EXHIBIT 10.1
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LOAN AND SECURITY AGREEMENT
BY AND AMONG
THE MAJESTIC STAR CASINO, LLC
CERTAIN OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS BORROWERS,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
WELLS FARGO FOOTHILL, INC.
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF OCTOBER 7, 2003
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of October 7, 2003, by and among, on the one hand, the lenders
identified on the signature pages hereof (such lenders, together with their
respective successors and permitted assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), WELLS FARGO
FOOTHILL, INC., a California corporation, as the arranger and administrative
agent for the Lenders ("Agent"), and, on the other hand, THE MAJESTIC STAR
CASINO, LLC, an Indiana limited liability company ("Parent"), and each of
Parent's Subsidiaries identified on the signature pages hereof (such
Subsidiaries, together with Parent, are referred to hereinafter each
individually as a "Borrower", and individually and collectively, jointly and
severally, as the "Borrowers").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"Account" means an account (as that term is defined in the
Code), and any and all supporting obligations in respect thereof.
"Account Debtor" means any Person who is obligated under, with
respect to, or on account of, an Account, chattel paper, or a General
Intangible.
"ACH Transactions" means any cash management or related
services (including the Automated Clearing House processing of electronic funds
transfers through the direct Federal Reserve Fedline system) provided by a Bank
Product Provider for the account of Administrative Borrower or its Subsidiaries.
"Acquired Debt" means Indebtedness of a Person existing at the
time such Person is merged with or into any Borrower or a Restricted Subsidiary
of any Borrower or becomes a Restricted Subsidiary of any Borrower, other than
Indebtedness incurred in connection with, or in contemplation of, such Person
merging with or into any Borrower or a Restricted Subsidiary of any Borrower or
becoming a Restricted Subsidiary of any Borrower.
"Additional Documents" has the meaning set forth in Section
4.4(c).
"Adjusted Consolidated Cash Flow" means, with respect to any
Person for any period, such Person's Consolidated Cash Flow for such period,
adjusted to exclude (only to the extent included in calculating such
Consolidated Cash Flow of such Person for such period, and without duplication)
nonrecurring items (including, without limitation, restructuring costs) that
would be permitted to be excluded in accordance with Item 10 of Regulation S-K
under the Securities Act if Consolidated Cash Flow were included in a filing
with the SEC.
"Administrative Borrower" has the meaning set forth in Section
17.10.
"Advances" means advances made to Borrowers pursuant to the
provisions of Section 2.1.
"Affiliate" means, as applied to any specified Person, any
other Person who, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person. For
purposes of this definition, "control" means the possession, directly or
indirectly through one or more intermediaries, of the power to direct the
management and policies of a Person, whether through the ownership of Stock, by
contract, or otherwise; provided, however, that, for purposes of Section 7.13
hereof: (a) any Person which owns directly or indirectly 10% or more of the
Stock having ordinary voting power for the election of directors or other
members of the governing body of a Person or 10% or more of the partnership or
other ownership interests of a Person (other than as a limited partner of such
Person) shall be deemed an Affiliate of such Person, (b) each director (or
comparable manager) of a Person shall be deemed to be an Affiliate of such
Person, and (c) each partnership or joint venture in which a Person is a partner
or joint venturer shall be deemed an Affiliate of such Person.
"Agent" means WFF, in its capacity as arranger and
administrative agent hereunder, and any successor thereto.
"Agent Advances" has the meaning set forth in Section
2.3(e)(i).
"Agent-Related Persons" means Agent, together with its
Affiliates, officers, directors, employees, attorneys, and agents.
"Agent's Account" means the Deposit Account of Agent
identified on Schedule A-1.
"Agent's Liens" means the Liens granted by Borrowers or their
Subsidiaries to Agent under this Agreement or the other Loan Documents.
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"AMB Parking" means AMB Parking, LLC, a Delaware limited
liability company.
"Applicable Capital Gain Tax Rate" means a rate equal to the
sum of (i) the highest marginal Federal capital gain tax rate applicable to an
individual who is a citizen of the United States plus (ii) an amount equal to
the sum of the highest marginal state and local capital gains tax rates
applicable to an individual who is a resident of the State of New York,
multiplied by a factor equal to 1 minus the rate described in clause (i) above.
In no event shall the Applicable Capital Gain Tax Rate exceed the greater of (1)
the highest aggregate applicable effective marginal rate of Federal, state and
local income tax to which an individual resident of the State of New York would
be subject in the relevant year of
determination (as certified to the Agent by a nationally recognized tax
accounting firm) plus 5% and (2) 60%.
