EXHIBIT 10.73
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AMENDED AND RESTATED
CREDIT AGREEMENT
among
PENN NATIONAL GAMING, INC.,
VARIOUS BANKS,
CORESTATES BANK, N.A.,
as CO-AGENT,
and
BANKERS TRUST COMPANY,
as AGENT
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Dated as of November 27 , 1996
and
amended and restated
as of
December 17, 1997
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CREDIT AGREEMENT, dated as of November 27, 1996 and amended and
restated as of December 17, 1997, among PENN NATIONAL GAMING, INC., a
Pennsylvania corporation (the "Borrower"), the Banks party hereto from time to
time, CORESTATES BANK, N.A., as Co-Agent, and BANKERS TRUST COMPANY, as Agent
(all capitalized terms used herein and defined in Section 10 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, the Borrower, the Original Banks, the Co-Agent and the Agent
are parties to a Credit Agreement, dated as of November 27, 1996 (as amended and
modified to, but not including, the Restatement Effective Date, the "Original
Credit Agreement"); and
WHEREAS, the Borrower has requested that the Original Credit Agreement
be amended and restated in its entirety, and the Banks, the Co-Agent and the
Agent are willing to amend and restate the same, upon the terms and conditions
set forth herein;
NOW, THEREFORE, the parties hereto agree that the Original Credit
Agreement shall be and is hereby amended and restated in its entirety as
follows:
Section 1. Amount and Terms of Credit.
1.01 The Commitments. Subject to and upon the terms and conditions set
forth herein, each Bank severally agrees to make, at any time and from time to
time after the Restatement Effective Date and prior to the Final Maturity Date,
a revolving loan or revolving loans (each a "Loan" and, collectively, the
"Loans") to the Borrower, which Loans (i) shall, at the option of the Borrower,
be incurred and maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that, except as otherwise specifically provided in
Section 1.10(b), all Loans comprising the same Borrowing shall at all times be
of the same Type, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed for any Bank at any time outstanding
that aggregate principal amount which, when added to the product of such Bank's
Percentage and the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Loans) at
such time, equals the Commitment of such Bank at such time and (iv) shall not
exceed for all Banks at any time outstanding that aggregate principal amount
which, when added to the amount of all Letter of Credit Outstandings (exclusive
of Unpaid Drawings which are repaid with the proceeds of, and simultaneously
with the incurrence of, the respective incurrence of Loans) at such time, equals
the Total Commitment at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing of Loans shall not be less than the Minimum Borrowing Amount
applicable thereto. More than one Borrowing may occur on the same date, but at
no time shall there be outstanding more than eight Borrowings of Eurodollar
Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to incur
(x) Eurodollar Loans hereunder, the Borrower shall give the Agent at the Notice
Office at least three
Business Days' prior notice of each Eurodollar Loan to be incurred hereunder and
(y) Base Rate Loans hereunder, the Borrower shall give the Agent at the Notice
Office notice thereof no later than the date on which each Base Rate Loan is to
be incurred hereunder, provided that (in each case) any such notice shall be
deemed to have been given on a certain day only if given before 11:00 A.M. (New
York time) on such day. Each such notice (each a "Notice of Borrowing"), except
as otherwise expressly provided in Section 1.10, shall be irrevocable and shall
be given by the Borrower in writing, or by telephone promptly confirmed in
writing, in the form of Exhibit A, appropriately completed to specify the
aggregate principal amount of the Loans to be incurred pursuant to such
Borrowing, the date of such Borrowing (which shall be a Business Day), and
whether the Loans being incurred pursuant to such Borrowing are to be initially
maintained as Base Rate Loans or, to the extent permitted hereunder, Eurodollar
Loans and, if Eurodollar Loans, the initial Interest Period to be applicable
thereto. The Agent shall promptly give each Bank notice of such proposed
Borrowing, of such Bank's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Agent may act without liability upon the basis of telephonic notice
of such Borrowing or prepayment, believed by the Agent in good faith to be from
the Chairman of the Board, the President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer or the Controller of the Borrower, or from
any other authorized officer of the Borrower designated in writing by the
Borrower to the Agent as being authorized to give such notices, prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the right
to dispute the Agent's record of the terms of such telephonic notice of such
Borrowing or prepayment of Loans, absent manifest error.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York time)
(or 2:00 P.M. (New York time) in the case of Base Rate Loans made on same day
notice) on the date specified in each Notice of Borrowing, each Bank will make
available its pro rata portion (determined in accordance with Section 1.07) of
each such Borrowing requested to be made on such date. All such amounts will be
made available in Dollars and in immediately available funds at the Payment
Office, and the Agent will make available to the Borrower at the Payment Office
the aggregate of the amounts so made available by the Banks. Unless the Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to the Agent such Bank's portion of any
Borrowing to be made on such date, the Agent may assume that such Bank has made
such amount available to the Agent on such date of Borrowing and the Agent may
(but shall not be obligated to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Agent by such Bank, the Agent shall be
entitled to recover such corresponding amount on demand from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent shall promptly notify the Borrower and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent shall also be
entitled to recover on demand from such Bank or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the Borrower until
the date
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such corresponding amount is recovered by the Agent, at a rate per annum equal
to (i) if recovered from such Bank, at the overnight Federal Funds Rate and (ii)
if recovered from the Borrower, the rate of interest applicable to the
respective Borrowing, as determined pursuant to Section 1.08. Nothing in this
Section 1.04 shall be deemed to relieve any Bank from its obligation to make
Loans hereunder or to prejudice any rights which the Borrower may have against
any Bank as a result of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced by a promissory note
duly executed and delivered by the Borrower substantially in the form of Exhibit
B, with blanks appropriately completed in conformity herewith (each a "Note"
and, collectively, the "Notes"). The Note issued to each Bank that has a
Commitment or outstanding Loans shall (i) be executed by the Borrower, (ii) be
payable to such Bank or its registered assigns and be dated the Restatement
Effective Date (or, if issued after the Restatement Effective Date, be dated the
date of the issuance thereof), (iii) be in a stated principal amount equal to
the Commitment of such Bank (or, if issued after the termination thereof, be in
a stated principal amount equal to the outstanding Loans of such Bank at such
time) and be payable in the outstanding principal amount of the Loans evidenced
thereby, (iv) mature on the Final Maturity Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(b) Each Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
any of its Note endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in such notation shall not affect the Borrower's obligations in respect of
such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount of
the outstanding principal amount of Loans made pursuant to one or more
Borrowings of one or more Types of Loans into a Borrowing of another Type of
Loan, provided that, (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Loans being converted and no such partial
conversion of Eurodollar Loans shall reduce the outstanding principal amount of
such Eurodollar Loans made pursuant to a single Borrowing to less than the
Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be
converted into Eurodollar Loans if no Default or Event of Default is in
existence on the date of the conversion and (iii) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings of Eurodollar Loans
than is permitted under Section 1.02. Each such conversion shall be effected by
the Borrower by giving the Agent at the Notice Office prior to 11:00 A.M. (New
York time) at least three Business Days' prior notice (each a "Notice of
Conversion") specifying the Loans to be so
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converted, the Borrowing or Borrowings pursuant to which such Loans were made
and, if to be converted into Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall give each Bank prompt notice of
any such proposed conversion affecting any of its Loans. Upon any such
conversion the proceeds thereof will be deemed to be applied directly on the day
of such conversion to prepay the outstanding principal amount of the Loans being
converted.
1.07 Pro Rata Borrowings. All Borrowings under this Agreement shall be
incurred from the Banks pro rata on the basis of their Commitments. It is
understood that no Bank shall be responsible for any default by any other Bank
of its obligation to make Loans hereunder and that each Bank shall be obligated
to make the Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06 or 1.09, as applicable, at a rate per annum which
shall be equal to the sum of the Applicable Margin plus the Base Rate in effect
from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate
Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the sum
of the Applicable Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the rate which
is 2% per annum in excess of the rate then borne by such Borrowings, in each
case, with such interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall determine
the Eurodollar Rate for each Interest Period applicable to Eurodollar Loans and
shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
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1.09 Interest Periods. At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrower shall have the right to elect, by giving the
Agent notice thereof, the interest period (each an "Interest Period") applicable
to such Eurodollar Loan, which Interest Period shall, at the option of the
Borrower, be a one, two, three or six-month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times have
the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall commence
on the date of Borrowing of such Eurodollar Loan (including the date of any
conversion thereto from a Base Rate Loan) and each Interest Period occurring
thereafter in respect of such Eurodollar Loan shall commence on the day on
which the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a day for
which there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, however, that if any
Interest Period for a Eurodollar Loan would otherwise expire on a day which
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;
(v) no Interest Period may be selected at any time when a Default or an
Event of Default is then in existence; and
(vi) no Interest Period in respect of any Borrowing of any Eurodollar
Loan shall be selected which extends beyond the Final Maturity Date.
If upon the expiration of any Interest Period applicable to a Borrowing
of Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and
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binding upon all parties hereto but, with respect to clause (i) below, may be
made only by the Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar
Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental (including any NAIC) rule,
regulation, order, guideline or request (whether or not having the force of
law) or in the interpretation or administration thereof and including the
introduction of any new law or governmental (including any NAIC) rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payment to any Bank of
the principal of or interest on the Notes or any other amounts payable
hereunder (except for changes in the rate of tax on, or determined by
reference to, the net income or profits of such Bank pursuant to the laws of
the jurisdiction in which it is organized or in which its principal office
or applicable lending office is located or any subdivision thereof or
therein) or (B) a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate and/or (y) other
circumstances since the date of this Agreement affecting the interbank
Eurodollar market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental (including any
NAIC) rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental (including any NAIC) request (whether or
not having force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (by telephone promptly confirmed in writing)
to the Borrower and, except in the case of clause (i) above, to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred (including by way of conversion) shall be deemed rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to such
Bank, upon such Bank's written request therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased
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costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Bank, showing in reasonable
detail the basis for the calculation thereof, submitted to the Borrower by such
Bank shall, absent manifest error, be final and conclusive and binding on all
the parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Agent telephonic
notice (confirmed in writing) on the same date that the Borrower was notified by
the affected Bank or the Agent pursuant to Section 1.10(a)(ii) or (iii) or (y)
if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' written notice to the Agent, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan, provided that, if more than one Bank
is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If any Bank determines that after the date of this Agreement the
introduction of or any change in any applicable law or governmental (including
any NAIC) rule, regulation, order, guideline, directive or request (whether or
not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority
(including any NAIC), central bank or comparable agency, will have the effect of
increasing the amount of capital required or expected to be maintained by such
Bank or any corporation controlling such Bank based on the existence of such
Bank's Commitment hereunder or its obligations hereunder, then the Borrower
shall pay to such Bank, upon its written demand therefor, such additional
amounts as shall be required to compensate such Bank or such other corporation
for the increased cost to such Bank or such other corporation or the reduction
in the rate of return to such Bank or such other corporation as a result of such
increase of capital. In determining such additional amounts, each Bank will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Bank's determination of compensation
owing under this Section 1.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Bank, upon determining
that any additional amounts will be payable pursuant to this Section 1.10(c),
will give prompt written notice thereof to the Borrower, which notice shall show
in reasonable detail the basis for calculation of such additional amounts.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding loss of
anticipated profits) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or the Agent) a Borrowing of, or conversion from or
into, Eurodollar Loans does not
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occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment (including any repayment
made pursuant to Section 4.01, 4.02 or as a result of an acceleration of the
Loans pursuant to Section 9) or conversion of any of its Eurodollar Loans occurs
on a date which is not the last day of an Interest Period with respect thereto;
(iii) if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Loans when
required by the terms of this Agreement or the Note held by such Bank or (y) any
election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Bank, it
will, if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank or
otherwise defaults in its obligations to make Loans or fund Unpaid Drawings, (y)
upon the occurrence of an event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect
to any Bank which results in such Bank charging to the Borrower increased costs
in excess of those being generally charged by the other Banks or (z) in the case
of a refusal by a Bank to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Banks as (and to the extent) provided in Section
12.12(b), the Borrower shall have the right, if no Default or Event of Default
then exists (or, in the case of preceding clause (z), no Default or Event of
Default will exist immediately after giving effect to such replacement), to
replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferees, none of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank") and each of whom shall be
required to be reasonably acceptable to the Agent, provided that (i) at the time
of any replacement pursuant to this Section 1.13, the Replacement Bank shall
enter into one or more Assignment and Assumption Agreements pursuant to Section
12.04(b) (and with all fees payable pursuant to said Section 12.04(b) to be paid
by the Replacement Bank) pursuant to which the Replacement Bank shall acquire
the entire Commitment and all outstanding Loans of, and, in each case,
participations in Letters of Credit by, the Replaced Bank and, in connection
therewith, shall pay to (x) the Replaced Bank in respect thereof an amount equal
to the sum of (I) an amount equal to the principal of, and all accrued interest
on, all outstanding Loans of the Replaced Bank, (II) an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such time
and (III) an amount equal to all accrued, but theretofore unpaid, Fees owing to
the Replaced Bank pursuant to Section 3.01 and (y) each Issuing Bank an amount
equal to such
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Replaced Bank's Percentage of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) to the extent such amount was not theretofore funded by such
Replaced Bank to such Issuing Bank and (ii) all obligations of the Borrower due
and owing to the Replaced Bank at such time (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
Bank concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreement, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.06, 4.04, 11.06 and 12.01), which shall survive as to
such Replaced Bank. It is understood and agreed that replacements pursuant to
this Section 1.13 shall be effected by means of assignments which otherwise meet
the applicable requirements of Section 12.04(b).
Section 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request that the Issuing Bank
issue, at any time and from time to time on and after the Restatement Effective
Date and prior to the Final Maturity Date, for the account of the Borrower and
for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable Obligations of the
Borrower or any of its Subsidiaries, an irrevocable standby letter of credit, in
a form customarily used by the Issuing Bank or in the other form as has been
approved by the Issuing Bank (each such standby letter of credit, a "Letter of
Credit") in support of such L/C Supportable Obligations. It is hereby
acknowledged and agreed that each of the letters of credit described in Schedule
III (the "Existing Letters of Credit") which were issued under the Original
Credit Agreement for the account of the Borrower prior to the Restatement
Effective Date and which remain outstanding on the Restatement Effective Date
shall constitute a "Letter of Credit" for all purposes of this Agreement and
shall be deemed issued for purposes of Sections 2.04(a), 3.01(b) and 3.01(c) on
the Restatement Effective Date. All Letters of Credit shall be denominated in
Dollars and shall be issued on a sight basis only.
(b) Subject to and upon the terms and conditions set forth herein, the
Issuing Bank hereby agrees that it will, at any time and from time to time on
and after the Restatement Effective Date and prior to the Final Maturity Date,
following its receipt of the respective Letter of Credit Request, issue for the
account of the Borrower, one or more Letters of Credit in support of such L/C
Supportable Obligations of the Borrower or any of its Subsidiaries as are
permitted to remain outstanding without giving rise to a Default or an Event of
Default, provided that the Issuing Bank shall be under no obligation to issue
any Letter of Credit of the types described above if at the time of such
issuance:
(i) any order, judgment or decree of any governmental authority
(including the NAIC) or arbitrator shall purport by its terms to enjoin or
restrain the Issuing Bank
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from issuing the Letter of Credit or any requirement of law applicable to
the Issuing Bank or any request or directive (whether or not having the
force of law) from any governmental authority (including the NAIC) with
jurisdiction over the Issuing Bank shall prohibit, or request that the
Issuing Bank refrain from, the issuance of letters of credit generally or
the Letter of Credit in particular or shall impose upon the Issuing Bank
with respect to the Letter of Credit any restriction or reserve or capital
requirement (for which the Issuing Bank is not otherwise compensated) not in
effect on the date hereof, or any unreimbursed loss, cost or expense which
was not applicable or in effect with respect to the Issuing Bank as of the
date hereof and which the Issuing Bank reasonably and in good faith deems
material to it; or
(ii) the Issuing Bank shall have received notice from the Required
Banks prior to the issuance of such Letter of Credit of the type described
in the second sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $3,000,000 or (y) when added to the aggregate
principal amount of all Loans then outstanding, an amount equal to the Total
Commitment at such time and (ii) each Letter of Credit shall by its terms
terminate on or before the earlier of (x) the date which occurs 12 months after
the date of the issuance thereof (although any such Letter of Credit may be
extendible for successive periods of up to 12 months, but not beyond the third
Business Day prior to the Final Maturity Date, on terms acceptable to the
Issuing Bank) and (y) three Business Days prior to the Final Maturity Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever the
Borrower desires that a Letter of Credit be issued for its account, the Borrower
shall give the Agent and the Issuing Bank at least five Business Days' (or such
shorter period as is acceptable to the Issuing Bank) written notice thereof.
Each notice shall be in the form of Exhibit C (each a "Letter of Credit
Request"). The Agent shall promptly transmit copies of each Letter of Credit
Request to each Bank.
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.02. Unless the Issuing Bank has received notice from the Required Banks before
it issues a Letter of Credit that one or more of the conditions specified in
Section 5 are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 2.02, then the Issuing Bank shall, subject to the terms
and conditions of this Agreement, issue the requested Letter of Credit for the
account of the Borrower in accordance with the Issuing Bank's usual and
customary practices. Upon its issuance of or amendment or modification to any
Letter of Credit, the Issuing Bank shall promptly notify the Borrower, each
Participant and the Agent of such issuance, amendment or modification and such
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notification shall be accompanied by a copy of the issued Letter of Credit or
amendment or modification. Notwithstanding anything to the contrary contained in
this Agreement, in the event that a Bank Default exists, the Issuing Bank shall
not be required to issue any Letter of Credit unless the Issuing Bank has
entered into an arrangement satisfactory to it and the Borrower to eliminate the
Issuing Bank's risk with respect the participation in Letters of Credit by the
Defaulting Bank or Banks, including by cash collateralizing such Defaulting
Bank's or Banks' Percentage of the Letter of Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall
not be less than $50,000 or such lesser amount as is acceptable to the Issuing
Bank.
