EXHIBIT 10.72
$175,000,000
CREDIT AGREEMENT
DATED AS OF APRIL 23, 1999
AMONG
ISLE OF CAPRI CASINOS, INC.,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent and Issuing Lender,
BANK ONE LOUISIANA, N.A.,
as Syndication Agent,
and
WELLS FARGO BANK, N.A.,
as Documentation Agent,
ARRANGED BY:
CIBC OPPENHEIMER CORP.
TABLE OF CONTENTS
Page
Section 1. DEFINITIONS................................................. 2
1.1 Certain Defined Terms....................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement................................ 33
1.3 Other Definitional Provisions and Rules of Construction..... 33
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.................. 33
2.1 Commitments; Making of Loans; the Register; Notes........... 33
2.2 Interest on the Loans....................................... 42
2.3 Fees........................................................ 45
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments;
Application of Proceeds of Collateral and Payments Under
Subsidiary Guaranty......................................... 46
2.5 Use of Proceeds............................................. 54
2.6 Special Provisions Governing Eurodollar Rate Loans.......... 54
2.7 Increased Costs; Taxes; Capital Adequacy.................... 56
2.8 Obligation of Lenders and Issuing Lenders to Mitigate;
Replacement of Lender....................................... 60
Section 3. LETTERS OF CREDIT........................................... 62
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein...................................... 62
3.2 Letter of Credit Fees....................................... 64
3.3 Drawings and Reimbursement of Amounts Paid Under Letters
of Credit................................................... 64
3.4 Obligations Absolute........................................ 67
3.5 Indemnification; Nature of Issuing Lenders' Duties.......... 68
3.6 Increased Costs and Taxes Relating to Letters of Credit..... 69
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT................... 70
4.1 Conditions to Term Loans, Revolving Loans and Swing Line
Loans....................................................... 70
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TABLE OF CONTENTS
(continued)
Page
4.2 Conditions to All Loans..................................... 79
4.3 Conditions to Letters of Credit............................. 79
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES.................... 80
5.1 Organization, Powers, Qualification, Good Standing, Business
and Subsidiaries............................................ 80
5.2 Authorization of Borrowing, etc............................. 81
5.3 Financial Condition......................................... 82
5.4 No Material Adverse Change; No Restricted Junior Payments... 83
5.5 Title to Properties; Liens; Real Property................... 83
5.6 Litigation; Adverse Facts................................... 83
5.7 Payment of Taxes............................................ 84
5.8 Performance of Agreements; Materially Adverse Agreements;
Material Contracts.......................................... 84
5.9 Governmental Regulation..................................... 85
5.10 Securities Activities....................................... 85
5.11 Employee Benefit Plans...................................... 85
5.12 Certain Fees................................................ 86
5.13 Environmental Protection.................................... 86
5.14 Employee Matters............................................ 87
5.15 Solvency.................................................... 87
5.16 Matters Relating to Collateral.............................. 87
5.17 Related Agreements.......................................... 88
5.18 Disclosure.................................................. 88
5.19 Year 2000 Compliance........................................ 89
Section 6. COMPANY'S AFFIRMATIVE COVENANTS............................. 89
6.1 Financial Statements and Other Reports...................... 89
6.2 Corporate Existence, etc.................................... 95
6.3 Payment of Taxes and Claims; Tax Consolidation.............. 95
6.4 Maintenance of Properties; Insurance........................ 96
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TABLE OF CONTENTS
(continued)
Page
6.5 Inspection Rights........................................... 96
6.6 Compliance with Laws, etc.; Maintenance of Gaming and
Liquor Licenses............................................. 97
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of
Environmental Laws.......................................... 97
6.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries................................................ 99
6.9 Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral; Additional Ship
Mortgages................................................... 100
6.10 Year 2000 Compliance........................................ 102
Section 7. COMPANY'S NEGATIVE COVENANTS................................ 103
7.1 Indebtedness................................................ 103
7.2 Liens and Related Matters................................... 104
7.3 Investments; Joint Ventures................................. 106
7.4 Contingent Obligations...................................... 106
7.5 Restricted Junior Payments.................................. 107
7.6 Financial Covenants......................................... 108
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions................................................ 110
7.8 Consolidated Capital Expenditures........................... 111
7.9 Restriction on Leases....................................... 113
7.10 Sales and Lease-Backs....................................... 113
7.11 Sale or Discount of Receivables............................. 114
7.12 Transactions with Shareholders and Affiliates............... 114
7.13 Disposal of Subsidiary Stock................................ 114
7.14 Conduct of Business......................................... 114
7.15 Amendments or Waivers of Certain Related Agreements;
Amendments of Documents Relating to Subordinated
Indebtedness; Designation of "Designated Senior
Indebtedness"............................................... 115
7.16 Fiscal Year................................................. 115
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TABLE OF CONTENTS
(continued)
Page
Section 8. EVENTS OF DEFAULT........................................... 115
8.1 Failure to Make Payments When Due........................... 115
8.2 Default in Other Agreements................................. 116
8.3 Breach of Certain Covenants................................. 116
8.4 Breach of Warranty.......................................... 116
8.5 Other Defaults Under Loan Documents......................... 116
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc........ 116
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.......... 117
8.8 Judgments and Attachments................................... 117
8.9 Dissolution................................................. 117
8.10 Employee Benefit Plans...................................... 117
8.11 Change of Control........................................... 118
8.12 Invalidity of Subsidiary Guaranty; Failure of Security;
Repudiation of Obligations.................................. 118
8.13 Loss of Gaming Licenses..................................... 118
Section 9. ADMINISTRATIVE AGENT........................................ 119
9.1 Appointment................................................. 119
9.2 Powers and Duties; General Immunity......................... 120
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness............................... 122
9.4 Right to Indemnity.......................................... 122
9.5 Successor Administrative Agent and Swing Line Lender........ 123
9.6 Collateral Documents and Guaranties......................... 123
Section 10. MISCELLANEOUS............................................... 124
10.1 Assignments and Participations in Loans and Letters
of Credit................................................... 124
10.2 Expenses.................................................... 127
10.3 Indemnity................................................... 128
10.4 Set-Off; Security Interest in Deposit Accounts.............. 128
10.5 Ratable Sharing............................................. 129
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TABLE OF CONTENTS
(continued)
Page
10.6 Amendments and Waivers...................................... 130
10.7 Independence of Covenants................................... 131
10.8 Notices..................................................... 131
10.9 Survival of Representations, Warranties and Agreements...... 131
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative....... 132
10.11 Marshalling; Payments Set Aside............................. 132
10.12 Severability................................................ 132
10.13 Obligations Several; Independent Nature of Lenders' Rights.. 132
10.14 Headings.................................................... 132
10.15 Applicable Law.............................................. 133
10.16 Successors and Assigns...................................... 133
10.17 Consent to Jurisdiction and Service of Process.............. 133
10.18 Waiver of Jury Trial........................................ 134
10.19 Confidentiality............................................. 134
10.20 Counterparts; Effectiveness................................. 135
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII FORM OF OPINION OF COMPANY COUNSEL
IX FORM OF OPINION OF O'MELVENY & MYERS LLP
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF CERTIFICATE RE NON-DOMESTIC BANK STATUS
XII [INTENTIONALLY OMITTED]
XIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIV FORM OF COMPANY PLEDGE AGREEMENT
XV FORM OF COMPANY SECURITY AGREEMENT
XVI FORM OF SUBSIDIARY GUARANTY
XVII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XVIII FORM OF SUBSIDIARY SECURITY AGREEMENT
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
4.1F OTHER REFINANCED INDEBTEDNESS
4.1I CLOSING DATE MORTGAGED PROPERTIES
4.1K SHIP MORTGAGES
5.1 SUBSIDIARIES OF COMPANY
5.2C GOVERNMENTAL CONSENTS
5.5 REAL PROPERTY
5.8 MATERIAL CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
ii
ISLE OF CAPRI CASINOS, INC.
$175,000,000
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of April 23, 1999 and entered into
by and among ISLE OF CAPRI CASINOS, INC., a Delaware corporation (the
"Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a "Lender" and collectively as
"Lenders"), CIBC INC. ("CIBC Inc."), as swing line lender (in such capacity, the
"Swing Line Lender"), CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as agent for
Lenders (in such capacity, the "Administrative Agent") and as issuing lender
with respect to any Letter of Credit (in such capacity, the "Issuing Lender"),
BANK ONE LOUISIANA, N.A., as syndication agent for Lenders (in such capacity,
the "Syndication Agent"), WELLS FARGO BANK, N.A., as documentation agent for
Lenders (in such capacity, the "Documentation Agent"), and CIBC OPPENHEIMER
CORP., as lead arranger (in such capacity, the "Lead Arranger").
R E C I T A L S
---------------
WHEREAS, Company will tender in the Offer and Consent Solicitation
(capitalized terms used herein without definition shall have the meanings set
forth therefor in subsection 1.1 of this Agreement) for the purchase of all of
the outstanding Existing Senior Secured Notes in an aggregate principal amount
equal to $315,000,000;
WHEREAS, on or before the Closing Date, Company will issue and sell
not less than $390,000,000 in aggregate principal amount of the Subordinated
Notes, and will have arranged and obtained not less than $565,000,000 in total
financing (including the Subordinated Notes and the Obligations hereunder) to
finance the Offer and Consent Solicitation and the other transactions
contemplated by the Loan Documents and Related Agreements, in each case on terms
and conditions satisfactory to Administrative Agent.;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company, the proceeds of which will be used (i) together with the proceeds of
the issuance and sale of the Subordinated Notes, to fund the Financing
Requirements, and (ii) to provide financing for working capital and other
general corporate purposes of Company and its Restricted Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a First Priority Lien on substantially all of its real,
personal and mixed property, including a pledge of all of the capital stock of
each of its domestic Restricted Subsidiaries; and
WHEREAS, all of the Restricted Subsidiaries have agreed to guarantee
the Obligations hereunder and under the other Loan Documents and to secure their
guaranties by granting to Administrative Agent, on behalf of Lenders, a First
Priority Lien on substantially all of their respective real, personal and mixed
property, including a pledge of all of the capital stock of each of their
respective domestic Restricted Subsidiaries owned by them:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Administrative
Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms.
---------------------
The following terms used in this Agreement shall have the following
meanings:
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination
Date with respect to any Interest Period for a Eurodollar Rate Loan, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) obtained
by dividing (x) the rate of interest equal to (a) the interest rate per annum
--------
for deposits in Dollars in an amount approximately equal to the amount of CIBC's
Eurodollar Rate Loan and for a period approximately equal to such Interest
Period which appears on page 3750 of the Dow Jones Telerate Screen as of 11:00
A.M. (London time) two (2) Business Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period, or (b) if such a
rate does not appear on page 3750 of the Dow Jones Telerate Screen, the average
(rounded upwards, if necessary, to the nearest 1/100 of 1%) of the rates per
annum at which Dollar deposits in immediately available funds are offered to
CIBC in the interbank Eurodollar market as at or about 11:00 A.M. (New York City
time) two (2) Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of CIBC's Eurodollar Rate Loan and for a
period approximately equal to such Interest Period, by (y) a percentage equal to
--
100% minus the stated maximum rate (expressed as a percentage) of all reserve
-----
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"Affected Lender" has the meaning assigned to that term in subsection
2.6C.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Affiliated Fund" means, with respect to any Lender that is a fund
that invests (in whole or in part) in commercial loans, any other fund that
invests (in whole or in part) in commercial loans and is managed by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.
2
"Agreement" means this Credit Agreement dated as of April 23, 1999, as
it may be amended, supplemented or otherwise modified from time to time.
"Airplane" means the King Air 200 airplane owned by Company on the
Closing Date.
"Applicable Base Rate Margin" means, as at any date of determination,
a percentage per annum as set forth below opposite the applicable Consolidated
Total Leverage Ratio:
Consolidated Total Leverage Ratio Applicable Base Rate
-------------------------------------------------------------------------------
greater than or equal to 4.50:1.00 2.00%
less than 4.50:1.00 1.75%
but greater than or equal to 4.00:1.00
less than 4.00:1.00 1.50%
but greater than or equal to 3.50:1.00
less than 3.50:1.00 1.25%
but greater than or equal to 3.00:1.00
less than 3.00:1.00 1.00%
but greater than or equal to 2.50:1.00
less than 2.50:1.00 0.75%
; provided that until the delivery of the first Margin Determination Certificate
--------
pursuant to subsection 6.1(xix) after the six-month anniversary of the Closing
Date, the Applicable Base Rate Margin for Term Loans and Revolving Loans that
are Base Rate Loans shall be 1.75% per annum.
"Applicable Eurodollar Rate Margin" means, as at any date of
determination, a percentage per annum as set forth below opposite the applicable
Consolidated Total Leverage Ratio:
3
Applicable Eurodollar Rate
Consolidated Total Leverage Margin
--------------------------------------------------------------------------------
greater than or equal to 4.50:1.00 3.00%
less than 4.50:1.00 2.75%
but greater than or equal to 4.00:1.00
less than 4.00:1.00 2.50%
but greater than or equal to 3.50:1.00
less than 3.50:1.00 2.25%
but greater than or equal to 3.00:1.00
less than 3.00:1.00 2.00%
but greater than or equal to 2.50:1.00
less than 2.50:1.00 1.75%
; provided that until the delivery of the first Margin Determination Certificate
--------
pursuant to subsection 6.1(xix) after the six-month anniversary of the Closing
Date, the Applicable Eurodollar Rate Margin for Term Loans and Revolving Loans
that are Eurodollar Rate Loans shall be 2.75% per annum.
"Asset Sale" means the sale by Company or any of its Restricted
Subsidiaries to any Person other than Company or any of its Restricted
Subsidiaries of (i) any of the stock or other equity or ownership interests of
any of Company's Subsidiaries, (ii) substantially all of the assets of any
division or line of business of Company or any of its Subsidiaries, or (iii) any
other assets (whether tangible or intangible) of Company or any of its
Subsidiaries (other than (a) gaming equipment sold in the ordinary course of
business to the extent the proceeds of such sale are promptly reinvested in
other gaming equipment, and (b) any such other assets to the extent that the
aggregate value of such assets sold in any single transaction or related series
of transactions is equal to $2,000,000 or less).
"Assets Held for Sale or Development" means (i) the FFC Preferred
Stock, (ii) the Airplane, (iii) the Real Estate Options, (iv) the Cripple Creek
Land and (v) the Discontinued Assets.
"Assignment Agreement" means an Assignment Agreement in substantially
the form of Exhibit X annexed hereto.
---------
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Reference Rate
or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
4
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"Biloxi Casino Expansion Project" means the expansion or replacement
of the existing casino barge located at the Biloxi Gaming Facilities, either by
adding an additional barge to the existing barge or replacing the existing barge
with a larger barge.
"Biloxi Gaming Facilities" means the Gaming Facilities owned, leased,
operated or used by Company or its Restricted Subsidiaries in Biloxi,
Mississippi.
"Biloxi Leasehold Property" means the approximately 8 acres of
Leasehold Property leased from the City of Biloxi and the Biloxi Port Commission
in Harrison County, Mississippi, and used in connection with the Isle of Capri
Crowne Plaza Resort located at the Biloxi Gaming Facilities.
"Biloxi Podium Expansion Project" means the construction of a new
podium complex at the Biloxi Gaming Facilities to house an approximately 800-
space parking garage, a new sports/entertainment restaurant and retail space and
to serve as a base for either a timeshare facility or a hotel.
"Bossier City Gaming Facilities" means the Gaming Facilities owned,
leased, operated or used by Company or its Restricted Subsidiaries in Bossier
City, Louisiana.
"Bossier City Hotel Project" means the construction of an
approximately 305-room deluxe hotel located adjacent to the casino at the
Bossier City Gaming Facilities.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or the State of
Mississippi or is a day on which banking institutions located in such state are
authorized or required by law or other governmental action to close.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of
5
deposit or bankers' acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia that (a) is at least "adequately capitalized" (as defined in the
regulations of its primary Federal banking regulator) and (b) has Tier 1 capital
(as defined in such regulations) of not less than $100,000,000; and (v) shares
of any money market mutual fund that (a) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and (ii)
above, (b) has net assets of not less than $500,000,000, and (c) has the highest
rating obtainable from either S&P or Moody's.
"Certificate re Non-Domestic Bank Status" means a certificate
substantially in the form of Exhibit XI annexed hereto delivered by a Lender to
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Administrative Agent pursuant to subsection 2.7B(iii).
"Change of Control" means
(i) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) is
or becomes the "beneficial owner" (as such term is used in Rules 13d-3 and
13d-5 promulgated pursuant to the Exchange Act), directly or indirectly, of
equity Securities representing the greater of (x) the percentage of the
combined voting power of the outstanding Voting Stock of Company held by
Permitted Equity Holders (including shares as to which Company or a
Permitted Equity Holder holds an effective proxy to vote) or (y) 35% or
more of the combined voting power of the outstanding Voting Stock of
Company, but excluding in each case from the percentage of voting power
held by any "group" the voting power of shares owned by the Permitted
Equity Holders who are deemed to be members of the "group" so long as such
Permitted Equity Holders beneficially own a majority of the voting power of
the Voting Stock held by such "group, and at such time the Permitted Equity
Holders together shall fail to beneficially own, directly or indirectly,
equity Securities representing at least the same percentage of voting power
of such Voting Stock as the percentage "beneficially owned" by such
"person" or "group";
(ii) any sale, transfer or other conveyance, whether direct or
indirect, of a majority of the fair market value of the assets of Company,
on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction, any
"person" or "group" (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act, whether or not applicable) (other than the
Permitted Equity Holders (including any Permitted Equity Holders who are
part of a "group" where such Permitted Equity Holders beneficially own a
majority of the voting power of the Voting Stock held by such "group")) is
or becomes the "beneficial owner" (as such term is used in Rules 13d-3 and
13d-5 promulgated pursuant to the Exchange Act), directly or indirectly, of
more than 35% of the equity Securities of the transferee;
(iii) during any period of 12 consecutive months after the date
hereof, individuals who at the beginning of any such 12-month period
constituted the Board of Directors of Company (together with any new
directors whose election by such Board or whose nomination for election by
the shareholders of Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning
6
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board of
Directors of Company then in office; or
(iv) the occurrence of a "Change of Control" under the Subordinated
Note Indenture.
"CIBC" has the meaning assigned to that term in the introduction to
this Agreement.
"CIBC Inc." has the meaning assigned to that term in the introduction
to this Agreement.
"Closing Date" means the date on or before May 31, 1999, on which the
initial Loans are made.
"Coahoma Expansion Project" means the construction and development of
a casino and pavilion, a hotel with up to 250 rooms and related entertainment
complex as part of the Coahoma Gaming Facilities.
"Coahoma Gaming Facilities" means the Gaming Facilities owned, leased,
operated or used by Company or its Restricted Subsidiaries in Coahoma County,
Mississippi.
"Collateral" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations; provided,
--------
however, that "Collateral" shall not include Pompano Park or the Assets Held for
- -------
Sale or Development.
"Collateral Account" has the meaning assigned to that term in the
Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account Agreement
executed and delivered by Company and Administrative Agent on the Closing Date,
substantially in the form of Exhibit XIII annexed hereto, as such Collateral
------------
Account Agreement may hereafter be amended, supplemented or otherwise modified
from time to time.
"Collateral Documents" means the Collateral Account Agreement, the
Company Pledge Agreement, the Company Security Agreement, the Subsidiary Pledge
Agreements, the Subsidiary Security Agreements, the Mortgages, the Ship
Mortgages and all other instruments or documents delivered by any Loan Party
pursuant to this Agreement or any of the other Loan Documents in order to grant
to Administrative Agent, on behalf of Lenders, a Lien on any real, personal or
mixed property of that Loan Party as security for the Obligations.
"Commitment Fee Percentage" means, as at any date of determination, a
percentage per annum as set forth below opposite the applicable Consolidated
Total Leverage Ratio:
7
Consolidated Total Leverage Ratio Commitment Fee Percentage
--------------------------------------------------------------------------------
greater than or equal to 3.50:1.00 0.500%
less than 3.50:1.00 0.375%
; provided that until the delivery of the first Margin Determination Certificate
--------
pursuant to subsection 6.1(xix) after the six-month anniversary of the Closing
Date, the Commitment Fee Percentage shall be 0.500% per annum.
"Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"Company" has the meaning assigned such term in the introduction to
this Agreement.
"Company Pledge Agreement" means the Company Pledge Agreement executed
and delivered by Company on the Closing Date, substantially in the form of
Exhibit XIV annexed hereto, as such Company Pledge Agreement may thereafter be
- -----------
amended, supplemented or otherwise modified from time to time.
"Company Security Agreement" means the Company Security Agreement
executed and delivered by Company on the Closing Date, substantially in the form
of Exhibit XV annexed hereto, as such Company Security Agreement may thereafter
----------
be amended, supplemented or otherwise modified from time to time.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit VII annexed hereto delivered to Administrative Agent and Lenders by
-----------
Company pursuant to subsection 6.1(iv).
"Confidential Information Memorandum" means that certain Confidential
Information Memorandum relating to Company dated March 1999.
"Conforming Leasehold Interest" means any Recorded Leasehold Interest
as to which the lessor has agreed in writing for the benefit of Administrative
Agent (which writing has been delivered to Administrative Agent), whether under
the terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of "Landlord
Consent and Estoppel," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
"Consolidated Capital Expenditures" means, for any period, the sum of
(i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Restricted Subsidiaries) by Company and its Restricted Subsidiaries during that
period that, in conformity with GAAP, are included in "additions to property,
plant or equipment" or comparable items reflected in the consolidated statement
of
8
cash flows of Company and its Restricted Subsidiaries plus (ii) to the extent
----
not covered by clause (i) of this definition, the aggregate of all expenditures
by Company and its Restricted Subsidiaries during that period to acquire (by
purchase or otherwise) the business, property or fixed assets of any Person, or
the stock or other evidence of beneficial ownership of any Person that, as a
result of such acquisition, becomes a Restricted Subsidiary of Company.
"Consolidated EBITDA" means, for any period, the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) provisions for taxes based on income, (iv) total depreciation
expense, (v) total amortization expense, (vi) pre-opening expense, (vii) cash
dividends or other distributions actually paid to Company by its Unrestricted
Subsidiaries (but excluding any distributions made for the purpose of paying any
taxes arising from any equity ownership interests in such Unrestricted
Subsidiaries), (viii) management fees actually paid to Company by its
Unrestricted Subsidiaries, and (ix) other non-recurring items reducing
Consolidated Net Income but not requiring the expenditure of cash less the sum
----
of (x) interest income, and (y) other non-recurring items increasing
Consolidated Net Income but not constituting the receipt of cash, all of the
foregoing as determined on a consolidated basis for Company and its Restricted
Subsidiaries in conformity with GAAP.
"Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Interest Expense
plus capitalized interest less interest income, and (ii) all mandatory principal
- ---- ----
payments required to be made by Company or any of its Restricted Subsidiaries
(whether or not such payments are actually made), all of the foregoing as
determined on a consolidated basis for Company and its Restricted Subsidiaries
in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP) of Company and its Restricted Subsidiaries on a consolidated basis
with respect to all outstanding Indebtedness of Company and its Restricted
Subsidiaries, including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Agreements, but excluding, however, any amounts
referred to in subsection 2.3 payable to Administrative Agent and Lenders on or
before the Closing Date.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Company and its Restricted Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
--------
Person accrued prior to the date it becomes a Restricted Subsidiary of Company
or is merged into or consolidated with Company or any of its Restricted
Subsidiaries or that Person's assets are acquired by Company or any of its
Restricted Subsidiaries, and (ii) the income of any Restricted Subsidiary of
Company to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary.
"Consolidated Net Worth" means, as at any date of determination, the
sum of the capital stock and additional paid-in capital plus retained earnings
(or minus accumulated
9
deficits) of Company and its Restricted Subsidiaries on a consolidated basis
determined in conformity with GAAP.
"Consolidated Rental Payments" means, for any period, the aggregate
amount of all rents paid or payable by Company and its Restricted Subsidiaries
on a consolidated basis during that period under all Operating Leases (other
than Excluded Leases) to which Company or any of its Restricted Subsidiaries is
a party as lessee.
"Consolidated Senior Debt" means, as at any date of determination,
Consolidated Total Debt less the aggregate amount of all unsecured Subordinated
----
Indebtedness of Company and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Senior Leverage Ratio" means, as at any date of
determination, the ratio of (a) Consolidated Senior Debt as of the last day of
the Fiscal Quarter for which such determination is being made, to (b)
Consolidated EBITDA, after giving effect on a pro forma basis to any
acquisitions of any assets or any Persons pursuant to Expansion Capital
Expenditures permitted under subsection 7.8(ii) and/or any Asset Sales permitted
under subsection 7.7(vi), for the consecutive four Fiscal Quarters ending on the
last day of the Fiscal Quarter for which such determination is being made.
"Consolidated Total Debt" means, as at any date of determination, the
aggregate amount of all Indebtedness of Company and its Restricted Subsidiaries
plus the Contingent Obligations of Company and its Restricted Subsidiaries where
- ----
the primary obligation of such Contingent Obligation constitutes Indebtedness or
a makewell, keepwell or other similar agreement, but excluding Contingent
Obligations under Hedge Agreements, in each case determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Leverage Ratio" means, as at any date of
determination, the ratio of (a) Consolidated Total Debt as of the last day of
the Fiscal Quarter for which such determination is being made, to (b)
Consolidated EBITDA, after giving effect on a pro forma basis to any
acquisitions of any assets or any Persons pursuant to Expansion Capital
Expenditures permitted under subsection 7.8(ii) and/or any Asset Sales permitted
under subsection 7.7(vi), for the consecutive four Fiscal Quarters ending on the
last day of the Fiscal Quarter for which such determination is being made.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the
10
obligation of another, including, without limitation, any credit support
agreements, makewell agreements, keepwell agreements and any other agreements
evidencing similar obligations, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (X) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited. The obligations so guaranteed or otherwise supported (if
other than Indebtedness), including, without limitation, guarantees of minimum
room rates or occupancy levels, shall be in form and substance satisfactory to
Administrative Agent.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Cripple Creek Land" means the real estate owned or leased by Company
in Cripple Creek, Colorado, as of the Closing Date.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"Discontinued Assets" means the following assets held for sale by
Company or its Subsidiaries as of the Closing Date: (i) the Emerald Lady
riverboat and the Diamond Lady riverboat; (ii) the Lucky Seven barge and one
other barge (vessel number 511360); and (iii) certain gaming equipment valued at
less than $250,000.