"Applicable Gaming Laws" has the meaning set forth in Section
9.1.
"Applicable Income Tax Rate" means a rate equal to the sum of
(i) the highest marginal Federal income tax rate applicable to an individual who
is a citizen of the United States plus (ii) an amount equal to the sum of the
highest marginal state and local income tax rates applicable to an individual
who is a resident of the State of New York, multiplied by a factor equal to 1
minus the rate described in clause (i) above. In no event shall the Applicable
Income Tax Rate exceed the greater of (1) the highest aggregate applicable
effective marginal rate of Federal, state and local income tax to which an
individual resident of the State of New York would be subject in the relevant
year of determination (as certified to the Agent by a nationally recognized tax
accounting firm) plus 5% and (2) 60%.
"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to (a) during the period from and after the date
of the execution and delivery of this Agreement up to the date that is the first
anniversary of the Closing Date, 4% times the Maximum Revolver Amount, (b)
during the period from and including the date that is the first anniversary of
the Closing Date up to the date that is the second anniversary of the Closing
Date, 3% times the Maximum Revolver Amount, and (c) during the period from and
including the date that is the second anniversary of the Closing Date up to the
third anniversary of the Closing Date, 2% times the Maximum Revolver Amount, (d)
during the period from and including the date that is the third anniversary of
the Closing Date up to the Maturity Date, 1% times the Maximum Revolver Amount.
"Applicable Unused Line Fee Percentage" means, as of any date
of determination, an amount equal to (a) 0.25%, if the average Revolver Usage
during the immediately preceding quarterly period was greater than $65,000,000,
(b) 0.375%, if the average Revolver Usage during the immediately preceding
quarterly period was equal to or greater than $37,500,000 and less than or equal
to $65,000,000, and (c) 0.50%, if the average Revolver Usage during the
immediately preceding quarterly period was less than $37,500,000.
"Asset Sale" means any (a) direct or indirect sale,
assignment, transfer, lease, conveyance, or other disposition, other than in the
ordinary course of business, of any assets of Parent or any of its Restricted
Subsidiaries, (b) direct or indirect sale, assignment, transfer, lease,
conveyance or other disposition of a Vessel, a material trademark owned by
Parent or any of its Restricted Subsidiaries, or any Real Property on which a
Casino is located, (c) direct or indirect issuance or sale of any capital Stock
of any Restricted Subsidiary of Parent (other than directors' qualifying shares)
to any Person, or (d) Event of Loss with respect to any assets of Parent or any
of its Restricted Subsidiaries. For purposes of this definition, (i) any series
of transactions that are part of a common plan shall be deemed a single Asset
Sale, (ii) the term "Asset Sale" shall not include any transaction or series of
transactions (other than transactions in respect of a Vessel, a material
trademark owned by
Parent or any of its Restricted Subsidiaries, or any Real Property on which a
Casino is located (excluding any Real Property adjacent to a Casino which does
not contain the Casino)) that have a fair market value (or result in gross
proceeds) of less than $1,000,000, until the aggregate fair market value and
gross proceeds of the transactions excluded from the definition of Asset Sales
pursuant to this clause (ii) exceed $5,000,000, (iii) any merger, consolidation
or sale of all or substantially all of the assets of Parent and its Restricted
Subsidiaries that is governed by and complies with Section 7.3(a) shall not
constitute an Asset Sale, (iv) the conveyance, sale, transfer, assignment or
other disposition of inventory and other assets acquired and held for resale in
the ordinary course of business, consistent with past practices of Parent and
its Restricted Subsidiaries shall not constitute an Asset Sale, (v) the sale or
disposition by Parent or any of its Restricted Subsidiaries of damaged, worn out
or other obsolete personal property in the ordinary course of business shall not
constitute an Asset Sale so long as such property is no longer necessary for the
proper conduct of Parent's business or the business of such Restricted
Subsidiary, as applicable, (vi) the liquidation of Cash Equivalents shall not
constitute an Asset Sale, (vii) a transfer of assets by Parent to a Restricted
Subsidiary or by a Restricted Subsidiary to Parent or another Restricted
Subsidiary, and an issuance of Stock by a Restricted Subsidiary to Parent or to
another Restricted Subsidiary, shall not be deemed to be an Asset Sale, and
(viii) any Investment that is not prohibited by Section 7.12 will not be deemed
to be an Asset Sale.
