. Gibbons
Name: C.H. Gibbons
Title: Vice President & Trust Officer
BA LEASING & CAPITAL CORPORATION,
not in its individual capacity
except as expressly stated herein,
but solely as Agent
By: /s/ David F. Scully
Name: David F. Scully
Title: Vice President
BANK OF SCOTLAND, as Co-Agent and
as Lender
By: /s/ Catherine M. (Illegible)
Name: Catherine M. (Illegible)
Title: Vice President
FIRST INTERSTATE BANK OF NEVADA, as
Co-Agent and as Lender
By: /s/ Steve Byrne
Name: Steve Byrne
Title: Vice President
SOCIETE GENERALE, as Co-Agent and
as Lender
By: /s/ Donald L. Schubert
Name: Donald L. Schubert
Title: Vice President
CREDIT LYONNAIS, LOS ANGELES
BRANCH, as Co-Agent and as
Lender
By: /s/ Thierry Vincent
Name: Thierry Vincent
Title: Vice President
BA LEASING & CAPITAL CORPORATION,
as Lender
By: /s/ David F. Scully
Name: David F. Scully
Title: Vice President
THE CIT GROUP/EQUIPMENT FINANCING,
INC., as Lender
By: /s/ John H. Beville
Name: John H. Beville
Title: Senior Vice President
UNITED STATES NATIONAL BANK OF
OREGON, as Lender
By: (Illegible)
Name: (Illegible)
Title: (Illegible)
BANK OF BOSTON, as Lender
By: /s/ Reginald T. Dawson
Name: Reginald T. Dawson
Title: Director
IMPERIAL BANK, as Lender
By: /s/ Steven K. Johnson
Name: Steven K. Johnson
Title: Senior Vice President
TRUSTMARK NATIONAL BANK, as Lender
By: /s/ John W. Ray, Jr.
Name: John W. Ray, Jr.
Title: Vice President
FIRST SECURITY BANK OF UTAH, N.A.,
as Lender
By: /s/ David P. Williams
Name: David P. Williams
Title: Vice President
FIRST NATIONAL BANK OF COMMERCE, as
Lender
By: /s/ (Illegible)
Name: (Illegible)
Title: Vice President
HANCOCK BANK, as Lender
By: /s/ Watson Butts
Name: Watson Butts
Title: Vice President
DEPOSIT GUARANTY NATIONAL BANK, as
Lender
By: /s/ Larry C. Ratzlaff
Name: Larry C. Ratzlaff
Title: Senior Vice President
SCHEDULE I
TO
PARTICIPATION AGREEMENT
SUBSIDIARY GUARANTORS
Grand Casinos Resorts, Inc.
Grand Casinos of Mississippi, Inc. - Gulfport
Grand Casinos of Mississippi, Inc. - Biloxi
Grand Casinos Biloxi Theater, Inc.
GCI Biloxi Hotel Acquisition Corporation
GCI Gulfport Hotel Acquisition Corporation
Mille Lacs Gaming Corporation
Grand Casinos of Louisiana, Inc. - Tunica - Biloxi
Grand Casinos of Louisiana, Inc. - Coushatta
GCA Acquisition Subsidiary, Inc.