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
"Eligible Assignee" means a Person that is (I) to the extent required
under applicable Gaming Laws, registered with, approved by, or not disapproved
by (whichever may be required under applicable Gaming Laws), all applicable
Gaming Authorities, and (II) (A) (i) a commercial bank, savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; provided that such financial institution has a combined capital
-------
and surplus of at least $100,000,000; (ii) a commercial bank organized under the
laws of any other country or a political subdivision thereof; provided that (x)
--------
such bank is acting through a branch or agency located in the United States or
(y) such bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political subdivision
of such country; or (iii) any other entity which is an "accredited investor"
11
(as defined in Regulation D under the Securities Act) which extends credit or
buys loans as one of its businesses including insurance companies, mutual funds,
lease financing companies and investment funds and any Affiliated Funds; or (B)
any Lender, any Affiliate of any Lender, or any Affiliated Fund of any Lender;
provided that no Affiliate of Company shall be an Eligible Assignee.
- --------
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et seq.), the
-- ---
Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the
-- ---
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the Federal
-- ---
Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42
-- ---
U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S) 2601
-- ---
et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
- -- ---
(S)136 et seq.), the Occupational Safety and Health Act (29 U.S.C. (S) 651 et
-- --- --
seq.), the Oil Pollution Act (33 U.S.C. (S) 2701 et seq) and the Emergency
- --- ------
Planning and Community Right-to-Know Act (42 U.S.C. (S) 11001 et seq.), each as
-- ---
amended or supplemented, any analogous present or future state or local statutes
or laws, and any regulations promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former
12
ERISA Affiliate of Company or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of Company or such Subsidiary within the meaning
of this definition with respect to the period such entity was an ERISA Affiliate
of Company or such Subsidiary and with respect to liabilities arising after such
period for which Company or such Subsidiary could be liable under the Internal
Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Company, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
13
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excluded Guarantors" means Isle of Capri Casino Colorado, Inc., a
Colorado corporation, and PPI, Inc., a Florida corporation.
"Excluded Leases" means (i) all leases existing as of the Closing Date
under which Company or any of its Restricted Subsidiaries is a lessee, (ii) all
leases arising from or relating to the Tunica Gaming Facilities and the Biloxi
Gaming Facilities under which Company or any of its Restricted Subsidiaries
enters into after the Closing Date and becomes a lessee, and (iii) all leases
replacing any of the foregoing. In the case of (ii) and (iii), such leases and
the rental payments in respect of such leases shall be reasonably satisfactory
to Administrative Agent.
"Existing Senior Secured Note Indenture" means the indenture pursuant
to which the Existing Senior Secured Notes were issued, as amended.
"Existing Senior Secured Notes" means the $315,000,000 in aggregate
principal amount of 12.5% Senior Secured Notes of Company due 2003.
"Expansion Capital Expenditures" means any Consolidated Capital
Expenditure by Company or any of its Subsidiaries which are made with respect to
any Related Business that is, or after giving effect to such expenditures will
be, (a) owned by Company or any of its Subsidiaries, or (b) which further
expands or enhances any Gaming Facility owned, leased, operated or used by
Company or any of its Subsidiaries existing or under construction as of the
Closing Date and which is not properly characterized as a Maintenance Capital
Expenditure.
"Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon and all Gaming Facilities) now,
hereafter or heretofore owned, leased, operated or used by Company or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FFC Preferred Stock" means all shares of preferred stock, $100 par
value, of Freedom Financial Corporation owned by Company.
"Financial Plan" has the meaning assigned to that term in subsection
6.1(xiii).
14
"Financing Requirements" means the aggregate of all amounts necessary
(i) to repurchase the outstanding Existing Senior Secured Notes pursuant to the
Offer and Consent Solicitation, (ii) to pay accrued and unpaid interest on such
Existing Senior Secured Notes, (iii) to pay not more than $46,000,000 in tender
offer premiums and consent fees, (iv) to refinance all of the Other Refinanced
Indebtedness, and (v) to pay Transactions Costs.
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances which as a matter of statutory law have priority over any other
Lien irrespective of the prior perfection or filing of such other Lien and, with
respect to ships, barges and other vessels, Permitted Priority Maritime Liens)
and (ii) such Lien is the only Lien (other than Liens permitted pursuant to
subsection 7.2) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its Subsidiaries as
determined on the basis of a four consecutive Fiscal Quarter period where (x) in
the case of every Fiscal Year other than a Fiscal Year ending during a leap
year, each such Fiscal Quarter consists of two four-week monthly periods and one
five-week monthly period or thirteen total weeks for each such Fiscal Quarter
and such Fiscal Year shall consist of a total of fifty-two weeks, and (y) in the
case of a Fiscal Year ending during a leap year, each of the first three such
Fiscal Quarters shall be for a period of thirteen total weeks and the last such
Fiscal Quarter shall be for a period of fourteen total weeks consisting of one
four-week monthly period and two five-week monthly periods and such Fiscal Year
shall consist of a total of fifty-three weeks; provided that Fiscal Year 1999
--------
shall end on April 25, 1999.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Funding and Payment Office" means (i) the office of Administrative
Agent and Swing Line Lender located at CIBC, 425 Lexington Avenue, New York, NY
10017, or (ii) such other office of Administrative Agent and Swing Line Lender
as may from time to time hereafter be designated as such in a written notice
delivered by Administrative Agent and Swing Line Lender to Company and each
Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
15
"Gaming Authority" means any governmental agency, authority, board,
bureau, commission, department, office or instrumentality that holds regulatory,
licensing or permit authority over gambling, gaming or Gaming Facility
activities conducted by Company or any of its Subsidiaries within its
jurisdiction.
"Gaming Facility" means any gaming establishment and other property or
assets directly ancillary thereto or used in connection therewith, including,
without limitation, any casinos, hotels, resorts, race tracks, theaters, parking
facilities, recreational vehicle parks, timeshare operations, retail shops,
restaurants, other buildings, land, golf courses and other recreation and
entertainment facilities, marinas, vessels, barges, ships and related equipment.
"Gaming Laws" means all statutes, rules, regulations, ordinances,
codes, administrative or judicial orders or decrees or other laws pursuant to
which any Gaming Authority possesses regulatory, licensing or permit authority
over gambling, gaming or Gaming Facility activities conducted by Company or any
of its Subsidiaries within its jurisdiction.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court or any Gaming Authority.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined in any Environmental Law or as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", acutely hazardous waste", "radioactive waste", "biohazardous
waste", "pollutant", "toxic pollutant", "contaminant", "restricted hazardous
waste", "infectious waste", "toxic substances", or any other term or expression
intended to define, list or classify substances by reason of properties harmful
to health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity of
any Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
16
"Hedge Agreement" means (i) any Interest Rate Agreement designed to
hedge against fluctuations in interest rates, (ii) any foreign exchange
contract, currency swap agreement, futures contract, option contract, synthetic
cap or other similar agreement or arrangement to which Company or any of its
Subsidiaries is a party designed to hedge against fluctuations in currency
values, and (iii) any other agreement or arrangement to which Company or any of
its Subsidiaries is a party which hedges against or is based upon fluctuations
in the value of the equity Securities of any Person, or any equity forward
agreements or similar agreements or arrangements.
"ICBH" means Isle of Capri Black Hawk L.L.C., a Colorado limited
liability company.
"Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements constitute
(X) in the case of Hedge Agreements, Contingent Obligations, and (Y) in all
other cases, Investments, and in neither case constitute Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection 10.3.
"Information Systems and Equipment" means all computer hardware,
firmware and software, as well as other information processing systems, or any
equipment containing embedded microchips, whether directly or indirectly owned,
licensed, leased, operated or otherwise controlled by Company or any of its
Subsidiaries, including through third-party service providers, and which, in
whole or in part, are used, operated, relied upon or integral to Company's or
any of its Subsidiaries' conduct of their businesses.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Company and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate Loan,
the last Business Day of each March, June, September and December of each year
commencing on the first such date to occur after the Closing Date, and (ii) with
respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of each Interest Period of
--------
six months "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
17
"Interest Period" has the meaning assigned to that term in subsection
2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Restricted Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person (including any
Subsidiary of Company), (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by any Restricted Subsidiary of Company
from any Person other than Company or any of its Restricted Subsidiaries, of any
equity Securities of such Subsidiary, (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by Company or any of its Restricted Subsidiaries to any
other Person (other than a wholly-owned domestic Restricted Subsidiary of
Company), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business, or (iv) Interest Rate Agreements not
constituting Hedge Agreements. The amount of any Investment shall be the excess
of (x) the original cost of such Investment plus (y) the cost of all additions
----
thereto, without any adjustments for increases or decreases in value, or write-
ups, write-downs or write-offs with respect to such Investment, over (z) the
aggregate amount of all distributions of Cash or Cash Equivalents constituting a
return of capital on such Investment.
"IP Collateral" means, collectively, the Collateral consisting of
Intellectual Property under the Company Security Agreement and the Subsidiary
Security Agreements.
"Issuing Lender" has the meaning assigned to that term in the
introduction to this Agreement and also means any Lender which agrees or is
otherwise obligated to issue a Letter of Credit, determined as provided in
subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
--------
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"Lake Charles Gaming Facilities" means the Gaming Facilities owned,
leased, operated or used by Company or its Restricted Subsidiaries in Westlake
(near Lake Charles), Louisiana.
18
"Lake Charles Leasehold Property" means the approximately 16.25 acres
of Leasehold Property leased in Calcasieu Parish, Louisiana, and used in
connection with the Isle of Capri Casino and Hotel located at the Lake Charles
Gaming Facilities.
"Lake Charles Project" means the construction of an approximately 250-
room waterfront deluxe hotel with convention space and restaurants located at
the Lake Charles Gaming Facilities.
"Landlord Consent and Estoppel" means (x) with respect to any
Leasehold Property (other than the Biloxi Leasehold Property and the Lake
Charles Leasehold Property), a letter, certificate or other instrument in
writing from the lessor under the related lease, satisfactory in form and
substance to Administrative Agent, pursuant to which such lessor agrees, for the
benefit of Administrative Agent, (i) that without any further consent of such
lessor or any further action on the part of the Loan Party holding such
Leasehold Property, such Leasehold Property may be encumbered pursuant to a
Mortgage and may be assigned to the purchaser at a foreclosure sale or in a
transfer in lieu of such a sale (and to a subsequent third party assignee if
Administrative Agent, any Lender, or an Affiliate of either so acquires such
Leasehold Property), (ii) that such lessor shall not terminate such lease as a
result of a default by such Loan Party thereunder without first giving
Administrative Agent notice of such default and at least 60 days (or, if such
default cannot reasonably be cured by Administrative Agent within such period,
such longer period as may reasonably be required) to cure such default, and
(iii) to such other matters relating to such Leasehold Property as
Administrative Agent may reasonably request, and (y) with respect to the Biloxi
Leasehold Property and the Lake Charles Leasehold Property, a letter,
certificate or other instrument in writing from the lessor under the related
lease, in each case in form and substance reasonably satisfactory to
Administrative Agent.
"Lead Arranger" has the meaning assigned to that term in the
introduction to this Agreement.
"Leasehold Property" means any leasehold interest of any Loan Party as
lessee under any lease of real property.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires.
"Letter of Credit" or "Letters of Credit" means Standby Letters of
Credit issued or to be issued by Issuing Lenders for the account of Company
pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which may be drawn under all Letters of
Credit then outstanding plus (ii) the aggregate amount of all drawings under
----
Letters of Credit honored by Issuing Lenders and not theretofore reimbursed by
Company in any manner, either directly or out of the proceeds of Revolving Loans
pursuant to subsection 3.3B.
"License Revocation" means the revocation, failure to renew or
suspension of, or the appointment of a receiver, supervisor or similar official
with respect to, any casino, gambling
19
or gaming license issued by any Gaming Authority covering any Gaming Facility or
other gaming facility owned, leased, operated or used by Company or any of its
Subsidiaries.
"Lien" means any lien, mortgage, ship mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Term Loans, Revolving Loans
or Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Company in favor of an Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
"Loan Party" means each of Company and any of Company's Subsidiaries
from time to time executing a Loan Document, and "Loan Parties" means all such
Persons, collectively.
"Maintenance Capital Expenditures" means any Consolidated Capital
Expenditures by Company or any of its Subsidiaries which are made to maintain,
restore or refurbish the condition or usefulness of property of Company or any
of its Subsidiaries, or otherwise to support the continuation of such Person's
day-to-day operations as then conducted, but which are not properly chargeable
to repairs and maintenance in accordance with GAAP; provided, however, that such
-------- -------
term shall not include any Consolidated Capital Expenditures to restore the
condition or usefulness of property to the extent funded from Net
Insurance/Condemnation Proceeds delivered to Company or any of its Subsidiaries
in accordance with the terms of the Loan Documents.
"Margin Determination Certificate" means an Officer's Certificate of
Company delivered (a) with respect to each Fiscal Quarter (other than each
fourth Fiscal Quarter), with the financial statements required pursuant to
subsection 6.1(ii), and (b) with respect to each fourth Fiscal Quarter, within
45 days of the last day of such fourth Fiscal Quarter, setting forth in
reasonable detail the Consolidated Total Leverage Ratio which is applicable as
of the last day of the fiscal period for which such financial statements and
Officer's Certificate are being delivered; provided that each Margin
--------
Determination Certificate to be delivered pursuant to subdivision (a) above
shall be included as part of the Compliance Certificate for each such Fiscal
Quarter.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries taken as a whole or (ii) the
impairment of the ability of Company and its
20
Subsidiaries taken as a whole to perform, or of Administrative Agent or Lenders
to enforce, the Obligations.
"Material Contract" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or of
material importance to the operations of Company or any of its Subsidiaries.
"Material Subsidiary" means each Subsidiary of Company now existing or
hereafter acquired or formed by Company which, on a consolidated basis for such
Subsidiary and its Subsidiaries, (i) for the most recent Fiscal Year accounted
for more than 5.0% of the consolidated revenues of Company and its Subsidiaries
or (ii) as at the end of such Fiscal Year, was the owner of more than 5.0% of
the consolidated assets of Company and its Subsidiaries.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in such form as may be approved by Administrative
Agent in its reasonable discretion, in each case with such changes thereto as
may be reasonably recommended by Administrative Agent's or Company's local
counsel based on local laws or customary local mortgage or deed of trust
practices, or (ii) at Administrative Agent's option, in the case of an
Additional Mortgaged Property (as defined in subsection 6.9), an amendment to an
existing Mortgage, in form reasonably satisfactory to Administrative Agent,
adding such Additional Mortgaged Property to the Real Property Assets encumbered
by such existing Mortgage, in either case as such security instrument or
amendment may be amended, supplemented or otherwise modified from time to time.
"Mortgages" means all such instruments, including the Closing Date Mortgages (as
defined in subsection 4.1I(i)) and any Additional Mortgages (as defined in
subsection 6.9B(i)), collectively.
"Mortgaged Property" means a Closing Date Mortgaged Property (as
defined in subsection 4.1I(i)) or an Additional Mortgaged Property (as defined
in subsection 6.9B).
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset
Sale, (ii) payment of the outstanding principal amount of, premium or penalty,
if any, and interest on any Indebtedness (other than the Loans) that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale,
21
and (iii) any reasonable brokerage fees, commissions and other similar expenses
relating to such Asset Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
"Non-Recourse Debt" means Indebtedness (i) as to which neither Company
nor any of its Restricted Subsidiaries (a) provides any guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, keepwell
or makewell agreement or instrument that would constitute Indebtedness) or (b)
is directly or indirectly liable (as a guarantor or otherwise), and (ii) no
default with respect to which (including any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of
Company or any of its Restricted Subsidiaries to declare a default under such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Notes" means one or more of the Term Notes, Revolving Notes or Swing
Line Note or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent pursuant
- ---------
to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to Administrative
----------
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice substantially
in the form of Exhibit III annexed hereto delivered by Company to Administrative
-----------
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"Offer and Consent Solicitation" means, collectively, (i) the offer by
Company to the holders of outstanding Existing Senior Secured Notes to
repurchase for cash $315,000,000 in aggregate principal amount of such notes,
and (ii) the solicitation by Company from the holders of outstanding Existing
Senior Secured Notes of consents to certain amendments and waivers to the
Existing Senior Secured Note Indenture, in each case as described in and in
22
accordance with the terms of the Offer and Consent Solicitation Materials, for
an aggregate payment which does not exceed the principal amount of the Existing
Senior Secured Notes so repurchased plus accrued and unpaid interest thereon,
----
and not more than $46,000,000 in tender offer premiums and consent fees.
"Offer and Consent Solicitation Materials" means, collectively, (i)
the Offer to Purchase and Consent Solicitation Statement distributed by Company
on March 15, 1999 to the holders of the Existing Senior Secured Notes, (ii) the
Consent and Letter of Transmittal, together with the substitute Form W-9, and
(iii) such other documents, transmittal letters and related materials provided
to the holders of outstanding Existing Senior Secured Notes and delivered to
Administrative Agent and Lenders prior to the Closing Date, as each such
document, letter or material may be amended from time to time thereafter to the
extent permitted under subsection 7.15A.
"Offering Memorandum" means that certain Offering Memorandum relating
to the Subordinated Notes dated April 20, 1999.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents or its chief
financial officer or its treasurer.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"Other Refinanced Indebtedness" means the Indebtedness of Company and
its Subsidiaries in an aggregate amount of up to $44,000,000 (including any
accrued but unpaid interest thereon and any premiums and penalties relating
thereto) to be refinanced with proceeds from the Subordinated Notes and the
initial Loans under this Agreement; provided that the Indebtedness selected by
--------
Company to be so refinanced shall be satisfactory to Lead Arranger and shall be
identified as "Other Refinanced Indebtedness" on Schedule 4.1F annexed hereto.
-------------
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"Permitted Encumbrances" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and rights
of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and
23
materialmen, and other Liens imposed by law, in each case incurred in the
ordinary course of business (a) for amounts not yet overdue or (b) for
amounts that are overdue and that (in the case of any such amounts overdue
for a period in excess of 5 days) are being contested in good faith by
appropriate proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for
any such contested amounts, and (2) in the case of a Lien with respect to
any portion of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral on account of
such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in any
material respect with the ordinary conduct of the business of Company or
any of its Subsidiaries or resulting in a material diminution in the value
of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, navigational servitudes,
restrictions, encroachments, and other minor defects or irregularities in
title, in each case which do not and will not interfere in any material
respect with the ordinary conduct of the business of Company or any of its
Subsidiaries or result in a material diminution in the value of any
Collateral as security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under any
lease permitted by subsection 7.9, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b),
so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements relating
solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(x) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
24
(xi) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or
similar agreements entered into in the ordinary course of business of
Company and its Subsidiaries;
(xii) licenses of patents, trademarks and other intellectual property
rights granted by Company or any of its Subsidiaries in the ordinary course
of business and not interfering in any material respect with the ordinary
conduct of the business of Company or such Subsidiary; and
(xiii) Permitted Priority Maritime Liens.
"Permitted Equity Holders" means Bernard Goldstein and his three adult
sons.
"Permitted Priority Maritime Liens" means maritime Liens on ships,
barges or other vessels for wages of a stevedore, when employed directly by a
Person listed in 46 U.S.C. (S) 31341, crew's wages, salvage and general average,
whether now existing or hereafter arising and other maritime Liens which arise
by operation of law during the normal operations of such ships, barges or other
vessels which (a) are paid in the ordinary course of business, and (b) have not
been recorded on the General Index or Abstract of Title (U.S.C.G. 1332) of such
ships, barges or other vessels or judicially asserted.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Company Pledge Agreement and the Subsidiary Pledge Agreements.
"Pompano Park" means the Gaming Facilities owned, leased, operated or
used by Company and its Subsidiaries in Pompano Beach, Florida.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Pro Rata Share" means (i) with respect to all payments, computations
and other matters relating to the Term Loan Commitment or the Term Loan of any
Lender, the percentage obtained by dividing (x) the Term Loan Exposure of that
--------
Lender by (y) the aggregate Term Loan Exposure of all Lenders, (ii) with respect
--
to all payments, computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender or any Letters of Credit issued
or participations therein purchased by any Lender or any participations in any
Swing Line Loans purchased by any Lender, the percentage obtained by dividing
--------
(x) the Revolving Loan Exposure of that Lender by (y) the aggregate Revolving
--
Loan Exposure of all Lenders, and (iii) for all other purposes with respect to
each Lender, the percentage obtained by dividing (x) the sum of the Term Loan
--------
Exposure of that Lender plus the Revolving Loan
----
25
Exposure of that Lender by (y) the sum of the aggregate Term Loan Exposure of
--
all Lenders plus the aggregate Revolving Loan Exposure of all Lenders, in any
----
such case as the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1. The initial Pro Rata Share of each Lender for
purposes of each of clauses (i), (ii) and (iii) of the preceding sentence is set
forth opposite the name of that Lender in Schedule 2.1 annexed hereto.
--------
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"Real Estate Options" means (i) all options held by Company, directly
or indirectly, on the Closing Date and (ii) all options acquired by Company,
directly or indirectly, after the Closing Date, in each case to purchase or
lease land with an aggregate cost to Company and its Restricted Subsidiaries not
to exceed $2,000,000.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recorded Leasehold Interest" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in Administrative Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "Record Document" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to Administrative Agent.
"Reference Rate" means the rate that CIBC announces from time to time
as its prime lending rate, as in effect from time to time.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, Offer and Consent
Solicitation Materials, the Offering Memorandum, the Subordinated Notes and the
Subordinated Note Indenture.
26
"Related Businesses" means the gaming businesses (including pari-
mutuel betting) conducted by Company and its Subsidiaries as of the Closing Date
and any and all reasonably related businesses necessary for, in support or
anticipation of and ancillary to or in preparation for, the gaming businesses,
including without limitation, the development, expansion or operation of any
Gaming Facility (including any land-based, dockside, riverboat or other type of
Gaming Facility).
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"Requisite Lenders" means Lenders having or holding more than 50% of
the sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
----
Revolving Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"Restricted Subsidiary" means any Subsidiary of Company other than an
Unrestricted Subsidiary.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii), and "Revolving Loan
Commitments" means such commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means April 23, 2004.
"Revolving Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
----
the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage
in respect of all Letters of Credit issued by that Lender (in each case net of
any participations purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
----
participations purchased by that
27
Lender in any outstanding Letters of Credit or any unreimbursed drawings under
any Letters of Credit plus (d) in the case of Swing Line Lender, the aggregate
----
outstanding principal amount of all Swing Line Loans (net of any participations
therein purchased by other Lenders) plus (e) the aggregate amount of all
----
participations purchased by that Lender in any outstanding Swing Line Loans.
"Revolving Loans" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(ii).
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(i)(b) on the Closing Date, (ii) any promissory notes
of Company issued pursuant to the last paragraph of subsection 2.1E relating to
any increase in Revolving Loan Commitments made pursuant to subsection 2.1A(iv),
and (iii) any promissory notes issued by Company pursuant to the last sentence
of subsection 10.1B(i) in connection with assignments of the Revolving Loan
Commitments and Revolving Loans of any Lenders, in each case substantially in
the form of Exhibit V annexed hereto, as they may be amended, supplemented or
---------
otherwise modified from time to time.
"Securities" means any stock, shares, partnership interests,
membership interests, voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement, options, warrants,
bonds, debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities" or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Ship Mortgage" means a security instrument (whether designated as a
first preferred ship mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in such form as may be approved by Administrative
Agent in its reasonable discretion, in each case with such changes thereto as
may be reasonably recommended by Administrative Agent's or Company's local
counsel based on local laws or customary local first preferred ship mortgage
practices, as such security instrument may be amended, supplemented or otherwise
modified from time to time. "Ship Mortgages" means all such instruments,
collectively.
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the
28
meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Restricted Subsidiaries in respect of industrial revenue
or development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Restricted Subsidiaries, (iii) the obligations of third
party insurers of Company or any of its Restricted Subsidiaries arising by
virtue of the laws of any jurisdiction requiring third party insurers, (iv)
obligations with respect to Capital Leases or Operating Leases of Company or any
of its Restricted Subsidiaries, and (v) performance, payment, deposit or surety
obligations of Company or any of its Restricted Subsidiaries, in any case if
required by law or governmental rule or regulation or in accordance with custom
and practice in the industry.
"Subordinated Indebtedness" means (i) the Indebtedness of Company
evidenced by the Subordinated Notes and (ii) any other Indebtedness of Company
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
reasonably satisfactory to Administrative Agent.
"Subordinated Note Indenture" means the indenture pursuant to which
the Subordinated Notes are issued, as such indenture may be amended from time to
time to the extent permitted under subsection 7.15B.
"Subordinated Notes" means the $390,000,000 in aggregate principal
amount of 8-3/4% Subordinated Notes due 2009 of Company issued pursuant to the
Subordinated Note Indenture.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Subsidiary Guarantor" means any domestic Restricted Subsidiary of
Company that executes and delivers a counterpart of the Subsidiary Guaranty on
the Closing Date or from time to time thereafter pursuant to subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by existing domestic Restricted Subsidiaries of Company on the Closing
Date and to be executed and delivered by additional domestic Restricted
Subsidiaries of Company from time to time
29
thereafter in accordance with subsection 6.8, substantially in the form of
Exhibit XVI annexed hereto, as such Subsidiary Guaranty may hereafter be
- -----------
amended, supplemented or otherwise modified from time to time.