2.04 Letter of Credit Participations. (a) Immediately upon the issuance
by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be deemed to
have sold and transferred to each Bank, other than the Issuing Bank (each such
Bank, in its capacity under this Section 2.04, a "Participant"), and each such
Participant shall be deemed irrevocably and unconditionally to have purchased
and received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such Participant's Percentage, in
such Letter of Credit, each drawing or payment made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Upon any change in the
Commitments or Percentages of the Banks pursuant to Section 1.13 or 12.04, it is
hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new Percentages of the assignor and assignee
Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall not have an obligation relative to the other Banks other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Bank under or in connection with any
Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for the Issuing Bank any resulting
liability to the Borrower, any other Credit Party, any Bank or any other Person.
(c) In the event that the Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to Section 2.05(a), the Issuing Bank shall promptly
notify the Agent, which shall promptly notify each Participant of such failure,
and each Participant shall promptly and unconditionally pay to the Issuing Bank
the amount of such Participant's Percentage of such unreimbursed payment in
Dollars and in same day funds. If the Agent so notifies, prior to 11:00 A.M.
(New York time) on any Business Day, any Participant required to fund a payment
under a Letter of Credit, such Participant shall make available to the Issuing
Bank in Dollars such Participant's Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such Participant shall
not have so made its Percentage of the amount of such
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payment available to the Issuing Bank, such Participant agrees to pay to the
Issuing Bank, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Issuing
Bank at the overnight Federal Funds Rate for the first three days and at the
interest rate applicable Base Rate Loans for each day thereafter. The failure of
any Participant to make available to the Issuing Bank its Percentage of any
payment under any Letter of Credit shall not relieve any other Participant of
its obligation hereunder to make available to the Issuing Bank its Percentage of
any Letter of Credit on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant to
make available to the Issuing Bank such other Participant's Percentage of any
such payment.
(d) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, the Issuing Bank shall pay to each Participant
which has paid its Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participant's share (based upon the proportionate aggregate
amount originally funded by such Participant to the aggregate amount funded by
all Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, the Issuing Bank shall furnish
to such Participant copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to the Issuing
Bank with respect to Letters of Credit issued by it shall be irrevocable and not
subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, any Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the
Borrower or any Subsidiary of the Borrower and the beneficiary named in any
such Letter of Credit);
(iii) any draft, certificate or any 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;
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(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the Issuing Bank, by making payment to the Agent in
immediately available funds at the Payment Office, for any payment or
disbursement made by the Issuing Bank under any Letter of Credit issued by it
(each such amount, so paid until reimbursed, an "Unpaid Drawing"), not later
than two Business Days following receipt by the Borrower of notice of such
payment or disbursement (provided that no such notice shall be required to be
given if a Default or an Event of Default under Section 9.05 shall have occurred
and be continuing, in which case the Unpaid Drawing shall be due and payable
immediately without presentment, demand, protest or notice of any kind (all of
which are hereby waived by the Borrower)), with interest on the amount so paid
or disbursed by the Issuing Bank, to the extent not reimbursed prior to 12:00
Noon (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but excluding the date the Issuing Bank
was reimbursed by the Borrower therefor at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Margin for Base Rate
Loans; provided, however, to the extent such amounts are not reimbursed prior to
12:00 Noon (New York time) on the third Business Day following the receipt by
the Borrower of notice of such payment or disbursement or following the
occurrence of a Default or an Event of Default under Section 9.05, interest
shall thereafter accrue on the amounts so paid or disbursed by such Issuing Bank
(and until reimbursed by the Borrower) at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Margin for Base Rate
Loans plus 2%, in each such case, with interest to be payable on demand. The
Issuing Bank shall give the Borrower prompt written notice of each Drawing under
any Letter of Credit, provided that the failure to give any such notice shall in
no way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against any Bank (including in its
capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse the Issuing Bank for any wrongful payment made by the
Issuing Bank under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Issuing
Bank.
2.06 Increased Costs. If at any time after the date of this Agreement,
the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by any governmental authority (including the
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NAIC) charged with the interpretation or administration thereof, or compliance
by the Issuing Bank or any Participant with any request or directive by any such
authority (whether or not having the force of law), shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by the Issuing Bank or participated
in by any Participant, or (ii) impose on the Issuing Bank or any Participant any
other conditions relating, directly or indirectly, to this Agreement; and the
result of any of the foregoing is to increase the cost to the Issuing Bank or
any Participant of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by the Issuing
Bank or any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of the Issuing Bank or
such Participant pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, upon the delivery of the
certificate referred to below to the Borrower by the Issuing Bank or any
Participant (a copy of which certificate shall be sent by the Issuing Bank or
such Participant to the Agent), the Borrower shall pay to the Issuing Bank or
such Participant such additional amount or amounts as will compensate such Bank
for such increased cost or reduction in the amount receivable or reduction on
the rate of return on its capital. The Issuing Bank or any Participant, upon
determining that any additional amounts will be payable pursuant to this Section
2.06, will give prompt written notice thereof to the Borrower, which notice
shall include a certificate submitted to the Borrower by the Issuing Bank or
such Participant (a copy of which certificate shall be sent by the Issuing Bank
or such Participant to the Agent), setting forth in reasonable detail the basis
for the calculation of such additional amount or amounts necessary to compensate
the Issuing Bank or such Participant. The certificate required to be delivered
pursuant to this Section 2.06 shall, absent manifest error, be final and
conclusive and binding on the Borrower.
Section 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the Agent for distribution
to each Non-Defaulting Bank a commitment commission (the "Commitment
Commission") for the period from and including the Restatement Effective Date to
but excluding the Final Maturity Date (or such earlier date as the Total
Commitment shall have been terminated), computed at a rate for each day equal to
the Applicable Commitment Commission Percentage of the daily average Unutilized
Commitment of such Non-Defaulting Bank. Accrued Commitment Commission shall be
due and payable quarterly in arrears on each Quarterly Payment Date and on the
Final Maturity Date or such earlier date upon which the Total Commitment is
terminated.
(b) The Borrower agrees to pay to the Agent for distribution to each
Bank (based on each such Bank's respective Percentage) a fee in respect of each
Letter of Credit issued hereunder (the "Letter of Credit Fee") for the period
from and including the date of issuance of such Letter of Credit to and
including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to the Eurodollar Spread on the daily Stated
Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in
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arrears on each Quarterly Payment Date and on the first day after the
termination of the Total Commitment upon which no Letters of Credit remain
outstanding.
(c) The Borrower agrees to pay to the Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued by it (the
"Facing Fee"), for the period from and including the date of issuance of such
Letter of Credit to and including the date of the termination of such Letter of
Credit, computed at a rate equal to 1/8 of 1% per annum of the daily Stated
Amount of such Letter of Credit, provided that in any event the minimum amount
of the Facing Fee payable in any 12 month period for each Letter of Credit shall
be $500; it being agreed that, on the date of issuance of any Letter of Credit
and on each anniversary thereof prior to the termination of such Letter of
Credit, if $500 will exceed the amount of Facing Fees that will accrue with
respect to such Letter of Credit for the immediately succeeding 12 month period,
the full $500 shall be payable on the date of issuance of such Letter of Credit
and on each such anniversary thereof. Except as otherwise provided in the
proviso to the immediately preceding sentence, accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day after the termination of the Total Commitment upon which no Letters of
Credit remain outstanding.
(d) The Borrower agrees to pay to the Issuing Bank, upon each payment
under, issuance of, or amendment to, any Letter of Credit, such amount as shall
at the time of such event be the administrative charge and the reasonable
expenses which the Issuing Bank is generally imposing in connection with such
occurrence with respect to letters of credit.
(e) The Borrower agrees to pay to the Agent, for its own
account, such other fees as have been agreed to in writing by the Borrower and
the Agent.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least
one Business Day's prior written notice to the Agent at the Notice Office (which
notice the Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, at any time or from time to time, without premium or
penalty, (i) to terminate the Total Unutilized Commitment, in whole or in part,
pursuant to this Section 3.02(a), in an integral multiple of $250,000, in the
case of partial reductions to the Total Unutilized Commitment, provided that
each such reduction shall apply proportionately to permanently reduce the
Commitment of each Bank.
(b) In the event of a refusal by a Bank to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Banks as (and to the extent) provided
in Section 12.12(b), the Borrower may, subject to its compliance with the
requirements of Section 12.12(b), upon five Business Days' prior written notice
to the Agent at the Notice Office (which notice the Agent shall promptly
transmit to each of the Banks) terminate the entire Commitment of such Bank, so
long as all Loans, together with accrued and unpaid interest, Fees and all other
amounts, owing to such Bank are repaid concurrently with the effectiveness of
such termination pursuant to Section 4.01(b) (at which time Schedule I shall be
deemed modified to reflect such changed amounts),
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and at such time, such Bank shall no longer constitute a "Bank" for purposes of
this Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 11.06 and
12.01), which shall survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
the Commitment of each Bank) shall terminate in its entirety on December 31,
1997 unless the Restatement Effective Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Commitment (and the Commitment of each Bank)
shall terminate in its entirety on the earlier of (i) the date on which a Change
of Control occurs and (ii) the Final Maturity Date.
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on or after the Restatement Effective Date
upon which the Borrower or any of its Subsidiaries receives any cash proceeds
from any incurrence by the Borrower or any of its Subsidiaries of Indebtedness
for borrowed money (other than Indebtedness for borrowed money permitted to be
incurred pursuant to Section 8.04 as such Section is in effect on the
Restatement Effective Date), the Total Commitment shall be permanently reduced
on such date by an amount equal to 100% of the Net Debt Proceeds of the
respective incurrence of Indebtedness.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on or after the Restatement Effective Date
upon which the Borrower or any of its Subsidiaries receives cash proceeds from
any Asset Sale, the Total Commitment shall be permanently reduced on such date
by an amount equal to 100% of the Net Sale Proceeds of such Asset Sale; provided
that no reduction to the Total Commitment shall be required pursuant to this
Section 3.03(d) so long as no Default or Event of Default then exists and the
Borrower delivers a certificate to the Agent on or prior to such date stating
that such Net Sale Proceeds shall be used to purchase replacement assets within
270 days following the date of such Asset Sale (which certificate shall set
forth the estimates of the proceeds to be so expended), and provided further,
that if all or any portion of such Net Sale Proceeds not giving rise to a
reduction to the Total Commitment are not so reinvested in replacement assets
within such 270 day period, such remaining portion shall give rise to a
reduction to the Total Commitment on the last day of such period as set forth
above in this Section 3.03(d).
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, within 10 days following each date on or after
the Restatement Effective Date upon which the Borrower or any of its
Subsidiaries receives any cash proceeds from any Recovery Event, the Total
Commitment shall be permanently reduced on such 10th day by an amount equal to
100% of the Net Insurance Proceeds of such Recovery Event, provided that so long
as no Default or Event of Default then exists and such proceeds do not exceed
$10,000,000, no reduction to the Total Commitment shall be required pursuant to
this Section 3.03(d) to the extent that the Borrower has delivered a certificate
to the Agent on or prior to such date stating
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that such proceeds shall be used to replace or restore any properties or assets
in respect of which such proceeds were paid within 270 days following the date
of the receipt of such proceeds (which certificate shall set forth the estimates
of the proceeds to be so expended), and provided further, that (i) if the amount
of such proceeds exceeds $10,000,000, then the Total Commitment shall be reduced
by the entire amount and not just the portion in excess of $10,000,000 and (ii)
if all or any portion of such proceeds not giving rise to a reduction to the
Total Commitment pursuant to the preceding proviso are not so used within 270
days after the date of the receipt of such proceeds, such remaining portion
shall give rise to a reduction in the Total Commitment on the last day of such
period as set forth above in this Section 3.03(e).
(f) Each reduction to the Total Commitment pursuant to this Section
3.03 shall be applied proportionately to permanently reduce the Commitment of
each Bank.
Section 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrower shall have the
right to prepay the Loans, without premium or penalty, in whole or in part at
any time and from time to time on the following terms and conditions: (i) the
Borrower shall give the Agent prior to 12:00 Noon (New York time) at the Notice
Office (x) at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay Base Rate Loans
and (y) at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay Eurodollar Loans, the
amount of such prepayment and the Types of Loans to be prepaid and, in the case
of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
made, which notice the Agent shall promptly transmit to each of the Banks; (ii)
each prepayment shall be in an aggregate principal amount of at least $250,000
and, if greater, in an integral multiple of $100,000, provided that if any
partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall
reduce the outstanding principal amount of Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar
Loans and any election of an Interest Period with respect thereto given by the
Borrower shall have no force or effect; (iii) prepayments of Eurodollar Loans
made pursuant to this Section 4.01(a) may only be made on the last day of an
Interest Period applicable thereto; and (iv) each prepayment in respect of any
Loans made pursuant to a Borrowing shall be applied pro rata among such Loans,
provided that, at the Borrower's election, such prepayment shall not be applied
to any Loan of a Defaulting Bank.
(b) In the event of a refusal by a Bank to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Banks as (and to the extent) provided
in Section 12.12(b), the Borrower may, upon five Business Days' prior written
notice to the Agent at the Notice Office (which notice the Agent shall promptly
transmit to each of the Banks) repay all Loans, together with accrued and unpaid
interest, Fees, and other amounts owing to such Bank in accordance with, and
subject to the requirements of, said Section 12.12(b) so long as (A) the entire
Commitment of such Bank is terminated concurrently with such repayment pursuant
to Section 3.02(b) (at which time
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Schedule I shall be deemed modified to reflect the changed Commitments) and (B)
the consents, if any, required by Section 12.12(b) in connection with the
repayment pursuant to this clause (b) have been obtained.
4.02 Mandatory Repayments. (a) On any day on which the sum of the
aggregate outstanding principal amount of the Loans plus the Letter of Credit
Outstandings exceeds the Total Commitment as then in effect, the Borrower shall
prepay on such day the principal of Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Loans, the aggregate
amount of the Letter of Credit Outstandings exceeds the Total Commitment as then
in effect, the Borrower shall pay to the Agent at the Payment Office on such day
an amount of cash or Cash Equivalents equal to the amount of such excess (up to
a maximum amount equal to the Letter of Credit Outstandings at such time), such
cash or Cash Equivalents to be held as security for all obligations of the
Borrower to the Issuing Banks and the Banks hereunder in a cash collateral
account to be established by the Agent.
(b) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant
to which made, provided that: (i) repayments of Eurodollar Loans pursuant to
this Section 4.02 may only be made on the last day of an Interest Period
applicable thereto unless all Eurodollar Loans with Interest Periods ending on
such date of required repayment and all Base Rate Loans have been paid in full;
(ii) if any repayment of Eurodollar Loans made pursuant to a single Borrowing
shall reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to
an amount less than the Minimum Borrowing Amount applicable thereto, such
Borrowing shall be converted at the end of the then current Interest Period into
a Borrowing of Base Rate Loans; and (iii) each repayment of any Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans. In the
absence of a designation by the Borrower as described in the preceding sentence,
the Agent shall, subject to the above, make such designation in its sole
discretion.
(c) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, all then outstanding Loans shall be
repaid in full on the earlier of (i) the date on which a Change of Control
occurs and (ii) the Final Maturity Date.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be
made to the Agent for the account of the Bank or Banks entitled thereto not
later than 12:00 Noon (New York time) on the date when due and shall be made in
Dollars in immediately available funds at the Payment Office. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in
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Section 4.04(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except as
provided in the second succeeding sentence, any tax imposed on or measured by
the net income or profits of a Bank pursuant to the laws of the jurisdiction in
which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Bank is located or any subdivision thereof or
therein) and all interest, penalties or similar liabilities with respect to such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
(all such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every payment of all amounts
due under this Agreement or under any Note, after withholding or deduction for
or on account of any Taxes, will not be less than the amount provided for herein
or in such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income or
profits of such Bank pursuant to the laws of the jurisdiction in which such Bank
is organized or in which the principal office or applicable lending office of
such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Bank is organized or in which
the principal office or applicable lending office of such Bank is located and
for any withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank, in respect of such amounts so paid to or on behalf of
such Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. The Borrower will
furnish to the Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower agrees to indemnify and hold harmless each
Bank, and reimburse such Bank upon its written request, for the amount of any
Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Agent on or prior to the Restatement
Effective Date, or in the case of a Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 12.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224 (or
successor forms) pursuant to clause (i) above, (x) a certificate substantially
in the form of Exhibit D (any such certificate, a "Section 4.04(b)(ii)
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to
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payments of interest to be made under this Agreement and under any Note. In
addition, each Bank agrees that from time to time after the Restatement
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, such Bank
will deliver to the Borrower and the Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor form), or Form W-8 (or successor form) and a Section 4.04(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Bank to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or such Bank shall immediately
notify the Borrower and the Agent of its inability to deliver any such Form or
Certificate, in which case such Bank shall not be required to deliver any such
Form or Certificate pursuant to this Section 4.04(b). Notwithstanding anything
to the contrary contained in Section 4.04(a), but subject to Section 12.04(b)
and the immediately succeeding sentence, (x) the Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, Fees or other amounts
payable hereunder for the account of any Bank which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for U.S.
Federal income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such Bank
has not provided to the Borrower the Internal Revenue Service Forms required to
be provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case
of a payment, other than interest, to a Bank described in clause (ii) above, to
the extent that such Forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 4.04 and except as set forth
in Section 12.04(b), the Borrower agrees to pay any additional amounts and to
indemnify each Bank in the manner set forth in Section 4.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any Taxes deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Restatement Effective
Date in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of such Taxes.
Section 5. Conditions Precedent. The occurrence of the Restatement
Effective Date and the obligation of each Bank to make Loans on and after the
Restatement Effective Date, and the obligation of the Issuing Bank to issue
Letters of Credit on and after the Restatement Effective Date, are subject at
the time of any such Credit Event to the satisfaction of any the following
conditions (to the extent applicable to such Credit Event):
5.01 Execution of the Agreement. On or prior to the Restatement
Effective Date, this Agreement shall have been executed and delivered in
accordance with Section 12.10.
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5.02 Notes. On or prior to the Restatement Effective Date, there shall
have been delivered to the Agent for the account of each of the Banks the
appropriate Note executed by the Borrower, in the amount, maturity and as
otherwise provided herein.
5.03 Officer's Certificate. On the Restatement Effective Date, the
Agent shall have received a certificate, dated the Restatement Effective Date
and signed on behalf of the Borrower by the Chairman of the Board, the President
or any Vice President of the Borrower, stating that all of the conditions in
Sections 5.07, 5.08, 5.09 and 5.10 have been satisfied on such date.