"Assignee" has the meaning set forth in Section 14.1(a).
"Assignment and Acceptance" means an Assignment and Acceptance
Agreement substantially in the form of Exhibit A-1.
"Assumed Tax Benefit" shall mean, with respect to each fiscal
year, the sum of (i) the product of (a) Ordinary Loss times (b) the Applicable
Income Tax Rate, (ii) the product of (c) Long-Term Capital Loss times (d) the
Applicable Capital Gain Tax Rate and (iii) the product of (a) Short-Term Capital
Loss times (b) the Applicable Capital Gains Tax Rate.
"Assumed Tax Liability" shall mean the sum of the Assumed
Ordinary Tax Liability, the Assumed Long-Term Capital Tax Liability and the
Assumed Short-Term Tax Liability.
"Assumed Long-Term Capital Tax Liability" shall mean, the
product of (i) the Net Capital Gain, if any, allocated by a Borrower to its
Equity Holders for a fiscal year and (ii) the Applicable Capital Gain Tax Rate.
"Assumed Ordinary Tax Liability" shall mean (a) the product of
(a) the excess of (1) all items of taxable income gain (but not including
capital gain) allocated by a Borrower to its Equity Holders for a fiscal year,
over (2) the sum of all items of taxable deduction or loss (but not including
capital loss) allocated by a Borrower to its Equity Holders for a fiscal year
and (b) the Applicable Income Tax Rate.
"Assumed Short-Term Tax Liability" shall mean the product of
(i) the Net Short-Term Capital Gain, if any, allocated by a Borrower to its
Equity Holders for a fiscal year and (ii) the Applicable Income Tax Rate.
"Authorized Person" means any officer or employee of
Administrative Borrower.
"Availability" means, as of any date of determination, the
amount that Borrowers are entitled to borrow as Advances hereunder (after giving
effect to all then outstanding Obligations (other than Bank Product Obligations)
and all sublimits and reserves then applicable hereunder).
"Bank Product" means any financial accommodation extended to
Administrative Borrower or its Subsidiaries by a Bank Product Provider (other
than pursuant to this Agreement) including: (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions,
(f) cash management, including controlled disbursement, accounts or services, or
(g) transactions under Hedge Agreements.
"Bank Product Agreements" means those agreements entered into
from time to time by Administrative Borrower or its Subsidiaries with a Bank
Product Provider in connection with the obtaining of any of the Bank Products.
"Bank Product Obligations" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Administrative
Borrower or its Subsidiaries to any Bank Product Provider pursuant to or
evidenced by the Bank Product Agreements and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including all such amounts
that Administrative Borrower or its Subsidiaries are obligated to reimburse to
Agent or any member of the Lender Group as a result of Agent or such member of
the Lender Group purchasing participations from, or executing indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Administrative Borrower or
its Subsidiaries.
"Bank Product Provider" means Wells Fargo or any of its
Affiliates.
"Bank Product Reserve" means, as of any date of determination,
the lesser of (a) $2,000,000, and (b) the amount of reserves that Agent has
established (based upon the Bank Product Providers' reasonable determination of
the credit exposure in respect of then extant Bank Products) in respect of Bank
Products then provided or outstanding.
"Bankruptcy Code" means title 11 of the United States Code, as
in effect from time to time.
"Barden" means Don H. Barden, an individual.
"Base LIBOR Rate" means the rate per annum, determined by
Agent in accordance with its customary procedures, and utilizing such electronic
or other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/100%), to be the rate at which Dollar deposits (for
delivery on the first day of the requested Interest Period) are offered to major
banks in the London interbank market 2 Business Days prior to the commencement
of the requested Interest Period, for a term and in an amount comparable to the
Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of an extant LIBOR Rate Loan or as
a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Administrative
Borrower in accordance with this Agreement, which determination shall be
conclusive in the absence of manifest error.
"Base Rate" means, the rate of interest announced, from time
to time, within Wells Fargo at its principal office in San Francisco as its
"prime rate", with the understanding that the "prime rate" is one of Wells
Fargo's base rates (not necessarily the lowest of such rates) and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto and is evidenced by the recording thereof after its
announcement in such internal publications as Wells Fargo may designate.
"Base Rate Loan" means the portion of the Advances that bears
interest at a rate determined by reference to the Base Rate.