"Subsidiary Pledge Agreement" means each Subsidiary Pledge Agreement
executed and delivered by an existing Subsidiary Guarantor (other than an
Excluded Guarantor) on the Closing Date or executed and delivered by any
additional Subsidiary Guarantor from time to time thereafter in accordance with
subsection 6.8, in each case substantially in the form of Exhibit XVII annexed
------------
hereto, as such Subsidiary Pledge Agreement may be amended, supplemented or
otherwise modified from time to time, and "Subsidiary Pledge Agreements" means
all such Subsidiary Pledge Agreements, collectively.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor (other than
an Excluded Guarantor) on the Closing Date or executed and delivered by any
additional Subsidiary Guarantor from time to time thereafter in accordance with
subsection 6.8, in each case substantially in the form of Exhibit XVIII annexed
-------------
hereto, as such Subsidiary Security Agreement may be amended, supplemented or
otherwise modified from time to time, and "Subsidiary Security Agreements" means
all such Subsidiary Security Agreements, collectively.
"Supplemental Collateral Agent" has the meaning assigned to that term
in subsection 9.1B.
"Swing Line Lender" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor Swing
Line Lender appointed pursuant to subsection 9.5B.
"Swing Line Loan Commitment" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(iii).
"Swing Line Loans" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iii).
"Swing Line Note" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(ii) on the Closing Date and (ii) any promissory note
issued by Company to any successor Administrative Agent and Swing Line Lender
pursuant to the last sentence of subsection 9.5B, in each case substantially in
the form of Exhibit VI annexed hereto, as it may be amended, supplemented or
----------
otherwise modified from time to time.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided that "Tax on the overall net income" of a Person shall be
--------
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are
30
considered to arise in or to relate to a particular jurisdiction, or otherwise)
of that Person (and/or, in the case of a Lender, its lending office).
"Term Loan Commitment" means the commitment of a Lender to make a Term
Loan to Company pursuant to subsection 2.1A(i), and "Term Loan Commitments"
means such commitments of all Lenders in the aggregate.
"Term Loan Exposure" means, with respect to any Lender as of any date
of determination (i) prior to the funding of the Term Loans, that Lender's Term
Loan Commitment and (ii) after the funding of the Term Loans, the outstanding
principal amount of the Term Loan of that Lender.
"Term Loans" means the Loans made by Lenders to Company pursuant to
subsection 2.1A(i).
"Term Notes" means (i) the promissory notes of Company issued pursuant
to subsection 2.1E(i)(a) on the Closing Date, (ii) any promissory notes of
Company issued pursuant to the last paragraph of subsection 2.1E relating to any
increase in Term Loans made pursuant to subsection 2.1A(iv), and (iii) any
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Term Loan Commitments or Term
Loans of any Lenders, in each case substantially in the form of Exhibit IV
----------
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"Title Company" means, collectively, one or more title insurance
companies reasonably satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the aggregate principal amount of all
----
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
----
"Transaction Costs" means the fees, costs and expenses payable by
Company on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents and the Related Agreements in an aggregate
amount not to exceed $17,000,000.
"Tunica Gaming Facilities" means the Gaming Facilities owned, leased,
operated or used by company or its Restricted Subsidiaries in Tunica County,
Mississippi.
"Tunica Project" means the renovation of the existing casino barge,
the construction of two multi-purpose theaters with a total of approximately
2,000 seats, and the construction of an approximately 200 to 250-room new hotel,
in each case as part of the Tunica Gaming Facilities.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; provided that such
--------
31
Subsidiary: (i) has no Indebtedness other than Non-Recourse Debt; (ii) is not
party to any agreement, contract, arrangement or understanding with Company or
any Restricted Subsidiary of Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of Company; (iii) is a Person with respect to which
neither Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (1) to subscribe for additional equity Securities or other
equity or ownership interests, or (2) to maintain or preserve such Person's
financial condition or to cause such Person to achieve or maintain any specified
levels of profitability; (iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of Company or any of its
Restricted Subsidiaries; and (v) has no Subsidiaries other than Unrestricted
Subsidiaries; and provided further that, notwithstanding the foregoing, Company
may not designate as an Unrestricted Subsidiary (x) any then existing Subsidiary
that owns, leases, operates or uses any assets or function directly relating to
or necessary for the conduct of casino gaming at the Biloxi Gaming Facilities,
the Bossier City Gaming Facilities, the Coahoma Gaming Facilities, the Lake
Charles Gaming Facilities, the Tunica Gaming Facilities or the Vicksburg Gaming
Facilities, or (y) PPI, Inc. Any such designation by the Board of Directors
shall be evidenced to Administrative Agent by filing with Administrative Agent
resolutions of the Board of Directors giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to
meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of Company as of such date. The Board of Directors may at
any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under subsection 7.1 and (ii) no Event of Default or
Potential Event of Default would be in existence following such designation.
"Vicksburg Gaming Facilities" means the Gaming Facilities owned,
leased, operated or used by Company or its Restricted Subsidiaries in Vicksburg,
Mississippi.
"Voting Stock" means, with respect to any Person, the capital stock
(including any and all shares, interests (including partnership, membership and
other equity interests), participations, rights in, or other equivalents
(however designated and whether voting or nonvoting) of, such capital stock, and
any and all rights, warrants or options exchangeable for or convertible into
such capital stock) of such Person which ordinarily has voting power for the
election of directors (or persons performing similar functions) of such Person,
whether at all times or only as long as no senior class of Securities has such
voting power by reason of any contingency.
"Year 2000 Compliant" means that all Information Systems and Equipment
accurately process date data (including without limitation calculating,
comparing and sequencing) in all material respects before, during and after the
year 2000, as well as same and multi-century dates, or between the years 1999
and 2000, taking into account all leap years, including the fact that the year
2000 is a leap year, and further, that when used in combination
32
with or interfacing with, other Information Systems and Equipment, shall
accurately accept, release and exchange date data, and shall in all material
respects continue to function in the same manner as it performs today and shall
not otherwise materially impair the accuracy or functionality of Information
Systems and Equipment.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
------------------------------------------------------------------------
Agreement.
---------
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (other than the absence of footnotes
with respect to the financial statements and other information delivered
pursuant to clauses (i) and (ii) of subsection 6.1) and delivered together with
the reconciliation statements provided for in subsection 6.1(v). Calculations
in connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
-------------------------------------------------------
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
-------------------------------------------------
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make the Loans described in subsections
2.1A(i) and 2.1A(ii) and Swing Line Lender hereby agrees to make the Loans
described in subsection 2.1A(iii):
(i) Term Loans. Each Lender severally agrees to lend to Company on
----------
the Closing Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the Term Loan Commitments to be used for the purposes
identified in subsection 2.5A. The amount of each Lender's Term Loan
Commitment is set forth opposite its name on
33
Schedule 2.1 annexed hereto and the aggregate original amount of the Term
------------
Loan Commitments is $50,000,000; provided that the Term Loans of Lenders
--------
shall be adjusted to give effect to (1) any increase in Term Loans pursuant
to subsection 2.1A(iv), and (2) any assignments of the Term Loans pursuant
to subsection 10.1B. Each Lender's Term Loan Commitment shall expire
immediately and without further action on May 31, 1999 if the Term Loans
are not made on or before that date. Company may make only one borrowing
under the Term Loan Commitments. Amounts borrowed under this subsection
2.1A(i) and subsequently repaid or prepaid may not be reborrowed.
(ii) Revolving Loans. Each Lender severally agrees, subject to
---------------
the limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend to
Company from time to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Revolving Loan Commitments to be used for the purposes identified in
subsection 2.5B. The original amount of each Lender's Revolving Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed hereto
------------
and the aggregate original amount of the Revolving Loan Commitments is
$125,000,000; provided that the Revolving Loan Commitments of Lenders shall
--------
be adjusted to give effect to (1) any increase in Revolving Loan
Commitments pursuant to subsection 2.1A(iv), and (2) any assignments of the
Revolving Loan Commitments pursuant to subsection 10.1B; and provided
--------
further that the amount of the Revolving Loan Commitments shall be reduced
-------
from time to time by the amount of any reductions thereto made pursuant to
subsections 2.4B(ii) and 2.4B(iii). Each Lender's Revolving Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full no
later than that date; provided that each Lender's Revolving Loan Commitment
--------
shall expire immediately and without further action on May 31, 1999 if the
Term Loans are not made on or before that date. Amounts borrowed under this
subsection 2.1A(ii) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitments
shall be subject to the limitation that in no event shall the Total
Utilization of Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect.
(iii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
----------------
the limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company from time to time
during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date by making Swing Line Loans to Company in an
aggregate amount not exceeding the amount of the Swing Line Loan Commitment
to be used for the purposes identified in subsection 2.5B, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving
34
Loan Commitment. The original amount of the Swing Line Loan Commitment is
$10,000,000; provided that any reduction of the Revolving Loan Commitments
--------
made pursuant to subsection 2.4B(ii) or 2.4B(iii) which reduces the
aggregate Revolving Loan Commitments to an amount less than the then
current amount of the Swing Line Loan Commitment shall result in an
automatic corresponding reduction of the Swing Line Loan Commitment to the
amount of the Revolving Loan Commitments, as so reduced, without any
further action on the part of Company, Administrative Agent or Swing Line
Lender. The Swing Line Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Swing Line Loans and all other amounts
owed hereunder with respect to the Swing Line Loans shall be paid in full
no later than that date; provided that the Swing Line Loan Commitment shall
--------
expire immediately and without further action on May 31, 1999 if the Term
Loans are not made on or before that date. Amounts borrowed under this
subsection 2.1A(iii) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan Commitment
shall be subject to the limitation that in no event shall the Total
Utilization of Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing Line
Lender may, at any time in its sole and absolute discretion, deliver to
Administrative Agent (with a copy to Company), no later than 11:00 A.M.
(New York City time) on the first Business Day in advance of the proposed
Funding Date, a notice (which shall be deemed to be a Notice of Borrowing
given by Company) requesting Lenders to make Revolving Loans that are Base
Rate Loans on such Funding Date in an amount equal to the amount of such
Swing Line Loans (the "Refunded Swing Line Loans") outstanding on the date
such notice is given which Swing Line Lender requests Lenders to prepay.
Anything contained in this Agreement to the contrary notwithstanding, (i)
the proceeds of such Revolving Loans made by Lenders other than Swing Line
Lender shall be immediately delivered by Administrative Agent to Swing Line
Lender (and not to Company) and applied to repay a corresponding portion of
the Refunded Swing Line Loans and (ii) on the day such Revolving Loans are
made, Swing Line Lender's Pro Rata Share of the Refunded Swing Line Loans
shall be deemed to be paid with the proceeds of a Revolving Loan made by
Swing Line Lender, and such portion of the Swing Line Loans deemed to be so
paid shall no longer be outstanding as Swing Line Loans and shall no longer
be due under the Swing Line Note of Swing Line Lender but shall instead
constitute part of Swing Line Lender's outstanding Revolving Loans and
shall be due under the Revolving Note of Swing Line Lender. Company hereby
authorizes Administrative Agent and Swing Line Lender to charge Company's
accounts with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line
Lender the amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by Lenders, including the Revolving
Loan deemed to be made by Swing Line Lender, are not sufficient to repay in
full the Refunded Swing Line Loans. If any portion of any such amount paid
(or deemed to be paid) to Swing Line Lender should be recovered by or on
behalf of Company from Swing
35
Line Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all Lenders in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the
request of Swing Line Lender as provided in the immediately preceding
paragraph in an amount sufficient to repay any amounts owed to Swing Line
Lender in respect of any outstanding Swing Line Loans or (b) the Revolving
Loan Commitments are terminated at a time when any Swing Line Loans are
outstanding, each Lender shall be deemed to, and hereby agrees to, have
purchased a participation in such outstanding Swing Line Loans in an amount
equal to its Pro Rata Share (calculated, in the case of the foregoing
clause (b), immediately prior to such termination of the Revolving Loan
Commitments) of the unpaid amount of such Swing Line Loans together with
accrued interest thereon. Upon one Business Day's notice from Swing Line
Lender, each Lender shall deliver to Swing Line Lender an amount equal to
its respective participation in same day funds at the Funding and Payment
Office. In order to further evidence such participation (and without
prejudice to the effectiveness of the participation provisions set forth
above), each Lender agrees to enter into a separate participation agreement
at the request of Swing Line Lender in form and substance reasonably
satisfactory to the parties thereto. In the event any Lender fails to make
available to Swing Line Lender the amount of such Lender's participation as
provided in this paragraph, Swing Line Lender shall be entitled to recover
such amount on demand from such Lender together with interest thereon at
the rate customarily used by Swing Line Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate. In
the event Swing Line Lender receives a payment of any amount in which other
Lenders have purchased participations as provided in this paragraph, Swing
Line Lender shall promptly distribute to each such other Lender its Pro
Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and
each Lender's obligation to purchase a participation in any unpaid Swing
Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender, Company or any other
Person for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse change in
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party thereto;
or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided that such obligations of each
--------
Lender are subject to the condition that (X) Swing Line Lender believed in
good faith that all conditions under Section 4 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, as
the case may be, were satisfied at the time such Refunded Swing Line Loans
or unpaid Swing Line Loans were made or (Y) the satisfaction of any such
condition not satisfied had been waived in accordance with subsection 10.6
prior to
36
or at the time such Refunded Swing Line Loans or other unpaid Swing Line
Loans were made.
(iv) Increases of the Term Loans or Revolving Loan Commitments. At the
---------------------------------------------------------
mutual discretion of Company and Lead Arranger, Company may request in
writing at any time during the period from the Closing Date to and
including the second anniversary of the Closing Date that (x) the then
effective aggregate principal amount of Term Loans be increased, and/or (y)
the then effective aggregate principal amount of Revolving Loan Commitments
be increased; provided that (1) the aggregate principal amount of the
increases in Term Loans and/or Revolving Loan Commitments pursuant to this
subsection 2.1A(iv) shall not exceed $75,000,000, (2) Company may not make
more than two requests for such increases in Term Loans and/or Revolving
Loan Commitments, (3) no Event of Default or Potential Event of Default
shall have occurred and be continuing or occurs as a result of such
increases in Term Loans and/or Revolving Loan Commitments, (4) such
increases shall be subject to any prior approvals or exemptions required
under any applicable Gaming Laws, and (5) Company shall, and shall cause
its Restricted Subsidiaries to, execute and deliver such documents and
instruments and take such other actions (including, without limitation,
obtaining appropriate endorsements to title insurance policies) as may be
reasonably requested by Administrative Agent in connection with such
increases. Any request under this subsection 2.1A(iv) shall be submitted
by Company to Administrative Agent (which shall forward copies to Lenders),
specify the proposed effective date and amount of such increase and be
accompanied by an Officer's Certificate stating that no Event of Default or
Potential Event of Default exists or will occur as a result of such
increase. Company may also specify any fees offered to those Lenders (the
"Increasing Lenders") which agree to increase the principal amount of their
Term Loans or Revolving Loan Commitments, as the case may be, which fees
may be variable based upon the amount by which any such Lender is willing
to increase the principal amount of its Term Loan or Revolving Loan
Commitment, as the case may be. No Lender shall have any obligation,
express or implied, to offer to increase the aggregate principal amount of
its Term Loan or Revolving Loan Commitment, as the case may be. Only the
consent of each Increasing Lender shall be required for an increase in the
aggregate principal amount of Term Loans or Revolving Loan Commitments, as
the case may be, pursuant to this subsection 2.1A(iv). No Lender which
elects not to increase the principal amount of its Term Loan or Revolving
Loan Commitment, as the case may be, may be replaced in respect of its
existing Term Loan or Revolving Loan Commitment, as the case may be, as a
result thereof without such Lender's consent.
Each Increasing Lender shall as soon as practicable specify the
amount of the proposed increase which it is willing to assume. Company may
accept some or all of the offered amounts or designate new lenders who
qualify as Eligible Assignees and which are reasonably acceptable to
Administrative Agent as additional Lenders hereunder in accordance with
this subsection 2.1A(iv) (each such new lender being a "New Lender"), which
New Lender may assume all or a portion of the increase in the aggregate
principal amount of the Term Loans or Revolving Loan Commitments, as the
case may be. Company and Administrative Agent shall have discretion
jointly to adjust
37
the allocation of the increased aggregate principal amount of Term Loans or
Revolving Loan Commitments, as the case may be, among Increasing Lenders
and New Lenders.
Each New Lender designated by Company and reasonably acceptable
to Administrative Agent shall become an additional party hereto as a New
Lender concurrently with the effectiveness of the proposed increase in the
aggregate principal amount of the Term Loans or Revolving Loan Commitments,
as the case may be, upon its execution of an instrument of Joinder, in each
case in form and substance satisfactory to Administrative Agent.
Subject to the foregoing, any increase requested by Company shall
be effective as of the date proposed by Company and shall be in the
principal amount equal to (i) the principal amount which Increasing Lenders
are willing to assume as increases to the principal amount of their Term
Loans or Revolving Loan Commitments, as the case may be, plus (ii) the
----
principal amount offered by New Lenders with respect to Term Loans or
Revolving Loan Commitments, as the case may be, in either case as adjusted
by Company and Administrative Agent pursuant to this subsection 2.1A(iv).
All new Term Loans to be made under this subsection 2.1A(iv) shall be made
to Company on the same day as such increase in Term Loans under this
subsection 2.1A(iv) becomes effective. Upon effectiveness of any such
increase, the Pro Rata Share of each Lender will be adjusted to give effect
to the increase in Term Loans or Revolving Loan Commitments, as the case
may be, and Administrative Agent shall distribute to Lenders a revised
Schedule 2.1 reflecting the Term Loan, Revolving Loan Commitment and Pro
------------
Rata Share of each Lender after giving effect to such increase. To the
extent that the adjustment of Pro Rata Shares results in loss or expenses
to any Lender as a result of the prepayment of any Eurodollar Rate Loan on
a date other than the scheduled last day of the applicable Interest Period,
Company shall be responsible for such loss or expense pursuant to
subsection 2.6D.
B. Borrowing Mechanics. Term Loans or Revolving Loans made on any Funding
Date (other than Revolving Loans made pursuant to a request by Swing Line
Lender pursuant to subsection 2.1A(iii) for the purpose of repaying any
Refunded Swing Line Loans or Revolving Loans made pursuant to subsection
3.3B for the purpose of reimbursing any Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it) shall be in an aggregate
minimum amount of $1,000,000 and multiples of $1,000,000 in excess of that
amount; provided that Term Loans or Revolving Loans made on any Funding
--------
Date as Eurodollar Rate Loans with a particular Interest Period shall be in
an aggregate minimum amount of $2,500,000 and integral multiples of
$1,000,000 in excess of that amount. Swing Line Loans made on any Funding
Date shall be in an aggregate minimum amount of $250,000 and integral
multiples of $250,000 in excess of that amount. Whenever Company desires
that Lenders make Term Loans or Revolving Loans it shall deliver to
Administrative Agent a Notice of Borrowing no later than 11:00 A.M. (New
York City time) at least three Business Days in advance of the proposed
Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing
Line Loan, it shall deliver to Administrative Agent a Notice of Borrowing
no later than 11:00 A.M. (New York City time) on the proposed Funding Date.
The Notice of Borrowing shall specify (i) the proposed Funding Date (which
shall be a Business Day), (ii) the amount and
38
type of Loans requested, (iii) in the case of Swing Line Loans and any
Loans made on the Closing Date, that such Loans shall be Base Rate Loans,
(iv) in the case of Term Loans and Revolving Loans not made on the Closing
Date, whether such Loans shall be Base Rate Loans or Eurodollar Rate Loans,
and (v) in the case of any Loans requested to be made as Eurodollar Rate
Loans, the initial Interest Period requested therefor. Term Loans and
Revolving Loans may be continued as or converted into Base Rate Loans and
Eurodollar Rate Loans in the manner provided in subsection 2.2D. In lieu of
delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
--------
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. Disbursement of Funds. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be, of the proposed borrowing. Each Lender shall make
the amount of its Loan available to Administrative Agent not later than 1:00
P.M. (New York City time) on the applicable Funding Date, and Swing Line Lender
shall make the amount of its Swing Line Loan available to Administrative Agent
not later than 1:00 P.M. (New York City time) on the applicable Funding Date, in
each case in same day funds in Dollars, at the Funding and Payment Office.
Except as provided in subsection 2.1A(iii) or subsection 3.3B with respect to
Revolving Loans used to repay Refunded Swing Line Loans or to reimburse any
Issuing Lender for the amount of a drawing under a Letter of Credit issued
39
by it, upon satisfaction or waiver of the conditions precedent specified in
subsections 4.1 (in the case of Loans made on the Closing Date) and 4.2 (in the
case of all Loans), Administrative Agent shall promptly upon receipt make the
proceeds of such Loans available to Company on the applicable Funding Date by
causing an amount of same day funds in Dollars equal to the proceeds of all such
Loans received by Administrative Agent from Lenders or Swing Line Lender, as the
case may be, to be credited to the account of Company at the Funding and Payment
Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from time
to time (the "Register"). The Register shall be available for inspection by
Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Term Loan
Commitment and Revolving Loan Commitment and the Term Loan and Revolving
Loans from time to time of each Lender, the Swing Line Loan Commitment and
the Swing Line Loans from time to time of Swing Line Lender, and each
repayment or prepayment in respect of the principal amount of the Term Loan
or Revolving Loans of each Lender or the Swing Line Loans of Swing Line
Lender. Any such recordation shall be conclusive and binding on Company and
each Lender, absent manifest error; provided that failure to make any such
--------
recordation, or any error in such recordation, shall not affect any
Lender's Commitments or Company's Obligations in respect of any applicable
Loans.
40
(iii) Each Lender shall record on its internal records (including the
Notes held by such Lender) the amount of the Term Loan and each Revolving
Loan made by it and each payment in respect thereof. Any such recordation
shall be conclusive and binding on Company, absent manifest error; provided
--------
that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Commitments or Company's
Obligations in respect of any applicable Loans; and provided further that
-------- -------
in the event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v) Company hereby designates CIBC to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent CIBC serves
in such capacity, CIBC and its officers, directors, employees, agents and
affiliates shall constitute Indemnitees for all purposes under subsection
10.3.
E. Notes. Company shall execute and deliver on the Closing Date (i) to
each Lender (or to Administrative Agent for that Lender) (a) a Term Note
substantially in the form of Exhibit IV annexed hereto to evidence that Lender's
----------
Term Loan, in the principal amount of that Lender's Term Loan and with other
appropriate insertions, and (b) a Revolving Note substantially in the form of
Exhibit V annexed hereto to evidence that Lender's Revolving Loans, in the
- ---------
principal amount of that Lender's Revolving Loan Commitment and with other
appropriate insertions, and (ii) to Swing Line Lender (or to Administrative
Agent for Swing Line Lender) a Swing Line Note substantially in the form of
Exhibit VI annexed hereto to evidence Swing Line Lender's Swing Line Loans, in
- ----------
the principal amount of the Swing Line Loan Commitment and with other
appropriate insertions.
Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent as provided in subsection 10.1B(ii). Any request,
authorization or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, assignee or transferee of that
Note or of any Note or Notes issued in exchange therefor.
41
In the event Company increases the aggregate principal amount of the
Term Loans or Revolving Loan Commitments, as the case may be, pursuant to
subsection 2.1A(iv), Company shall issue replacement Term Notes or Revolving
Notes, as the case may be, to each Increasing Lender and new Term Notes or
Revolving Notes, as the case may be, to each New Lender.
2.2 Interest on the Loans.
---------------------
A. Rate of Interest. Subject to the provisions of subsections 2.6 and
2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable basis for determining
the rate of interest with respect to any Term Loan or any Revolving Loan shall
be selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B, and the basis for determining
the interest rate with respect to any Term Loan or any Revolving Loan may be
changed from time to time pursuant to subsection 2.2D. If on any day a Term Loan
or Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Term Loans
and the Revolving Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus the
----
Applicable Base Rate Margin; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
----
Subject to the provisions of subsections 2.2E and 2.7, the Swing Line
Loans shall bear interest through maturity at the sum of the Base Rate plus the
----
Applicable Base Rate Margin.
Upon delivery of the Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(xix), the Applicable Base Rate
Margin and Applicable Eurodollar Rate Margin shall automatically be adjusted in
accordance with such Margin Determination Certificate, such adjustment to become
effective on the next succeeding Business Day following the receipt by
Administrative Agent of such Margin Determination Certificate; provided that (1)
--------
at any time a Margin Determination Certificate is not delivered at the time
required pursuant to subsection 6.1(xix), from the time such Margin
Determination Certificate was required to be delivered until delivery of such
Margin Determination Certificate, the Applicable Base Rate Margin shall be 2.00%
and the Applicable Eurodollar Rate Margin shall be 3.00%, and (2) if a Margin
Determination Certificate erroneously indicates an applicable margin (x) more
favorable to Company than should be afforded by the actual calculation of the
Consolidated Total Leverage Ratio, Company shall promptly pay additional
interest and letter of credit fees to correct for such error, and (y) less
favorable to Company than should be afforded by the actual calculation of the
42
Consolidated Total Leverage Ratio, Lenders shall promptly reimburse Company an
amount equal to such excess interest and letter of credit fees to correct for
such error.
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period (or with
respect to clause (vi) below only, such shorter period acceptable to
Administrative Agent); provided that:
--------
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
of Conversion/ Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
--------
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Term
Loans shall extend beyond April 23, 2004 and no Interest Period with
respect to any portion of the Revolving Loans shall extend beyond the
Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the Term
Loans shall extend beyond a date on which Company is required to make a
scheduled payment of principal of the Term Loans unless the sum of (a) the
aggregate principal amount of Term Loans that are Base Rate Loans plus (b)
the aggregate principal amount of Term Loans that are Eurodollar Rate Loans
with Interest Periods expiring on or before such date equals or exceeds the
principal amount required to be paid on the Term Loans on such date;
43
(vii) there shall be no more than ten (10) Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
--------
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Term Loans or Revolving Loans equal to $1,000,000 and integral
multiples of $1,000,000 in excess of that amount from Loans bearing interest at
a rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $2,500,000 and integral multiples of $1,000,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
-------- -------
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 11:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
--------
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in
44
good faith to have been given by a duly authorized officer or other person
authorized to act on behalf of Company or for otherwise acting in good faith
under this subsection 2.2D, and upon conversion or continuation of the
applicable basis for determining the interest rate with respect to any Loans in
accordance with this Agreement pursuant to any such telephonic notice Company
shall have effected a conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. Post-Maturity Interest. Any principal payments on the Loans (whether
Base Rate Loans or Eurodollar Rate Loans) not paid when due and, to the extent
permitted by applicable law, any interest payments on the Loans or any fees or
other amounts owed hereunder not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate which is 2.00% per annum in excess of the highest interest rate
otherwise payable under this Agreement for Base Rate Loans; provided that, in
--------
the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective such
Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2.00% per annum
in excess of the highest interest rate otherwise payable under this Agreement
for Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
--------
day on which it is made, one day's interest shall be paid on that Loan.