5.04 Opinions of Counsel. On the Restatement Effective Date, the Agent
shall have received from (i) Morgan, Lewis & Bockius, counsel to the Credit
Parties, an opinion addressed to the Agent, the Co-Agent, the Collateral Agent
and each of the Banks and dated the Restatement Effective Date, covering the
matters set forth in Exhibit E-1 and such other matters incident to the
transactions contemplated herein as the Agent or the Co-Agent may reasonably
request and (ii) Mesirov Gelman Jaffe Cramer & Jamieson, counsel to the Credit
Parties, an opinion addressed to the Agent, the Co-Agent, the Collateral Agent
and the Banks, and dated the Restatement Effective Date, covering the matters
set forth in Exhibit E-2 and such other matters incident to the transactions
contemplated herein as the Agent or the Co-Agent may reasonably request.
5.05 Corporate Documents; Proceedings; etc. (a) On the Restatement
Effective Date, the Agent shall have received a certificate from each Credit
Party, dated the Restatement Effective Date, signed by the Chairman of the
Board, the President or any Vice President of such Credit Party, and attested to
by the Secretary or any Assistant Secretary of such Credit Party, in the form of
Exhibit F with appropriate insertions, together with copies of the certificate
of incorporation (or equivalent organizational document) and by-laws of such
Credit Party (but only to the extent that any such certificate of incorporation
and/or by-laws have been modified since November 27, 1996 or such Credit Party
is a new Credit Party) and the resolutions of such Credit Party referred to in
such certificate, and the foregoing resolutions shall be in form and substance
reasonably acceptable to the Agent and the Co-Agent.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be satisfactory in form and substance to the
Agent, the Co-Agent and the Required Banks, and the Agent shall have received
all information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams or facsimiles, if any, which the Agent or the Co-Agent
reasonably may have requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.
(c) On the Restatement Effective Date, the corporate, ownership and
capital structure (including, without limitation, the terms of any capital
stock, options, warrants or other securities issued by the Borrower or any of
its Subsidiaries) of the Borrower and its Subsidiaries
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shall be in form and substance reasonably satisfactory to the Agent, the
Co-Agent and the Required Banks.
5.06 Shareholders' Agreements; Tax Sharing Agreements; Existing
Indebtedness Agreements. On or prior to the Restatement Effective Date, there
shall have been delivered to (or there shall have been made available for review
by) the Agent true and correct copies of the following documents:
(i) all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to any such entity
with respect to its capital stock, including, without limitation, the
Charles Town Joint Venture Agreement (collectively, the "Shareholders'
Agreements");
(ii) all tax sharing, tax allocation and other similar agreements
entered into by the Borrower or any of its Subsidiaries (collectively, the
"Tax Sharing Agreements"); and
(iii) all agreements evidencing or relating to Indebtedness of the
Borrower or any of its Subsidiaries which is to remain outstanding after the
Restatement Effective Date (collectively, the "Existing Indebtedness
Agreements");
all of which Shareholders' Agreements, Existing Indebtedness Agreements and Tax
Sharing Agreements shall be in form and substance satisfactory to the Agent, the
Co-Agent and the Required Banks and shall be in full force and effect on the
Restatement Effective Date.
5.07 Senior Notes. (a) On the Restatement Effective Date, (i) the
Borrower shall have received gross cash proceeds of $80,000,000 from the
issuance by it of a like principal amount of the Senior Notes and (ii) the
Borrower shall have utilized a portion of the net cash proceeds received
therefrom to repay all outstanding obligations under the Original Credit
Agreement or required by Section 5.08.
(b) On or prior to the Restatement Effective Date, there shall
have been delivered to the Agent true and correct copies of the Senior Note
Documents, and all of the terms and conditions of the Senior Note Documents
(including, without limitation, amortization, maturities, interest rates,
covenants, defaults, remedies and sinking fund provisions) shall be reasonably
satisfactory in form and substance to the Agent, the Co-Agent and the Required
Banks.
5.08 Original Credit Agreement, etc. (a) On the Restatement Effective
Date and concurrently with the issuance of the Senior Notes (i) all loans under
the Original Credit Agreement shall have been repaid in cash in full, (ii) there
shall have been paid in cash in full all accrued but unpaid interest on the
loans outstanding under the Original Credit Agreement and (iii) there shall have
been paid in cash in full all accrued but unpaid fees (including, without
limitation, commitment fees, letter of credit fees and facing fees) and other
amounts, costs and expenses (including, without limitation, breakage costs, if
any, with respect to Eurodollar rate loans) owing under the Original Credit
Agreement, in each case regardless of whether or not any
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of the foregoing amounts would otherwise be due and payable at such time
pursuant to the terms of the Original Credit Agreement.
(b) On the Restatement Effective Date, (i) all Interest Rate Protection
Agreements entered into by the Borrower prior to the Restatement Effective Date
shall have been terminated and (ii) all amounts, costs and expenses owing by the
Borrower pursuant to such Interest Rate Protection Agreements as a result of the
termination thereof shall have been paid in full.
(c) On the Restatement Effective Date, the Agent, the Continuing Banks
and the Non-Continuing Banks shall have executed and delivered an
acknowledgement letter in the form of Exhibit G.
5.09 Adverse Change, etc. (a) Since September 30, 1997, nothing shall
have occurred (and neither the Agent, the Co-Agent nor the Banks shall have
become aware of any facts or conditions not previously known) which the Agent,
the Co-Agent or the Required Banks shall determine (a) has had, or could
reasonably be expected to have, a material adverse effect on the rights or
remedies of the Banks or the Agent, or on the ability of any Credit Party to
perform its obligations to them hereunder or under any other Credit Document or
(b) has had, or could reasonably be expected to have, a material adverse effect
on the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of the Borrower or any of its Subsidiaries.
(b) All necessary governmental (domestic and foreign) and third party
approvals and/or consents (including, without limitation, any approvals and/or
consents of any Commission necessary, or in the reasonable opinion of the Agent
or the Co-Agent desirable, to operate the businesses of the Borrower or any of
its Subsidiaries permitted under Section 8.15) in connection with the
Transaction and the other transactions contemplated by the Documents and
otherwise referred to herein or therein shall have been obtained and remain in
effect, and all applicable waiting periods with respect thereto shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon, the
Transaction or the other transactions contemplated by the Documents or otherwise
referred to herein or therein. Additionally, there shall not exist any judgment,
order, injunction or other restraint issued or filed or a hearing seeking
injunctive relief or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the Transaction or the other transactions
contemplated by the Documents or otherwise required to herein or therein.
(c) The Borrower and its Subsidiaries shall have all licenses,
including, without limitation, gaming, racing and alcohol licenses, necessary
for the operation of its businesses.
5.10 Litigation. On the Restatement Effective Date, there shall be no
actions, suits or proceedings pending or threatened (i) with respect to the
Transaction, this Agreement or any other Document or (ii) which the Agent, the
Co-Agent or the Required Banks shall determine could reasonably be expected to
have a material adverse effect on (a) the Transaction
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or on the business, operations, property, assets, condition (financial or
otherwise) or the prospects of the Borrower or any of its Subsidiaries, (b) the
rights or remedies of the Banks or the Agent hereunder or under any other Credit
Document or (c) the ability of any Credit Party to perform its respective
obligations to the Banks or the Agent hereunder or under any other Credit
Document.
5.11 Assumption and Acknowledgment. On the Restatement Effective Date,
each Credit Party shall have duly authorized, executed and delivered an
assumption and acknowledgment agreement in the form of Exhibit H (the
"Assumption and Acknowledgment Agreement").
5.12 Mortgage Amendments. On the Restatement Effective Date, the
Collateral Agent shall have received fully executed counterparts of amendments
(the "Mortgage Amendments"), in form and substance satisfactory to the
Collateral Agent, to each of the Existing Mortgages, together with evidence that
counterparts of each of the Mortgage Amendments have been delivered to the title
company insuring the Lien on the Existing Mortgages for recording in all places
to the extent necessary or desirable, in the judgment of the Collateral Agent,
effectively to maintain a valid and enforceable first priority mortgage lien on
the Existing Mortgaged Properties in favor of the Collateral Agent for the
benefit of the Secured Creditors, and the Collateral Agent shall have received
either endorsements to the existing Mortgage Policies or new Mortgage Policies,
in either case assuring the Collateral Agent that each Existing Mortgage is a
valid and enforceable first priority mortgage lien on the respective Existing
Mortgaged Properties, free and clear of all defects and encumbrances except
Permitted Encumbrances.
5.13 Projections; Pro Forma Balance Sheet; Financial Review. On or
prior to the Restatement Effective Date, the Agent shall have received copies of
historical financial statements, the pro forma financial statements and the
Projections referred to in Sections 6.05(a) and (d), and the foregoing financial
statements and Projections shall be in form and substance satisfactory to the
Agent, the Co-Agent and the Required Banks.
5.14 Solvency Certificate; Insurance Certificates. On the Restatement
Effective Date, the Borrower shall have delivered to the Agent:
(i) a certificate in the form of Exhibit I executed by the Chief
Financial Officer of the Borrower; and
(ii) certificates of insurance complying with the requirements of
Section 7.03 for the business and properties of the Borrower and its
Subsidiaries, in form and substance, satisfactory to the Agent, the Co-Agent
and the Required Banks and naming the Collateral Agent as an additional
insured and as loss payee, and stating that such insurance shall not be
canceled without at least 30 days prior written notice by the insurer to the
Collateral Agent (or such shorter period of time as a particular insurance
company generally provides).
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5.15 Fees, etc. On the Restatement Effective Date, the Borrower shall
have paid to the Agent, the Co-Agent and each Bank all costs, fees and expenses
(including, without limitation, legal fees and expenses) payable to the Agent,
the Co-Agent and such Bank to the extent then due.
5.16 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
5.17 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan, the Agent shall have received a Notice of Borrowing meeting
the requirements of Section 1.03(a).
(b) Prior to the issuance of each Letter of Credit, the Agent and the
Issuing Bank shall have received a Letter of Credit Request meeting the
requirements of Section 2.03.
The occurrence of the Restatement Effective Date and the acceptance of
the proceeds of each Loan and the making of each Letter of Credit Request shall
constitute a representation and warranty by the Borrower to the Agent and each
of the Banks that all the applicable conditions specified in this Section 5
exist as of the date of each such Credit Event. All of the Notes, certificates,
legal opinions and other documents and papers referred to in this Section 5,
unless otherwise specified, shall be delivered to the Agent at the Notice Office
for the account of each of the Banks and, except for the Notes, in sufficient
counterparts or copies for each of the Banks and shall be in form and substance
satisfactory to the Agent and the Required Banks.
Section 6. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, the Borrower makes
the following representations, warranties and agreements, in each case after
giving effect to the Transaction, all of which shall survive the execution and
delivery of this Agreement and the Notes and the making of the Loans and
issuance of the Letters of Credit, with the occurrence of the Restatement
Effective Date and each other Credit Event on or after the Restatement Effective
Date being deemed to constitute a representation and warranty that the matters
specified in this Section 6 are true and correct on and as of the Restatement
Effective Date and on the date of each such other Credit Event (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct only as of
such specified date).
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6.01 Corporate and Other Status. Each Credit Party and each of its
Subsidiaries (i) is a duly organized and validly existing corporation, limited
liability company or partnership, as the case may be, in good standing under the
laws of the jurisdiction of its organization, (ii) has the corporate, limited
liability company or partnership power and authority, as the case may be, to own
its property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of its property or the conduct of its business requires
such qualifications except for failures to be so qualified which, individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
6.02 Corporate and Other Power and Authority. Each Credit Party has the
corporate, limited liability company or partnership power and authority, as the
case may be, to execute, deliver and perform the terms and provisions of each of
the Documents to which it is party and has taken all necessary corporate,
limited liability company or partnership action, as the case may be, to
authorize the execution, delivery and performance by it of each of such
Documents. Each Credit Party has duly executed and delivered each of the
Documents to which it is party, and each of such Documents constitutes its
legal, valid and binding obligation enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the certificate of incorporation,
by-laws, limited liability company agreement or partnership agreement (or
equivalent organizational documents) of the Borrower or any of its Subsidiaries.
6.04 Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for those that
have otherwise been obtained or made on or prior to the Restatement Effective
Date and which remain in full force and effect on the Restatement Effective
Date), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the
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execution, delivery and performance of any Document or (ii) the legality,
validity, binding effect or enforceability of any such Document.
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of the
Borrower and its Subsidiaries at December 31, 1996 and September 30, 1997 and
the related consolidated statements of income, cash flows and shareholders'
equity of the Borrower and its Subsidiaries for the fiscal year and nine-month
period ended on such dates, as the case may be, copies of which have been
furnished to the Banks prior to the Restatement Effective Date, present fairly
the financial position of the Borrower and its Subsidiaries at the date of such
balance sheets and the results of the operations of the Borrower and its
Subsidiaries for the periods covered thereby. The pro forma consolidated balance
sheet of the Borrower and its Subsidiaries as of September 30, 1997, a copy of
which has been furnished to the Banks prior to the Restatement Effective Date,
presents fairly the pro forma financial position of the Borrower and its
Subsidiaries as of September 30, 1997 and after giving effect to the
Transaction. All of the foregoing financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied,
subject to normal year-end audit adjustments in the case of the nine-month and
other interim financial statements referred to above. Since September 30, 1997,
there has been no material adverse change in the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
(b) On and as of the Restatement Effective Date and after giving effect
to the Transaction and to all Indebtedness (including the Loans and the Senior
Notes) being incurred or assumed and Liens created by the Credit Parties in
connection therewith, (a) the sum of the assets, at a fair valuation, of each of
the Borrower on a stand-alone basis and of the Borrower and its Subsidiaries
taken as a whole will exceed its debts; (b) each of the Borrower on a
stand-alone basis and the Borrower and its Subsidiaries taken as a whole has not
incurred and does not intend to incur, and does not believe that they will
incur, debts beyond their ability to pay such debts as such debts mature; and
(c) each of the Borrower on a stand alone basis and the Borrower and its
Subsidiaries taken as a whole will have sufficient capital with which to conduct
its business. For purposes of this Section 6.05(b), "debt" means any liability
on a claim, and "claim" means (i) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 6.05(a), there were as of the Restatement Effective Date no
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in
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aggregate, could reasonably be expected to be material to the Borrower and its
Subsidiaries taken as a whole. As of the Restatement Effective Date, the
Borrower does not know of any basis for the assertion against it or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully disclosed in the financial statements delivered pursuant to Section
6.05(a) which, either individually or in the aggregate, could reasonably be
expected to be material to the Borrower and its Subsidiaries taken as a whole.
(d) On and as of the Restatement Effective Date, the Projections
delivered to the Agent and the Banks prior to the Restatement Effective Date
have been prepared in good faith and are based on reasonable assumptions, and
there are no statements or conclusions in the Projections which are based upon
or include information known to the Borrower to be misleading in any material
respect or which fail to take into account material information known to the
Borrower regarding the matters reported therein. On the Restatement Effective
Date, the Borrower believes that the Projections are reasonable and attainable.
6.06 Litigation. There are no actions, suits or proceedings pending or,
to the best knowledge of the Borrower, threatened (i) with respect to any
Document, (ii) with respect to any material Indebtedness of the Borrower or any
of its Subsidiaries or (iii) that are reasonably likely to materially and
adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
6.07 True and Complete Disclosure. All factual information (taken as a
whole) furnished by any Credit Party in writing to the Agent or any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement, the other Credit Documents or
any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any Credit
Party in writing to the Agent or any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information was provided.
6.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Loans
shall be used for the working capital and general corporate purposes of the
Borrower and its Subsidiaries.
(b) No part of any Credit Event (or the proceeds thereof) will be used
to purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof nor the occurrence of any other Credit Event will
violate or be inconsistent with the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
6.09 Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal and state income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all taxes and assessments payable by
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it which have become due, except for those contested in good faith and
adequately disclosed and fully provided for on the financial statements of the
Borrower and its Subsidiaries in accordance with generally accepted accounting
principles. The Borrower and each of its Subsidiaries have at all times paid, or
have provided adequate reserves (in the good faith judgment of the management of
the Borrower) for the payment of, all federal, state, local and foreign income
taxes applicable for all prior fiscal years and for the current fiscal year to
date. There is no material action, suit, proceeding, investigation, audit, or
claim now pending or, to the knowledge of the Borrower threatened, by any
authority regarding any taxes relating to the Borrower or any of its
Subsidiaries. As of the Restatement Effective Date, neither the Borrower nor any
of its Subsidiaries has entered into an agreement or waiver or been requested to
enter into an agreement or waiver extending any statute of limitations relating
to the payment or collection of taxes of the Borrower or any of its
Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of the Borrower or any of its Subsidiaries not to
be subject to the normally applicable statute of limitations.
6.10 Compliance with ERISA. (i) Each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws, including, without limitation, ERISA and the Code; each
Plan (and each related trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401(a)
and 501(a) of the Code; no Reportable Event has occurred; no Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or
in reorganization; no Plan has an Unfunded Current Liability; no Plan which is
subject to Section 412 of the Code or Section 302 of ERISA has an accumulated
funding deficiency, within the meaning of such sections of the Code or ERISA, or
has applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; all contributions required to be made with
respect to a Plan have been timely made; neither the Borrower nor any Subsidiary
of the Borrower nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such material liability under any of the foregoing sections
with respect to any Plan; no condition exists which presents a material risk to
the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of
incurring a material liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no proceedings have been instituted
to terminate or appoint a trustee to administer any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, expected or
threatened; using actuarial assumptions and computation methods consistent with
Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of the
Borrower and its Subsidiaries and its ERISA Affiliates to all Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent Credit Event, would
not exceed $500,000; each group health plan (
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as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which
covers or has covered employees or former employees of the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate has at all times been operated
in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA
and Section 4980B of the Code; no lien imposed under the Code or ERISA on the
assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and the Borrower and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither the Borrower nor any of its
Subsidiaries has incurred any obligation in connection with the termination
of or withdrawal from any Foreign Pension Plan. The present value of the
accrued benefit liabilities (whether or not vested) under each Foreign
Pension Plan, determined as of the end of the Borrower's most recently ended
fiscal year on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
6.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties party thereto in
the Security Agreement Collateral described therein, and the Collateral Agent,
for the benefit of the Secured Creditors, has a fully perfected first lien on,
and security interest in, all right, title and interest in all of the Security
Agreement Collateral described therein, subject to no other Liens other than
Permitted Liens. The recordation of the Assignment of Security Interest in U.S.