"Base Rate Margin" means, as of any date of determination, the
following margin based upon Parent's most recent EBITDA calculation (determined
as set forth in the following paragraph); provided, however, that for the period
from the Closing Date through the date Agent receives the certified calculation
of Parent's EBITDA in respect of the testing period ended on October 31, 2003
delivered by Parent pursuant to Section 6.3, the applicable Base Rate Margin
shall be 0.50 percentage points:
Level EBITDA Base Rate Margin
- ----- ------ ----------------
I greater than $65,000,000 0.25 percentage points
II equal to or greater than $55,000,000 and less 0.50 percentage points
than or equal to $65,000,000
III less than $55,000,000 0.75 percentage points
Except as set forth in the foregoing proviso, the Base Rate
Margin shall be based upon Parent's most recent EBITDA calculation, which will
be calculated monthly based upon the 12 consecutive fiscal months then ended.
Except as set forth in the initial proviso in this definition, the Base Rate
Margin shall be re-determined each month on the first day of the month following
the date Parent delivers to Agent the certified calculation of EBITDA pursuant
to Section 6.3 hereof; provided, however, that if Parent fails to provide
such certification when such certification is due, the applicable Base Rate
Margin shall be set at the margin in the row styled "Level III" as of the first
day of the month following the date on which the certification was required to
be delivered until the date on which such certification is delivered (on which
date (but not retroactively), without constituting a waiver of any Default or
Event of Default occasioned by the failure to timely deliver such certification,
the Base Rate Margin shall be set at the margin based upon the EBITDA
calculation disclosed by such certification).
"BCG" means Barden Colorado Gaming, LLC, a Colorado limited
liability company.
"BDI" means Barden Development, Inc., an Indiana corporation.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which any Borrower or any Subsidiary or ERISA
Affiliate of any Borrower has been an "employer" (as defined in Section 3(5) of
ERISA) within the past six years.
"Berthing Agreement" means that certain Majestic Berthing
Agreement, dated as of April 23, 1996, between Parent and BHR Joint Venture, as
amended from time to time through the Closing Date.
"BHR Attributed Debt" shall have the meaning ascribed thereto
in the Indenture.
"BHR Joint Venture" means Buffington Harbor Riverboats, LLC, a
Delaware limited liability company, in which Parent, as of the Closing Date,
owns a 50% membership interest, and any other Flow Through Entity owned solely
by the members of the BHR Joint Venture.
"BHR Operating Agreement" means that certain First Amended and
Restated Operating Agreement of the BHR Joint Venture, made as of October 31,
1995 (as amended through the Effective Date) by and between Trump Indiana, Inc.,
a Delaware corporation, and Parent.
"BMG" means Barden Mississippi Gaming, LLC, a Mississippi
limited liability company.
"BNG" means Barden Nevada Gaming, LLC, a Nevada limited
liability company.
"Board of Directors" means the board of directors (or
comparable managers) of Parent or any committee thereof duly authorized to act
on behalf of the board of directors (or comparable managers).
"Books" means all of Administrative Borrower's and its
Subsidiaries' now owned or hereafter acquired books and records (including all
of their Records indicating,
summarizing, or evidencing their assets (including the Collateral) or
liabilities, all of Administrative Borrower's and its Subsidiaries' Records
relating to their business operations or financial condition, and all of their
goods or General Intangibles related to such information).
"Borrower" and "Borrowers" have the respective meanings set
forth in the preamble to this Agreement.
"Borrower Collateral" means all of each Borrower's now owned
or hereafter acquired right, title, and interest in and to each of the
following:
(a) all of its Accounts,
(b) all of its Books,
(c) all of its commercial tort claims,
(d) all of its Deposit Accounts,
(e) all of its Equipment,
(f) all of its General Intangibles,
(g) all of its Inventory,
(h) all of its Investment Property (including all of
its securities and Securities Accounts),
(i) all of its Negotiable Collateral,
(j) money or other assets of such Borrower that now
or hereafter come into the possession, custody, or control of any member of the
Lender Group, and
(k) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Deposit Accounts,
Equipment, General Intangibles, Inventory, Investment Property, Negotiable
Collateral, Real Property, money, or other tangible or intangible property
resulting from the sale, exchange, collection, or other disposition of any of
the foregoing, or any portion thereof or interest therein, and the proceeds
thereof.
The foregoing to the contrary notwithstanding, "Borrower
Collateral" shall not include Excluded Assets.
"Borrowing" means a borrowing hereunder consisting of Advances
made on the same day by the Lenders (or Agent on behalf thereof), or by Swing
Lender in the case of a Swing Loan, or by Agent in the case of an Agent Advance,
in each case, to Administrative Borrower.