2.3 Fees.
----
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan
45
Commitments over the Total Utilization of Revolving Loan Commitments (but not
any outstanding Swing Line Loans) multiplied by the Commitment Fee Percentage,
---------- --
such commitment fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable quarterly in arrears on the last
Business Day of each March, June, September and December of each year commencing
on the first such date to occur after the Closing Date, and on the Revolving
Loan Commitment Termination Date.
Upon delivery of the Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(xix), the Commitment Fee
Percentage shall automatically be adjusted in accordance with such Margin
Determination Certificate, such adjustment to become effective on the next
succeeding Business Day following the receipt by Administrative Agent of such
Margin Determination Certificate; provided that (1) at any time a Margin
--------
Determination Certificate is not delivered at the time required pursuant to
subsection 6.1(xix), from the time such Margin Determination Certificate was
required to be delivered until delivery of such Margin Determination
Certificate, the Commitment Fee Percentage shall be 0.500%, and (2) if a Margin
Determination Certificate erroneously indicates an applicable margin (x) more
favorable to Company than should be afforded by the actual calculation of the
Consolidated Total Leverage Ratio, Company shall promptly pay additional
commitment fees to correct for such error, and (y) less favorable to Company
than should be afforded by the actual calculation of the Consolidated Total
Leverage Ratio, Lenders shall promptly reimburse Company an amount equal to such
excess commitment fees to correct for such error.
B. Upfront Fee. Company agrees to pay to Lead Arranger an upfront fee on
the Closing Date as more particularly set forth in that certain fee letter dated
as of March 17, 1999.
C. Annual Administrative Fee. Company agrees to pay to Administrative
Agent an annual administrative fee as more particularly set forth in that
certain fee letter dated as of March 17, 1999.
D. Other Fees. Company agrees to pay to Administrative Agent such other
fees in the amounts and at the times separately agreed upon between Company and
Administrative Agent.
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
---------------------------------------------------------------------
General Provisions Regarding Payments; Application of Proceeds of
-----------------------------------------------------------------
Collateral and Payments Under Subsidiary Guaranty.
-------------------------------------------------
A. Scheduled Payments of Term Loans. Company shall make principal
payments on the Term Loans in installments on the dates and in the amounts set
forth below:
Scheduled Repayment Date Scheduled Repayment
of Term Loans
----------------------------------------------------------------------
July 23, 1999 $ 833,333
October 22, 1999 $ 833,333
46
Scheduled Repayment Date Scheduled Repayment
of Term Loans
----------------------------------------------------------------------
January 21, 2000 $ 833,333
April 28, 2000 $ 833,333
July 28, 2000 $ 1,666,667
October 27, 2000 $ 1,666,667
January 26, 2001 $ 1,666,667
April 27, 2001 $ 1,666,667
July 27, 2001 $ 2,500,000
October 26, 2001 $ 2,500,000
January 25, 2002 $ 2,500,000
April 26, 2002 $ 2,500,000
July 26, 2002 $ 3,333,333
October 25, 2002 $ 3,333,333
January 24, 2003 $ 3,333,333
April 25, 2003 $ 3,333,333
July 25, 2003 $ 4,166,667
October 24, 2003 $ 4,166,667
January 23, 2004 $ 4,166,667
April 23, 2004 $ 4,166,667
----------------------------
Total $50,000,000
; provided that the scheduled installments of principal of the Term Loans
--------
set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Term Loans in accordance with subsection
2.4B(iv); provided further that the Term Loans and all other amounts owed
-------- -------
hereunder with respect to the Term Loans shall be paid in full no later
than April 23, 2004, and the final installment payable by Company in
respect of the Term Loans on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the Term
Loans; and provided further that in the event that the aggregate principal
-------- -------
amount of Term Loans is increased pursuant to subsection 2.1A(iv), then
each scheduled principal repayment to be made after such increase becomes
effective shall be increased by an amount equal to (a) the aggregate
principal amount of the increase in Term Loans pursuant to subsection
2.1A(iv) multiplied by (b) an amount equal to (x) such scheduled repayment
---------- --
amount divided by (y) the aggregate principal amount of Term Loans to be
------- --
repaid immediately prior to giving effect to the increase in Term Loans
made pursuant to subsection 2.1A(iv).
B. Prepayments and Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. Company may, upon written or telephonic
---------------------
notice to Administrative Agent on or prior to 12:00 Noon (New York City
time) on the date of
47
prepayment, which notice, if telephonic, shall be promptly confirmed in
writing, at any time and from time to time prepay any Swing Line Loan on
any Business Day in whole or in part in an aggregate minimum amount of
$250,000 and integral multiples of $250,000 in excess of that amount.
Company may, upon not less than one Business Day's prior written or
telephonic notice, in the case of Base Rate Loans, and three Business Days'
prior written or telephonic notice, in the case of Eurodollar Rate Loans,
in each case given to Administrative Agent by 12:00 Noon (New York City
time) on the date required and, if given by telephone, promptly confirmed
in writing to Administrative Agent (which original written or telephonic
notice Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time prepay any
Term Loans or Revolving Loans on any Business Day in whole or in part in an
aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000
in excess of that amount; provided, however, that a Eurodollar Rate Loan
-------- -------
may only be prepaid on the expiration of the Interest Period applicable
thereto. Notice of prepayment having been given as aforesaid, the principal
amount of the Loans specified in such notice shall become due and payable
on the prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company
--------------------------------------------------
may, upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which original written
or telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the Revolving Loan
--------
Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount. Company's notice
to Administrative Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
----------------------------------------------------------------
Commitments. The Loans shall be prepaid and/or the Revolving Loan
-----------
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and/or reductions to be
applied as set forth below or as more specifically provided in subsection
2.4B(iv):
(a) Prepayments and Reductions From Net Asset Sale Proceeds. No
-------------------------------------------------------
later than the first Business Day following the date of receipt by
Company or any of its Restricted Subsidiaries of any Net Asset Sale
Proceeds in respect of any Asset Sale, Company shall prepay the Loans
and/or the Revolving Loan Commitments shall be permanently reduced in
an aggregate amount equal to 100% of the amount of such Net Asset Sale
Proceeds; provided, however, that
-------- -------
48
such Net Asset Sale Proceeds received by Company or any of its
Restricted Subsidiaries from any Asset Sales permitted under
subsection 7.7(vi) shall be excluded from the requirements of this
subsection 2.4B(iii)(a) to the extent such proceeds are reinvested or
committed in writing to be reinvested in a Related Business within 180
days after receipt of such proceeds.
(b) Prepayments and Reductions from Net Insurance/Condemnation
----------------------------------------------------------
Proceeds. No later than the first Business Day following the date of
--------
receipt by Administrative Agent or by Company or any of its Restricted
Subsidiaries of any Net Insurance/ Condemnation Proceeds, Company
shall prepay the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to 100% of the amount
of such Net Insurance/Condemnation Proceeds; provided, however, such
-------- -------
Net Insurance/Condemnation Proceeds received by Company or any of its
Restricted Subsidiaries shall be excluded from the requirements of
this subsection 2.4B(iii)(b) to the extent that (i) under the terms of
any lease or other agreement existing on the Closing Date such Net
Insurance/Condemnation Proceeds are required to be used to replace,
rebuild or repair the asset so damaged, destroyed or taken, or (ii)
Company or the applicable Restricted Subsidiary determines to utilize
such Net Insurance/Condemnation Proceeds to replace, rebuild or repair
the asset, damaged, destroyed or taken, and in each case referred to
in clauses (i) and (ii) above, Company or such Restricted Subsidiary
so utilizes or has committed in writing to so utilize such Net
Insurance/Condemnation Proceeds within 180 days of the receipt of such
proceeds.
(c) Prepayments and Reductions Due to Issuance of Debt
--------------------------------------------------
Securities. On the date of receipt by Company of the Cash proceeds
----------
(any such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "Net Debt Proceeds") from
the issuance of any debt Securities (other than the issuance of
Indebtedness permitted under subsection 7.1) of Company after the
Closing Date, Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount equal
to 75% of such Net Debt Proceeds.
(d) Calculations of Net Proceeds Amounts; Additional Prepayments
------------------------------------------------------------
and Reductions Based on Subsequent Calculations. Concurrently with any
-----------------------------------------------
prepayment of the Loans and/or reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(c), Company shall
deliver to Administrative Agent an Officer's Certificate demonstrating
the calculation of the amount (the "Net Proceeds Amount") of the
applicable Net Asset Sale Proceeds or Net Insurance/Condemnation
Proceeds, the applicable Net Debt Proceeds (as such term is defined in
subsection 2.4B(iii)(c)), as the case may be, that gave rise to such
prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was greater
than the amount set forth in such Officer's Certificate, Company shall
promptly make an additional prepayment of the Loans (and/or, if
applicable, the Revolving Loan Commitments
49
shall be permanently reduced) in an amount equal to the amount of such
excess, and Company shall concurrently therewith deliver to
Administrative Agent an Officer's Certificate demonstrating the
derivation of the additional Net Proceeds Amount resulting in such
excess.
(e) Prepayments Due to Reductions or Restrictions of Revolving
----------------------------------------------------------
Loan Commitments. Company shall from time to time prepay first the
---------------- -----
Swing Line Loans, and second the Revolving Loans to the extent
------
necessary so that the Total Utilization of Revolving Loan Commitments
shall not at any time exceed the Revolving Loan Commitments then in
effect.
(iv) Application of Prepayments.
--------------------------
(a) Application of Voluntary Prepayments by Type of Loans and
---------------------------------------------------------
Order of Maturity. Any voluntary prepayments pursuant to subsection
-----------------
2.4B(i) shall be applied as specified by Company in the applicable
notice of prepayment; provided that in the event Company fails to
--------
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding Swing Line
-----
Loans to the full extent thereof, second to repay outstanding
------
Revolving Loans to the full extent thereof, and third to repay
-----
outstanding Term Loans to the full extent thereof. Any voluntary
prepayments of the Term Loans pursuant to subsection 2.4B(i) shall be
applied to reduce the scheduled installments of principal of the Term
Loans set forth in subsection 2.4A in inverse order of maturity;
provided, however, that Company, at its option, may apply such
-------- -------
voluntary prepayments first to reduce the immediately succeeding two
-----
scheduled installments of principal of Term Loans set forth in
subsection 2.4A, and second, to the extent of any remaining portion of
------
such voluntary prepayments, to reduce the scheduled installments of
principal of Term Loans set forth in subsection 2.4A in inverse order
of maturity.
(b) Application of Mandatory Prepayments by Type of Loans. Any
-----------------------------------------------------
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(c) shall be applied
first to prepay the Term Loans to the full extent thereof, second, to
----- ------
the extent of any remaining portion of the Applied Amount, to prepay
the Swing Line Loans to the full extent thereof and to permanently
reduce the Revolving Loan Commitments by the amount of such
prepayment, third, to the extent of any remaining portion of the
-----
Applied Amount, to prepay the Revolving Loans to the full extent
thereof and to further permanently reduce the Revolving Loan
Commitments by the amount of such prepayment, and fourth, to the
------
extent of any remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full extent
thereof.
(c) Application of Mandatory Prepayments of Term Loans by Order
-----------------------------------------------------------
of Maturity. Any mandatory prepayments of the Term Loans pursuant to
-----------
subsection
50
2.4B(iii) shall be applied to reduce the scheduled installments of
principal of the Term Loans set forth in subsection 2.4A in inverse
order of maturity.
(d) Application of Prepayments to Base Rate Loans and Eurodollar
------------------------------------------------------------
Rate Loans. Subject to the immediately following sentence, considering
----------
Term Loans and Revolving Loans being prepaid separately, any
prepayment thereof shall be applied first to Base Rate Loans to the
full extent thereof before application to Eurodollar Rate Loans, in
each case in a manner which minimizes the amount of any payments
required to be made by Company pursuant to subsection 2.6D. If on any
day on which Loans would otherwise be required to be prepaid pursuant
to subsection 2.4B(iii), but for the operation of this subsection
2.4B(iv)(d) (each a "Prepayment Date"), the amount of such required
prepayment exceeds the then outstanding aggregate principal amount of
the Loans which consist of Base Rate Loans, and no Event of Default or
Potential Event of Default has occurred and is continuing or would
occur as a result thereof, then on such Prepayment Date, Company may,
at its option, deposit Cash into an investment account with
Administrative Agent (the "Investment Account") in an amount equal to
such excess; provided that (x) Company shall grant to Administrative
--------
Agent, on behalf of Lenders, a perfected security interest in such
Investment Account and shall execute and deliver such agreements and
instruments as Administrative Agent may reasonably request in order to
perfect such security interest, and (y) Administrative Agent shall
invest such Cash in Cash Equivalents only. If Company makes such
deposit (a) only the outstanding Base Rate Loans shall be required to
be prepaid on such Prepayment Date, and (b) on the last day of each
Interest Period in effect after such Prepayment Date, Administrative
Agent is irrevocably authorized and directed to apply funds held in
the Investment Account (and liquidate investments held in the
Investment Account as necessary) to prepay the Eurodollar Rate Loans
for which the Interest Period is then ending until the aggregate of
such prepayments equals the prepayment which would have been required
on such Prepayment Date but for the operation of this subsection
2.4(iv)(d). So long as no Event of Default or Potential Event of
Default has occurred and is continuing or would occur as a result
thereof, at such time as the aggregate prepayments made pursuant to
the immediately preceding sentence equals the prepayment which would
have been required on such Prepayment Date but for the operation of
this subsection 2.4B(iv)(d) (and excluding any amounts which would
otherwise have been required to be paid under 2.6D), any amounts
remaining in the Investment Account after such prepayments, which
amounts are attributable to the deposit made on the applicable
Prepayment Date or to net income earned on such deposit, shall be
remitted to an account designated by Company.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of principal,
--------------------------
interest, fees and other Obligations hereunder and under the Notes shall be
made in Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative Agent
not later than 1:00 P.M. (New York
51
City time) on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Administrative Agent after that time
on such due date shall be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes Administrative Agent to
charge its accounts with Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal, interest, fees
and expenses due hereunder (subject to sufficient funds being available in
its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
-------------------------------------------------
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
-------------------------
payments in respect of Term Loans and Revolving Loans shall be apportioned
among all outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment fees of such
Lender when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
-------------------------
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of
-------------------
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
--------
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
52
D. Application of Proceeds of Collateral and Payments Under Subsidiary
Guaranty.
(i) Application of Proceeds of Collateral. Except as provided in
subsection 2.4B(iii)(a) with respect to prepayments from Net Asset Sale
Proceeds, all proceeds received by Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for,
and/or (then or at any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured Obligations (as
defined in such Collateral Document) in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Administrative Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by Administrative
Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations for the ratable
benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) Application of Payments Under Subsidiary Guaranty. All payments
-------------------------------------------------
received by Administrative Agent under the Subsidiary Guaranty shall be
applied promptly from time to time by Administrative Agent in the following
order of priority:
(a) To the payment of the costs and expenses of any collection
or other realization under the Subsidiary Guaranty, including
reasonable compensation to Administrative Agent and its agents and
counsel, and all expenses, liabilities and advances made or incurred
by Administrative Agent in connection therewith, all in accordance
with the terms of this Agreement and the Subsidiary Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in the
Subsidiary Guaranty for the ratable benefit of the holders thereof;
and
(c) thereafter, to the extent of any excess such payments, to
the payment to the applicable Subsidiary Guarantor or to whosoever may
be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
53
2.5 Use of Proceeds.
---------------
A. Term Loans. The proceeds of the Term Loans, together with the proceeds
of the debt capitalization of Company described in subsection 4.1D, shall be
applied by Company to fund the Financing Requirements.
B. Revolving Loans; Swing Line Loans. The proceeds of any Revolving Loans
and any Swing Line Loans shall be applied by Company for working capital and
general corporate purposes, which may include the making of intercompany loans
to any of Company's wholly-owned Restricted Subsidiaries, in accordance with
subsection 7.1(iii), for their own working capital and general corporate
purposes.
C. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
54
C. Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "Affected Lender" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to
55
subsection 2.4B(i)) or other principal payment or any conversion of any of its
Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
Company, or (iv) as a consequence of any other default by Company in the
repayment of its Eurodollar Rate Loans when required by the terms of this
Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
- -------- -------
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
----------------------------------------
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its
56
applicable lending office) of principal, interest, fees or any other amount
payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error; provided, however, that Company shall be liable for such
-------- -------
additional amounts only if such Lender shall have delivered such written
statement to Company within 90 days after such Lender shall have made such
determination of any such increased costs; and provided further that if such
-------- -------
Lender delivers such written statement after such 90 day period, then Company
shall be liable only for such additional amounts arising after delivery to
Company of such written statement.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under
-----------------------------
this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied, collected, withheld or assessed by
or within the United States of America or any political subdivision in or
of the United States of America or any other jurisdiction from or to which
a payment is made by or on behalf of Company or by any federation or
organization of which the United States of America or any such jurisdiction
is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such
Tax from any sum paid
57
or payable by Company to Administrative Agent or any Lender under any of
the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Company) for its own account or (if that liability
is imposed on Administrative Agent or such Lender, as the case may be)
on behalf of and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after
the date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue
58
Service Form 1001 or 4224 (or any successor forms), properly completed
and duly executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (1) above, a Certificate re Non-Domestic Bank Status together
with two original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption required
under the Internal Revenue Code or the regulations issued thereunder
to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any
payments to such Lender of interest payable under any of the Loan
Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Domestic Bank
Status and two original copies of Internal Revenue Service Form W-8,
as the case may be, properly completed and duly executed by such
Lender, together with any other certificate or statement of exemption
required in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to payments to such Lender under the Loan Documents
or (2) notify Administrative Agent and Company of its inability to
deliver any such forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this subsection 2.7B(iii); provided that if such Lender
--------
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
59
certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate; Replacement of
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Lender.
- ------
A. Mitigation. Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or Issuing Lender
responsible for administering the Loans or Letters of Credit of such Lender or
Issuing Lender, as the case may be, becomes aware of the occurrence of an event
or the existence of a condition that would cause such Lender to become an
Affected Lender or that would entitle such Lender or Issuing Lender to receive
payments under subsection 2.7 or subsection 3.6, it will, to the extent not
inconsistent with the internal policies of such Lender or Issuing Lender and any
applicable legal or regulatory restrictions, use reasonable efforts (i) to make,
issue, fund or maintain the Commitments of such Lender or the affected Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an Affected
Lender would cease to exist or the additional amounts which would otherwise be
required to be paid to such Lender or Issuing Lender pursuant to subsection 2.7
or subsection 3.6 would be materially reduced and if, as determined by such
Lender or Issuing Lender in its sole discretion, the making, issuing, funding or
maintaining of such Commitments or Loans or Letters of Credit through such other
lending or letter of credit office or in accordance with such other measures, as
the case may be, would not otherwise materially adversely affect such
Commitments or Loans or Letters of Credit or the interests of such Lender or
Issuing Lender; provided that such Lender or Issuing Lender will not be
--------
obligated to utilize such other lending or letter of credit office pursuant to
this subsection 2.8
60
unless Company agrees to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office as described in clause (i) above. A certificate as to the amount of any
such expenses payable by Company pursuant to this subsection 2.8 (setting forth
in reasonable detail the basis for requesting such amount) submitted by such
Lender or Issuing Lender to Company (with a copy to Administrative Agent) shall
be conclusive absent manifest error.
B. Replacement of Lender. If Company receives a notice pursuant to
subsection 2.7A, 2.7C or 3.6, Company shall have the right, if no Potential
Event of Default or Event of Default then exists, to replace such Lender (a
"Replaced Lender") with one or more Eligible Assignees (collectively, the
"Replacement Lender") acceptable to Administrative Agent; provided that (i) at
--------
the time of any replacement pursuant to this subsection 2.8B, the Replacement
Lender shall enter into one or more Assignment Agreements pursuant to subsection
10.1B (and with all fees payable pursuant to such subsection 10.1B to be paid by
the Replacement Lender) pursuant to which the Replacement Lender shall acquire
all of the outstanding Loans and Commitments of, and in each case participations
in Letters of Credit and Swing Line Loans by, the Replaced Lender and, in
connection therewith, shall pay to (x) the Replaced Lender in respect thereof an
amount equal to the sum of (A) an amount equal to the principal of all
outstanding Loans of the Replaced Lender and (B) an amount equal to all unpaid
drawings with respect to Letters of Credit that have been funded by (and not
reimbursed to) such Replaced Lender, (y) the appropriate Issuing Lender an
amount equal to such Replaced Lender's Pro Rata Share of any unpaid drawings
with respect to Letters of Credit (which at such time remains an unpaid drawing)
issued by it to the extent such amount was not theretofore funded by such
Replaced Lender, and (z) Swing Line Lender an amount equal to such Replaced
Lender's Pro Rata Share of any Refunded Swing Line Loans to the extent such
amount was not theretofore funded by such Replaced Lender, and (ii) all
obligations (including, without limitation, all such amounts, if any, owing
under subsection 2.6D) of Company owing to the Replaced Lender (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid), shall be paid in full
to such Replaced Lender concurrently with such replacement. All accrued but
unpaid interest, commitment fees and letter of credit fees and other amounts
payable to the Replaced Lender shall be paid in accordance with the terms set
forth in the respective Assignment Agreement. Upon the execution and delivery
of the respective Assignment Agreements, the payment of amounts referred to in
clauses (i) and (ii) above and delivery to the Replacement Lender of the
appropriate Note or Notes executed by Company, the Replacement Lender shall
become a Lender hereunder and the Replaced Lender shall cease to constitute a
Lender hereunder except with respect to indemnification and confidentiality
provisions under this Agreement which by the terms of this Agreement survive the
termination of this Agreement, which indemnification and confidentiality
provisions shall survive as to such Replaced Lender. Notwithstanding anything
to the contrary contained above, no Issuing Lender may be replaced hereunder at
any time while it has Letters of Credit outstanding hereunder unless
arrangements satisfactory to such Issuing Lender (including the furnishing of a
Standby Letter of Credit in form and substance, and issued by an issuer,
satisfactory to such Issuing Lender or the furnishing of cash collateral in
amounts and pursuant to arrangements satisfactory to such Issuing Lender or the
cancellation and return of such outstanding Letter of Credit) have been made
with respect to such outstanding Letters of Credit.
61
Section 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
---------------------------------------------------------------------
Therein.
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A. Letters of Credit. In addition to Company requesting that Lenders make
Revolving Loans pursuant to subsection 2.1A(ii) and that Swing Line Lender make
Swing Line Loans pursuant to subsection 2.1A(iii), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders issue Letters of Credit for the
account of Company for the purposes specified in the definition of Standby
Letters of Credit. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company herein set forth,
any one or more Lenders may, but (except as provided in subsection 3.1B(ii))
shall not be obligated to, issue such Letters of Credit in accordance with the
provisions of this subsection 3.1; provided that Company shall not request that
--------
any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $15,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) the Revolving Loan Commitment Termination Date and
(b) the date which is one year from the date of issuance of such Standby
Letter of Credit; provided that the immediately preceding clause (b) shall
--------
not prevent any Issuing Lender from agreeing that a Standby Letter of
Credit will automatically be extended for one or more successive periods
not to exceed one year each unless such Issuing Lender elects not to extend
for any such additional period; and provided further that such Issuing
-------- -------
Lender shall elect not to extend such Standby Letter of Credit if it has
knowledge that an Event of Default or Potential Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time such Issuing Lender must elect whether or not
to allow such extension;
(iv) any Standby Letter of Credit for the purpose of supporting (a)
trade payables or (b) any Indebtedness constituting "antecedent debt" (as
that term is used in Section 547 of the Bankruptcy Code); and
(v) any Letter of Credit denominated in a currency other than
Dollars.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance of a
------------------
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 11:00 A.M. (New York City time) at least three
Business Days, or such shorter period as may be agreed to by the Issuing
Lender in any particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall specify (a) the
proposed date of
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issuance (which shall be a Business Day), (b) the face amount of the
Letter of Credit, (c) the expiration date of the Letter of Credit, (d) the
name and address of the beneficiary, and (e) either the verbatim text of
the proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit and in the event CIBC is the Issuing
Lender, such Notice of Issuance of Letter of Credit shall attach a current
application form from CIBC with respect to the issuance of such Letter of
Credit; provided that the Issuing Lender, in its reasonable discretion, may
--------
require changes in the text of the proposed Letter of Credit or any such
documents; and provided further that no Letter of Credit shall require
-------- -------
payment against a conforming draft to be made thereunder on the same
business day (under the laws of the jurisdiction in which the office of the
Issuing Lender to which such draft is required to be presented is located)
that such draft is presented if such presentation is made after 10:00 A.M.
(in the time zone of such office of the Issuing Lender) on such business
day.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of Issuance
of Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit Company shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Company is required to certify in
the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
-------------------------------
Agent of a Notice of Issuance of Letter of Credit pursuant to subsection
3.1B(i) requesting the issuance of a Letter of Credit, in the event
Administrative Agent elects to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, and Administrative Agent shall be
the Issuing Lender with respect thereto. In the event that Administrative
Agent, in its sole discretion, elects not to issue such Letter of Credit,
Administrative Agent shall promptly so notify Company, whereupon Company
may request any other Lender to issue such Letter of Credit by delivering
to such Lender a copy of the applicable Notice of Issuance of Letter of
Credit. Any Lender so requested to issue such Letter of Credit shall
promptly notify Company and Administrative Agent whether or not, in its
sole discretion, it has elected to issue such Letter of Credit, and any
such Lender which so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto. In the event that all other Lenders
shall have declined to issue such Letter of Credit, notwithstanding the
prior election of Administrative Agent not to issue such Letter of Credit,
Administrative Agent shall be obligated to issue such Letter of Credit and
shall be the Issuing Lender with respect thereto, notwithstanding the fact
that the Letter of Credit Usage with respect to such Letter of Credit and
with respect to all other Letters of Credit issued by Administrative Agent,
when aggregated with Administrative Agent's outstanding Revolving Loans and
Swing Line Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect.