Patents and Trademarks in the form attached to the Security Agreement in the
United States Patent and Trademark Office together with filings on Form UCC-1
made pursuant to the Security Agreement will create, as may be perfected by such
filing and recordation, a perfected security interest granted to the Collateral
Agent in the United States trademarks and patents covered by the Security
Agreement and the recordation of the Assignment of Security Interest in U.S.
Copyrights in the form attached to the Security Agreement with the United States
Copyright Office together with filings on Form UCC-1 made pursuant to the
Security Agreement will create, as may be perfected by such filing and
recordation, a perfected security interest granted to the Collateral Agent in
the United States copyrights covered by the Security Agreement.
(b) The security interests created in favor of the Collateral Agent, as
Pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement
constitute first priority perfected security interests in the Pledged Securities
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests created in the Pledged
Securities under the Pledge Agreement.
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(c) The Mortgages (as amended by the Mortgage Amendments in the case of
the Existing Mortgages) create, for the obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and mortgage
lien on all of the Mortgaged Properties in favor of the Collateral Agent (or
such other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors, superior to and prior to the rights of all
third persons (except that the security interest and mortgage lien created in
the Mortgaged Properties may be subject to the Permitted Encumbrances related
thereto) and subject to no other Liens (other than Liens permitted under Section
8.01). Schedule IV contains a true and complete list of each parcel of Real
Property owned or leased by the Borrower and its Subsidiaries on the Restatement
Effective Date, and the type of interest therein held by the Borrower or such
Subsidiary. The Borrower and each of its Subsidiaries have good and marketable
title to all fee-owned Real Property and valid leasehold title to all
Leaseholds, in each case free and clear of all Liens except those described in
the first sentence of this subsection (c).
6.12 Representations and Warranties in the Documents. All
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were (or are) made (or deemed made).
6.13 Properties. The Borrower and each of its Subsidiaries have good
and marketable title to all material properties owned by them, including all
property reflected in the balance sheets referred to in Section 6.05(a) (except
as sold or otherwise disposed of since the date of such balance sheet in the
ordinary course of business or a permitted by the terms of this Agreement), free
and clear of all Liens, other than Permitted Liens.
6.14 Capitalization. On the Restatement Effective Date, the
authorized capital stock of the Borrower shall consist of (i) 20,000,000 shares
of common stock, $.01 par value per share and (ii) 1,000,000 shares of preferred
stock, $.01 par value per value, of which no shares of such preferred stock are
issued or outstanding. All outstanding shares of capital stock of the Borrower
have been duly and validly issued, are fully paid and nonassessable. The
Borrower does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock, except for options or warrants
to purchase shares of its common stock.
6.15 Subsidiaries. As of the Restatement Effective Date, the Borrower
has no Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule
V correctly sets forth, as of the Restatement Effective Date, the percentage
ownership (direct or indirect) of the Borrower in each class of capital stock or
other equity of each of its Subsidiaries and also identifies the direct owner
thereof.
6.16 Compliance with Statutes, etc. Each of the Borrower and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the
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conduct of its business and the ownership of its property (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls), except such noncompliances as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
6.17 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.18 Public Utility Holding Company Act. Neither the Borrower nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
6.19 Environmental Matters. (a) The Borrower and each of its
Subsidiaries have complied with, and on the date of each Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or threatened
Environmental Claims against the Borrower or any of its Subsidiaries (including
any such claim arising out of the ownership or operation by the Borrower or any
of its Subsidiaries of any Real Property no longer owned or operated by the
Borrower or any of its Subsidiaries) or any Real Property owned or operated by
the Borrower or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences with respect to any Real Property owned or operated by
the Borrower or any of its Subsidiaries (including any Real Property formerly
owned or operated by the Borrower or any of its Subsidiaries but no longer owned
or operated by the Borrower or any of its Subsidiaries) or any property
adjoining or adjacent to any such Real Property that could be expected (i) to
form the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property owned or operated by the Borrower or any of
its Subsidiaries or (ii) to cause any Real Property owned or operated by the
Borrower or any of its Subsidiaries to be subject to any restrictions on the
ownership, occupancy or transferability of such Real Property by the Borrower or
any of its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by the Borrower or any of its Subsidiaries where such generation, use,
treatment or storage has violated or could be expected to violate any
Environmental Law. Hazardous Materials have not at any time been Released on or
from any Real Property owned or operated by the Borrower or any of its
Subsidiaries where such Release has violated or could be expected to violate any
applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section 6.19, the
representations made in this Section 6.19 shall not be untrue unless the
aggregate effect of all violations, claims, restrictions, failures and
noncompliances of the types described above could
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reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
6.20 Labor Relations. Neither the Borrower nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a material adverse effect on the Borrower or on the Borrower and its
Subsidiaries taken as a whole. There is (i) no unfair labor practice complaint
pending against the Borrower or any of its Subsidiaries or threatened against
any of them before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against the Borrower or any of its Subsidiaries or threatened
against the Borrower or any of its Subsidiaries and (iii) no union
representation question exists with respect to the employees of the Borrower or
any of its Subsidiaries, except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either individually or in the aggregate) such as could
not reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
6.21 Patents, Licenses, Franchises and Formulas. Each of the Borrower
and each of its Subsidiaries owns all the patents, trademarks, permits, service
marks, trade names, copyrights, licenses (including, but not limited to, gaming
and alcohol licenses), franchises, proprietary information (including but not
limited to rights in computer programs and databases) and formulas, or rights
with respect to the foregoing, and has obtained assignments of all leases and
other rights of whatever nature, necessary for the present conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, could reasonably be expected to
result in a material adverse effect on the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
6.22 Licenses. (a) The Penn National Licenses and the Plains Company
Licenses are in full force and effect, have not been subject to any suspension
at any time within the last five years and there are no grounds to suspend or
revoke any of such Licenses, nor has any notice been received with respect to
such Licenses at any time within the last five years from the Pennsylvania Horse
Racing Commission or the Pennsylvania Harness Racing Commission that the
Pennsylvania Horse Racing Commission or the Pennsylvania Harness Racing
Commission believes there are grounds for suspending or revoking any of such
Licenses or indicating that any inquiry is or may be conducted with respect to
any such suspension or revocation or the fitness of any shareholder of the
Borrower or any of its Subsidiaries to hold any capital stock therein.
(b) The Charles Town Licenses are in full force and effect, have not
been subject to any suspension at any time and there are no grounds to suspend
or revoke any of such Licenses, nor has any notice been received with respect to
such Licenses from the West Virginia
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Racing Commission or the West Virginia Lottery Commission that the West Virginia
Racing Commission or the West Virginia Lottery Commission believes there are
grounds for suspending or revoking any of such Licenses or indicating that any
inquiry is or may be conducted with respect to any such suspension or revocation
or the fitness of any shareholder of the Borrower or any of its Subsidiaries to
hold any capital stock or other equity interest therein.
6.23 Indebtedness. Schedule VI sets forth a true and complete list of
all Indebtedness (including Contingent Obligations) of the Borrower and its
Subsidiaries as of the Restatement Effective Date and which is to remain
outstanding after giving effect to the Transaction (excluding the Senior Notes,
the Loans and the Letters of Credit, the "Existing Indebtedness"), in each case
showing the aggregate principal amount thereof and the name of the respective
borrower and any Credit Party or any of its Subsidiaries which directly or
indirectly guarantees such debt.
6.24 Issuance of the Senior Notes. At the time of the issuance thereof,
the Senior Notes shall have been issued in accordance with the terms of the
Senior Note Documents and all applicable laws. At the time of the issuance
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to issue the Senior Notes have been (or
will, within the time frame required, be) obtained, given, filed or taken and
are or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained). Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the issuance of the Senior Notes or the performance by the
Borrower or any of its Subsidiaries of their obligations under the Senior Note
Documents. All actions taken by the Borrower or any of its Subsidiaries pursuant
to or in furtherance of the issuance of Senior Notes have been taken in
compliance with the Senior Note Documents and all applicable laws.
Section 7. Affirmative Covenants. The Borrower hereby covenants and
agrees that on and after the Restatement Effective Date and until the Total
Commitment and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to each Bank:
(a) Monthly Reports. Within 30 days after the end of each fiscal month
of the Borrower, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal month and the related consolidated
statements of income and retained earnings and statement of cash flows for such
fiscal month and for the elapsed portion of the fiscal year ended with the last
day of such fiscal month, in each case setting forth comparative figures for the
corresponding fiscal month in the prior fiscal year and comparable budgeted
figures for such fiscal month.
(b) Quarterly Financial Statements. Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated and
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consolidating balance sheets of the Borrower and its Subsidiaries as at the end
of such quarterly accounting period and the related consolidated and
consolidating statements of income and retained earnings and statement of cash
flows for such quarterly accounting period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly accounting period, in each
case setting forth comparative figures for the related periods in the prior
fiscal year, all of which shall be certified by the Chief Financial Officer of
the Borrower, subject to normal year-end audit adjustments and (ii) management's
discussion and analysis of the important operational and financial developments
during the quarterly and year-to-date periods.
(c) Annual Financial Statements. Within 90 days after the close of each
fiscal year of the Borrower, (i) the consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as at the end of such fiscal year
and the related consolidated and consolidating statements of income and retained
earnings and of cash flows for such fiscal year setting forth comparative
figures for the preceding fiscal year and certified (x) in the case of the
consolidated financial statements, by BDO Seidman, LLP or such other independent
certified public accountants of recognized national standing reasonably
acceptable to the Agent, together with a report of such accounting firm stating
that in the course of its regular audit of the financial statements of the
Borrower and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Default or an Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or Event
of Default has occurred and is continuing, a statement as to the nature thereof
and (y) in the case of the consolidating financial statements, by the Chief
Financial Officer of the Borrower and (ii) management's discussion and analysis
of the important operational and financial developments during the respective
fiscal year.
(d) Management Letters. Promptly after the Borrower's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its certified public accountants and management's response thereto.
(e) Budgets and Projections. No later than thirty days following the
first day of each fiscal year of the Borrower, a budget in form satisfactory to
the Agent (including budgeted statements of income and sources and uses of cash
and balance sheets) prepared by the Borrower for each of the months of such
fiscal year prepared in detail.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01(b) and (c), a certificate of
the Chief Financial Officer of the Borrower to the effect that, to the best of
such officer's knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which certificate shall
(x) set forth in reasonable detail the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the provisions
of Sections 3.03(d), 3.03(e), 8.04, 8.05 and 8.07 through 8.11, inclusive, at
the end of such fiscal quarter or year, as the case may be.
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(g) Notice of Default or Litigation. Promptly upon, and in any event
within three Business Days after, an officer of any Credit Party obtains
knowledge thereof, notice of (i) the occurrence of any event which constitutes a
Default or an Event of Default and (ii) any litigation or governmental
investigation or proceeding pending (x) against the Borrower or any of its
Subsidiaries which could reasonably be expected to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole, (y) with respect to any material Indebtedness of the Borrower or any
of its Subsidiaries or (z) with respect to the Transaction or any Document.
(h) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports, if
any, which the Borrower or any of its Subsidiaries shall publicly file with the
Securities and Exchange Commission or any successor thereto (the "SEC") or
deliver to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor).
(i) Environmental Matters. Promptly after an officer of any Credit
Party obtains knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters could not, individually
or when aggregated with all other such environmental matters, be reasonably
expected to materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against the Borrower
or any of its Subsidiaries or any Real Property owned or operated by the
Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property
owned or operated by the Borrower or any of its Subsidiaries that (a)
results in noncompliance by the Borrower or any of its Subsidiaries with any
applicable Environmental Law or (b) could be expected to form the basis of
an Environmental Claim against the Borrower or any of its Subsidiaries or
any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that could be expected
to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by the Borrower or any of its
Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by the Borrower or any of its Subsidiaries as required by
any Environmental Law or any governmental or other administrative agency;
provided, that in any event the Borrower shall deliver to each Bank all
notices received by the Borrower or any of its Subsidiaries
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from any government or governmental agency under, or pursuant to, CERCLA
which identify the Borrower or any of its Subsidiaries as potentially
responsible parties for remediation costs or which otherwise notify the
Borrower or any of its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response thereto.
(j) Regulatory Matters. Promptly after (i) the Borrower or any of its
Subsidiaries receives any correspondence or other written communication from any
Commission (other than correspondence relating to routine operating matters of
the Borrower or any of its Subsidiaries in the ordinary course of business) or
(ii) the Borrower or any of its Subsidiaries delivers any correspondence or
other written communication to any Commission (other than correspondence
relating to routine operating matters of the Borrower or any of its
Subsidiaries), the Borrower shall deliver copies of any such correspondence or
other written communication to each of the Banks.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Agent or any Bank may reasonably request.
7.02 Books, Records and Inspections; Annual Meeting with Banks. (a) The
Borrower will, and will cause each of its Subsidiaries to, keep proper books of
record and accounts in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Agent or any Bank to visit
and inspect, under guidance of officers of the Borrower or such Subsidiary, any
of the properties of the Borrower or such Subsidiary, and to examine the books
of account of the Borrower or such Subsidiary and discuss the affairs, finances
and accounts of the Borrower or such Subsidiary with, and be advised as to the
same by, its and their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the Agent or
such Bank may reasonably request.
(b) At a date to be mutually agreed upon between the Agent and the
Borrower occurring on or prior to the 120th day after the close of each fiscal
year of the Borrower, the Borrower will hold a meeting with all of the Banks at
which meeting shall be reviewed the financial results of the previous fiscal
year and the financial condition of the Borrower and its Subsidiaries and the
budgets presented for the current fiscal year of the Borrower.
7.03 Maintenance of Property; Insurance. (a) Schedule VII sets forth a
true and complete listing of all insurance maintained by the Borrower and its
Subsidiaries as of the Restatement Effective Date. The Borrower will, and will
cause each of its Subsidiaries to, (i)
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keep all property necessary to the business of the Borrower and its Subsidiaries
in reasonably good working order and condition, ordinary wear and tear excepted,
(ii) maintain insurance on all such property in at least such amounts and
against at least such risks as is consistent and in accordance with industry
practice for companies similarly situated owning similar properties in the same
general areas in which the Borrower or any of its Subsidiaries operates, and
(iii) furnish to the Agent or any Bank, upon written request, full information
as to the insurance carried. At any time that insurance at levels described on
Schedule VII is not being maintained by the Borrower or any Subsidiary of the
Borrower, the Borrower will, or will cause one of its Subsidiaries to, promptly
notify the Agent in writing and, if thereafter notified by the Agent or the
Required Banks to do so, the Borrower or any such Subsidiary, as the case may
be, shall obtain such insurance at such levels and coverage which are at least
as great as to the extent such insurance is reasonably available.
(b) The Borrower will, and will cause each of the other Credit Parties
to, at all times keep its property insured in favor of the Collateral Agent, and
all policies (including Mortgage Policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by
the Borrower and/or such other Credit Parties) (i) shall be endorsed to the
Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss payee
and/or additional insured), (ii) shall state that such insurance policies shall
not be cancelled without at least 30 days' prior written notice thereof by the
respective insurer to the Collateral Agent (or such shorter period of time as a
particular insurance company policy generally provides), (iii) shall provide
that the respective insurers irrevocably waive any and all rights of subrogation
with respect to the Collateral Agent and the Secured Creditors, (iv) shall
contain the standard non-contributing mortgage clause endorsement in favor of
the Collateral Agent with respect to hazard liability insurance, (v) shall,
except in the case of public liability insurance, provide that any losses shall
be payable notwithstanding (A) any act or neglect of the Borrower or any such
other Credit Party, (B) the occupation or use of the properties for purposes
more hazardous than those permitted by the terms of the respective policy if
such coverage is obtainable at commercially reasonable rates and is of the kind
from time to time customarily insured against by Persons owning or using similar
property and in such amounts as are customary, (C) any foreclosure or other
proceeding relating to the insured properties or (D) any change in the title to
or ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to insure its
property in accordance with this Section 7.03, or if the Borrower or any of its
Subsidiaries shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Collateral Agent shall have the right (but shall be
under no obligation) to procure such insurance and the Borrower agrees to
reimburse the Collateral Agent for all costs and expenses of procuring such
insurance.
7.04 Corporate Franchises. The Borrower will, and will cause each of
its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, licenses and patents; provided, however, that nothing in this
Section 7.04 shall prevent (i) sales of assets and other transactions by the
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Borrower or any of its Subsidiaries in accordance with Section 8.02 or (ii) the
withdrawal by the Borrower or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
7.05 Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole.
7.06 Compliance with Environmental Laws. (a) The Borrower will comply,
and will cause each of its Subsidiaries to comply, in all material respects with
all Environmental Laws applicable to the ownership or use of its Real Property
now or hereafter owned or operated by the Borrower or any of its Subsidiaries,
will promptly pay or cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental
Laws. Neither the Borrower nor any of its Subsidiaries will generate, use,
treat, store, release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of Hazardous Materials on any Real Property now or
hereafter owned or operated by the Borrower or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except for Hazardous Materials generated, used, treated,
stored, released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and reasonably required
in connection with the operation, use and maintenance of the business or
operations of the Borrower or any of its Subsidiaries.
(b) At the written request of the Agent or the Required Banks and based
upon a reasonable concern as to the continued veracity and completeness of any
of the representations and warranties set forth in Section 6.19, compliance with
Section 7.06(a) or upon receipt of any notice given under Section 7.01(i), which
request shall specify in reasonable detail the basis therefor, at any time and
from time to time, the Borrower will provide, at the sole expense of the
Borrower, an environmental site assessment report concerning any Real Property
owned or operated by the Borrower or any of its Subsidiaries, prepared by an
environmental consulting firm reasonably approved by the Agent, indicating the
presence or absence of Hazardous Materials and the potential cost of any removal
or remedial action in connection with such Hazardous Materials on such Real
Property. If the Borrower fails to provide the same within ninety days after
such request was made, the Agent may order the same, the cost of which shall be
borne by the Borrower, and the Borrower shall grant and hereby grants to the
Agent and the Banks and their agents access to such Real Property and
specifically grants the Agent and the Banks an irrevocable non-exclusive
license, subject to the rights of tenants, to undertake such an
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assessment at any reasonable time upon reasonable notice to the Borrower, all
at the sole and reasonable expense of the Borrower.