"Borrowing Base" means, as of any date of determination, an
amount (calculated in sequential order) equal to (a) 150%, times (b) Parent's
consolidated EBITDA for the twelve month period ending as of the last day of the
month immediately preceding such date of determination minus (c) the aggregate
amount of reserves, if any, established by Agent under Section 2.1(b).
"Buffington Facility" means the Majestic Star Vessel, the Real
Property, the Equipment, and other personal property, in each case, related
thereto.
"Business Day" means any day that is not a Saturday, Sunday,
or other day on which banks are authorized or required to close in the state of
California, except that, if a determination of a Business Day shall relate to a
LIBOR Rate Loan, the term "Business Day" also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.
"Cage Cash" means cash on hand at a Casino.
"Capital Corp." means The Majestic Star Casino Capital Corp.,
an Indiana corporation.
"Capital Expenditures" means, with respect to any Person for
any period, the aggregate of all expenditures by such Person and its
Subsidiaries during such period that are capital expenditures as determined in
accordance with GAAP, whether such expenditures are paid in cash or financed.
"Capital Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means that portion of the
obligations under a Capital Lease that is required to be capitalized in
accordance with GAAP.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Rating Group ("S&P") or Moody's Investors Service, Inc.
("Moody's"), (c) commercial paper maturing no more than 1 year from the date of
creation thereof and, at the time of acquisition, having a rating of at least
A-2 from S&P or at least P-2 from Moody's, (d) certificates of deposit or
bankers' acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) demand Deposit Accounts maintained with any
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any individual bank is less
than or equal to $100,000 and is insured by the Federal Deposit Insurance
Corporation, (f) Investments in money market funds substantially all of whose
assets are invested in the types of assets described in clauses (a) through (e)
above, and (g) repurchase obligations for underlying securities of the types and
with the maturities described above.
"Cash Flow-Based Manager Distributions" means the
distributions payable to BDI by Parent under the Management Agreement in an
amount that does not exceed 5% of Borrowers' Adjusted Consolidated Cash Flow.
"Casino" means a gaming establishment owned by any Borrower or
any Restricted Subsidiary and any hotel, building, restaurant, theater,
amusement park, other entertainment facility, parking facilities, retail shops,
land, equipment, and other properties and assets directly ancillary thereto and
used or to be used in connection therewith.
"Change of Control" means (a) a majority of the members of the
Board of Directors of Parent do not constitute Continuing Directors, (b) Parent
ceases to own, directly or indirectly, own and control 100% of the outstanding
Stock of each of its Restricted Subsidiaries extant as of the Closing Date, (c)
Permitted Holders shall cease to own and control, beneficially, directly, and of
record more than 60% of the issued and outstanding Stock of Parent, (d) Parent
shall cease to own and control, beneficially, directly and of record 45% of the
issued and outstanding Stock of BHR Joint Venture, or (e) a "change of control"
(as that term is defined in the Indenture as in effect on the Closing Date) has
occurred.
"Closing Date" means the date of the making of the initial
Advance (or other extension of credit) hereunder.
"Closing Date Business Plan" means the set of Projections of
Borrowers for the 3 year period following the Closing Date (on a year by year
basis, and for the 1 year period following the Closing Date, on a month by month
basis), in form and substance (including as to scope and underlying assumptions)
satisfactory to Agent.
"Code" means the California Uniform Commercial Code, as in
effect from time to time.
"Collateral" means all assets and interests in assets and
proceeds thereof now owned or hereafter acquired by Administrative Borrower or
its Restricted Subsidiaries in or upon which a Lien is granted under any of the
Loan Documents (and shall not include the Excluded Assets).
"Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in Administrative Borrower's or its Restricted Subsidiaries'
Books, Equipment or, Inventory, in each case, in form and substance satisfactory
to Agent.
"Collections" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds).
"Colorado Mortgage" means the Mortgage executed by BCG in
favor of Agent encumbering the Real Property of BCG located in the state of
Colorado.
"Commercial Tort Claim Assignments" has the meaning set forth
in Section 4.4(b).
"Commitment" means, with respect to each Lender, its Revolver
Commitment, and, with respect to all Lenders, their Revolver Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder in accordance with the
provisions of Section 14.1.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 delivered by the chief financial officer of Parent to
Agent.