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(iii) Issuance of Letter of Credit. Upon satisfaction or waiver
----------------------------
(in accordance with subsection 10.6) of the conditions set forth in
subsection 4.3, the Issuing Lender shall issue the requested Letter of
Credit in accordance with the Issuing Lender's standard operating
procedures.
C. Lenders' Purchase of Participations in Letters of Credit. Immediately
upon the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby agrees to, have irrevocably purchased from the Issuing Lender a
participation in such Letter of Credit and any drawings honored thereunder in an
amount equal to such Lender's Pro Rata Share of the maximum amount which is or
at any time may become available to be drawn thereunder.
3.2 Letter of Credit Fees.
---------------------
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to 0.25% per annum of the daily amount available to be drawn under
such Standby Letter of Credit, and (b) a letter of credit fee, payable to
Administrative Agent for the account of Lenders, equal to the daily amount
available to be drawn under such Standby Letter of Credit multiplied by the
-------------
Applicable Eurodollar Margin, each such fronting fee or letter of credit
fee to be payable in arrears on and to (but excluding) the last Business
Day of each March, June, September and December of each year commencing on
the first such date to occur after the Closing Date, and computed on the
basis of a 360-day year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of this subsection
3.2, the daily amount available to be drawn under any Letter of Credit shall be
determined as of the close of business on any date of determination. Promptly
upon receipt by Administrative Agent of any amount described in clause (i)(b) of
this subsection 3.2, Administrative Agent shall distribute to each Lender its
Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
------------------------------------------------------------------
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
64
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In
the event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Dollars and in same day funds
equal to the amount of such honored drawing; provided that, anything contained
--------
in this Agreement to the contrary notwithstanding, (i) unless Company shall have
notified Administrative Agent and such Issuing Lender prior to 10:00 A.M. (New
York City time) on the date such drawing is honored that Company intends to
reimburse such Issuing Lender for the amount of such honored drawing with funds
other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders to
make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an
amount in Dollars equal to the amount of such honored drawing and (ii) subject
to satisfaction or waiver of the conditions specified in subsection 4.2B,
Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base
Rate Loans in the amount of such honored drawing, the proceeds of which shall be
applied directly by Administrative Agent to reimburse such Issuing Lender for
the amount of such honored drawing; and provided further that if for any reason
-------- -------
proceeds of Revolving Loans are not received by such Issuing Lender on the
Reimbursement Date in an amount equal to the amount of such honored drawing,
Company shall reimburse such Issuing Lender, on demand, in an amount in same day
funds equal to the excess of the amount of such honored drawing over the
aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Company shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.
(i) Payment by Lenders. In the event that Company shall fail for
------------------
any reason to reimburse any Issuing Lender as provided in subsection 3.3B
in an amount equal to the amount of any drawing honored by such Issuing
Lender under a Letter of Credit issued by it, such Issuing Lender shall
promptly notify each other Lender of the unreimbursed amount of such
honored drawing and of such other Lender's respective participation therein
based on such Lender's Pro Rata Share. Each Lender shall make available to
such Issuing Lender an amount equal to its respective participation, in
Dollars and in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 12:00 Noon (New York City time) on
the first business day (under the laws of the jurisdiction in which such
office of such Issuing Lender is located) after the date notified by such
Issuing Lender. In the event that any Lender fails to make available to
such Issuing Lender on such business day the amount of such Lender's
participation in such Letter of Credit as provided in this subsection 3.3C,
such Issuing Lender shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the rate customarily used by
such Issuing Lender for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. Nothing in this subsection
3.3C shall be deemed to prejudice the right of any Lender to recover from
any Issuing Lender
65
any amounts made available by such Lender to such Issuing Lender pursuant
to this subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with respect
to a Letter of Credit by such Issuing Lender in respect of which payment
was made by such Lender constituted gross negligence or willful misconduct
on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
---------------------------------------------------------------
In the event any Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of any drawing
honored by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such honored
drawing such other Lender's Pro Rata Share of all payments subsequently
received by such Issuing Lender from Company in reimbursement of such
honored drawing when such payments are received. Any such distribution
shall be made to a Lender at its primary address set forth below its name
on the appropriate signature page hereof or at such other address as such
Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to each
------------------------------
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the rate then
in effect under this Agreement with respect to Revolving Loans that are
Base Rate Loans and (b) thereafter, a rate which is 2.00% per annum in
excess of the rate of interest otherwise payable under this Agreement with
respect to Revolving Loans that are Base Rate Loans. Interest payable
pursuant to this subsection 3.3D(i) shall be computed on the basis of a 36
day or 366-day year, as the case may be, for the actual number of days
elapsed in the period during which it accrues and shall be payable on
demand or, if no demand is made, on the date on which the related drawing
under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
---------------------------------------------------
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in respect of
the period from the date such drawing is honored to but excluding the date
on which such Issuing Lender is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B), the amount that such other Lender would have
been entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such Letter
of Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any
portion of such honored drawing, such Issuing Lender shall distribute to
each other Lender which has
66
paid all amounts payable by it under subsection 3.3C(i) with respect to
such honored drawing such other Lender's Pro Rata Share of any interest
received by such Issuing Lender in respect of that portion of such honored
drawing so reimbursed by other Lenders for the period from the date on
which such Issuing Lender was so reimbursed by other Lenders to but
excluding the date on which such portion of such honored drawing is
reimbursed by Company. Any such distribution shall be made to a Lender at
its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
3.4 Obligations Absolute.
--------------------
The obligation of Company to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or one of
its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
67
provided, in each case, that payment by the applicable Issuing Lender under the
- --------
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
--------------------------------------------------
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
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Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or quasi-
governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of such Issuing Lender or Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being imposed
on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error; provided, however, that Company shall be liable
-------- -------
for such additional amounts only if such Lender shall have delivered such
written statement to Company within 90 days after such Lender shall have
69
made such determination of any such increased costs; and provided further that
-------- -------
if such Lender delivers such written statement after such 90 day period, then
Company shall be liable only for such additional amounts arising after delivery
to Company of such written statement.
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters
of Credit hereunder are subject to the prior or concurrent satisfaction of the
following conditions.
4.1 Conditions to Term Loans, Revolving Loans and Swing Line Loans.
--------------------------------------------------------------
The obligations of Lenders to make the Loans to be made on the
Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. Loan Party Documents. On or before the Closing Date, Company shall,
and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Company or such Loan Party, as the case may be, each, unless otherwise noted,
dated the Closing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation or other comparable formation documents, as the case may be,
of such Person, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation or formation and
each other state in which such Person is qualified as a foreign corporation
or other entity to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority
of each of such jurisdictions, each dated a recent date prior to the
Closing Date;
(ii) Copies of the Bylaws or other comparable charter documents, as
the case may be, of such Person, certified as of the Closing Date by such
Person's corporate secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors, General Partner or
other comparable governing body or entity, as the case may be, of such
Person approving and authorizing the execution, delivery and performance of
the Loan Documents and Related Agreements to which it is a party, certified
as of the Closing Date by the corporate secretary or an assistant secretary
of such Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officers or
entities, as the case may be, of such Person executing the Loan Documents
to which it is a party;
(v) Executed originals of the Loan Documents to which such Person
is a party; and
(vi) Such other documents as Administrative Agent may reasonably
request.
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B. No Material Adverse Effect. Since April 26, 1998, no Material Adverse
Effect (in the sole opinion of Administrative Agent) shall have occurred.
C. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The corporate organizational structure and
-------------------
capital structure of Company and its Subsidiaries shall be as set forth on
Schedule 4.1C annexed hereto.
-------------
(ii) Management; Employment Contracts. The management structure of
--------------------------------
Company shall be as set forth on Schedule 4.1C annexed hereto, and
-------------
Administrative Agent shall have received copies of, and shall be satisfied
with the form and substance of, any and all employment contracts with
senior management of Company.
D. Issuance of Subordinated Notes.
(i) Issuance of Subordinated Notes. On or before the Closing Date,
------------------------------
Company shall have (x) issued and sold not less than $390,000,000 in
aggregate principal amount of Subordinated Notes having an interest rate
not in excess of 10%, and (y) arranged and obtained not less than
$565,000,000 in total financing (including the Subordinated Notes and the
Obligations hereunder) to finance the Offer and Consent Solicitation and
the other transactions contemplated by the Loan Documents and Related
Agreements, in each case on terms and conditions satisfactory to
Administrative Agent.
(ii) Use of Proceeds by Company. Company shall have provided evidence
--------------------------
satisfactory to Administrative Agent that the proceeds of the debt
capitalization of Company described in the immediately preceding clause (i)
have been irrevocably committed, prior to or concurrent with the
application of the proceeds of the Term Loans, to the payment of a portion
of the Financing Requirements.
E. Related Agreements.
(i) Form of Related Agreements. The Subordinated Note Indenture,
--------------------------
the Offer and Consent Solicitation Materials and each other Related
Agreement shall be in form and substance satisfactory to Administrative
Agent.
(ii) Related Agreements in Full Force and Effect. Administrative
-------------------------------------------
Agent shall have received a fully executed or conformed copy of each
Related Agreement and any documents executed in connection therewith, and
each Related Agreement shall be in full force and effect and no provision
thereof shall have been modified or waived in any respect determined by
Administrative Agent to be material, in each case without the consent of
Administrative Agent.
F. Matters Relating to Existing Indebtedness of Company and its
Subsidiaries.
(i) Termination of Existing Indebtedness and Related Liens; Existing
----------------------------------------------------------------
Letters of Credit. Each of the Other Refinanced Indebtedness of Company or
-----------------
any of its Subsidiaries is identified as "Other Refinanced Indebtedness" on
Schedule 4.1F annexed
-------------
71
hereto. On the Closing Date, Company and its Subsidiaries shall have (a)
repaid in full or otherwise refinanced all of the Other Refinanced
Indebtedness (the aggregate principal amount of which Indebtedness shall
not exceed $44,000,000), (b) terminated any commitments to lend or make
other extensions of credit thereunder, (c) delivered to Administrative
Agent all documents or instruments necessary to release all Liens securing
Indebtedness or other obligations of Company and its Subsidiaries
thereunder, and (d) made arrangements satisfactory to Administrative Agent
with respect to the cancellation of any letters of credit outstanding
thereunder or the issuance of Letters of Credit to support the obligations
of Company and its Subsidiaries with respect thereto.
(ii) Redemption of Existing Senior Secured Notes. Company shall have
-------------------------------------------
(a) redeemed or defeased all of the Existing Senior Secured Notes for an
aggregate consideration not to exceed the outstanding principal thereof,
together with any accrued and unpaid interest thereon and any tender
premiums and consent fees relating thereto, and (b) delivered to
Administrative Agent all documents or instruments necessary to release all
Liens securing the Indebtedness or other obligations of Company and its
Subsidiaries under the Existing Senior Secured Notes and the Existing
Senior Secured Note Indenture.
(iii) Existing Indebtedness to Remain Outstanding. Administrative
-------------------------------------------
Agent shall have received an Officer's Certificate of Company stating that,
after giving effect to the transactions described in this subsection 4.1F,
the Indebtedness of Loan Parties (other than Indebtedness under the Loan
Documents and the Subordinated Notes) shall consist of approximately
$15,500,000 in aggregate principal amount of outstanding Indebtedness and
Capital Leases described in Schedule 7.1 annexed hereto. The terms and
------------
conditions of all such Indebtedness shall be in form and in
substance satisfactory to Administrative Agent and Requisite Lenders.
G. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Offer and Consent Solicitation,
the other transactions contemplated by the Loan Documents and the Related
Agreements, and the continued operation of the business conducted by Company and
its Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Offer and Consent Solicitation, and each of the foregoing
shall be in full force and effect, in each case other than those the failure to
obtain or maintain which, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. All applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose adverse
conditions on the Offer and Consent Solicitation or the financing thereof. No
action, request for stay, petition for review or rehearing, reconsideration, or
appeal with respect to any of the foregoing shall be pending, and the time for
any applicable agency to take action to set aside its consent on its own motion
shall have expired.
72
H. Consummation of the Offer and Consent Solicitation.
(i) pursuant to the Offer and Consent Solicitation,
(a) contemporaneously with the application of the debt proceeds
described in subsection 4.1D and the initial Loans made on the Closing
Date, the Offer and Consent Solicitation shall have been consummated
in all respects in accordance with the Offer and Consent Solicitation
Materials and no term or condition of the Offer and Consent
Solicitation shall have been amended, supplemented, waived or
otherwise modified in any respect determined by Administrative Agent
to be material without the consent of Administrative Agent;
(b) $315,000,000 in aggregate principal amount of the Existing
Senior Secured Notes shall have been (1) tendered in exchange for an
aggregate Cash payment not exceeding the sum of (x) the principal
amount thereof plus (y) accrued and unpaid interest thereon plus (z)
tender offer premiums and consent fees not exceeding $46,000,000 in
the aggregate, or (2) otherwise defeased in accordance with the terms
and conditions of the Consent and Solicitation Materials; and
(c) Company shall have obtained all such consents, amendments
and waivers with respect to the Existing Senior Secured Note Indenture
as may be required to permit the consummation of the Offer and Consent
Solicitation, the related financings (including the incurrence of the
Obligations hereunder and the Subordinated Notes) and the other
transactions contemplated by the Loan Documents and the Related
Agreements;
(ii) Transaction Costs shall not exceed $17,000,000; and
(iii) Administrative Agent shall have received an Officer's
Certificate of Company to the effect set forth in clauses (i)-
(ii) above.
I. Closing Date Mortgages; Closing Date Mortgage Policies; Etc.
Administrative Agent shall have received from Company and each applicable
Subsidiary Guarantor:
(i) Closing Date Mortgages. Fully executed and notarized Mortgages
----------------------
(each a "Closing Date Mortgage" and, collectively, the "Closing Date
Mortgages") in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in
Schedule 4.1I annexed hereto (each a "Closing Date Mortgaged Property" and,
collectively, the "Closing Date Mortgaged Properties");
(ii) Opinions of Local Counsel. An opinion of counsel (which counsel
-------------------------
shall be reasonably satisfactory to Administrative Agent) in each state in
which a Closing Date Mortgaged Property is located with respect to the
enforceability of the form(s) of Closing Date Mortgages to be recorded in
such state and such other matters as Administrative Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Administrative Agent;
73
(iii) Landlord Consents and Estoppels; Recorded Leasehold Interests.
-------------------------------------------------------------
In the case of each Closing Date Mortgaged Property consisting of a
Material Leasehold Property, (a) a Landlord Consent and Estoppel with
respect thereto and (b) evidence that such Material Leasehold Property is a
Recorded Leasehold Interest;
(iv) Title Insurance. (a) ALTA extended coverage title insurance
---------------
policies or unconditional commitments therefor (the "Closing Date Mortgage
Policies") issued by the Title Company with respect to the Closing Date
Mortgaged Properties listed in Part A of Schedule 4.1I annexed hereto, in
-------------
amounts not less than the respective amounts designated therein with
respect to any particular Closing Date Mortgaged Properties, insuring fee
simple title to, or a valid leasehold interest in, each such Closing Date
Mortgaged Property vested in such Loan Party and assuring Administrative
Agent that the applicable Closing Date Mortgages create valid and
enforceable First Priority mortgage Liens on the Closing Date Mortgaged
Properties encumbered thereby, subject only to Permitted Encumbrances,
which Closing Date Mortgage Policies (1) shall include an endorsement for
mechanics' liens, for future advances under this Agreement and for any
other matters reasonably requested by Administrative Agent and (2) shall
provide for affirmative insurance and such reinsurance as Administrative
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Administrative Agent; and (b) evidence
satisfactory to Administrative Agent that such Loan Party has (i) delivered
to the Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Closing Date Mortgage
Policies and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Closing Date Mortgage Policies and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Closing Date Mortgages in
the appropriate real estate records;
(v) Title Reports. With respect to each Closing Date Mortgaged
-------------
Property listed in Part B of Schedule 4.1I annexed hereto, a
-------------
title report issued by the Title Company with respect thereto,
dated not more than 30 days prior to the Closing Date and satisfactory in
form and substance to Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Closing Date Mortgage Policies or in the title reports delivered
pursuant to subsection 4.1I(v);
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence, which
-------------------------------------------
may be in the form of a letter from an insurance broker or a municipal
engineer, as to whether (1) any Closing Date Mortgaged Property is a Flood
Hazard Property and (2) the community in which any such Flood Hazard
Property is located is participating in the National Flood Insurance
Program, (b) if there are any such Flood Hazard Properties, such Loan
Party's written acknowledgement of receipt of written notification from
Administrative Agent (1) as to the existence of each such Flood Hazard
Property and (2) as to whether the community in which each such Flood
Hazard Property is located is participating in the National Flood Insurance
Program, and (c) in the event any such Flood Hazard Property is located in
a community that participates in the National Flood
74
Insurance Program, evidence that Company has obtained flood insurance in
respect of such Flood Hazard Property to the extent required under the
applicable regulations of the Board of Governors of the Federal Reserve
System; and
(viii) Environmental Indemnity. One or more environmental indemnity
-----------------------
agreements, satisfactory in form and substance to Administrative Agent and
its counsel, with respect to the indemnification of Administrative Agent
and Lenders for any liabilities that may be imposed on or incurred by any
of them as a result of any Hazardous Materials Activity.
J. Security Interests in Personal and Mixed Property. To the extent not
otherwise satisfied pursuant to subsection 4.1I, Administrative Agent shall have
received evidence satisfactory to it that Company and Subsidiary Guarantors
shall have taken or caused to be taken all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Administrative Agent,
desirable in order to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
---------------------------------
Agent of accurate and complete schedules to all of the applicable
Collateral Documents;
(ii) Stock Certificates and Instruments. Delivery to Administrative
----------------------------------
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent) representing
all capital stock pledged pursuant to the Company Pledge Agreement and the
Subsidiary Pledge Agreements and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery to
--------------------------------------------
Administrative Agent of (a) the results of a recent search, by a Person
satisfactory to Administrative Agent, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which
may have been made with respect to any personal or mixed property of any
Loan Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions, and/or pay-off letters,
each in form and substance satisfactory to Administrative Agent, in each
case as may be necessary to terminate any effective UCC financing
statements or fixture filings disclosed in such search (other than any such
financing statements or fixture filings in respect of Liens permitted to
remain outstanding pursuant to the terms of this Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
--------------------------------------------
Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and
75
mixed property Collateral of such Loan Party, for filing in all
jurisdictions as may be necessary or, in the opinion of Administrative
Agent, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents;
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
---------------------
cover sheets or other documents or instruments required to be filed with
the PTO in order to create or perfect Liens in respect of any IP
Collateral; and
(vi) Opinions of Local Counsel. Delivery to Administrative Agent of
-------------------------
an opinion of counsel (which counsel shall be reasonably satisfactory to
Administrative Agent) under the laws of each jurisdiction in which any Loan
Party or any personal or mixed property Collateral is located with respect
to the creation and perfection of the security interests in favor of
Administrative Agent in such Collateral and such other matters governed by
the laws of such jurisdiction regarding such security interests as
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent.
K. Ship Mortgages. Administrative Agent shall have received from Company
and each applicable Subsidiary Guarantor fully executed and notarized Ship
Mortgages in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each ship, barge or other vessel listed in
Schedule 4.1K annexed hereto, and such other approvals, opinions or documents in
- -------------
connection with the foregoing as Administrative Agent may reasonably request.
L. Real Estate and Other Appraisals. Administrative Agent shall have
received appraisals from one or more independent real estate and other
appraisers satisfactory to Administrative Agent, in form, scope and substance
satisfactory to Administrative Agent (including a determination that the
appraised value (on a going concern basis) of the Biloxi Gaming Facilities, the
Vicksburg Gaming Facilities, the Bossier City Gaming Facilities and the Lake
Charles Gaming Facilities, collectively, is not less than $500,000,000) and
satisfying the requirements of any applicable laws and regulations, concerning
any Closing Date Mortgaged Properties (as defined in subsection 4.1I) and ships
or barges subject to Ship Mortgages, in each case to the extent required under
such laws and regulations as determined by Administrative Agent in its
discretion.
M. Environmental Reports. Administrative Agent shall have received
reports and other information, in form, scope and substance satisfactory to
Administrative Agent, regarding environmental matters relating to Company and
its Subsidiaries and the Facilities, which reports shall include a Phase I
environmental assessment for each of the Facilities currently owned, leased,
operated or used by Company or any of its Subsidiaries (collectively, the "Phase
I Report") which (a) conforms to the current version of ASTM Standard Practice
for Environmental Site Assessments: Phase I Environmental Site Assessment
Process, E 1527, (b) was conducted no more than six months prior to the Closing
Date by one or more environmental consulting firms reasonably satisfactory to
Administrative Agent, (c) includes an assessment of asbestos-containing
materials at such Facilities, and (d) includes an estimate of the reasonable
worst-case cost of investigating and remediating any Hazardous Materials
Activity identified in
76
the Phase I Report as giving rise to an actual or potential material violation
of any Environmental Law or as presenting a material risk of giving rise to a
material Environmental Claim.
N. Financial Statements; Pro Forma Balance Sheet. On or before the
Closing Date, Lenders shall have received from Company (i) audited financial
statements of Company and its Subsidiaries for Fiscal Years 1998, 1997 and 1996,
consisting of balance sheets and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows for such Fiscal Years,
(ii) unaudited financial statements of Company and its Subsidiaries as at
January 24, 1999, consisting of a balance sheet and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows for the
nine-month period ending on such date, all in reasonable detail and certified by
the chief financial officer of Company that they fairly present the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments, and
(iii) pro forma consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the Closing Date, prepared in accordance with GAAP (other
than the absence of footnotes) and reflecting the consummation of the Offer and
Consent Solicitation, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, which pro forma
financial statements shall be in form and substance satisfactory to Lenders.
O. [INTENTIONALLY OMITTED]
P. Evidence of Insurance. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.
Q. Opinions of Counsel to Loan Parties. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Allan B. Solomon, General Counsel of Loan Parties,
Mayer, Brown & Platt, special counsel for Loan Parties, and Phelps Dunbar
L.L.P., counsel for Loan Parties, each in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Closing
Date and setting forth substantially the matters in the opinions designated in
Exhibit VIII annexed hereto and as to such other matters as Administrative Agent
- ------------
acting on behalf of Lenders may reasonably request, and (ii) evidence
satisfactory to Administrative Agent that Loan Parties have requested such
counsel to deliver such opinions to Lenders.
R. Opinions of Administrative Agent's Counsel. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Administrative Agent, dated as of the Closing
Date, substantially in the form of Exhibit IX annexed hereto and as to such
----------
ther matters as Administrative Agent acting on behalf of Lenders may reasonably
request.
S. Opinions of Counsel Delivered Under Related Agreements. Administrative
Agent and its counsel shall have received copies of each of the opinions of
counsel delivered to the parties under the Related Agreements, together with a
letter from each such counsel (to the
77
extent not inconsistent with such counsel's established internal policies)
authorizing Lenders to rely upon such opinion to the same extent as though it
were addressed to Lenders.
T. Fees. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.
U. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Administrative Agent an Officer's Certificate, in form
and substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 5 hereof are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company shall have performed
in all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent and Requisite Lenders.
V. No Litigation. There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that has not been disclosed by
Company in writing pursuant to subsection 5.6 or 6.1(x) prior to the execution
of this Agreement, and there shall have occurred no development not so disclosed
in any such action, suit, proceeding, governmental investigation or arbitration
so disclosed, that, in either event, in the opinion of Administrative Agent or
of Requisite Lenders, could reasonably be expected to have a Material Adverse
Effect; and no injunction or other restraining order shall have been issued and
no hearing to cause an injunction or other restraining order to be issued shall
be pending or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by this Agreement or
the making of Loans hereunder.
W. No Disruption of Financial and Capital Markets. There shall have been
no material adverse change after March 17, 1999 in the syndication markets for
credit facilities similar in nature to the credit facilities provided under this
Agreement and the other Loan Documents, and there shall not have occurred and be
continuing a material disruption of or material adverse change in the financial,
banking or capital markets that would have an adverse effect on such syndication
markets, in each case as determined by Administrative Agent in its sole
discretion.
X. Completion of Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in
form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.
78
4.2 Conditions to All Loans.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed Notice
of Borrowing, in each case signed by the chief executive officer, the chief
financial officer or the treasurer of Company or by any employee of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing and the application of the proceeds thereof that would constitute
an Event of Default or a Potential Event of Default; and
(iii) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date.
4.3 Conditions to Letters of Credit.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any employee of Company designated by
any of the above-described officers on behalf of Company in a writing delivered
to Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
79
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce
other Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
----------------------------------------------------------------
Subsidiaries.
------------
A. Organization and Powers. Each Loan Party is a corporation,
partnership or limited liability company duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation
as specified in Schedule 5.1 annexed hereto. Each Loan Party has all requisite
corporate power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents and Related Agreements to which it is a party and to carry out
the transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing could not
reasonably be expected to have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsections 7.14.
D. Subsidiaries. All of the Subsidiaries of Company as of the Closing
Date are identified in Schedule 5.1 annexed hereto, as said Schedule 5.1 may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvi). Schedule 5.1 identifies which Subsidiaries of Company are Restricted
Subsidiaries and Unrestricted Subsidiaries. The capital stock of each of the
Subsidiaries of Company identified in Schedule 5.1 annexed hereto (as so
supplemented) is duly authorized, validly issued, fully paid and nonassessable
and none of such capital stock constitutes Margin Stock. Each of the
Subsidiaries of Company identified in Schedule 5.1 annexed hereto (as so
supplemented) is a corporation, partnership or limited liability company duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or formation set forth therein, has all
requisite corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted, and is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good
standing or a lack of such corporate power and authority could not reasonably be
expected to have a Material Adverse Effect. Schedule 5.1 annexed hereto (as so
supplemented) correctly sets forth, as of the
80
Closing Date, the ownership interest of Company and each of its Subsidiaries in
each of the Subsidiaries of Company identified therein. As of the Closing Date,
there exists no Indebtedness nor Contingent Obligations of the Unrestricted
Subsidiaries owed to Company or any of its Restricted Subsidiaries (other than
approximately $3,300,000 of Indebtedness owing by ICBH to Company) or for which
Company or any of its Restricted Subsidiaries is or may become liable.