7.07 ERISA. As soon as possible and, in any event, within ten (10) days
after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Borrower
will deliver to each of the Banks a certificate of the Chief Financial Officer
of the Borrower setting forth the full details as to such occurrence and the
action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Borrower, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency, within the meaning of Section 412 of the Code or Section 302 of
ERISA, has been incurred or an application may be or has been made for a waiver
or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan; that any
contribution required to be made with respect to a Plan or Foreign Pension Plan
has not been timely made; that a Plan has been or may be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan has an Unfunded Current Liability; that proceedings may be or have been
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or may
incur any liability (including any indirect, contingent, or secondary liability)
to or on account of the termination of or withdrawal from a Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan
under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or
502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B
of the Code; or that the Borrower or any Subsidiary of the Borrower may incur
any material liability pursuant to any employee welfare benefit plan (as defined
in Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan
[or any Foreign Pension Plan]. The Borrower will deliver to each of the Banks a
complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service. In addition to any certificates or notices delivered
to the Banks pursuant to the first sentence hereof, copies of annual reports and
any material notices received by the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate with respect to any Plan or Foreign Pension Plan shall be
delivered to the Banks no later than ten (10) days after the date such report
has been filed with the Internal Revenue Service or such notice has been
received by the Borrower, the Subsidiary or the ERISA Affiliate, as applicable.
7.08 End of Fiscal Years; Fiscal Quarters. The Borrower will cause (i)
each of its, and each of its Subsidiaries', fiscal years to end on December 31,
and (ii) each of its, and each
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of its Subsidiaries', fiscal quarters to end on March 31, June 30, September 30
and December 31, provided that with respect to any Subsidiary acquired after the
Restatement Effective Date in accordance with (and to the extent permitted by)
this Agreement which has a different fiscal year end or fiscal quarter end from
those set forth above, the Borrower shall change such Subsidiary's fiscal year
end and/or fiscal quarter end to the dates set forth above within 60 days after
the date of such acquisition..
7.09 Performance of Obligations. The Borrower will, and will cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement, loan agreement or credit agreement and
each other material agreement, contract or instrument by which it is bound,
except such non-performances as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
7.10 Payment of Taxes. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for sums that have become
due and payable which, if unpaid, might become a Lien not otherwise permitted
under Section 8.01(i); provided, that neither the Borrower nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with generally
accepted accounting principles.
7.11 Additional Security; Further Assurances. (a) The Borrower will,
and will cause each of the Subsidiary Guarantors to, grant to the Collateral
Agent security interests and mortgages in such assets and properties of the
Borrower and such Subsidiary Guarantors as are not covered by the original
Security Documents, and as may be requested from time to time by the Agent or
the Required Banks (collectively, the "Additional Security Documents"). All such
security interests and mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Agent and shall constitute
valid and enforceable perfected security interests and mortgages superior to and
prior to the rights of all third Persons and subject to no other Liens except
for Permitted Liens. The Additional Security Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall have been paid in full.
(b) The Borrower will, and will cause each of the Subsidiary Guarantors
to, at the expense of the Borrower, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
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further steps relating to the collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, the
Borrower will cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be reasonably
requested by the Agent to assure itself that this Section 7.11 has been complied
with.
(c) The Borrower agrees that each action required above by
this Section 7.11 shall be completed as soon as possible, but in no event later
than 90 days after such action is either requested to be taken by the Agent or
the Required Banks or required to be taken by the Borrower and the Subsidiary
Guarantors pursuant to the terms of this Section 7.11; provided that in no event
will the Borrower be required to take any action, other than using its best
efforts, to obtain consents from third parties with respect to its compliance
with this Section 7.11.
Section 8. Negative Covenants. The Borrower hereby covenants and agrees
that on and after the Restatement Effective Date and until the Total Commitment
and all Letters of Credit have terminated and the Loans, Notes and Unpaid
Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
8.01 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute; provided that the provisions of this
Section 8.01 shall not prevent the creation, incurrence, assumption or existence
of the following (Liens described below are herein referred to as "Permitted
Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
(ii) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, which were incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Borrower's or
such Subsidiary's property or assets or materially impair the use thereof in
the operation of the business of the Borrower or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
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(iii) Liens in existence on the Restatement Effective Date which are
listed, and the property subject thereto described, in Schedule VIII, but
only to the respective date, if any, set forth in such Schedule VIII for the
removal, replacement and termination of any such Liens, plus renewals,
replacements and extensions of such Liens to the extent set forth on
Schedule VIII, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal, replacement or extension
and (y) any such renewal, replacement or extension does not encumber any
additional assets or properties of the Borrower or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Borrower or any of its
Subsidiaries;
(vii) Liens upon assets of the Borrower or any of its Subsidiaries
subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 8.04(iv), provided that (x) such
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and (y) the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other asset
of the Borrower or any Subsidiary of the Borrower;
(viii) Liens placed upon equipment or machinery used in the ordinary
course of business of the Borrower or any of its Subsidiaries at the time of
the acquisition thereof by the Borrower or any such Subsidiary or within 90
days thereafter to secure Indebtedness incurred to pay all or a portion of
the purchase price thereof or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of any such equipment or machinery or
extensions, renewals or replacements of any of the foregoing for the same or
a lesser amount, provided that (x) the aggregate outstanding principal
amount of all Indebtedness secured by Liens permitted by this clause (viii)
shall not at any time exceed $250,000 and (y) in all events, the Lien
encumbering the equipment or machinery so acquired does not encumber any
other asset of the Borrower or such Subsidiary;
(ix) Liens placed upon video lottery terminals used at the Charles Town
Race Track (the "Charles Town Video Lottery Terminals") at the time of the
acquisition of such video lottery terminals by the Charles Town Joint
Venture or within 90 days thereafter to secure Indebtedness incurred to pay
all or at least 85% of the purchase price thereof or to secure Indebtedness
incurred solely for the purpose of financing the acquisition of any such
video lottery terminals or extensions, renewals or replacements of any such
video lottery terminals for the same or a lesser amount, provided that (v)
the Liens contemplated by this clause (ix) shall only be permitted after the
termination of the
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GTECH Contract, (w) the aggregate outstanding principal amount of all
Indebtedness secured by Liens permitted by this clause (ix) shall not at any
time exceed $11,000,000, (x) the only recourse in respect of such
Indebtedness shall be against the Charles Town Video Lottery Terminals so
financed and not against the Charles Town Joint Venture, the Borrower or any
other Subsidiary of the Borrower, (y) in all events, the Lien encumbering
the Charles Town Video Lottery Terminals so acquired does not encumber any
other asset of the Charles Town Joint Venture or any assets of the Borrower
or any other Subsidiary of the Borrower and (z) prior to the entering into
of any such financing arrangements, the documentation with respect thereto
shall have been delivered to the Banks and shall be in form and substance
reasonably satisfactory to the Required Banks;
(x) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case
not securing Indebtedness and not materially interfering with the conduct of
the business of the Borrower or any of its Subsidiaries;
(xi) Liens arising from precautionary UCC financing statement filings
regarding operating leases permitted under Section 8.07;
(xii) Liens arising out of the existence of judgments or awards in
respect of which the Borrower or any of its Subsidiaries shall in good faith
be prosecuting an appeal or proceedings for review in respect of which there
shall have been secured a subsisting stay of execution pending such appeal
or proceedings, provided that the aggregate amount of any cash and the fair
market value of any property subject to such Liens do not exceed $100,000 at
any time outstanding;
(xiii) statutory and common law landlords' liens under leases to which
the Borrower or any of its Subsidiaries is a party; and
(xiv) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance and social security benefits and Liens securing the
performance of bids, tenders, leases and contracts in the ordinary course of
business, statutory obligations, surety bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money),
provided that the aggregate outstanding amount of obligations secured by
Liens permitted by this clause (xiv) (and the value of all cash and property
encumbered by Liens permitted pursuant to this clause (xiv)) shall not at
any time exceed $250,000.
In connection with the granting of Liens of the type described in clauses (vii),
(viii) and (ix) of this Section 8.01 by the Borrower or any of its Subsidiaries,
the Agent and the Collateral Agent shall be authorized to take any actions
deemed appropriate by it in connection therewith (including, without limitation,
by executing appropriate lien releases or lien subordination
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agreements in favor of the holder or holders of such Liens, in each case solely
with respect to the item or items of equipment or other assets subject to
such Liens.
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall be
permitted to the extent not in violation of Section 8.08;
(ii) each of the Borrower and its Subsidiaries may sell assets (other
than the capital stock of any Subsidiary Guarantor, the equity interest in
the Charles Town Joint Venture, any Mortgaged Property or the Charles Town
Race Track), so long as (x) no Default or Event of Default then exists or
would result therefrom, (y) each such sale is in an arm's-length transaction
and the Borrower or the respective Subsidiary receives at least fair market
value (as determined in good faith by the Borrower or such Subsidiary, as
the case may be), (iii) at least 85% of the total consideration received by
the Borrower or such Subsidiary is cash and is paid at the time of the
closing of such sale, (iv) the Total Commitment is reduced in an amount
equal to the Net Sale Proceeds therefrom as (and to the extent) required by
Section 3.03(d) and (v) the aggregate amount of the proceeds received from
all assets sold pursuant to this clause (ii) shall not exceed $3,000,000 in
any fiscal year of the Borrower;
(iii) Investments may be made to the extent permitted by Section 8.05;
(iv) each of the Borrower and its Subsidiaries may lease (as lessee)
real or personal property (so long as any such lease does not create a
Capitalized Lease Obligation except to the extent permitted by Section
8.04(iv));
(v) each of the Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(vi) each of the Borrower and its Subsidiaries may sell obsolete or
worn-out equipment or materials in the ordinary course of business;
(vii) each of the Borrower and its Subsidiaries may grant leases or
subleases to other Persons not materially interfering with the conduct of
the business of the Borrower or any of its Subsidiaries;
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(viii) each of the Borrower and its Subsidiaries may, in the ordinary
course of business, license, as licensor or licensee, patents, trademarks,
copyrights and know-how to and/or from third Persons and to and/or from one
another so long as any such license by the Borrower or any other Credit
Party in its capacity as licensor is permitted to be assigned pursuant to
the Security Agreement (to the extent that the security interest in such
patents, trademarks, copyrights and know-how is granted thereunder) and does
not otherwise prohibit the granting of a Lien by the Borrower or any other
Credit Party pursuant to the Security Agreement in the intellectual property
covered by such license; and
(ix) so long as no Default or Event of Default then exists, any
Wholly-Owned Subsidiary of the Borrower may merge with and into any other
Wholly-Owned Subsidiary of the Borrower, so long as in the case of any
merger involving a Subsidiary Guarantor, the Subsidiary Guarantor shall be
the surviving corporation of such merger.
To the extent the Required Banks waive the provisions of this Section 8.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 8.02 (other than to the Borrower or a Subsidiary thereof), such
Collateral shall be sold free and clear of the Liens created by the Security
Documents, and the Agent and the Collateral Agent shall be authorized to take
any actions deemed appropriate in order to effect the foregoing.
8.03 Dividends. The Borrower will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay cash Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower;
(ii) so long as no Default or Event of Default then exists or would
result therefrom, any non-Wholly-Owned Subsidiary of the Borrower may pay
cash Dividends to its shareholders or partners generally so long as the
Borrower or its respective Subsidiary which owns the equity interest or
interests in the Subsidiary paying such Dividends receives at least its
proportionate share thereof (based upon its relative holdings of equity
interests in the Subsidiary paying such Dividends and taking into account
the relative preferences, if any, of the various classes of equity interests
in such Subsidiary, including the preferences in favor of the Borrower in
respect of Dividends paid by the Charles Town Joint Venture); and
(iii) so long as there shall exist no Default or Event of Default (both
before and after giving effect to the payment thereof), the Borrower may
repurchase outstanding shares of its common stock (or options to purchase
such common stock) following the death, disability or termination of
employment of employees of the Borrower or any of its Subsidiaries, provided
that the aggregate amount of Dividends paid by the Borrower pursuant to this
clause (iii) shall not exceed $50,000 in any fiscal year of the Borrower.
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8.04 Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Existing Indebtedness outstanding on the Restatement Effective
Date and listed on Schedule VI, without giving effect to any subsequent
extension, renewal or refinancing thereof except to the extent set forth on
Schedule VI, provided that the aggregate principal amount of the
Indebtedness to be extended, renewed or refinanced does not increase from
that amount outstanding at the time of any such extension, renewal or
refinancing;
(iii) Indebtedness under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Section 8.04 so
long as all of the terms and conditions of such Interest Rate Protection
Agreements are satisfactory to the Agent;
(iv) Indebtedness of the Borrower and its Subsidiaries evidenced by
Capitalized Lease Obligations to the extent permitted pursuant to Section
8.08, provided that in no event shall the aggregate principal amount of
Capitalized Lease Obligations permitted by this clause (iv) exceed $100,000
at any time outstanding;
(v) Indebtedness subject to Liens permitted under Sections 8.01(viii)
and (ix);
(vi) intercompany Indebtedness among the Borrower and its Subsidiaries
to the extent permitted by Section 8.05(vii) and (ix);
(vii) Indebtedness of the Borrower and the Subsidiary Guarantors under
the Senior Note Documents in an aggregate principal amount not to exceed
$80,000,000 (as reduced by any repayments of principal thereof); and
(viii) additional unsecured Indebtedness of the Borrower and its
Subsidiaries not to exceed $100,000 in aggregate principal amount at any
time outstanding.
Notwithstanding anything to the contrary contained in this Section 8.04
or in Section 8.01, until such time as the Charles Town Joint Venture is a
Wholly-Owned Subsidiary of the Borrower, the only Indebtedness that the Charles
Town Joint Venture shall be permitted to incur is under clause (i) above, clause
(ii) above (but no refinancings thereof), clause (iv) above, clause (v) above
(but only in respect of Liens permitted under Section 8.01(ix)) and clause (vi)
above.
8.05 Advances, Investments and Loans. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
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otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms of the Borrower or such Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) the Borrower and its Subsidiaries may hold the Investments held
by them on the Restatement Effective Date and described on Schedule IX
(excluding any Investments previously made in the Charles Town Joint
Venture), provided that any additional Investments made with respect thereto
shall be permitted only if independently justified under the other
provisions of this Section 8.05;
(iv) the Borrower and its Subsidiaries may receive non-cash
consideration in connection with any asset sale permitted by Section
8.02(ii) but only to the extent set forth in Section 8.02(ii);
(v) the Borrower and its Subsidiaries may make loans and advances in
the ordinary course of business to their respective employees so long as the
aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and advances)
shall not exceed $100,000;
(vi) the Borrower may enter into Interest Protection Agreements to the
extent permitted by Section 8.04(iii);
(vii) the Borrower and the Subsidiary Guarantors may make intercompany
loans and advances between or among one another (collectively, "Intercompany
Loans"), so long as each Intercompany Loan shall be evidenced by an
Intercompany Note that is pledged to the Collateral Agent pursuant to the
Pledge Agreement;
(viii) the Borrower and its Subsidiaries may make cash capital
contributions to Subsidiaries of the Borrower which are Subsidiary
Guarantors; and
(ix) the Borrower and its Subsidiaries may make cash equity
contributions and/or Intercompany Loans to the Charles Town Joint Venture in
an aggregate amount not to exceed $47,100,000 (which amount includes any
such cash equity contributions and/or Intercompany Loans made prior to
Restatement Effective Date, including $18,100,000 of Intercompany Loans
originally made to finance the Charles Town acquisition and to pay related
fees and expenses) to fund the Capital Expenditures
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permitted by Section 8.08(d) so long as, in the case of any such
Intercompany Loans, same are evidenced by an Intercompany Note that is
pledged to the Collateral Agent pursuant to the Pledge Agreement.
8.06 Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any of its Subsidiaries, other than in the
ordinary course of business and on terms and conditions substantially as
favorable to the Borrower or such Subsidiary as would reasonably be obtained by
the Borrower or such Subsidiary at that time in a comparable arm's-length
transaction with a Person other than an Affiliate, except that the following in
any event shall be permitted:
(i) Dividends may be paid to the extent provided in Section 8.03;
(ii) loans may be made and other transactions may be entered into by
the Borrower and its Subsidiaries to the extent permitted by Sections 8.02,
8.04 and 8.05;
(iii) customary fees may be paid to non-officer directors of the
Borrower and its Subsidiaries; and
(iv) Subsidiaries of the Borrower may pay management fees to the
Borrower.
8.07 Leases. The Borrower will not permit the aggregate payments
(including, without limitation, any property taxes paid as additional rent or
lease payments) made by the Borrower and its Subsidiaries on a consolidated
basis under any agreement to rent or lease any real or personal property (or any
extension or renewal thereof) (excluding Capitalized Lease Obligations) to
exceed for any fiscal year set forth below the amount set forth opposite such
fiscal year below:
Fiscal Year Ending Amount
------------------ ----------
December 31, 1997 $1,300,000
December 31, 1998 $1,400,000
December 31, 1999 $1,400,000
December 31, 2000 $1,400,000
December 31, 2001 $1,400,000
December 31, 2002 $1,400,000
8.08 Capital Expenditures. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
(x) during the period from the Restatement Effective Date through and including
December 31, 1998 the Borrower and its Subsidiaries may make Capital
Expenditures in an aggregate amount not to exceed $10,300,000 (it being
understood and agreed that no part of such $10,300,000 may be used to make
Capital Expenditures to refurbish the Charles Town Race Track or purchase and/or
develop the Tennessee Downs race track or related facilities although up to
$1,000,000 of such $10,300,000 may be used to refurbish the Charles Town
Racetrack) and (y) during any fiscal year of the
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Borrower set forth below (taken as one accounting period), the Borrower and its
Subsidiaries may make Capital Expenditures so long as the aggregate amount of
all such Capital Expenditures does not exceed in any fiscal year of the Borrower
set forth below the amount set forth opposite such fiscal year below:
Fiscal Year Ending Amount
------------------ ----------
December 31, 1999 $2,000,000
December 31, 2000 $2,000,000
December 31, 2001 $2,000,000
December 31, 2002 $2,000,000
(b) In addition to the foregoing, the Borrower and its Subsidiaries may
make Capital Expenditures with the amount of Net Insurance Proceeds received by
the Borrower or any of its Subsidiaries from any Recovery Event so long as such
Net Insurance Proceeds are used to replace or restore any properties or assets
in respect of which such Net Insurance Proceeds were paid within 270 days
following the date of receipt of such Net Insurance Proceeds from such Recovery
Event to the extent such Net Insurance Proceeds do not give rise to a reduction
in the Total Commitment pursuant to Section 3.03(e).