5.2 Authorization of Borrowing, etc.
--------------------------------
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Agreements have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties
of the Loan Documents and the Related Agreements to which they are parties and
the consummation of the transactions contemplated by the Loan Documents and such
Related Agreements do not and will not (i) violate any provision of any law or
any governmental rule or regulation or any Gaming Law applicable to Company or
any of its Subsidiaries, the Certificate or Articles of Incorporation or other
formation or charter document or Bylaws of Company or any of its Subsidiaries or
any order, judgment or decree of any court or other agency of government or
Gaming Authority binding on Company or any of its Subsidiaries (other than any
violation of any such law, governmental rule or regulation, or Gaming Law or any
such order, judgment or decree, in each case which could not reasonably be
expected to have a Material Adverse Effect), (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Company or any of its Subsidiaries (other
than any such conflict, breach or default which could not reasonably be expected
to have a Material Adverse Effect), (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries (other than any Liens created under any of the Loan Documents
in favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Closing Date and
disclosed in writing to Lenders.
C. Governmental Consents. Except for such authorizations, approvals,
consents or notices (a) obtained or delivered as of the Closing Date, (b)
subsequently required in connection with the addition of any Subsidiary
Guarantor pursuant to subsection 6.8, or (c) set forth on Schedule 5.2C annexed
-------------
hereto, the execution, delivery and performance by Loan Parties of the Loan
Documents and the Related Agreements to which they are parties and the
consummation of the transactions contemplated by the Loan Documents and such
Related Agreements do not and will not result in any License Revocation or
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body or any Gaming Authority. Other than the filings or recordings
contemplated by subsection 5.16A, all authorizations, approvals, consents,
notices, registrations or filings required to be obtained, delivered, filed or
made as of the Closing Date for the execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and
81
such Related Agreements have been obtained from or registered or filed with the
applicable federal, state or other governmental authorities or regulatory bodies
or Gaming Authorities.
D. Binding Obligation. Each of the Loan Documents and Related Agreements
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. Valid Issuance of Subordinated Notes. Company has the corporate power
and authority to issue the Subordinated Notes. The Subordinated Notes, when
issued and paid for, will be the legally valid and binding obligations of
Company, enforceable against Company in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability. The
subordination provisions of the Subordinated Notes will be enforceable against
the holders thereof and the Loans and all other monetary Obligations hereunder
are and will be within the definition of "Senior Indebtedness" included in such
provisions. The Subordinated Notes, when issued and sold, will either (a) have
been registered or qualified under applicable federal and state securities laws
or (b) be exempt therefrom.
F. Compliance with Laws. Company and its Subsidiaries are in compliance
with all presently existing applicable statutes, laws, regulations, rules,
ordinances and orders of any kind whatsoever (including, without limitation, any
zoning and building laws or ordinances, subdivision laws or ordinances, any
Environmental Laws or Gaming Laws, or any presently existing rules, regulations
or orders of any governmental entity, authority or agency or any Gaming
Authority), and with all present existing covenants and restrictions of record
relating to the use and occupancy of any of their respective properties, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
5.3 Financial Condition.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated and
consolidating balance sheets of Company and its Subsidiaries as at April 26,
1998 and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the
Fiscal Year then ended and (ii) the unaudited consolidated and consolidating
balance sheets of Company and its Subsidiaries as at January 24, 1999 and the
related unaudited consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the nine
months then ended. All such statements were prepared in conformity with GAAP
and fairly present, in all material respects, the financial position (on a
consolidated and, where applicable, consolidating basis) of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated and, where
applicable, consolidating basis) of the entities described therein for each of
the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
82
Company does not (and will not following the funding of the initial Loans) have
any Contingent Obligation, contingent liability or liability for taxes, long-
term lease or unusual forward or long-term commitment that is not reflected in
the foregoing financial statements or the notes thereto and which in any such
case is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Company or any of its
Subsidiaries.
5.4 No Material Adverse Change; No Restricted Junior Payments.
---------------------------------------------------------
Since April 26, 1998, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
During the period from April 26, 1998 through and including the Closing Date,
neither Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.
5.5 Title to Properties; Liens; Real Property.
-----------------------------------------
A. Title to Properties; Liens. Company and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7.
Except as permitted by this Agreement, all such properties and assets are free
and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 5.5 annexed hereto
------------
contains a true, accurate and complete list of (i) all Real Property Assets
constituting fee properties and (ii) all leases, subleases or assignments of
leases (together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset of any Loan Party,
regardless of whether such Loan Party is the landlord or tenant (whether
directly or as an assignee or successor in interest) under such lease, sublease
or assignment. Except as specified in Schedule 5.5 annexed hereto, each
------------
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and there is no default by any Loan Party thereunder. Company
does not have knowledge of any default by any other party thereto that has
occurred and is continuing thereunder, and each such agreement constitutes the
legally valid and binding obligation of each applicable Loan Party, enforceable
against such Loan Party in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles.
5.6 Litigation; Adverse Facts.
-------------------------
A. Proceedings, Investigations and Violations. There are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company or any of its Subsidiaries) at law or in
equity, or before or by any federal, state,
83
municipal or other governmental department, commission, board, bureau, agency or
instrumentality or Gaming Authority, domestic or foreign (including any
Environmental Claims) that are pending or, to the knowledge of Company,
threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries and that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Neither Company nor any of its Subsidiaries (i) is in violation of any
applicable laws (including Environmental Laws) that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, or
(ii) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
B. Land Use Proceedings. As of the Closing Date, there are no pending
condemnation, zoning or other land use proceedings or special assessment
proceedings with respect to the Closing Date Mortgaged Properties or the use
thereof, and Seller has not received written notice from any Governmental
Authority threatening any such proceeding. After the Closing Date, there are no
material pending condemnation, zoning or other land use proceedings or special
assessment proceedings with respect to the Closing Date Mortgaged Properties or
the use thereof, and Seller has not received written notice from any
Governmental Authority threatening any such proceeding. Seller has not entered
into any agreements or commitments with Governmental Authorities that will be
binding on the Closing Date Mortgaged Properties after the Closing Date and
which would (i) materially affect the operations of or the entitlements
applicable to such properties, (ii) require the owner of any such property to
make improvements to such property or make dedications or off-site improvements
for the benefit of adjoining properties, or (iii) make additional expenditures
with respect to the operation of the Closing Date Mortgaged Properties.
5.7 Payment of Taxes.
----------------
Except to the extent permitted by subsection 6.3, all tax returns and
reports of Company and its Subsidiaries required to be filed by any of them have
been timely filed, and all taxes shown on such tax returns to be due and payable
and all assessments, fees and other governmental charges upon Company and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises which are due and payable have been paid when due and payable.
Company knows of no proposed tax assessment against Company or any of its
Subsidiaries which is not being actively contested by Company or such Subsidiary
in good faith and by appropriate proceedings; provided that such reserves or
--------
other appropriate provisions, if any, as shall be required in conformity with
GAAP shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
------------------------------------------------------------------
Contracts.
- ---------
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect,
84
of such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all the
------------
Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
- ------------
material defaults currently exist thereunder.
D. Neither Company nor any of its Subsidiaries has entered into any
currently effective contracts for the sale of the Closing Date Mortgaged
Properties, nor do there exist any currently effective rights of first refusal
or options to purchase such properties.
5.9 Governmental Regulation.
-----------------------
Except for the Gaming Laws described in Schedule 5.2C annexed hereto,
-------------
neither Company nor any of its Subsidiaries is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
---------------------
A. Neither Company 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.
B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
----------------------
A. Company, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with respect
to each Employee Benefit Plan, and have performed all their obligations under
each Employee Benefit Plan. Each Employee Benefit Plan which is intended to
qualify under Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, or except as set forth in Schedule 5.11 annexed hereto, no
-------------
Employee Benefit Plan provides
85
health or welfare benefits (through the purchase of insurance or otherwise) for
any retired or former employee of Company, any of its Subsidiaries or any of
their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed $5,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $5,000,000.
5.12 Certain Fees.
------------
Except for fees disclosed to Administrative Agent prior to the
Closing Date, no broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, and
Company hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any non-disclosed broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
5.13 Environmental Protection.
------------------------
(i) neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
(ii) neither Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. (S)
9604) or any comparable state law;
(iii) there are and, to Company's knowledge, have been no conditions,
occurrences, or Hazardous Materials Activities which could reasonably be
expected to form the basis of an Environmental Claim against Company or
any of its Subsidiaries that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
(iv) neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries has filed
any notice under any Environmental Law indicating past or present
treatment of Hazardous
86
Materials at any Facility, and none of Company's or any of its
Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent; and
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition has occurred or is occurring with respect to Company or any
of its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity which individually or in the
aggregate has had or could reasonably be expected to have a Material Adverse
Effect.
5.14 Employee Matters.
----------------
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 Solvency.
--------
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
------------------------------
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.1I, 4.1J,
6.8 and 6.9 and (ii) the delivery to Administrative Agent of any Pledged
Collateral not delivered to Administrative Agent at the time of execution and
delivery of the applicable Collateral Document (all of which Pledged Collateral
has been so delivered) are effective to create in favor of Administrative Agent
for the benefit of Lenders, as security for the respective Secured Obligations
(as defined in the applicable Collateral Document in respect of any Collateral),
a valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing or recording of the
Closing Date Mortgages (as defined in subsection 4.1I) and the Ship Mortgages,
the filing of any UCC financing statements delivered to Administrative Agent for
filing (but not yet filed) and the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf of
Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for such authorizations, approvals or
other actions set forth on Schedule
--------
87
5.2C annexed hereto and filings or recordings contemplated by subsection 5.16A
- ----
and except as may be required, in connection with the disposition of any Pledged
Collateral, by laws generally affecting the offering and sale of securities.
C. Absence of Third-Party Filings. Except (x) such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A, (y)
for Permitted Encumbrances, and (z) for Liens which shall be terminated pursuant
to UCC termination statements delivered pursuant to subsection 4.1J to
Administrative Agent for filing (but not yet filed), such Liens to be terminated
upon the filing or recording of such UCC termination statements, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
F. Conditions Affecting the Closing Date Mortgaged Properties. There are
no defects, facts or conditions affecting the Closing Date Mortgaged Properties
that would make them unsuitable for the current use of such properties or of any
abnormal hazards (including earth movement, slippage or flood damage) affecting
the Closing Date Mortgaged Properties, except for defects, facts or conditions
which could not reasonably be expected to have a Material Adverse Effect.
G. Permits and Approvals for the Closing Date Mortgaged Properties.
Company has obtained, or caused its Subsidiaries to obtain, all permits,
authorizations, and approvals, including, without limitation, all sewer and
water permits, elevator permits, certificates of occupancy, subdivision
approvals, environmental approvals, zoning and land use entitlements which are
necessary for the current operation of the Closing Date Mortgaged Properties,
and there are no uncured violations thereof, except for permits, authorizations
and approvals where the failure to obtain, and violations thereof, could not
reasonably be expected to have a Material Adverse Effect.
5.17 Related Agreements.
------------------
Company has delivered to Lenders complete and correct copies of each
Related Agreement and of all exhibits and schedules thereto.
5.18 Disclosure.
----------
No representation or warranty of Company or any of its Subsidiaries
contained in the Confidential Information Memorandum or in any Loan Document or
Related Agreement or in any other document, certificate or written statement
(taken as a whole) furnished to Lenders
88
by or on behalf of Company or any of its Subsidiaries for use in connection with
the transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may materially differ from the projected results. There are no facts
known (or which should upon the reasonable exercise of diligence be known) to
Company (other than matters of a general economic nature) that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
5.19 Year 2000 Compliance.
--------------------
All Information Systems and Equipment are either Year 2000
Compliant, or any reprogramming, remediation or any other corrective action,
including the internal testing of all such Information Systems and Equipment,
will be completed by August 31, 1999. To the extent that such
reprogramming/remediation and testing action is required, the cost thereof, as
well as the cost of the reasonably foreseeable consequences of failure to become
Year 2000 Compliant, to Company and its Subsidiaries (including without
limitation reprogramming errors and the failure or other systems or equipment)
will not result in an Event of Default or could not reasonably be expected to
have a Material Adverse Effect.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Financial Statements and Other Reports.
--------------------------------------
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent (with copies
for each Lender, which copies shall be promptly distributed to Lenders by
Administrative Agent):
(i) Monthly Financials: as soon as available and in any event
within 35 days after the end of each month ending after the Closing Date,
the consolidated statements of income of Company and its Subsidiaries and
separate statements of income of each Gaming Facility of Company and its
Subsidiaries, in each case for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month,
89
setting forth in each case in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year,
to the extent prepared on a monthly basis, all in reasonable detail,
subject to changes resulting from audit and normal year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any event
--------------------
within (x) 50 days after the end of each Fiscal Quarter, (other than each
fourth Fiscal Quarter), or (y) 95 days after the end of each fourth Fiscal
Quarter, (a) the consolidated and consolidating balance sheets of Company
and its Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated and consolidating statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such Fiscal Quarter and
for the period from the beginning of the then current Fiscal Year to the
end of such Fiscal Quarter, setting forth in each case in comparative form
the corresponding figures for the corresponding periods of the previous
Fiscal Year and the corresponding figures from the Financial Plan for the
current Fiscal Year, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, and (b) a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
-------------------
within 95 days after the end of each Fiscal Year, (a) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company and
its Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year and
the corresponding figures from the Financial Plan for the Fiscal Year
covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a narrative
report describing the operations of Company and its Subsidiaries in the
form prepared for presentation to senior management for such Fiscal Year,
and (c) in the case of such consolidated financial statements, a report
thereon of Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by Company and
satisfactory to Administrative Agent, which report shall be unqualified,
shall express no doubts about the ability of Company and its Subsidiaries
to continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows
for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such
90
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards;
(iv) Officer's and Compliance Certificates: together with each
-------------------------------------
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officer's Certificate of
Company stating that the signer has reviewed the terms of this Agreement
and has made, or caused to be made under the signer's supervision, a review
in reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signer does not have
knowledge of the existence as at the date of such Officer's Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto; and
(b) a Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
restrictions contained in Section 7, in each case to the extent compliance
with such restrictions is required to be tested at the end of the
applicable accounting period, together with a description (including
amounts) of all Investments and Consolidated Capital Expenditures made
during such period, and with respect to each construction or expansion
project of Company and its Restricted Subsidiaries, a report setting forth
the budgeted and/or projected total cost of such project, the costs
incurred to date for such project and the expenditures made to date for
such project;
(v) Reconciliation Statements: if, as a result of any change in
-------------------------
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1
will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions had
no such change in accounting principles and policies been made, then (a)
together with the first delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, consolidated financial statements of Company and its
Subsidiaries for (y) the current Fiscal Year to the effective date of such
change and (z) the two full Fiscal Years immediately preceding the Fiscal
Year in which such change is made, in each case prepared on a pro forma
basis as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such change, a
written statement of the chief accounting officer or chief financial
officer of Company setting forth the differences (including any differences
that would affect any calculations relating to the financial covenants set
forth in subsection 7.6) which would have resulted if such financial
statements had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
91
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable by
--------
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to believe
either or both that the information contained in the certificates delivered
therewith pursuant to subdivision (iv) above is not correct or that the
matters set forth in the Compliance Certificates delivered therewith
pursuant to clause (b) of subdivision (iv) above for the applicable Fiscal
Year are not stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
------------------------------
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (b) all regular and
periodic reports and all registration statements (other than on Form S-8 or
a similar form) and prospectuses, if any, filed by Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other statements made available generally by
Company or any of its Subsidiaries to the public concerning material
developments in the business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of Company
-----------------------
obtaining knowledge (a) of any condition or event that constitutes an Event
of Default or Potential Event of Default, or becoming aware that any Lender
has given any notice to Company (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to
Company or any of its Subsidiaries or taken any other action with respect
to a claimed default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if Company were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officer's Certificate specifying the nature and
period of existence of such condition, event or change, or specifying the
notice given or action taken by any such Person and the nature
92
of such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any officer
-------------------------------
of Company obtaining knowledge of (X) the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial
or otherwise), governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of Company or
any of its Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Company to Lenders or (Y) any material development
in any Proceeding that, in any case:
(1) if adversely determined, could reasonably be expected to
have a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings not covered by insurance
involving an alleged liability of, or claims against or affecting, Company
or any of its Subsidiaries equal to or greater than $5,000,000, and
promptly after request by Administrative Agent such other information as
may be reasonably requested by Administrative Agent to enable
Administrative Agent and its counsel to evaluate any of such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the occurrence
------------
of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Company, any of its Subsidiaries
or any of their respective ERISA Affiliates has taken, is taking or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the
PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
-------------
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan; (b) all notices received by Company, any of its Subsidiaries or any
of their respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (c) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
---------------
later than 30 days following the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year and the next
succeeding Fiscal Year (the "Financial Plan" for such Fiscal Years),
including (a) forecasted consolidated and consolidating balance
93
sheets and forecasted consolidated and consolidating statements of income
and cash flows of Company and its Subsidiaries for each such Fiscal Year,
(b) forecasted consolidated and consolidating statements of income and cash
flows of Company and its Subsidiaries for each month of each such Fiscal
Year, together with an explanation of the assumptions on which such
forecasts are based, and (c) such other information and projections as any
Lender may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the
---------
last day of each Fiscal Year, a report in form and substance satisfactory
to Administrative Agent outlining all material insurance coverage
maintained as of the date of such report by Company and its Restricted
Subsidiaries and all material insurance coverage planned to be maintained
by Company and its Restricted Subsidiaries in the immediately succeeding
Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written
------------------
notice of any change in the Board of Directors of Company;
(xvi) New Subsidiaries: promptly upon any Person becoming a
----------------
Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company and
(b) all of the data required to be set forth in Schedule 5.1 annexed hereto
------------
with respect to all Subsidiaries of Company (it being understood that such
written notice shall be deemed to supplement Schedule 5.1 annexed hereto
------------
for all purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event within ten
------------------
Business Days after any Material Contract of Company or any of its
Restricted Subsidiaries is terminated or amended in a manner that is
materially adverse to Company or such Restricted Subsidiary, as the case
may be, or any new Material Contract is entered into, a written statement
describing such event with copies of such material amendments or new
contracts, and an explanation of any actions being taken with respect
thereto;
(xviii) UCC Search Report: as promptly as practicable (depending on
-----------------
the jurisdiction) after the date of filing of any UCC financing statement
executed by any Loan Party pursuant to subsection 4.1J(iv) or 6.8A, copies
of completed UCC searches evidencing the proper filing, recording and
indexing of all such UCC financing statement and listing all other
effective financing statements that name such Loan Party as debtor,
together with copies of all such other financing statements not previously
delivered to Administrative Agent by or on behalf of Company or such Loan
Party;
(xix) Margin Determination Certificate: together with each
--------------------------------
delivery of financial statements for each Fiscal Quarter (other than each
fourth Fiscal Quarter) pursuant to subdivision (ii) above, and within 45
days of the last day of each fourth Fiscal Quarter, a Margin Determination
Certificate demonstrating in reasonable detail the calculation of the
Consolidated Total Leverage Ratio for the four consecutive Fiscal Quarters
ending on the day of the accounting period covered by such financial
statements;
(xx) License Revocation: promptly upon any officer of Company
------------------
obtaining knowledge of a License Revocation, written notice thereof
together with such other
94
information as may be reasonably available to Company to enable Lenders and
their counsel to evaluate such License Revocation, and such other
information as may be reasonably requested by Administrative Agent;
(xxi) Specified Projects Carryover Amount: in the event Company
-----------------------------------
elects to add any Specified Projects Carryover Amount (as defined in
subsection 7.8(ii)) to the Total Expansion CapEx Carryover Amount (as
defined in subsection 7.8(ii)), promptly after full completion of any of
the projects described in subsection 7.8(i), the Officer's Certificate
described in subsection 7.8(ii), which certificate shall state that the
applicable construction or expansion projects have been fully completed,
demonstrate the calculation of the Specified Projects Carryover Amount,
such calculation to be reasonably satisfactory to Administrative Agent,
and, subject to the provisos contained in subsection 7.8(ii), request such
Specified Projects Carryover Amount be included in the Total Expansion
CapEx Carryover Amount; and
(xxii) Other Information: with reasonable promptness, such other
-----------------
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender.
6.2 Corporate Existence, etc.
-------------------------
Except as permitted under subsection 7.7, Company will, and will cause
each of its Restricted Subsidiaries to, at all times preserve and keep in full
force and effect its corporate existence and all rights and franchises material
to its business; provided, however, that neither Company nor any of its
-------- -------
Restricted Subsidiaries shall be required to preserve any such right or
franchise if the Board of Directors of Company or such Restricted Subsidiary
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of Company or such Restricted Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any material respect
to Company, such Restricted Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
----------------------------------------------
A. Company will, and will cause each of its Restricted Subsidiaries to,
pay all taxes, assessments and other governmental charges imposed upon it or any
of its properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (1) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (2) in the case of a charge or claim which has or may become a
Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim.
95
B. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance.
------------------------------------
A. Maintenance of Properties. Company will, and will cause each of its
Restricted Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties (including, without limitation, all Gaming Facilities) used or useful
in the business of Company and its Restricted Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Restricted Subsidiaries as
may customarily be carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses, in each
case in such amounts (giving effect to self-insurance), with such deductibles,
covering such risks and otherwise on such terms and conditions as shall be
customary for corporations similarly situated in the industry. Without limiting
the generality of the foregoing, Company will maintain or cause to be maintained
(i) flood insurance with respect to each Flood Hazard Property that is located
in a community that participates in the National Flood Insurance Program, in
each case in compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System, and (ii) replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times satisfactory to Administrative Agent in its
commercially reasonable judgment. Each such policy of insurance shall (a) name
Administrative Agent for the benefit of Lenders as an additional insured
thereunder as its interests may appear and (b) in the case of each business
interruption and casualty insurance policy, contain a loss payable clause or
endorsement, satisfactory in form and substance to Administrative Agent, that
names Administrative Agent for the benefit of Lenders as the loss payee
thereunder for any covered loss in excess of $10,000,000 and provides for at
least 30 days prior written notice to Administrative Agent of any modification
or cancellation of such policy.
6.5 Inspection Rights.
-----------------
Company shall, and shall cause each of its Restricted Subsidiaries to,
permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of Company or of any of its Restricted
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
- ---------
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
96
6.6 Compliance with Laws, etc.; Maintenance of Gaming and Liquor Licenses.
---------------------------------------------------------------------
A. Compliance with Laws. Company shall comply, and shall cause each of
its Subsidiaries to comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority or Gaming Authority
(including all Environmental Laws and Gaming Laws), noncompliance with which
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
B. Maintenance of Licenses. Company shall, and shall cause each of its
Restricted Subsidiaries to, maintain (i) such valid gaming licenses,
registrations and findings of suitability in all jurisdictions as may be
necessary to operate each of its Gaming Facility businesses and (ii) all liquor
licenses and registrations as may be necessary to sell alcoholic beverages from
and in its Gaming Facilities.
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's Actions
---------------------------------------------------------------------------
Regarding Hazardous Materials Activities, Environmental Claims and
------------------------------------------------------------------
Violations of Environmental Laws.
------------------
A. Environmental Review and Investigation. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Company, and (ii) conduct its own
investigation of any Facility; provided that, in the case of any Facility no
--------
longer owned, leased, operated or used by Company or any of its Subsidiaries,
Company shall only be obligated to use all commercially reasonable efforts to
obtain permission for Administrative Agent's professional consultant to conduct
an investigation of such Facility. For purposes of conducting such a review
and/or investigation, Company hereby grants to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Company or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith. Any such review and/or
investigation of any Facility shall be conducted, unless otherwise agreed to by
Company and Administrative Agent, upon reasonable notice during normal business
hours and, to the extent reasonably practicable, shall be conducted so as not to
interfere with the ongoing operations at such Facility or to cause any damage or
loss to any property at such Facility. Company and Administrative Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of Administrative Agent pursuant to this subsection 6.7A will be
obtained and shall be used by Administrative Agent and Lenders for the purposes
of Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents.
Administrative Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (x) it will
indemnify and hold harmless Administrative Agent and each Lender from any costs,
losses or liabilities relating to Company's use of or reliance on such report,
(y) neither Administrative Agent nor any Lender makes any representation or
warranty with respect to such report, and (z) by delivering such report to
Company, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
97
B. Environmental Disclosure. Company will deliver to Administrative
Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
--------------------------------
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or with respect to any Environmental Claims which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
--------------------------------------------------
upon the occurrence thereof, written notice describing in reasonable detail
(a) any Release required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws,
and (b) any remedial action taken by Company or any other Person in
response to (1) any Hazardous Materials Activities the existence of which
has a reasonable possibility of resulting in one or more Environmental
Claims having, individually or in the aggregate, a Material Adverse Effect,
or (2) any Environmental Claims that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims, Releases,
----------------------------------------------------------------
Etc. As soon as practicable following the sending or receipt thereof by
---
Company or any of its Subsidiaries, a copy of any and all written
communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (b) any Release required to be reported
to any federal, state or local governmental or regulatory agency, and (c)
any request for information from any governmental agency that suggests such
agency is investigating whether Company or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
---------------------------------------------------------------
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to (1) expose Company or any
of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability of Company or any of its
Subsidiaries to maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for their respective
operations and (b) any proposed action to be taken by Company or any of its
Subsidiaries to commence manufacturing or other industrial operations or to
modify current operations in a manner that could reasonably be expected to
subject Company or any of its Subsidiaries to any material additional
obligations or requirements under any Environmental Laws that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
98
(v) Other Information. With reasonable promptness, such other
-----------------
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
-----------------------------------------------------------
Company shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim. In the event Company or any of its Subsidiaries
undertakes any such action with respect to any Hazardous Materials, Company
or such Subsidiary shall conduct and complete such action in compliance
with all applicable Environmental Laws and in accordance with the policies,
orders and directives of all federal, state and local governmental
authorities except when, and only to the extent that, Company's or such
Subsidiary's liability with respect to such Hazardous Materials Activity is
being contested in good faith by Company or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
--------------------------------------------------------------
Environmental Laws. Company shall promptly take, and shall cause each of
------------------
its Subsidiaries promptly to take, any and all actions necessary to (1)
cure any material violation of applicable Environmental Laws by Company or
its Subsidiaries that could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect and (2) make an appropriate
response to any Environmental Claim against Company or any of its
Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
---------------------------------------------------------------------------
by Certain Subsidiaries and Future Subsidiaries.
-----------------------------------------------
A. Execution of Subsidiary Guaranty and Personal Property Collateral
-----------------------------------------------------------------
Documents. In the event that any Subsidiary of Company existing on the Closing
- ---------
Date that has not previously executed the Subsidiary Guaranty hereafter becomes
a domestic Restricted Subsidiary, or in the event that any Person becomes a
domestic Restricted Subsidiary after the date hereof, Company will (i) promptly
notify Administrative Agent of that fact, (ii) execute, or cause the appropriate
Restricted Subsidiary to execute, a Pledge Amendment (as defined in the Company
Pledge Amendment and Subsidiary Pledge Amendment), (iii) cause such Restricted
Subsidiary to execute and deliver to Administrative Agent a counterpart of the
Subsidiary Guaranty and a Subsidiary Pledge Agreement and a Subsidiary Security
Agreement and (iv) to take all such further actions and execute all such further
documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.1J) as may be necessary or, in the
opinion of Administrative Agent, desirable to create in favor of Administrative
Agent, for the benefit of Lenders, a valid and perfected First Priority Lien on
all
99
of the personal and mixed property assets of such Restricted Subsidiary
described in the applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Restricted Subsidiary's Certificate or Articles of
Incorporation or equivalent charter or formation documents, together with a good
standing certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which such Person is qualified as a
foreign corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a copy of such Restricted Subsidiary's Bylaws, if
any, certified by its corporate secretary or an assistant secretary as of a
recent date prior to their delivery to Administrative Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such Restricted
Subsidiary as to (a) the fact that the attached resolutions of the Board of
Directors of such Restricted Subsidiary approving and authorizing the execution,
delivery and performance of such Loan Documents are in full force and effect and
have not been modified or amended and (b) the incumbency and signatures of the
officers of such Restricted Subsidiary executing such Loan Documents, and (iv) a
favorable opinion of counsel to such Restricted Subsidiary, in form and
substance satisfactory to Administrative Agent and its counsel, as to (a) the
due organization and good standing of such Restricted Subsidiary, (b) the due
authorization, execution and delivery by such Restricted Subsidiary of such Loan
Documents, (c) the enforceability of such Loan Documents against such Restricted
Subsidiary, (d) such other matters (including matters relating to the creation
and perfection of Liens in any Collateral pursuant to such Loan Documents) as
Administrative Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Administrative Agent and its counsel.
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
-------------------------------------------------------------------
Property Collateral; Additional Ship Mortgages.
----------------------------------------------
A. Conforming Leasehold Interests. If Company or any of its Restricted
Subsidiaries acquires any Material Leasehold Property, Company shall, or shall
cause such Restricted Subsidiary to, use commercially reasonable good faith best
efforts (without requiring Company or such Restricted Subsidiary to relinquish
any material rights or incur any material obligations or to expend more than a
nominal amount of money over and above the reimbursement, if required, of the
landlord's out-of-pocket costs, including attorneys fees) to cause such Material
Leasehold Property to be a Conforming Leasehold Interest.
B. Additional Mortgages, Etc. From and after the Closing Date, (x) after
the completion of the Coahoma Expansion Project, or (y) in the event that (i)
Company or any Subsidiary Guarantor acquires any fee interest in real property
or any Material Leasehold Property or (ii) at the time any Person becomes a
Subsidiary Guarantor, such Person owns or holds any fee interest in real
property or any Material Leasehold Property, in either case of this clause (y)
excluding any such Real Property Asset the encumbrancing of which requires the
consent of any applicable lessor or (in the case of clause (ii) above) then-
existing senior lienholder, where Company and its Subsidiaries are unable to
obtain such lessor's or senior lienholder's consent (any such non-excluded Real
Property Asset described in the foregoing
100
clause (x), (y)(i) or (y)(ii) being an "Additional Mortgaged Property"), Company
or such Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after (a) the completion of the Coahoma Expansion Project or (b)
such Person acquires such Additional Mortgaged Property or becomes a Subsidiary
Guarantor, as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage
-------------------
(an "Additional Mortgage"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
-------------------
Loan Party, in form and substance satisfactory to Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such
Loan Party of such Additional Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the enforceability
of the form of Additional Mortgage to be recorded in such state and such
other matters (including any matters governed by the laws of such state
regarding personal property security interests in respect of any
Collateral) as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest.
----------------------------------------------------------
In the case of an Additional Mortgaged Property consisting of a Material
Leasehold Property, (a) a Landlord Consent and Estoppel, unless otherwise
waived by Administrative Agent in its reasonable discretion, such waiver
not to be unreasonably withheld, and (b) evidence that such Material
Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Administrative Agent, an
---------------
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "Additional Mortgage Policy") issued by the Title Company with
respect to such Additional Mortgaged Property, in an amount satisfactory to
Administrative Agent, insuring fee simple title to, or a valid leasehold
interest in, such Additional Mortgaged Property vested in such Loan Party
and assuring Administrative Agent that such Additional Mortgage creates a
valid and enforceable First Priority mortgage Lien on such Additional
Mortgaged Property, subject only to a standard survey exception, which
Additional Mortgage Policy (1) shall include an endorsement for mechanics'
liens, for future advances under this Agreement and for any other matters
reasonably requested by Administrative Agent and (2) shall provide for
affirmative insurance and such reinsurance as Administrative Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to Administrative Agent; and (b) evidence satisfactory to
Administrative Agent that such Loan Party has (i) delivered to the Title
Company all certificates and affidavits required by the Title Company in
connection with the issuance of the Additional Mortgage Policy and (ii)
paid to the Title Company or to the appropriate governmental authorities
all expenses and premiums of the Title Company in connection with the
issuance of the Additional Mortgage Policy and all
101
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Additional Mortgage in the
appropriate real estate records;
(v) Title Report. If no Additional Mortgage Policy is required
------------
with respect to such Additional Mortgaged Property, a title report issued
by the Title Company with respect thereto, dated not more than 30 days
prior to the date such Additional Mortgage is to be recorded and
satisfactory in form and substance to Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of
------------------------------------------------
all recorded documents listed as exceptions to title or otherwise referred
to in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
-------------------------------------------
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged Property is
a Flood Hazard Property and (2) if so, whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgement of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program,
evidence that Company has obtained flood insurance in respect of such Flood
Hazard Property to the extent required under the applicable regulations of
the Board of Governors of the Federal Reserve System; and
(viii) Environmental Audit. If required by Administrative Agent,
-------------------
reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent and prepared by environmental
consultants reasonably satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Company or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property.
C. Additional Ship Mortgages, Etc. From and after the Closing Date, in
the event that Company or any Subsidiary Guarantor acquires any ship, barge or
other vessel as part of a Gaming Facility, Company or such Subsidiary Guarantor
shall deliver to Administrative Agent, as soon as practicable after such Person
acquires such additional ship, barge or other veseel, either (x) a Ship Mortgage
with respect to such acquired ship, barge or other vessel or (y) an assignment
of an existing Ship Mortgage, in form and substance satisfactory to
Administrative Agent, and such other approvals, opinions or documents in
connection with the foregoing as Administrative Agent may reasonably request.
6.10 Year 2000 Compliance.
--------------------
Company will take all reasonable steps to ensure that its Information
Systems and Equipment are at all times after August 31, 1999 Year 2000
Compliant, except insofar as the
102
failure to do so could not reasonably be expected to have a Material Adverse
Effect, and Company shall notify Administrative Agent and any Lender promptly
upon detecting any failure of the Information Systems and Equipment to be Year
2000 Compliant. In addition, Company shall provide Administrative Agent and any
Lender with such information about its year 2000 computer readiness (including
without limitation information as to contingency plans, budgets and testing
results) as Administrative Agent or such Lender shall reasonably request.
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Restricted Subsidiaries to
perform, all covenants in this Section 7.
7.1 Indebtedness.
------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Restricted Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection 7.4
and, upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned domestic Restricted Subsidiaries,
and any wholly-owned domestic Restricted Subsidiary of Company may become
and remain liable with respect to Indebtedness to Company or any other
wholly-owned domestic Restricted Subsidiary of Company; provided that (a)
--------
all such intercompany Indebtedness shall be evidenced by promissory notes,
(b) all such intercompany Indebtedness owed by Company to any of its
domestic Restricted Subsidiaries shall be subordinated in right of payment
to the payment in full of the Obligations pursuant to the terms of the
applicable promissory notes or an intercompany subordination agreement, and
(c) any payment by any domestic Restricted Subsidiary of Company under any
guaranty of the Obligations shall result in a pro tanto reduction of the
--- -----
amount of any intercompany Indebtedness owed by such domestic Restricted
Subsidiary to Company or to any of its domestic Restricted Subsidiaries for
whose benefit such payment is made;
(iv) Company and its Restricted Subsidiaries, as applicable, may
remain liable with respect to Indebtedness described in Schedule 7.1
------------
annexed hereto;
(v) Company and its Restricted Subsidiaries may become and remain
liable with respect to unsecured lines of credit with local financial
institutions in an aggregate principal amount not to exceed $10,000,000;
103
(vi) Company may become and remain liable with respect to
Indebtedness evidenced by the Subordinated Notes in an aggregate principal
amount not to exceed $390,000,000;
(vii) Company may become and remain liable with respect to other
unsecured Subordinated Indebtedness in an aggregate principal amount not to
exceed $200,000,000; provided that after giving effect to the incurrence of
--------
such Subordinated Indebtedness and the application of the proceeds thereof,
Company is in pro forma compliance with subsection 7.6 and no Potential
Event of Default or Event of Default has occurred and is continuing or
would arise as a result of the incurrence of such Subordinated
Indebtedness;
(viii) Company and its Restricted Subsidiaries may remain liable with
respect to Indebtedness incurred to refinance the then outstanding
aggregate principal amount of any Indebtedness permitted under this
subsection 7.1; provided that such refinancing Indebtedness (a) shall be in
--------
an aggregate principal amount not to exceed the then outstanding aggregate
principal amount of such Indebtedness to be so refinanced plus the amount
of accrued and unpaid interest thereon; (b) shall have a maturity no
earlier and an average life no longer than the Indebtedness being so
refinanced; and (c) shall contain terms and conditions no less favorable to
Company and Lenders and such other terms and conditions as are satisfactory
to Administrative Agent; provided further that to the extent that any
-------- -------
Indebtedness permitted under subsection 7.1 is refinanced pursuant to this
subsection 7.1(viii), then the maximum aggregate principal amount of such
Indebtedness permitted to be incurred pursuant to the applicable provision
of subsection 7.1 shall be reduced by an amount equal to the aggregate
principal amount of such permitted refinancing Indebtedness; and
(ix) Company and its Restricted Subsidiaries may become and remain
liable with respect to Capital Leases, other Indebtedness and other
Contingent Obligations permitted under subsection 7.4(x) in an aggregate
principal amount not to exceed $25,000,000 at any time outstanding;
provided that any Liens securing such Capital Leases, other Indebtedness or
--------
other Contingent Obligations shall be limited only to those assets that are
purchased, leased or financed by such Capital Leases, other Indebtedness or
other Contingent Obligations.
7.2 Liens and Related Matters.
-------------------------
A. Prohibition on Liens. Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Restricted Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
104
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens constituting a second Ship Mortgage granted in
connection with the financing of equipment or other appurtenances on the
ship, barge or other vessel so secured by such second Ship Mortgage;
provided that prior to granting such second Ship Mortgage, the Person to
--------
which is granted such Lien shall have entered into an intercreditor
agreement with Administrative Agent and Lenders and executed and delivered
such other related agreements and instruments as reasonably requested by
Administrative Agent in connection with such intercreditor agreement, in
each case in form and substance satisfactory to Administrative Agent;
(iv) Liens described in Schedule 7.2 annexed hereto; and
------------
(v) Liens securing Capital Leases, other Indebtedness and other
Contingent Obligations permitted under subsections 7.1(ix) and 7.4(x).
B. Equitable Lien in Favor of Lenders. If Company or any of its
Restricted Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstanding the
--------
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not permitted by the
provisions of subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither Company nor any
of its Restricted Subsidiaries shall enter into any agreement (other than the
Subordinated Note Indenture or any other agreement evidencing Subordinated
Indebtedness and containing similar terms to the Subordinated Note Indenture or
prohibiting only the creation of Liens securing such Subordinated Indebtedness)
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein or in the Subordinated Note Indenture
or in any other agreement evidencing Subordinated Indebtedness and containing
similar terms to the Subordinated Note Indenture, Company will not, and will not
permit any of its Restricted Subsidiaries to, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Restricted Subsidiary to (i) pay dividends
or make any other distributions on any of such Restricted Subsidiary's capital
stock owned by Company or any other Restricted Subsidiary of Company, (ii) repay
or prepay any Indebtedness owed by such Restricted Subsidiary to Company or any
other Restricted Subsidiary of Company, (iii) make loans or advances to Company
or any other Restricted Subsidiary of Company, or (iv) otherwise transfer any of
its property or assets to Company or any other Restricted Subsidiary of Company.
105
7.3 Investments; Joint Ventures.
---------------------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) Company and its Restricted Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Restricted Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Company;
(iii) Company and its Restricted Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iii);
(iv) Company and its Restricted Subsidiaries may make Consolidated
Capital Expenditures permitted by subsection 7.8;
(v) Company and its Restricted Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
------------
(vi) Company and its Restricted Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in ICBH, and may make
additional Investments in ICBH of up to $10,000,000 in the aggregate; and
(vii) Company and its Restricted Subsidiaries may make and own other
Investments (including, without limitation, Investments in Unrestricted
Subsidiaries) in an aggregate amount outstanding not to exceed (x) with
respect to Fiscal Year 2000, $10,000,000, (y) with respect to Fiscal Year
2001, $15,000,000, and (z) with respect to Fiscal Year 2002 and thereafter,
$25,000,000.
7.4 Contingent Obligations.
----------------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Restricted Subsidiaries of Company may become and remain liable
with respect to Contingent Obligations in respect of the Subsidiary
Guaranty;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to Contingent
Obligations under Interest Rate Agreements constituting Hedge Agreements
with respect to Indebtedness in an aggregate notional principal amount not
to exceed at any time $100,000,000;
106
(iv) Company and its Restricted Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets;
(v) Company and its Restricted Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of any
Indebtedness of Company or any of its Restricted Subsidiaries permitted by
subsection 7.1;
(vi) Company and its Restricted Subsidiaries, as applicable, may
remain liable with respect to Contingent Obligations described in Schedule
--------
7.4 annexed hereto;
---
(vii) Company and its Restricted Subsidiaries may become and remain
liable with respect to guaranties of the Indebtedness in respect of the
unsecured lines of credit permitted under subsection 7.1(v);
(viii) Restricted Subsidiaries may become and remain liable with
respect to Contingent Obligations arising under their subordinated
guaranties of the Subordinated Notes as set forth in the Subordinated Note
Indenture;
(ix) Restricted Subsidiaries may become and remain liable with
respect to Contingent Obligations arising under any subordinated guaranties
in respect of any other Subordinated Indebtedness permitted by subsection
7.1(vii); and
(x) Company and its Restricted Subsidiaries may become and remain
liable with respect to other Contingent Obligations, Capital Leases
permitted under subsection 7.1(ix), and other Indebtedness permitted under
subsection 7.1(ix) in an aggregate principal amount not to exceed
$25,000,000 at any time outstanding; provided that any Liens securing such
--------
Capital Leases, other Indebtedness or other Contingent Obligations shall be
limited only to those assets that are purchased, leased or financed by such
Capital Leases, other Indebtedness or other Contingent Obligations.
7.5 Restricted Junior Payments.
--------------------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that (i) Company may make
--------
regularly scheduled payments of interest in respect of the Subordinated Notes,
in accordance with the terms of and to the extent required by, and subject to
the subordination provisions contained in, the Subordinated Note Indenture; (ii)
Company may make regularly scheduled payments of interest in respect of any
other Subordinated Indebtedness in accordance with the terms of, and only to the
extent required by, and subject to the subordination provisions contained in,
the indenture or other agreement pursuant to which such Subordinated
Indebtedness was issued, as such indenture or other agreement may be amended
from time to time to the extent permitted under subsection 7.15B; and (iii)
Company may make a "Change of Control Offer" (as defined in the Subordinated
Note Indenture) with respect to the Subordinated Notes; provided, however, that
-------- -------
prior to making any such "Change of Control Offer", either (x) Company shall (1)
repay in full all Obligations (including, without limitation, any unpaid
principal, interest, fees, costs and expenses owed by
107
Company under this Agreement or any other Loan Document) and terminate all
outstanding Commitments under this Agreement or (2) offer to repay in full all
Obligations (including, without limitation, any unpaid principal, interest,
fees, costs and expenses owed by Company under this Agreement or any other Loan
Document) and terminate all outstanding Commitments under this Agreement and to
repay such Obligations owed to each Lender which has accepted such offer, or (y)
Administrative Agent and Requisite Lenders shall otherwise approve such "Change
of Control Offer" with respect to the Subordinated Notes.
7.6 Financial Covenants.
----------------------
A. Maximum Consolidated Total Leverage Ratio. Company shall not permit
the Consolidated Total Leverage Ratio as of the last day of any Fiscal Quarter
ending during any of the periods set forth below to exceed the correlative ratio
indicated:
Maximum Consolidated Total
Period Leverage Ratio
--------------------------------------------- ---------------------------
1st Fiscal Quarter, Fiscal Year 2000 4.75:1.00
2nd Fiscal Quarter, Fiscal Year 2000 4.75:1.00
3rd Fiscal Quarter, Fiscal Year 2000 5.00:1.00
4th Fiscal Quarter, Fiscal Year 2000 5.25:1.00
1st Fiscal Quarter, Fiscal Year 2001 5.25:1.00
2nd Fiscal Quarter, Fiscal Year 2001 5.25:1.00
3rd Fiscal Quarter, Fiscal Year 2001 5.25:1.00
4th Fiscal Quarter, Fiscal Year 2001 5.25:1.00
1st Fiscal Quarter, Fiscal Year 2002 5.25:1.00
2nd Fiscal Quarter, Fiscal Year 2002 5.25:1.00
3rd Fiscal Quarter, Fiscal Year 2002 5.00:1.00
4th Fiscal Quarter, Fiscal Year 2002 4.75:1.00
1st Fiscal Quarter, Fiscal Year 2003 4.75:1.00
2nd Fiscal Quarter, Fiscal Year 2003 4.50:1.00
3rd Fiscal Quarter, Fiscal Year 2003 4.50:1.00
4th Fiscal Quarter, Fiscal Year 2003 4.50:1.00
1st Fiscal Quarter, Fiscal Year 2004 4.00:1.00
2nd Fiscal Quarter, Fiscal Year 2004 4.00:1.00
3rd Fiscal Quarter, Fiscal Year 2004 4.00:1.00
4th Fiscal Quarter, Fiscal Year 2004 4.00:1.00
B. Maximum Consolidated Senior Leverage Ratio. Company shall not permit
the Consolidated Senior Leverage Ratio as of the last day of any Fiscal Quarter
ending during any of the periods set forth below to exceed the correlative ratio
indicated:
108
Maximum Consolidated
Period Senior Leverage Ratio
--------------------------------------------- -----------------------------
1st Fiscal Quarter, Fiscal Year 2000 2.00:1.00
2nd Fiscal Quarter, Fiscal Year 2000 2.00:1.00
3rd Fiscal Quarter, Fiscal Year 2000 2.25:1.00
4th Fiscal Quarter, Fiscal Year 2000 2.50:1.00
1st Fiscal Quarter, Fiscal Year 2001 2.50:1.00
2nd Fiscal Quarter, Fiscal Year 2001 2.50:1.00
3rd Fiscal Quarter, Fiscal Year 2001 2.50:1.00
4th Fiscal Quarter, Fiscal Year 2001 2.50:1.00
1st Fiscal Quarter, Fiscal Year 2002 2.50:1.00
2nd Fiscal Quarter, Fiscal Year 2002 2.50:1.00
3rd Fiscal Quarter, Fiscal Year 2002 2.50:1.00
4th Fiscal Quarter, Fiscal Year 2002 2.50:1.00
1st Fiscal Quarter, Fiscal Year 2003 2.50:1.00
2nd Fiscal Quarter, Fiscal Year 2003 2.25:1.00
3rd Fiscal Quarter, Fiscal Year 2003 2.25:1.00
4th Fiscal Quarter, Fiscal Year 2003 2.25:1.00
1st Fiscal Quarter, Fiscal Year 2004 2.25:1.00
2nd Fiscal Quarter, Fiscal Year 2004 2.25:1.00
3rd Fiscal Quarter, Fiscal Year 2004 2.25:1.00
4th Fiscal Quarter, Fiscal Year 2004 2.25:1.00
C. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
ratio of (i) Consolidated EBITDA less Maintenance Capital Expenditures to (ii)
----
Consolidated Fixed Charges for any four consecutive Fiscal Quarter period ending
during any of the periods set forth below to be less than the correlative ratio
indicated:
109
Minimum Fixed Charge
Period Coverage Ratio
--------------------------------------------- -----------------------------
1st Fiscal Quarter, Fiscal Year 2000 1.50:1.00
2nd Fiscal Quarter, Fiscal Year 2000 1.50:1.00
3rd Fiscal Quarter, Fiscal Year 2000 1.50:1.00
4th Fiscal Quarter, Fiscal Year 2000 1.50:1.00
1st Fiscal Quarter, Fiscal Year 2001 1.50:1.00
2nd Fiscal Quarter, Fiscal Year 2001 1.50:1.00
3rd Fiscal Quarter, Fiscal Year 2001 1.50:1.00
4th Fiscal Quarter, Fiscal Year 2001 1.50:1.00
1st Fiscal Quarter, Fiscal Year 2002 1.50:1.00
2nd Fiscal Quarter, Fiscal Year 2002 1.60:1.00
3rd Fiscal Quarter, Fiscal Year 2002 1.60:1.00
4th Fiscal Quarter, Fiscal Year 2002 1.60:1.00
1st Fiscal Quarter, Fiscal Year 2003 1.70:1.00
2nd Fiscal Quarter, Fiscal Year 2003 1.70:1.00
3rd Fiscal Quarter, Fiscal Year 2003 1.70:1.00
4th Fiscal Quarter, Fiscal Year 2003 1.70:1.00
1st Fiscal Quarter, Fiscal Year 2004 1.70:1.00
2nd Fiscal Quarter, Fiscal Year 2004 1.70:1.00
3rd Fiscal Quarter, Fiscal Year 2004 1.70:1.00
4th Fiscal Quarter, Fiscal Year 2004 1.70:1.00
D. Minimum Consolidated Net Worth. Company shall not permit Consolidated
Net Worth as of the last day of any given Fiscal Quarter in any given Fiscal
Year to be less than the sum of (i) 75% of Consolidated Net Worth as of the last
day of Fiscal Year 1999 plus (ii) 75% of Consolidated Net Income for each Fiscal
Quarter ending after the end of Fiscal Year 1999, plus (iii) an amount equal to
50% the net cash proceeds from any sales and issuances of Company's equity
Securities after the Closing Date.
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
----------------------------------------------------------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of its Restricted Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Restricted Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary Guarantor, or be liquidated, wound
up or
110
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Subsidiary Guarantor; provided that, in the case of such a merger, Company
--------
or such wholly-owned Subsidiary Guarantor shall be the continuing or
surviving corporation;
(ii) Company and its Restricted Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8;
(iii) Company and its Restricted Subsidiaries may dispose of
obsolete, worn out or surplus property in the ordinary course of business;
(iv) Company and its Restricted Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
--------
amount at least equal to the fair market value thereof;
(v) Company and its Restricted Subsidiaries may make Asset Sales of
the Assets Held for Sale or Development; provided that the consideration
--------
received for such assets shall be in an amount at least equal to the fair
market value thereof; and
(vi) Company and its Restricted Subsidiaries may make Asset Sales of
assets having a fair market value not in excess of $20,000,000; provided
--------
that (x) the consideration received for such assets shall be in an amount
at least equal to the fair market value thereof; (y) the consideration
received for such assets shall be in the form of Cash and/or promissory
notes, which notes shall be pledged to Administrative Agent pursuant to the
applicable Collateral Documents; and (z) the Net Asset Sale Proceeds of
such Asset Sales shall be applied as required by subsection 2.4B(iii)(a).