(c) In addition to the foregoing, the Charles Town Joint Venture may
make up to $29,000,000 of Capital Expenditures (including, for this purpose, any
such Capital Expenditures made prior to the Restatement Effective Date) to
refurbish the Charles Town Race Track.
(d) In addition to the foregoing, after the termination of the GTECH
Agreement and to the extent that the Charles Town Video Lottery Terminals are
not leased by the Charles Town Joint Venture, the Charles Town Joint Venture may
make Capital Expenditures to purchase the Charles Town Video Lottery Terminals
so long as at least 85% of the purchase price for such Charles Town Video
Lottery Terminals are financed under Section 8.01(ix).
(e) From and after such time as Tennessee Downs obtains all necessary
licenses, permits and approvals to conduct harness racing in the State of
Tennessee, Tennessee Downs may make up to $15,500,000 of Capital Expenditures to
purchase and/or develop a harness race track and related facilities in the State
of Tennessee.
8.09 Minimum Consolidated Net Worth. The Borrower will not permit
Consolidated Net Worth at any time to be less than the Minimum Consolidated Net
Worth at such time.
8.10 Consolidated Cash Interest Coverage Ratio. The Borrower will not
permit the Consolidated Cash Interest Coverage Ratio of the Borrower for any
Test Period ending on the last day of a fiscal quarter set forth below to be
less than the ratio set forth opposite such fiscal quarter below:
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Fiscal Quarter Ending Ratio
--------------------- ---------
December 31, 1997 4.00:1.00
March 31, 1998 3.00:1.00
June 30, 1998 2.50:1.00
September 30, 1998 2.50:1.00
December 31, 1998 2.50:1.00
March 31, 1999 2.50:1.00
June 30, 1999 2.50:1.00
September 30, 1999 2.50:1.00
December 31, 1999
and the last day of each
fiscal quarter thereafter 3.00:1.00
8.11 Maximum Leverage Ratio. The Borrower will not permit the Leverage
Ratio of the Borrower at any time during a period set forth below to be greater
than the ratio set forth opposite such period below:
Period Ratio
------ ---------
Restatement Effective Date through and including
December 30, 1998 4.80:1.00
December 31, 1998 through and including
December 30, 1999 3.75:1.00
December 31, 1999 and thereafter 3.00:1.00
8.12 Limitation on Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. The Borrower will not, and will not
permit any of its Subsidiaries to, (i) amend, modify or change its certificate
of incorporation (including, without limitation, by the filing or modification
of any certificate of designation) or by-laws (or the equivalent organizational
documents) or any agreement entered into by it with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new agreement with
respect to its capital stock, other than any such amendment, modification,
change or other action contemplated by this clause (i) which could not
reasonably be expected to be adverse to the interests of the Banks in any
material respect, (ii) amend, modify or change the Charles Town Joint Venture
Agreement, other than any such amendment, modification or change which could not
reasonably be expected to be adverse to the interests of the Banks in any
material respect (it being understood and agreed, however, that in any event the
Borrower or a Wholly-Owned Subsidiary thereof shall at all times be the managing
member of the Charles Town Joint Venture and shall own at least 89% of the
equity interest therein), (iii) amend, modify or change the GTECH Contract,
other than any such amendment, modification or change which could not reasonably
be expected to be adverse to the interests of the Banks in any material respect
or (iv) amend, modify or change any provision of any Tax Sharing Agreement or
enter into any new tax sharing agreement, tax allocation agreement or similar
agreements, other than any such
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amendment, modification, change or other action contemplated by this clause
(iii) which could not reasonably be expected to adversely effect the interests
of the Banks in any material respect.
8.13 Limitation on Certain Restrictions on Subsidiaries. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or any Subsidiary
of the Borrower, (b) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (c) transfer any of its properties or assets to the Borrower or
any Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or any
Subsidiary of the Borrower, (iv) customary provisions restricting assignment of
any licensing agreement entered into by the Borrower or any Subsidiary of the
Borrower in the ordinary course of business and (v) restrictions on the transfer
of any asset subject to a Lien permitted by this Agreement.
8.14 Limitation on Issuance of Capital Stock. (a) The Borrower will
not, and will not permit any of its Subsidiaries to, issue (i) any preferred
stock or (ii) any redeemable common stock (other than common stock that is
redeemable at the sole option of the Borrower).
(b) The Borrower will not permit any of its Subsidiaries to
issue any capital stock (including by way of sales of treasury stock) or any
options or warrants to purchase, or securities convertible into, capital stock,
except (i) for transfers and replacements of then outstanding shares of capital
stock, (ii) for stock splits, stock dividends and issuances which do not
decrease the percentage ownership of the Borrower or any of its Subsidiaries in
any class of the capital stock of such Subsidiary, (iii) to qualify directors to
the extent required by applicable law or (iv) for issuances by newly created or
acquired Subsidiaries in accordance with the terms of this Agreement.
8.15 Business. The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than the
businesses in which the Borrower and its Subsidiaries are engaged on the
Restatement Effective Date and reasonable extensions thereof, it being
understood and agreed that, except as provided below, in no event shall the
Borrower or any of its Subsidiaries engage in any business or enter into any
agreement which requires the Borrower or any of its Subsidiaries to make any
payments under Section 4 of the Plains Company Acquisition Agreement; provided,
however, the Borrower and its Subsidiaries may operate slot machines at the Penn
National Race Track, the Pocono Downs Race Track and at any Non-Primary Location
operated by the Borrower and its Subsidiaries and may make the required payments
pursuant to Section 4 of the Plains Company Acquisition Agreement in connection
therewith.
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8.16 Limitation on Creation of Subsidiaries. Notwithstanding anything
to the contrary contained in this Agreement, the Borrower will not, and will not
permit any of its Subsidiaries to, establish, create or acquire after the
Restatement Effective Date any Subsidiary, provided that the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish or create Wholly-Owned
Subsidiaries so long as (i) the capital stock of such new Wholly-Owned
Subsidiary is pledged pursuant to, and to the extent required by, the Pledge
Agreement and the certificates representing such stock, together with stock
powers duly executed in blank, are delivered to the Collateral Agent for the
benefit of the Secured Creditors, (ii) the partnership interests or limited
liability company interests, as the case may be, of such new Wholly-Owned
Subsidiary (to the extent that same is a partnership or a limited liability
company, as the case may be) are pledged and assigned pursuant to, and to the
extent required by, the Pledge Agreement, (iii) such new Wholly-Owned Subsidiary
executes a counterpart of the Subsidiaries Guaranty, the Pledge Agreement and
the Security Agreement, and (iv) such new Wholly-Owned Subsidiary, to the extent
requested by the Agent or the Required Banks, takes all actions required
pursuant to Section 7.11. In addition, (x) each new Wholly-Owned Subsidiary
shall execute and deliver, or cause to be executed and delivered, all other
relevant documentation of the type described in Section 5 as such new
Wholly-Owned Subsidiary would have had to deliver if such new Wholly-Owned
Subsidiary were a Credit Party on the Restatement Effective Date and (y) at such
time as the Charles Town Joint Venture becomes a Wholly-Owned Subsidiary of the
Borrower, or at such time as the Charles Town Joint Venture Agreement permits
the Charles Town Joint Venture to become a Subsidiary Guarantor hereunder (or
Bryant Development otherwise consents thereto), the Borrower shall cause the
Charles Town Joint Venture (A) to execute a counterpart of the Subsidiaries
Guaranty, the Pledge Agreement and the Security Agreement, (B) to the extent
requested by the Agent or the Required Banks, to take all actions required
pursuant to Section 7.11 and (C) to deliver all of the relevant documentation
described in preceding clause (x) of this sentence.
Section 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when due
of any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any interest on any Loan or Note, any Unpaid Drawing or any Fees or any other
amounts owing hereunder or thereunder; or
9.02 Representations, etc. Any representation, warranty or statement
made (or deemed made) by any Credit Party herein or in any other Credit Document
or in any certificate delivered to the Agent or any Bank pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of which
made or deemed made; or
9.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(g)(i) or 7.08 or Section 8 or (ii) default in the due performance
or observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth
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in Sections 9.01 and 9.02) and such default shall continue unremedied for a
period of 30 days after written notice thereof to the defaulting party by the
Agent or the Required Banks; or
9.04 Default Under Other Agreements. (i) The Borrower or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Notes) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity, or (ii) any Indebtedness (other than the Notes) of the
Borrower or any of its Subsidiaries shall be declared to be (or shall become)
due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof, provided that it
shall not be a Default or an Event of Default under this Section 9.04 unless the
aggregate principal amount of all Indebtedness as described in preceding clauses
(i) and (ii) is at least $500,000; or
9.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries, and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any Plan
which is subject to Title IV of ERISA shall have had or is likely to have a
trustee appointed to administer such Plan, any Plan which is subject to Title IV
of ERISA is,
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shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans [or Foreign Pension Plans]; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole; or
9.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral, in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except Permitted
Liens), and subject to no other Liens (except Permitted Liens); or
9.08 Subsidiaries Guaranty. At any time after the execution and
delivery thereof, the Subsidiaries Guaranty or any provision thereof shall cease
to be in full force or effect as to any Subsidiary Guarantor, or any Subsidiary
Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under the
Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any Subsidiary of the Borrower involving in the
aggregate for the Borrower and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments exceeds $500,000; or
9.10 Change of Control. A Change of Control shall occur; or
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9.11 Licenses. The termination, suspension or revocation of any
License, or the existence of any circumstance, event, matter or condition which
under any Act would permit any Commission to terminate, revoke or suspend any
such License, or any Commission shall require the Borrower or any of its
Subsidiaries to divest any License or its equity interest in any Subsidiary
owning or holding any License; or
9.12 Applications. If in any year the Borrower does not, or does not
cause one of its Subsidiaries to, submit all appropriate applications to the
Pennsylvania Horse Racing Commission and the Pennsylvania Harness Racing
Commission to conduct live horse racing at the Penn National Race Track and the
Pocono Downs Race Track, or to conduct full card simulcasting at any such Track,
in each case in the immediately following calendar year; or if in any year the
Borrower does not, or does not cause one of its Subsidiaries to, submit all
appropriate applications to the West Virginia Racing Commission to conduct live
horse racing at the Charles Town Race Track in the immediately following
calendar year; or if in any year the Borrower does not, or does not cause one of
its Subsidiaries to, submit all appropriate applications to the West Virginia
Lottery Commission for a license to operate at least 1000 video lottery
terminals in the immediately following fiscal year of the license (or such
higher number of video lottery terminals as the Borrower or such Subsidiary may
have previously been granted a license to operate);
9.13 Legality. At any time the conduct of live thoroughbred racing,
live harness racing or full card simulcasting in Pennsylvania cannot legally be
conducted at the Pocono Downs Race Track or the Penn National Race Track or
off-track wagering cannot legally be conducted at the Non-Primary Locations
operated by the holders of the Penn National Licenses or the Plains Company
Licenses, in each case under applicable Pennsylvania or federal law; or the
conduct of live horse racing, televised racing or operation of video lottery
terminals in West Virginia cannot legally be conducted at the Charles Town Race
Track under applicable West Virginia or federal law;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent, upon the written request of the Required
Banks, shall by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Agent, any Bank or the holder of
any Note to enforce its claims against any Credit Party (provided, that, if an
Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon the Commitment of each Bank shall forthwith terminate
immediately and any Commitment Commission shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and any
accrued interest in respect of all Loans and the Notes and all Obligations owing
hereunder and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Credit Party; (iii) terminate any Letter
of Credit which may be terminated in accordance with its terms; (iv) direct the
Borrower to pay (and the Borrower agrees that upon receipt of such notice,
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or upon the occurrence of an Event of Default specified in Section 9.05 with
respect to the Borrower, it will pay) to the Collateral Agent at the Payment
Office such additional amount of cash or Cash Equivalents, to be held as
security by the Collateral Agent, as is equal to the aggregate Stated Amount of
all Letters of Credit issued for the account of the Borrower and then
outstanding; (v) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents and (vi) apply any cash
collateral held by the Borrower pursuant to Section 4.02(a) to the repayment of
the Obligations.
Section 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Act" shall mean (i) the Pennsylvania Horse Race Industry Reform Act,
as amended, (ii) the West Virginia Racetrack Video Lottery Act, as amended, or
(iii) the West Virginia Code ss.19-23-1 et. seq., as amended, as applicable and
including, in each case, any successor thereto.
"Additional Security Documents" shall have the meaning provided in
Section 7.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (2) the then daily net annual assessment rate as
estimated by the Agent for determining the current annual assessment payable by
the Agent to the Federal Deposit Insurance Corporation for insuring three-month
certificates of deposit.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power (i) to vote
5% or more of the securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause the direction of the
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management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" shall mean Bankers Trust Company, in its capacity as Agent for
the Banks hereunder, and shall include any successor to the Agent appointed
pursuant to Section 11.09.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Applicable Commitment Commission Percentage" shall mean, at any time,
a percentage per annum equal to 1/2 of 1%, provided that so long as no Default
or Event of Default shall exist, from and after any Start Date to and including
the corresponding End Date, the Applicable Commitment Commission Percentage
shall be 3/8 of 1% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than
2.00:1.00.
"Applicable Margin" shall mean a percentage per annum equal to (i) in
the case of Base Rate Loans, 2% less the then applicable Interest Reduction
Discount, if any, and (ii) in the case of Eurodollar Loans, 3% less the then
applicable Interest Reduction Discount, if any.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to the Borrower or a Wholly-Owned
Subsidiary of the Borrower of any asset (including, without limitation, any
capital stock or other securities of, or equity interests in, another Person)
other than sales of assets pursuant to Sections 8.02 (v), (vi), (vii) and
(viii).
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"Assumption and Acknowledgment Agreement" shall have the meaning
provided in Section 5.11.
"Bank" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Bank" hereunder pursuant to Section 1.13 or
12.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing or to fund its portion of any unreimbursed payment under Section
2.04(c) or (ii) a Bank having notified in writing the Borrower and/or the Agent
that such Bank does not intend to comply with its obligations under Section 1.01
or 2, in the case of either clause (i) or (ii) as a result of any takeover or
control (including, without limitation, as a result of the occurrence of any
event of the type described in Section 9.05 with respect to such Bank) of such
Bank by any regulatory authority or agency.
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"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" shall mean, at any time, the highest of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate, (ii) the Prime Lending Rate
and (iii) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean each Loan designated or deemed designated
as such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan on a
given date (or resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period, provided that Base
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"Bryant Development" shall mean Bryant Development Company, a Virginia
corporation which holds an 11% equity interest in the Charles Town Joint Venture
as of the Restatement Effective Date.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York City, New York, a legal holiday or a day on which banking institutions
are authorized or required by law or other government action to close and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to any Person,
all rental obligations of such Person which, under generally accepted accounting
principles, are or will be required to be capitalized on the books of such
Person, in each case taken at the amount thereof accounted for as indebtedness
in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having
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maturities of not more than six months from the date of acquisition, (ii) Dollar
denominated time deposits and certificates of deposit of any commercial bank
having, or which is the principal banking subsidiary of a bank holding company
having, a long-term unsecured debt rating of at least "A" or the equivalent
thereof from Standard & Poor's Ratings Services or "A2" or the equivalent
thereof from Moody's Investors Service, Inc. with maturities of not more than
six months from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial paper issued by
any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by Standard & Poor's Ratings Services or at least P-1 or the
equivalent thereof by Moody's Investors Service, Inc. and in each case maturing
not more than six months after the date of acquisition by such Person and (v)
investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (iv)
above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss.9601 et seq.
"Change of Control" shall mean (i) any Person or "group"
(within the meaning of Rules 13d-3 or 13d-5 under the Securities Exchange Act
(as in effect on the Restatement Effective Date)), other than the Permitted
Holders, shall (A) have acquired beneficial ownership of 25% or more on a fully
diluted basis of the voting and/or economic interest in the Borrower's capital
stock or (B) have obtained the power (whether or not exercised) to elect a
majority of the Borrowers' directors, (ii) the Board of Directors of the
Borrower shall cease to consist of a majority of Continuing Directors, (iii) the
Permitted Holders shall cease to collectively own at least 25% on a fully
diluted basis of the voting and/or economic interest in the Borrower's capital
stock or (iv) a "change of control" or similar event shall occur under, and as
defined in, the Senior Note Documents.
"Charles Town Joint Venture" shall mean PNGI Charles Town Gaming
Limited Liability Company, a West Virginia limited liability company.
"Charles Town Joint Venture Agreement" shall mean the Operating
Agreement of the Charles Town Joint Venture dated February 27, 1996.
"Charles Town Licenses" shall mean the licenses to conduct horse racing
issued to the Borrower or one of its Subsidiaries by the West Virginia Racing
Commission and to conduct video lottery issued to the Borrower or one of its
Subsidiaries by the West Virginia Lottery Commission.
"Charles Town Races" shall mean Charles Town Races, Inc., a West
Virginia corporation.
"Charles Town Race Track" shall mean Charles Town Race Track located in
Jefferson County, West Virginia.
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"Charles Town Video Lottery Terminals" shall have the meaning provided
in Section 8.01(ix).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, the Mortgaged
Properties and all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02(a) or 9.
"Collateral Agent" shall mean the Agent acting as collateral agent for
the Secured Creditors pursuant to the Security Documents.
"Commission" shall mean each of the Pennsylvania Horse Racing
Commission, the Pennsylvania Harness Racing Commission, the West Virginia Racing
Commission and the West Virginia Lottery Commission.
"Commitment" shall mean, for each Bank, the amount set forth opposite
such Bank's name in Schedule I directly below the column entitled "Commitment,"
as same may be (x) reduced from time to time pursuant to Sections 3.02, 3.03
and/or 9 or (y) adjusted from time to time as a result of assignments to or from
such Bank pursuant to Section 1.13 or 12.04(b).
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Consolidated Cash Interest Coverage Ratio" shall mean, for
any period, the ratio of Consolidated EBITDA to Consolidated Cash Interest
Expense for such period (other than any Consolidated Cash Interest Expense for
such period associated with the financing of the Charles Town Video Lottery
Terminals as permitted under Section 8.01(ix)).
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense for such period including net costs under any
Interest Rate Protection Agreements, provided that there shall be excluded any
non-cash interest expense for such period (other than any interest that has been
capitalized) to the extent that same would otherwise have been included therein.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income
before Consolidated Interest Expense and provision for taxes for such period and
without giving effect (x) to any extraordinary gains or losses and (y) to any
gains or losses from sales of assets other than from sales of inventory sold in
the ordinary course of business.
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"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT for
such period, adjusted by (x) adding thereto the amount of all amortization of
intangibles and depreciation that were deducted in arriving at Consolidated EBIT
for such period, and (y) subtracting therefrom the amount of any payments made
by the Borrower or any of its Subsidiaries pursuant to Section 4 of the Plains
Company Acquisition Agreement for such period (but only to the extent that such
payments have not already reduced Consolidated Net Income for such period), it
being understood and agreed, however, that for purposes of this clause (y), such
payment will be treated as being paid in four equal consecutive quarterly
installments, with the first such installment being treated as being paid in the
fiscal quarter of the Borrower in which such payment is made.
"Consolidated Indebtedness" shall mean, at any time, the principal
amount of all Indebtedness of the Borrower and its Subsidiaries at such time
(other than (x) Indebtedness in respect of Letters of Credit, (y) Indebtedness
under Interest Rate Protection Agreements except to the extent of a payment
default thereunder and (z) any Indebtedness incurred to finance the Charles Town
Video Lottery Terminals as permitted under Section 8.01(ix)).
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrower and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, that portion of Capitalized Lease Obligations of the
Borrower and its Subsidiaries representing the interest factor for such period;
provided that the amortization of deferred financing costs with respect to this
Agreement or the Indebtedness incurred hereunder shall be excluded from
Consolidated Interest Expense to the extent same would otherwise have been
included therein.
"Consolidated Net Income" shall mean, for any Person and period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis (after any deduction for minority interests),
provided that (i) in determining Consolidated Net Income of the Borrower, the
net income of any other Person which is not a Subsidiary of the Borrower or is
accounted for by the Borrower by the equity method of accounting shall be
included only to the extent of the payment of dividends or distributions by such
other Person to the Borrower or a Subsidiary thereof during such period and (ii)
the net income (or loss) of any other Person acquired by such specified Person
or a Subsidiary of such Person in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded.
"Consolidated Net Worth" shall mean, on any date of determination
thereof, the consolidated net worth of the Borrower and its Subsidiaries
determined as of such date of determination.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary
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obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Bank" shall mean each Original Bank with a Commitment under
this Agreement on the Restatement Effective Date.
"Continuing Directors" shall mean the directors of the Borrower on the
Restatement Effective Date and each other director, if such other director's
nomination for election to the Board of Directors of the Borrower is recommended
by a majority of the then Continuing Directors or is recommended by a committee
of the Board of Directors a majority of which is composed of the then Continuing
Directors.
"CoreStates" shall mean CoreStates Bank, N.A., in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Credit Documents" shall mean this Agreement, each Note, the
Subsidiaries Guaranty, the Assumption and Acknowledgment Agreement and each
Security Document.
"Credit Event" shall mean (i) the occurrence of the Restatement
Effective Date and (ii) the making of any Loan or the issuance of any Letter of
Credit, it being understood that any conversion of a Loan pursuant to Section
1.06 shall not constitute a Credit Event.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividend" shall mean, with respect to any Person, that such Person has
declared or paid a dividend or returned any equity capital to its stockholders,
partners or members or
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authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders, partners
or members as such, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for a consideration any shares of any class of its
capital stock or any partnership or membership interests outstanding on or after
the Restatement Effective Date (or any options or warrants issued by such Person
with respect to its capital stock), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for a consideration any shares of any class of the capital
stock or any partnership or membership interests of such Person outstanding on
or after the Restatement Effective Date (or any options or warrants issued by
such Person with respect to its capital stock). Without limiting the foregoing,
"Dividends" with respect to any Person shall also include all payments made or
required to be made by such Person with respect to any stock appreciation
rights, plans, equity incentive or achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes.
"Documents" shall mean the Credit Documents and the Senior Note
Documents.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act).
"End Date" shall mean, for any Margin Reduction Period, the last day of
such Margin Reduction Period.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
ss.1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss.2601 et seq.;
the Clean Air Act, 42 U.S.C. ss.7401 et seq.;
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the Safe Drinking Water Act, 42 U.S.C. ss.3803 et seq.; the Oil Pollution Act
of 1990, 33 U.S.C. ss.2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. ss.11001 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C. ss.1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C. ss.651 et seq.; and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest
Period applicable to such Eurodollar Loan commencing two Business Days
thereafter as of 11:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period, divided (and rounded
upward to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the
then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves
required by applicable law) applicable to any member bank of the Federal Reserve
System in respect of Eurocurrency funding or liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Eurodollar Spread" shall mean a percentage per annum equal to
1/2 of the Applicable Margin as in effect from time to time for Eurodollar
Loans, provided that in no event shall the Eurodollar Spread be less than 1%.
"Event of Default" shall have the meaning provided in Section 9.
"Existing Indebtedness" shall have the meaning provided in Section
6.23.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.06.
"Existing Letters of Credit" shall have the meaning provided in Section
2.01.
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"Existing Mortgaged Properties" shall mean all Real Property of the
Credit Parties listed on Schedule IV and designated as Existing Mortgaged
Properties therein.
"Existing Mortgages" shall mean all Mortgages granted by the Credit
Parties pursuant to the Original Credit Agreement and which have not been
released prior to the Restatement Effective Date.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, 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 the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Final Maturity Date" shall mean December 15, 2002.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuating fund) or other similar program
established or maintained outside the United States of America by the Borrower
or any one or more of its Subsidiaries primarily for the benefit of employees of
the Borrower or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA or
the Code.
"GTECH Contract" shall mean that certain agreement relating to the
lease, installation and service of the Charles Town Video Lottery Terminals,
dated as of June 25, 1997, between the Charles Town Joint Venture and GTECH
Corporation.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the Release of which is prohibited, limited or
regulated by any governmental authority.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money
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or for the deferred purchase price of property or services, (ii) the maximum
amount available to be drawn under all letters of credit issued for the account
of such Person and all unpaid drawings in respect of such letters of credit,
(iii) all Indebtedness of the types described in clause (i), (ii), (iv), (v),
(vi) or (vii) of this definition secured by any Lien on any property owned by
such Person, whether or not such Indebtedness has been assumed by such Person
(provided, that, if the Person has not assumed or otherwise become liable in
respect of such Indebtedness, such Indebtedness shall be deemed to be in an
amount equal to the fair market value of the property to which such Lien relates
as determined in good faith by such Person), (iv) the aggregate amount required
to be capitalized under leases under which such Person is the lessee, (v) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vi) all Contingent Obligations of such Person and (vii) all
obligations under any Interest Rate Protection Agreement, any Other Hedging
Agreement or under any similar type of agreement. Notwithstanding the foregoing,
Indebtedness shall not include trade payables and accrued expenses incurred by
any Person in accordance with customary practices and in the ordinary course of
business of such Person.
"Intercompany Loan" shall have the meaning provided in Section
8.05(vii).
"Intercompany Note" shall mean a promissory note, in the form of
Exhibit K, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean, initially zero, and from and
after any Start Date to and including the corresponding End Date:
(A) 1/4 of 1% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be less
than or equal to 4.00:1.00 and none of the conditions set forth in clauses
(B), (C), (D) and (E) below are satisfied;
(B) 1/2 of 1% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be less
than or equal to 3.00:1.00 and none of the conditions set forth in clauses
(C), (D), and (E) below are satisfied;
(C) 1% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less
than or equal to 2.50:1.00 and none of the conditions set forth in clauses
(D), (E) and (F) below are satisfied;
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(D) 1-1/4% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than or equal to 2.00:1.00 and the condition set forth in
clause (E) below is not satisfied; or
(E) 1-1/2% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less
than or equal to 1.50:1.00.
Notwithstanding anything to the contrary above in this definition, the Interest
Reduction Discount shall be reduced to zero at all times when a Default or an
Event of Default shall exist.
"Investments" shall have the meaning provided in Section 8.05.
"Issuing Bank" shall mean BTCo.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower and its Subsidiaries incurred in the ordinary course of business to
horsemen for racing purposes, (ii) obligations of the Borrower and its
Subsidiaries for pari-mutual taxes and (iii) such other obligations of the
Borrower as are reasonably acceptable to the Issuing Bank and otherwise
permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of (i) Consolidated
Indebtedness at such time to (ii) Consolidated EBITDA for the Test Period then
most recently ended (in each case taken as one accounting period), provided that
for purposes of determining the Applicable Margin, the Interest Reduction
Discount and the Applicable Commitment Commission Percentage as of any Test
Date, the term "Consolidated Indebtedness" as used in the foregoing clause (i)
of this definition shall be the sum of (I) Consolidated Indebtedness (other than
Revolving Outstandings) on such Test Date plus (II) the average Revolving
Outstandings for the quarterly period ending on such Test Date.
"Licenses" shall mean each of the Penn National Licenses, the Plains
Company Licenses and the Charles Town Licenses, as the case may be.
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"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall have the meaning provided in Section 1.01.
"Margin Reduction Period" shall mean each period which shall commence
on a date on which the financial statements are delivered pursuant to Section
7.01(b) or (c), as the case may be, and which shall end on the earlier of (i)
the date of actual delivery of the next financial statements pursuant to Section
7.01(b) or (c), as the case may be, and (ii) the latest date on which the next
financial statements are required to be delivered to Section 7.01(b) or (c), as
the case may be, provided that the first Margin Reduction Period shall commence
no earlier than the date of delivery of the first set of financial statements
pursuant to Section 7.01(c) after the Restatement Effective Date.
"Margin Stock" shall have the meaning provided in Regulation U.
"Minimum Borrowing Amount" shall mean $250,000.
"Minimum Consolidated Net Worth" shall mean, at any time, the sum of
(i) $55,500,000 plus (ii) 50% of Consolidated Net Income of the Borrower, if
positive, for each fiscal quarter of the Borrower ended prior to the date of
determination plus (iii) 75% of the Net Equity Proceeds received by the Borrower
after the Restatement Effective Date, it being understood that any increase to
the Minimum Consolidated Net Worth shall be effective as of the last day of each
fiscal quarter of the Borrower.
"Mortgage" shall mean each mortgage, deed to secure debt or deed of
trust pursuant to which any Credit Party shall have granted to the Collateral
Agent a mortgage lien on such Credit Party's Mortgaged Property.
"Mortgage Amendments" shall have the meaning provided in Section 5.12.
"Mortgage Policies" shall mean the mortgage title insurance policies
issued in respect of each of the Mortgaged Properties.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
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"Net Equity Proceeds" shall mean, with respect to each issuance or sale
of any equity by any Person or any capital contribution to such Person, the cash
proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith) received by such Person from the respective sale of
issuance of its equity or from the respective capital contribution.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including fees and commissions, payments of unassumed liabilities relating to
the assets sold and required payments of any Indebtedness (other than
Indebtedness secured pursuant to the Security Documents) which is secured by the
respective assets which were sold), and the incremental taxes paid or payable as
a result of such Asset Sale.
"Non-Continuing Bank" shall mean each Original Bank which does not have
a commitment under this Agreement on the Restatement Effective Date.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Non-Primary Location" shall have the meaning provided in the Act
referred to in clause (i) of the definition of "Act".
"Note" shall have the meaning provided in Section 1.05(a).
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Agent located at One
Bankers Trust Plaza, 130 Liberty Street, New York, New York 10006, Attention:
Joseph Regan, or such other office as the Agent may hereafter designate in
writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Agent, the Co-Agent,
the Collateral Agent, the Issuing Bank or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Original Bank" shall mean each Person which was a Bank under, and as
defined in, the Original Credit Agreement immediately prior to the Restatement
Effective Date.
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"Original Credit Agreement" shall have the meaning provided in the
first "Whereas" clause of this Agreement.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at One
Bankers Trust Plaza, 130 Liberty Street, New York, New York 10006, or such other
office as the Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Penn National Licenses" shall mean the licenses to conduct
thoroughbred racing issued to the Borrower or one of its Subsidiaries by the
Pennsylvania Horse Racing Commission.
"Penn National Race Track" shall mean Penn National Race Track located
in Dauphin County, Pennsylvania.
"Pennsylvania Harness Racing Commission" shall mean the Pennsylvania
State Harness Racing Commission (and any successor thereto).
"Pennsylvania Horse Racing Commission" shall mean the Pennsylvania
State Horse Racing Commission (and any successor thereto).
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Commitment of such Bank at such
time and the denominator of which is the Total Commitment at such time, provided
that if the Percentage of any Bank is to be determined after the Total
Commitment has been terminated, then the Percentages of the Banks shall be
determined immediately prior (and without giving effect) to such termination.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be reasonably acceptable to the Agent in their reasonable
discretion.
"Permitted Holders" shall mean Peter D. Carlino, his progeny and his or
their spouses and any trusts over which any such Person has sole control (voting
or otherwise) and which name as beneficiaries only such Person or such Person's
spouse or children.
"Permitted Liens" shall have the meaning provided in Section 8.01.
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"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plains Company Acquisition Agreement" shall mean the Purchase
Agreement dated as of September 13, 1996, by and between the Estate of Joseph B.
Banks and the Borrower.
"Plains Company Licenses" shall mean the licenses to conduct harness
racing issued to the Borrower or one of its Subsidiaries by the Pennsylvania
Harness Racing Commission.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower or a Subsidiary of the Borrower or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which the Borrower, or a Subsidiary of the Borrower or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Pledge Agreement" shall mean the Pledge Agreement, dated as of
November 27, 1996, made by the Borrower and each Subsidiary Guarantor in favor
of the Collateral Agent, as Pledgee, as such agreement may be modified, amended
or supplemented from time to time, including, without limitation, as modified by
the Assumption and Acknowledgment Agreement.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in
the Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as defined in
the Pledge Agreement.
"Pocono Downs Race Track" shall mean Pocono Downs Race Track located in
Luzerne County, Pennsylvania.
"Prime Lending Rate" shall mean the rate which BTCo announces from time
to time as its prime lending rate, the Prime Lending Rate to change when and as
such prime lending rate changes. The Prime Lending Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. BTCo may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
"Projections" shall mean the projections which were prepared by the
Borrower for the five-year period after the Restatement Effective Date and
delivered to the Banks on or about December 12, 1997.
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"Quarterly Payment Date" shall mean each March 31, June 30, September
30 and December 31 occurring after the Restatement Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C.ss.6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of the Borrower or any of
its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 7.03.
"Register" shall have the meaning provided in Section 12.15.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" shall mean the disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into the
environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.13, .14, .16, .18, .19 or .20 of PBGC Regulation Section 4043.
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"Restatement Effective Date" shall have the meaning provided in Section
12.10.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
outstanding Commitments (or after the termination thereof, outstanding Loans and
Percentage of Letter of Credit Outstandings) represent an amount greater than
50% of the Total Commitment less the Commitments of all Defaulting Banks (or
after the termination thereof, the sum of the then total outstanding Loans of
Non-Defaulting Banks and the aggregate Percentages of all Non-Defaulting Banks
of the total outstanding Letter of Credit Outstandings at such time).
"Revolving Outstandings" shall mean, at any time, the sum of (I) the
aggregate principal amount of Loans then outstanding plus (II) the aggregate
amount of Letter of Credit Outstandings at such time.
"SEC" shall have the meaning provided in Section 7.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Security Agreement, dated as of
November 27, 1996, made by the Borrowers and each Subsidiary Guarantor in favor
of the Collateral Agent, as such agreement may be modified, amended or
supplemented from time to time, including, without limitation, as modified by
the Assumption and Acknowledgment Agreement.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Document" shall mean and include each of the Security
Agreement, the Pledge Agreement and each Mortgage and, after the execution and
delivery thereof, each Additional Security Document.
"Senior Note Documents" shall mean the Senior Note Indenture, the
Senior Notes and each other document or agreement relating to the issuance of
the Senior Notes.
"Senior Note Indenture" shall mean the Indenture dated as of December
17, 1997 among the Borrower, the Subsidiary Guarantors and State Street Bank and
Trust Company, as Trustee.
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"Senior Notes" shall mean the Borrower's 10-5/8% Senior Note due 2004.
"Shareholders' Agreements" shall have the meaning provided in Section
5.06.
"Start Date" shall mean, with respect to any Margin Reduction Period,
the first day of such Margin Reduction Period.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall mean the Subsidiaries Guaranty, dated as
of November 27, 1996, made by each of the Subsidiary Guarantors, as such
guaranty may be modified, amended or supplemented from time to time, including,
without limitation, the meaning provided in Section 5.12.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each direct and indirect Subsidiary
of the Borrower (other than the Charles Town Joint Venture so long as the
Charles Town Joint Venture is a non-Wholly-Owned Subsidiary of the Borrower).
"Tax Sharing Agreements" shall have the meaning provided in Section
5.06.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Tennessee Downs" shall mean Tennessee Downs, Inc., a Tennessee
corporation.
"Test Date" shall mean, with respect to any Start Date, the last day of
the most recent fiscal quarter or year, as the case may be, of the Borrower
ended immediately prior to such Start Date.