7.8 Consolidated Capital Expenditures.
---------------------------------
Company shall not, and shall not permit its Restricted Subsidiaries
to, make or incur Consolidated Capital Expenditures, except:
(i) Company and its Restricted Subsidiaries may make Expansion
Capital Expenditures in respect of:
(a) the completion of the Bossier City Hotel Project in an
aggregate amount not to exceed $45,000,000;
(b) the Biloxi Casino Expansion Project and the Coahoma
Expansion Project in an aggregate amount not to exceed $90,000,000;
provided that Company and its Restricted Subsidiaries shall not make
--------
Expansion Capital Expenditures in respect of (1) the Biloxi Casino
Expansion Project in an aggregate amount in excess of $45,000,000, and
(2) the Coahoma Expansion Project in an aggregate amount in excess of
$70,000,000;
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(c) the Biloxi Podium Expansion Project in an aggregate amount
not to exceed $25,000,000;
(d) the Tunica Project in an aggregate amount not to exceed
$75,000,000; and
(e) the Lake Charles Project in an aggregate amount not to
exceed $35,000,000; and
(ii) Company and its Restricted Subsidiaries may make other Expansion
Capital Expenditures, in any Fiscal Year indicated below, in an aggregate
amount not to exceed the corresponding amount (the "Maximum Expansion
Capital Expenditures Amount") set forth below opposite such Fiscal Year:
Maximum Expansion
Fiscal Year Capital Expenditures
----------- --------------------
Fiscal Year 2000 $ 10,000,000
Fiscal Year 2001 $ 25,000,000
Fiscal Year 2002 and each
Fiscal Year thereafter $ 50,000,000
; provided that:
(a) no single Expansion Capital Expenditure permitted under this
subsection 7.8(ii) shall exceed $50,000,000;
(b) the Maximum Expansion Capital Expenditures Amount for any
Fiscal Year after Fiscal Year 2000 shall be increased by an amount
equal to the sum of (1) the excess, if any, of the Maximum Expansion
Capital Expenditures Amount for the previous Fiscal Year (as adjusted
in accordance with this proviso) over the actual amount of Expansion
Capital Expenditures for such previous Fiscal Year (the "Expansion
CapEx Carryover Amount"), plus (2) the excess, if any, of any of the
----
maximum Expansion Capital Expenditures amounts set forth in subsection
7.8(i) over the actual amounts of Expansion Capital Expenditures
expended with respect to the corresponding construction and expansion
projects identified in subsection 7.8(i) (the "Specified Projects
Carryover Amount"; and together with the Expansion CapEx Carryover
Amount, the "Total Expansion CapEx Carryover Amount"); provided,
--------
however, that the Total Expansion CapEx Carryover Amount shall not
-------
exceed $10,000,000 in any given Fiscal Year; and provided further that
-------- -------
(x) with respect to any Specified Projects Carryover Amount, Company
shall deliver to Administrative Agent an Officer's Certificate stating
that the applicable construction or expansion projects have been fully
completed, demonstrating the calculation of the Specified Projects
Carryover Amount, such calculation to be reasonably satisfactory to
Administrative Agent, and, subject to the immediately preceding
proviso, requesting such Specified Projects Carryover Amount be
included in the Total Expansion CapEx Carryover Amount, and (y) after
Company delivers to Administrative Agent the Officer's
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Certificate described in the immediately preceding clause (x) and
determines the Specified Projects Carryover Amount for any of the
projects described in subsection 7.8(i), Company may not reallocate,
reapply or otherwise use such Specified Projects Carryover Amount for
any of the Expansion Capital Expenditures described in subsection
7.8(i); and
(c) Company and its Restricted Subsidiaries may use not more
than $5,000,000 of such other Expansion Capital Expenditures in any
given Fiscal Year beginning with the Fiscal Year 2000 for purposes of
covering any cost overruns with respect to the construction and
expansion projects identified in subsection 7.8(i); and
(iii) Company and its Restricted Subsidiaries may make $5,000,000, and
(y) the excess, if any, of the Maintenance Capital Expenditures in an
aggregate Maximum Maintenance Capital Expenditures Amount amount not to
exceed $20,000,000 in any Fiscal for the previous Fiscal Year (as adjusted
in Year beginning in the Fiscal Year 2000 (the accordance with this
proviso) over the actual "Maximum Maintenance Capital Expenditures amount
of Maintenance Capital Expenditures for Amount"); provided that the Maximum
Maintenance such previous Fiscal Year. Capital Expenditures Amount for any
Fiscal Year after Fiscal Year 2000 shall be increased by an amount equal to
the lesser of (x) $5,000,000, and (y) the excess, if any, of the Maximum
Maintenance Capital Expenditures Amount for the previous Fiscal Year (as
adjusted in accordance with this provios) over the actual amount of
Maintenance Capital Expenditures for such previous Fiscal Year.
7.9 Restriction on Leases.
---------------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, become liable in any way, whether directly or by assignment or
as a guarantor or other surety, for the obligations of the lessee under any
lease (other than the Excluded Leases and intercompany leases between Company
and its wholly-owned Subsidiaries), unless, immediately after giving effect to
the incurrence of liability with respect to such lease, the Consolidated Rental
Payments at the time in effect during the then current Fiscal Year shall not
exceed $2,000,000.
7.10 Sales and Lease-Backs.
---------------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Company or any of its
Restricted Subsidiaries has sold or transferred or is to sell or transfer to any
other Person (other than Company or any of its Restricted Subsidiaries) or (ii)
which Company or any of its Restricted Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by Company or any of its Restricted Subsidiaries to any
Person (other than Company or any of its Restricted Subsidiaries) in connection
with such lease; provided that Company and its Restricted Subsidiaries may
--------
become and remain liable as lessee, guarantor or other surety with respect to
any such lease if and to the extent that Company or any of its Restricted
Subsidiaries would be permitted to enter into, and remain liable under, such
lease under subsection 7.1 (ix), 7.4(x) or 7.9.
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7.11 Sale or Discount of Receivables.
-------------------------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, sell with recourse, or discount (except
discounts with the primary obligor of any accounts receivable) or otherwise sell
for less than the face value thereof, any of its notes or accounts receivable.
7.12 Transactions with Shareholders and Affiliates.
---------------------------------------------
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of Company or with any Affiliate of Company or of any such
holder, on terms that are less favorable to Company or that Restricted
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the foregoing
--------
restriction shall not apply to (i) any transaction between Company and any of
its wholly-owned Restricted Subsidiaries or between any of its wholly-owned
Restricted Subsidiaries otherwise permitted hereunder or (ii) reasonable and
customary fees paid to members of the Boards of Directors of Company and its
Restricted Subsidiaries.
7.13 Disposal of Subsidiary Stock.
----------------------------
Except for (x) any pledge or encumbrance of the capital stock or other
equity Securities of any of its Restricted Subsidiaries required under this
Agreement and the applicable Collateral Documents and (y) any sale of 100% of
the capital stock or other equity Securities of any of its Restricted
Subsidiaries in compliance with the provisions of subsection 7.7(i) or 7.7(vi),
Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity Securities of
any of its Restricted Subsidiaries, except to qualify directors if
required by applicable law; or
(ii) permit any of its Restricted Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Restricted
Subsidiaries (including such Restricted Subsidiary), except to Company,
another Restricted Subsidiary of Company, or to qualify directors if
required by applicable law.
7.14 Conduct of Business.
-------------------
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than the Related
Businesses.
114
7.15 Amendments or Waivers of Certain Related Agreements; Amendments of
------------------------------------------------------------------
Documents Relating to Subordinated Indebtedness; Designation of
----------------------------------------------------------------
"Designated Senior Indebtedness".
-------------------------------
A. Amendments or Waivers of Certain Related Agreements. Neither Company
nor any of its Restricted Subsidiaries will agree to any material amendment to,
or waive any of its material rights under, any Related Agreement (other than any
Related Agreement evidencing or governing any Subordinated Indebtedness) after
the Closing Date without in each case obtaining the prior written consent of
Requisite Lenders to such amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness. Company
shall not, and shall not permit any of its Restricted Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness (or a
trustee or other representative on their behalf) which would be adverse to
Company or Lenders.
C. Designation of "Designated Senior Indebtedness". Company shall not
designate any Indebtedness as "Designated Senior Indebtedness" (as defined in
the Subordinated Note Indenture) for purposes of the Subordinated Note Indenture
without the prior written consent of Requisite Lenders.
7.16 Fiscal Year.
-----------
Company shall not change its Fiscal Year-end as determined as of the
Closing Date without the consent of Administrative Agent.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 Failure to Make Payments When Due.
---------------------------------
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within five days after
the date due; or
115
8.2 Default in Other Agreements.
---------------------------
(i) Failure of Company or any of its Restricted Subsidiaries to pay
when due any principal of or interest on or any other amount payable in respect
of one or more items of Indebtedness (other than Indebtedness referred to in
subsection 8.1) or Contingent Obligations in an individual principal amount of
$7,500,000 or more or with an aggregate principal amount of $7,500,000 or more,
in each case beyond the end of any grace period provided therefor; or (ii)
breach or default by Company or any of its Restricted Subsidiaries with respect
to any other material term of (a) one or more items of Indebtedness or
Contingent Obligations in the individual or aggregate principal amounts referred
to in clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
---------------------------
Failure of Company to perform or comply with any term or condition
contained in subsections 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 Breach of Warranty.
------------------
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
8.5 Other Defaults Under Loan Documents.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after receipt
by Company and such Loan Party of notice from Administrative Agent or any Lender
of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
-----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Company or any of its Material Subsidiaries in
an involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Material Subsidiaries under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order
116
of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Company or any of its Material Subsidiaries, or over all or
a substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of Company or any of its Material Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Material Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
---------------------------------------------------
(i) Company or any of its Material Subsidiaries shall have an order
for relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Company or any of its Material Subsidiaries
shall make any assignment for the benefit of creditors; or (ii) Company or any
of its Material Subsidiaries shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts become due; or
the Board of Directors of Company or any of its Material Subsidiaries (or any
committee thereof) shall adopt any resolution or otherwise authorize any action
to approve any of the actions referred to in clause (i) above or this clause
(ii); or
8.8 Judgments and Attachments.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $7,500,000 or (ii)
in the aggregate at any time an amount in excess of $7,500,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Restricted Subsidiaries or any of their respective assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
60 days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
8.9 Dissolution.
-----------
Any order, judgment or decree shall be entered against Company or any
of its Material Subsidiaries decreeing the dissolution or split up of Company or
that Material Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
8.10 Employee Benefit Plans.
----------------------
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Company, any of its Restricted Subsidiaries or any of their respective ERISA
Affiliates in excess of $5,000,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities
117
(as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate
for all Pension Plans (excluding for purposes of such computation any Pension
Plans with respect to which assets exceed benefit liabilities), which exceeds
$5,000,000; or
8.11 Change of Control.
-----------------
There shall occur a Change of Control; or
8.12 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of
----------------------------------------------------------------------
Obligations.
-----------
At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms or as otherwise permitted under this Agreement) or
shall be declared to be null and void, (ii) any Collateral Document shall cease
to be in full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the satisfaction in
full of the Obligations or any other termination of such Collateral Document in
accordance with the terms hereof or thereof) or shall be declared null and void,
or Administrative Agent shall not have or shall cease to have a valid and
perfected First Priority Lien in any material Collateral purported to be covered
thereby, in each case for any reason other than the failure of Administrative
Agent or any Lender to take any action within its control, or (iii) any Loan
Party shall contest the validity or enforceability of any Loan Document in
writing or deny in writing that it has any further liability, including with
respect to future advances by Lenders, under any Loan Document to which it is a
party; or
8.13 Loss of Gaming Licenses.
-----------------------
The occurrence of a License Revocation by any Gaming Authority in a
jurisdiction in which Company or any of its Subsidiaries owns or operates a
Gaming Facility (other than with respect to Pompano Park); provided that such
--------
License Revocation continues for at least fifteen (15) calendar days:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit
118
hereunder shall thereupon terminate; provided that the foregoing shall not
--------
affect in any way the obligations of Lenders under subsection 3.3C(i) or the
obligations of Lenders to purchase participations in any unpaid Swing Line Loans
as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than non-
payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Company, and such provisions shall not at any
time be construed so as to grant Company the right to require Lenders to rescind
or annul any acceleration hereunder or to preclude Administrative Agent or
Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met. Lenders hereby acknowledge that any foreclosure under this Agreement
or any other Loan Document of any Gaming Facility, any Persons owning, leasing,
operating or using such Gaming Facility or any gaming equipment may be subject
to any prior approvals or exemptions required under any applicable Gaming Laws.
SECTION 9. ADMINISTRATIVE AGENT
9.1 Appointment.
-----------
A. Appointment of Administrative Agent. CIBC is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. Administrative
Agent agrees to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Administrative Agent and Lenders and Company shall
have no rights as a third party beneficiary of any of the provisions thereof.
In performing its functions and duties under this Agreement, Administrative
Agent shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company or any of its Subsidiaries.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any
119
jurisdiction denying or restricting the right of banking corporations or
associations to transact business as agent or trustee in such jurisdiction. It
is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint (with notice to Company) an
additional individual or institution as a separate trustee, co-trustee,
collateral agent or collateral co-agent (any such additional individual or
institution being referred to herein individually as a "Supplemental Collateral
Agent" and collectively as "Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral
Agent, or a successor thereto, shall die, become incapable of acting, resign or
be removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 Powers and Duties; General Immunity.
-----------------------------------
A. Powers; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by
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reason of this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon Administrative Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. No Responsibility for Certain Matters. Administrative Agent shall not
be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Administrative Agent to Lenders or by
or on behalf of Company to Administrative Agent or any Lender in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall Administrative Agent be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the use of the
Letters of Credit or as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in this Agreement to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the Letter of
Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by Administrative Agent under or in connection with any
of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 10.6) and,
upon receipt of such instructions from Requisite Lenders (or such other Lenders,
as the case may be), Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Administrative Agent as a result of Administrative
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
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D. Administrative Agent Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
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Creditworthiness.
----------------
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries.
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and Administrative Agent
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
9.4 Right to Indemnity.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, to the extent that Administrative Agent shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents; provided that no Lender shall be liable
--------
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent's gross negligence or willful misconduct. If any indemnity
furnished to Administrative Agent for any purpose shall, in the opinion of
Administrative Agent, be insufficient or become impaired, Administrative Agent
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
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9.5 Successor Administrative Agent and Swing Line Lender.
----------------------------------------------------
A. Successor Administrative Agent. Administrative Agent may resign at any
time by giving 30 days' prior written notice thereof to Lenders and Company, and
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring or removed Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of CIBC or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the retiring or
removed Administrative Agent and Swing Line Lender shall surrender the Swing
Line Note held by it to Company for cancellation, and (iii) Company shall issue
a new Swing Line Note to the successor Administrative Agent and Swing Line
Lender substantially in the form of Exhibit VI annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 Collateral Documents and Guaranties.
-----------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under the
Subsidiary Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and the Subsidiary Guaranty; provided that Administrative
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Agent shall not (i) enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in any Collateral
Document or the Subsidiary Guaranty or (ii) release any Collateral (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the prior
consent of Requisite Lenders (or, if required pursuant to subsection 10.6, all
Lenders); provided further, however, that, without further written consent or
-------- ------- -------
authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented or (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the capital
stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of
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Company) pursuant to a sale or other disposition permitted hereunder or to which
Requisite Lenders have otherwise consented. Anything contained in any of the
Loan Documents to the contrary notwithstanding, Company, Administrative Agent
and each Lender hereby agree that (X) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce the Subsidiary Guaranty, it being understood and agreed that all
powers, rights and remedies under the Collateral Documents and the Subsidiary
Guaranty may be exercised solely by Administrative Agent for the benefit of
Lenders in accordance with the terms thereof, and (Y) in the event of a
foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Administrative Agent, as
agent for and representative of Lenders (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
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A. General. Subject to subsection 10.1B, each Lender shall have the right
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of its Commitments or any
Loan or Loans made by it or its Letters of Credit or participations therein or
any other interest herein or in any other Obligations owed to it; provided that
--------
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided further that no
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such sale, assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Lender effecting such sale, assignment, transfer
or participation; and provided further that, anything contained herein to the
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contrary notwithstanding, the Swing Line Loan Commitment and the Swing Line
Loans of Swing Line Lender may not be sold, assigned or transferred as described
in clause (i) above to any Person other than a successor Administrative Agent
and Swing Line Lender to the extent contemplated by subsection 9.5. Except as
otherwise provided in this subsection 10.1, no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment or transfer of, or any granting of participations in, all
or any part of its Commitments or the Loans, the Letters of Credit or
participations therein, or the other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
--------------------------------
of Credit or participation therein, or other Obligation may (a) be assigned
in any amount to another Lender, or to an Affiliate or Affiliated Fund of
the assigning Lender or another Lender, with the giving of notice to
Company and Administrative Agent or (b) be assigned in an aggregate amount
of not less than $5,000,000 (or such lesser amount as
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shall constitute the aggregate amount of the Commitments, Loans, Letters of
Credit and participations therein, and other Obligations of the assigning
Lender) to any other Eligible Assignee with the prior written consent of
Company (which consent shall only be required if no Potential Event of
Default or Event of Default has occurred and is continuing) and
Administrative Agent (which consent of Company and Administrative Agent
shall not be unreasonably withheld or delayed). To the extent of any such
assignment in accordance with either clause (a) or (b) above, the assigning
Lender shall be relieved of its obligations with respect to its
Commitments, Loans, Letters of Credit or participations therein, or other
Obligations or the portion thereof so assigned. The parties to each such
assignment shall execute and deliver to Administrative Agent, for its
acceptance, an Assignment Agreement, together with a processing fee of
$3,500 and such forms, certificates or other evidence, if any, with respect
to United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery and acceptance, from and after the effective date
specified in such Assignment Agreement, (y) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder and (z) the assigning
Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment Agreement,
relinquish its rights (other than any rights which survive the termination
of this Agreement under subsection 10.9B) and be released from its
obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto; provided that, anything contained in any of the Loan
--------
Documents to the contrary notwithstanding, if such Lender is the Issuing
Lender with respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of an Issuing Lender with
respect to such Letters of Credit until the cancellation or expiration of
such Letters of Credit and the reimbursement of any amounts drawn
thereunder). The Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment of such assigning
Lender and, if any such assignment occurs after the issuance of the Notes
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes to Administrative Agent for cancellation, and thereupon
new Notes shall be issued to the assignee and to the assigning Lender,
substantially in the form of Exhibit IV or Exhibit V annexed hereto, as the
---------- ------- -
case may be, with appropriate insertions, to reflect the new Commitments
and/or outstanding Term Loans, as the case may be, of the assignee and the
assigning Lender.
(ii) Acceptance by Administrative Agent. Upon its receipt of an
----------------------------------
Assignment Agreement executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with the processing
fee referred to in subsection 10.1B(i) and any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters that such assignee may be required to deliver to Administrative
Agent pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment evidenced
thereby (in each case to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such
125
Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of Administrative
Agent to such assignment) and (b) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate or Affiliated Fund of the Lender granting such participation, shall
not be entitled to require such Lender to take or omit to take any action
hereunder except action directly affecting (i) the extension of the scheduled
final maturity date of any Loan allocated to such participation or (ii) a
reduction of the principal amount of or the rate of interest payable on any Loan
allocated to such participation, and all amounts payable by Company hereunder
(including amounts payable to such Lender pursuant to subsections 2.6D, 2.7 and
3.6) shall be determined as if such Lender had not sold such participation;
provided that Company shall continue to deal solely and directly with the
- --------
Lender which sold such participation in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents. Company
and each Lender hereby acknowledge and agree that, solely for purposes of
subsections 10.4 and 10.5, (a) any participation will give rise to a direct
obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
--------
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder. Any Lender which is an investment fund may pledge
all or any portion of its Loans and Notes to its trustee in support of such
investment fund's fees, expenses and indemnity obligations to such trustee;
provided that no Lender shall, as between Company and such Lender, be relieved
- --------
of any of its obligations hereunder as a result of any such pledge.
E. Information. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of
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such Lender contained in Section 2(c) of such Assignment Agreement are
incorporated herein by this reference.
10.2 Expenses.
--------
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of Administrative Agent in connection with the preparation of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto; (ii) all the costs of furnishing all opinions by counsel for Company
(including any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Administrative Agent (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Administrative
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Administrative Agent and of counsel providing any opinions that
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or its counsel) of obtaining and reviewing any appraisals provided for
under subsection 4.1L and any environmental audits or reports provided for under
subsection 4.1M or 6.9B(viii); (vi) the custody or preservation of any of the
Collateral; (vii) all other actual and reasonable costs and expenses incurred by
Administrative Agent in connection with the syndication of the Commitments and
the negotiation, preparation and execution of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (viii) after the occurrence and during
the continuation of an Event of Default and an acceleration of the Obligations,
all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by
Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents by reason of such acceleration (including in connection with the
sale of, collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings;
provided that Company shall not be responsible for expenses relating to
- --------
assignments between Lenders made pursuant to subsection 10.1.
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10.3 Indemnity.
---------
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Administrative Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative Agent
and Lenders (collectively called the "Indemnitees"), from and against any and
all Indemnified Liabilities (as hereinafter defined); provided that Company
--------
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the gross negligence or willful misconduct of that Indemnitee as determined by a
final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct or indirect
and whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of (i) this
Agreement or the other Loan Documents or the Related Agreements or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty), (ii) the statements contained in the
commitment letter delivered by any Lender to Company with respect thereto, or
(iii) any Environmental Claim or any Hazardous Materials Activity relating to or
arising from, directly or indirectly, any past or present activity, operation,
land ownership, or practice of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
continuance of any Event of Default each Lender is hereby authorized by Company
at any time or from time to time, without
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prior notice to Company or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender to or for the
credit or the account of Company against and on account of the obligations and
liabilities of Company to that Lender under this Agreement, the Letters of
Credit and participations therein and the other Loan Documents, including all
claims of any nature or description arising out of or connected with this
Agreement, the Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not (i) that Lender shall have made any
demand hereunder or (ii) the principal of or the interest on the Loans or any
amounts in respect of the Letters of Credit or any other amounts due hereunder
shall have become due and payable pursuant to Section 8 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
Company hereby further grants to Administrative Agent and each Lender a security
interest in all deposits and accounts maintained with Administrative Agent or
such Lender as security for the Obligations.
10.5 Ratable Sharing.
---------------
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
--------
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
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10.6 Amendments and Waivers.
----------------------
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
--------
waiver or consent which:
(a) increases the amount of any of the Commitments (other than as
provided under subsection 2.1A(iv)) or reduces the principal amount of any
of the Loans;
(b) changes in any manner the definition of "Pro Rata Share" or the
definition of "Requisite Lenders";
(c) changes in any manner any provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of all Lenders;
(d) postpones the date or reduces the amount of any scheduled payment
(but not prepayment) of principal of any of the Loans ;
(e) postpones the date on which any interest or any fees are payable;
decreases the interest rate borne by any of the Loans (other than any
waiver of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or the amount of any fees payable hereunder;
(f) increases the maximum duration of Interest Periods permitted
hereunder;
(g) reduces the amount or postpones the due date of any amount
payable in respect of, or extends the required expiration date of, any
Letter of Credit;
(h) changes in any manner the obligations of Lenders relating to the
purchase of participations in Letters of Credit;
(i) releases any Lien granted in favor of Administrative Agent with
respect to all or substantially all of the Collateral;
(j) releases all or substantially all of the Subsidiary Guarantors
from their obligations under the Subsidiary Guaranty, in each case other
than in accordance with the terms of the Loan Documents; or
(k) changes in any manner the provisions contained in subsection 8.1
or this subsection 10.6
shall be effective only if evidenced by a writing signed by or on behalf of all
Lenders. In addition, (i) any amendment, modification, termination or waiver of
any of the provisions contained in Section 4 shall be effective only if
evidenced by a writing signed by or on behalf of Administrative Agent and
Requisite Lenders, (ii) no amendment, modification, termination or waiver
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of any provision of any Note shall be effective without the written concurrence
of the Lender which is the holder of that Note, (iii) no amendment,
modification, termination or waiver of any provision of subsection 2.1A(iii) or
of any other provision of this Agreement relating to the Swing Line Loan
Commitment or the Swing Line Loans shall be effective without the written
concurrence of Swing Line Lender, and (iv) no amendment, modification,
termination or waiver of any provision of Section 9 or of any other provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of Administrative Agent shall be effective without the written
concurrence of Administrative Agent. Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Company in any case
shall entitle Company to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.
10.7 Independence of Covenants.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Administrative Agent shall not be effective
--------
until received. For the purposes hereof, the address of each party hereto shall
be as set forth under such party's name on the signature pages hereof or (i) as
to Company and Administrative Agent, such other address as shall be designated
by such Person in a written notice delivered to the other parties hereto and
(ii) as to each other party, such other address as shall be designated by such
party in a written notice delivered to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amounts drawn
thereunder, and the termination of this Agreement.
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10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
-------------------------------
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
------------
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 Headings.
--------
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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10.15 Applicable Law.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written consent of all
Lenders.
10.17 Consent to Jurisdiction and Service of Process.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION
10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
133
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
10.18 Waiver of Jury Trial.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business relationship, that each
has already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
10.19 Confidentiality.
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide prospective assignee, transferee or
participant that agrees to be bound by this subsection 10.19 in connection with
the contemplated assignment or transfer by such Lender of any Loans or any
participations therein or disclosures required or requested by any governmental
agency or representative thereof or pursuant to court order, subpoena or other
legal process; provided that, unless specifically prohibited by applicable law,
--------
regulation or court order, each Lender shall notify Company of any request by
any governmental agency or representative thereof (other than any such request
in connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information; and
134
provided further that in no event shall any Lender be obligated or required to
- -------- -------
return any materials furnished by or on behalf of Company or any of its
Subsidiaries.
10.20 Counterparts; Effectiveness.
---------------------------
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
ISLE OF CAPRI CASINOS, INC.
By: __________________________________________
Title: __________________________________________
Notice Address:
711 Washington Loop
Biloxi, Mississippi 39530
Facsimile: (228) 436-5998
Attention: Rexford A. Yeisley
S-1
LENDERS:
CANADIAN IMPERIAL BANK OF COMMERCE, as
Administrative Agent and Issuing Lender
By: _______________________________________
Paul J. Chakmak
Managing Director
CIBC Oppenheimer Corp., AS AGENT
Notice Address:
425 Lexington Avenue
New York, NY 10017
Facsimile No.: (212) 856-3799
Attention: Agency Services Department
S-2
CIBC INC., as Lender and Swing Line Lender
By: _______________________________________
Paul J. Chakmak
Managing Director
CIBC Oppenheimer Corp., AS AGENT
Notice Address:
350 South Grand Avenue
Suite 2600
Los Angeles, CA 90071
Facsimile No.: (213) 346-0157
Attention: Mr. Paul J. Chakmak
Domestic Office:
Eurodollar Office:
S-3