"Test Period" shall mean the four consecutive fiscal quarters of the
Borrower then last ended (in each case taken as one accounting period).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of the Banks.
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"Total Unutilized Commitment" shall mean, at any time, an amount equal
to the remainder of (x) the Total Commitment then in effect less (y) the sum of
the aggregate principal amount of Loans then outstanding plus the then aggregate
amount of Letter of Credit Outstandings.
"Transaction" shall mean, collectively (i) the issuance of the Senior
Notes and (ii) the occurrence of the Restatement Effective Date.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unutilized Commitment" shall mean, with respect to any Bank at any
time, such Bank's Commitment at such time less the sum of (i) the aggregate
outstanding principal amount of Loans made by such Bank and (ii) such Bank's
Percentage of the Letter of Credit Outstandings.
"West Virginia Lottery Commission" shall mean the West Virginia Lottery
Commission (and any successor thereto).
"West Virginia Racing Commission" shall mean the West Virginia Racing
Commission (and any successor thereto).
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
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Section 11. The Agent.
11.01 Appointment. The Banks hereby irrevocably designate BTCo as Agent
(for purposes of this Section 11, the term "Agent" also shall include BTCo in
its capacity as Collateral Agent pursuant to the Security Documents) to act as
specified herein and in the other Credit Documents. The Banks hereby irrevocably
designate CoreStates as Co-Agent to act as specified herein and in the other
Credit Documents. Each Bank hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Agent and the Co-Agent to take such action on their behalf under
the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent and the Co-Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
and the Co-Agent may perform any of their respective duties hereunder by or
through their respective officers, directors, agents, employees or affiliates.
11.02 Nature of Duties. Neither the Agent nor the Co-Agent shall have
any duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Agent, the Co-Agent,
nor any of their respective officers, directors, agents, employees or affiliates
shall be liable for any action taken or omitted by them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the Agent and
the Co-Agent shall be mechanical and administrative in nature; neither the Agent
nor the Co-Agent shall have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Bank or the holder of any
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent or
the Co-Agent any obligations in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein.
11.03 Lack of Reliance on the Agent and the Co-Agent. Independently and
without reliance upon the Agent or the Co-Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, neither the Agent nor the Co-Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note 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. Neither the Agent nor the Co-Agent shall be
responsible to any Bank or the holder of any Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the
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Borrower or any of its Subsidiaries or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document, or the financial
condition of the Borrower or any of its Subsidiaries or the existence or
possible existence of any Default or Event of Default.
11.04 Certain Rights of the Agent and the Co-Agent. If either the Agent
or the Co-Agent shall request instructions from the Required Banks with respect
to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Agent or the Co-Agent, as the case
may be, shall be entitled to refrain from such act or taking such action unless
and until the Agent or the Co-Agent, as the case may be, shall have received
instructions from the Required Banks; and neither the Agent nor the Co-Agent, as
the case may be, shall incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Bank or the holder of any Note shall have any
right of action whatsoever against the Agent or the Co-Agent as a result of the
Agent or the Co-Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required Banks.
11.05 Reliance. The Agent and the Co-Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Agent or the Co-Agent, as the case may be,
believed to be the proper Person, and, with respect to all legal matters
pertaining to this Agreement and any other Credit Document and its duties
hereunder and thereunder, upon advice of counsel selected by the Agent or the
Co-Agent, as the case may be.
11.06 Indemnification. To the extent the Agent or the Co-Agent is not
reimbursed and indemnified by the Borrower or any of its Subsidiaries, the Banks
will reimburse and indemnify the Agent or the Co-Agent, as the case may be, in
proportion to their respective "percentage" as used in determining the Required
Banks, for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Agent or the Co-Agent as the case may be, in performing its respective
duties hereunder or under any other Credit Document, in any way relating to or
arising out of this Agreement or any other Credit Document; provided that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's or the Co-Agent's gross negligence or willful
misconduct.
11.07 The Agent and the Co-Agent in their Individual Capacities. With
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this Agreement, the Agent and the Co-Agent shall have the rights
and powers specified herein for a "Bank" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Banks," "Required Banks," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent and the
Co-Agent in their respective individual capacities. The Agent and the Co-Agent
and their affiliates may accept
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deposits from, lend money to, and generally engage in any kind of banking,
investment banking, trust or other business with, or provide debt financing,
equity capital or other services (including financial advisory services) to, any
Credit Party or any Affiliate of any Credit Party (or any Person engaged in a
similar business with any Credit Party or any Affiliate thereof) as if they were
not performing the duties specified herein, and may accept fees and other
consideration from any Credit Party or any Affiliate of any Credit Party for
services in connection with this Agreement and otherwise without having to
account for the same to the Banks.
11.08 Holders. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Agent. Any request, authority or consent of any
Person 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, transferee, assignee or endorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Agent or the Co-Agent. (a) The Agent may
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 15 Business Days' prior
written notice to the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below. The Co-Agent may resign from the performance of its
functions and duties hereunder at any time by giving the Agent notice thereof.
Such resignation shall take effect upon the giving of such notice.
(b) Upon any such notice of resignation by the Agent, the Required
Banks shall appoint a successor Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower (it being
understood and agreed that the Co-Agent is deemed to be acceptable to the
Borrower).
(c) If a successor Agent shall not have been so appointed within such
15 Business Day period, the Agent with the consent of the Borrower (which
consent shall not be unreasonably withheld or delayed), shall then appoint a
successor Agent who shall serve as Agent hereunder or thereunder until such
time, if any, as the Required Banks appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) or
(c) above by the 20th Business Day after the date such notice of resignation was
given by the Agent, the Agent's resignation shall become effective and the
Required Banks shall thereafter perform all the duties of the Agent hereunder
and/or under any other Credit Document until such time, if any, as the Required
Banks appoint a successor Agent as provided above.
Section 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower shall: (i) whether or not
the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and
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expenses of the Agent and the Co-Agent (including, without limitation, the
reasonable fees and disbursements of White & Case and of the Agent's and the
Co-Agent's local racing and other counsel and consultants) in connection with
the preparation, execution and delivery of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein and
any amendment, waiver or consent relating hereto or thereto, of the Agent and
the Co-Agent in connection with their syndication efforts with respect to this
Agreement and of the Agent and the Co-Agent and, after the occurrence of an
Event of Default, each of the Banks in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Agent and the Co-Agent and, after the
occurrence of an Event of Default, for each of the Banks); (ii) pay and hold
each of the Banks harmless from and against any and all present and future
stamp, excise and other similar documentary taxes with respect to the foregoing
matters and save each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Bank) to pay such taxes; and (iii) indemnify
the Agent, the Co-Agent and each Bank, and each of their respective officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
the Agent, the Co-Agent or any Bank is a party thereto and whether or not such
investigation, litigation or other proceeding is brought by or on behalf of any
Credit Party) related to the entering into and/or performance of this Agreement
or any other Credit Document or the use of any Letter of Credit or the proceeds
of any Loans hereunder or the consummation of any Transaction or any other
transactions contemplated herein or in any other Credit Document or the exercise
of any of their rights or remedies provided herein or in the other Credit
Documents, or (b) the actual or alleged presence of Hazardous Materials in the
air, surface water or groundwater or on the surface or subsurface of any Real
Property owned or at any time operated by the Borrower or any of its
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials at any location, whether or not owned or operated by the
Borrower or any of its Subsidiaries, the non-compliance of any Real Property
with foreign, federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any Real Property, or
any Environmental Claim asserted against the Borrower, any of its Subsidiaries
or any Real Property owned or at any time operated by the Borrower or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Agent, the Co-Agent or any Bank set forth in the preceding sentence
may be unenforceable because it is violative of any law or public policy, the
Borrower shall
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make the maximum contribution to the payment and satisfaction of each of the
indemnified liabilities which is permissible under applicable law.
12.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized (to the extent not prohibited by applicable law) at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of any Credit Party against and on
account of the Obligations and liabilities of the Credit Parties to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank pursuant
to Section 12.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
12.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to the Co-Agent or any Bank, at its address specified on
Schedule II; and if to the Agent, at the Notice Office; or, as to any Credit
Party, the Co-Agent or the Agent, at such other address as shall be designated
by such party in a written notice to the other parties hereto and, as to each
Bank, at such other address as shall be designated by such Bank in a written
notice to the Borrower and the Agent. All such notices and communications shall,
when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the Agent shall
not be effective until received by the Agent.
12.04 Benefit of Agreement; Assignments; Participations. (a)
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto;
provided, however, the Borrower may not assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of the Banks
and, provided further, that, although any Bank may transfer, assign or grant
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitment hereunder except as provided in Sections 1.13 and 12.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder and, provided further, that no Bank shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would
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(i) extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Final Maturity Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment, shall not constitute a change in the terms of such
participation, and that an increase in Commitment or any Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents). In the case of
any such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with
one or more other Banks) may (x) assign all or a portion of its Commitment and
related outstanding Obligations hereunder to its parent company and/or any
affiliate of such Bank which is at least 50% owned by such Bank or its parent
company or to one or more Banks or (y) assign all, or if less than all, a
portion equal to at least $2,500,000 in the aggregate for the assigning Bank or
assigning Banks, of such Commitments hereunder to one or more Eligible
Transferees, each of which assignees shall become a party to this Agreement as a
Bank by execution of an Assignment and Assumption Agreement, provided that, (i)
at such time Schedule I shall be deemed modified to reflect the Commitments of
such new Bank and of the existing Banks, (ii) upon the surrender of the old
Notes by the assigning Bank (or, upon such assigning Bank's indemnifying the
Borrower for any lost Note pursuant to a customary indemnification agreement)
new Notes will be issued, at the Borrower's expense, to such new Bank and to the
assigning Bank upon the request of such new Bank or assigning Bank, such new
Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments, (iii) the consent of the Agent shall be required in connection with
any assignment to an Eligible Transferee pursuant to clause (y) above, (iv) the
Agent shall receive at the time of each such assignment, from the assigning or
assignee Bank, the payment of a non-refundable assignment fee of $3,500 and (v)
no such transfer or assignment will be effective until recorded by the Agent on
the Register pursuant to Section 12.15. To the extent of any assignment pursuant
to this Section 12.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitment. At the time of
each assignment pursuant to this Section 12.04(b) to a Person which is not
already a Bank hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Bank shall, to the extent legally entitled to do so,
provide to the Borrower the appropriate Internal Revenue Service Forms (and, if
applicable, a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To
the extent that an
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assignment of all or any portion of a Bank's Commitment pursuant to Section 1.13
or this Section 12.04(b) would, at the time of such assignment, result in
increased costs under Section 1.10, 2.06 or 4.04 from those being charged by the
respective assigning Bank prior to such assignment, then the Borrower shall not
be obligated to pay such increased costs (although the Borrower, in accordance
with and pursuant to the other provisions of this Agreement, shall be obligated
to pay any other increased costs of the type described above resulting from
changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Agent the Co-Agent, the Collateral Agent or any Bank in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Borrower or any other Credit Party and the Agent,
the Collateral Agent or any Bank shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Agent, the Co-Agent, the Collateral Agent or any Bank would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle any
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent, the Co-Agent,
the Collateral Agent or any Bank to any other or further action in any
circumstances without notice or demand.
12.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Agent agrees that promptly after its receipt of each payment from
or on behalf of the Borrower in respect of any Obligations hereunder, it shall
distribute such payment to the Banks (other than any Bank that has consented in
writing to waive its pro rata share of any such payment) pro rata based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
the Banks in such amount; provided
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that if all or any portion of such excess amount is thereafter recovered from
such Bank, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 12.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
12.07 Calculations; Computations; Accounting Terms. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Banks); provided that, except as otherwise specifically provided
herein, all computations of Applicable Commitment Commission Percentage and
Interest Reduction Discount, and all computations and all definitions used in
determining compliance with Sections 8.08 through 8.11, inclusive, shall utilize
accounting principles and policies in conformity with those used to prepare the
historical financial statements of the Borrower delivered to the Banks referred
to in Section 6.05(a).
(b) All computations of interest, Commitment Commission and other Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day; except that in the
case of Letter of Credit Fees, the last day shall be included) occurring in the
period for which such interest, Loan Commitment Commission or Fees are payable.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT,
THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS
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LACK PERSONAL JURISDICTION OVER THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM,
IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS
LACK PERSONAL JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE AGENT, ANY BANK OR THE HOLDER OF ANY
REVOLVING NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower, the Agent
and the Co-Agent.
12.10 Effectiveness. This Agreement shall become effective on the date
(the "Restatement Effective Date") on which (i) the Borrower, the Agent and each
Continuing Bank shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Agent at the
Notice Office, or, in the case of the Continuing Banks, shall have given to the
Agent telephonic (confirmed in writing), written, telex or telecopy notice
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(actually received) at such office that the same has been signed and mailed to
it and (ii) the conditions contained in Section 5 are met to the satisfaction of
the Agent, the Co-Agent and the Required Banks (determined immediately after the
occurrence of the Restatement Effective Date). Unless the Agent has received
actual notice from any Bank that the conditions contained in Section 5 have not
been met to its satisfaction, upon the satisfaction of the condition described
in clause (i) of the immediately preceding sentence and upon the Agent's good
faith determination that the conditions described in clause (ii) of the
immediately preceding sentence have been met, then the Restatement Effective
Date shall have been deemed to have occurred, regardless of any subsequent
determination that one or more of the conditions thereto had not been met
(although the occurrence of the Restatement Effective Date shall not release the
Borrower from any liability for failure to satisfy one or more of the applicable
conditions contained in Section 5). The Agent will give the Borrower and each
Bank prompt written notice of the occurrence of the Restatement Effective Date.
12.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
expiration date of any Letter of Credit beyond the Final Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (except to the extent repaid in cash) (it
being understood that any amendment or modification to the financial definitions
in this Agreement or to Section 12.07(a) shall not constitute a reduction in the
rate of interest or any Fees for purposes of this clause (i)), (ii) release all
or substantially all of the Collateral (except as expressly provided in the
Credit Documents) under all the Security Documents, (iii) amend, modify or waive
any provision of this Section 12.12, (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the same
basis as the Commitments are included on the Restatement Effective Date) or (v)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement; provided further, that no such change, waiver,
discharge or termination shall (w) increase the Commitment of any Bank over the
amount thereof then in effect without the consent of such Bank (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total
Commitment shall not constitute an increase of the Commitment of any Bank, and
that an increase in the available portion of the Commitment of any Bank shall
not constitute an increase of the Commitment of such Bank), (x) without the
consent of the Issuing Bank, amend, modify or waive any provision of Section 2
or alter its rights or obligations with respect to Letters of Credit, (y)
without the consent of the Agent and the Co-
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Agent, amend, modify or waive any provision of Section 11 or any other provision
as same relates to the rights or obligations of the Agent or the Co-Agent or (z)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 12.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Commitment
of such Bank in accordance with Sections 3.02(b) and/or 4.01(b), provided that,
unless the Commitment that is terminated pursuant to preceding clause (B) is
immediately replaced in full at such time through the addition of new Banks or
the increase of the Commitments of existing Banks (who in each case must
specifically consent thereto), then in the case of any action pursuant to
preceding clause (B) the Required Banks (determined after giving effect to the
proposed action) shall specifically consent thereto, provided further, that in
any event the Borrower shall not have the right to replace a Bank, terminate its
Commitment as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second proviso
to Section 12.12(a)).
12.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 11.06 and 12.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans at,
to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 12.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
12.15 Register. The Borrower hereby designates the Agent to serve as
the Borrower's agent, solely for purposes of this Section 12.15, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitment of such Bank and the rights to the principal of,
and interest on, any Loan
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made pursuant to such Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Agent with respect to ownership of
such Commitment and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitment and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Agent on the Register only upon
the acceptance by the Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 12.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Agent for acceptance and
registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Bank shall surrender the
Note evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Bank
and/or the new Bank. The Borrower agrees to indemnify the Agent from and against
any and all losses, claims, damages and liabilities of whatsoever nature which
may be imposed on, asserted against or incurred by the Agent in performing its
duties under this Section 12.15.
12.16 Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 12.16, each Bank agrees that it will use its reasonable efforts not
to disclose without the prior consent of the Borrower (other than to its
employees, auditors, advisors or counsel or to another Bank if the Bank or such
Bank's holding or parent company in its sole discretion determines that any such
party should have access to such information, provided such Persons shall be
subject to the provisions of this Section 12.16 to the same extent as such Bank)
any information with respect to the Borrower or any of its Subsidiaries which is
now or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by the Borrower to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public other than by virtue of a breach of
this Section 12.16(a) by the respective Bank, (b) as may be required or
reasonably appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or reasonably
appropriate in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Bank, (e) to the Agent, the Co-Agent or the Collateral Agent
and (f) to any prospective or actual transferee or participant in connection
with any contemplated transfer or participation of any of the Notes or
Commitments or any interest therein by such Bank, provided that such prospective
transferee agrees to be bound by the confidentiality provisions contained in
this Section 12.16.
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(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its Subsidiaries,
provided such Persons shall be subject to the provisions of this Section 12.16
to the same extent as such Bank).
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address: PENN NATIONAL GAMING, INC.
- --------
Wyomissing Professional Center
825 Berkshire Boulevard, Suite 203
Wyomissing, Pennsylvania 19610
Attention: Chief Financial Officer By \s\
Telephone: (610) 376-2400 ----------------------------------
Facsimile: (610) 376-2842 Title:
BANKERS TRUST COMPANY,
Individually and as Agent
By \s\
----------------------------------
Title:
CORESTATES BANK, N.A.,
Individually and as Co-Agent
By \s\
----------------------------------
Title:
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Schedule I
COMMITMENTS
Bank Commitment
---- ----------
Bankers Trust Company $ 6,000,000.00
CoreStates Bank, N.A. $ 6,000,000.00
TOTAL: $12,000,000.00
==============
Schedule II
BANK ADDRESSES
--------------
Bank Address
---- -------
Bankers Trust Company 130 Liberty Street
New York, New York
Attn: David Bell
Tel: (212) 250-9048
Fax: (212) 250-7218
CoreStates Bank, N.A. 600 Penn Street
Reading, Pennsylvania 19603
Attn: Jeff Wasmuth
Tel: 610-655-2884
Fax: 610-655-3300