"Consolidated Cash Flow" means with respect to any Person for
any period, the sum of:
(a) consolidated income (loss) from operations of such
Person and its Restricted Subsidiaries for such period, determined in accordance
with GAAP, plus
(b) to the extent such amounts are deducted in
calculating such income (loss) from operations of such Person for such period,
and without duplication (i) amortization, depreciation, and other non-cash
charges (including, without limitation, amortization of goodwill, deferred
financing fees, and other intangibles but excluding (x) non-cash charges
incurred after the Closing Date that require an accrual of or a reserve for cash
charges for any future period, and (y) normally recurring accruals such as
reserves against accounts receivables), (ii) provision for taxes based on income
or profits of such Person and its Restricted Subsidiaries and Permitted Tax
Distributions, (iii) Pre-opening Expenses, (iv) marine crew severance payments
that were made by such Person during Parent's third fiscal quarter of its 2002
fiscal year, in an aggregate amount not in excess of $222,000, (v) payments on
account of legal fees and expenses and claim reserves that were made by such
Person during Parent's fourth fiscal quarter of its 2002 fiscal year, in an
aggregate amount not in excess of $703,000, (vi) payments on account of
retention bonuses that were made by such Person during Parent's fourth fiscal
quarter of its 2002 fiscal year, in an aggregate amount not in excess of
$196,000, (vii) retroactive gaming tax payments that were made by such Person
during Parent's second fiscal quarter of its 2003 fiscal year, in an aggregate
amount not in excess of $2,072,000, and (viii) losses from the retirement of
Indebtedness incurred during Borrowers' fourth fiscal quarter of their 2003
fiscal year;
provided, that (1) the income from operations of any Person that is not a Wholly
Owned Subsidiary of such Person or that is accounted for by the equity method of
accounting will be
included only to the extent of the amount of dividends or distributions paid
during such period to such Person or to a Wholly Owned Subsidiary of such
Person, (2) the income from operations of any Person acquired in a pooling of
interest transaction for any period prior to the date of such acquisition will
be excluded, and (3) the income from operations of any Restricted Subsidiary
will not be included to the extent that declarations of dividends or similar
distributions by such Restricted Subsidiary are not at the time permitted,
directly or indirectly, by operation of the terms of its organizational
documents or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Restricted Subsidiary or its
owners.
"Consolidated Interest Expense" means, with respect to any
Person for any period, the result of (a) the consolidated interest expense of
such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including amortization of original issue discount, noncash interest
payment, and the interest component of Capital Lease Obligations), plus, (b) the
aggregate amount of all cash dividends or other cash payments in respect of
Disqualified Capital Stock of such Person and its Restricted Subsidiaries made
during such period, minus, (c) write-off of deferred financing costs, the
amortization of original issue discount for Indebtedness in existence on the
Closing Date, and any charge related to any premium or penalty paid, in each
case, accrued during such period in connection with redeeming or retiring any
Indebtedness before its stated maturity, as determined in accordance with GAAP,
to the extent such expense, cost, or charge was included in the calculation made
pursuant to clause (a) above.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such person and its
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; provided, however that (i) the Net Income of any other
Person relating to any portion of such period that such other Person (a) is not
a Wholly Owned Subsidiary of such Person, or (b) is accounted for by the equity
method of accounting will be included only to the extent of the amount of
dividends or distributions paid to such Person or a Wholly Owned Subsidiary of
such Person during such portion of such period, (ii) the Net Income of any other
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition will be excluded, (iii) the Net Income of any
Restricted Subsidiary will not be included to the extent that declarations of
dividends or similar distributions by such Restricted Subsidiary are not at the
time permitted, directly or indirectly, by operation of the terms of its
organizational documents or any agreement, instrument, judgment, decree, order,
statute, rule, or governmental regulation applicable to such Restricted
Subsidiary or its owners, and (iv) solely for the avoidance of doubt, any
Returns from Unrestricted Subsidiaries shall be included.
"Consolidated Net Worth" means, with respect to any Person,
the total stockholders' (or members') equity of such Person determined on a
consolidated basis in accordance with GAAP, adjusted to exclude (to the extent
included in calculating such stockholders' (or members') equity), (i) the amount
of any such stockholders' (or members') equity attributable to Disqualified
Capital Stock or treasury stock of such Person and its
consolidated Restricted Subsidiaries, (ii) all upward re-valuations and other
write-ups in the book value of any asset of such Person or a consolidated
Subsidiary of such Person subsequent to the Issue Date, and (iii) all
Investments in Subsidiaries of such Person that are not consolidated Restricted
Subsidiaries and in Persons that are not Restricted Subsidiaries of such Person.
"Continuing Director" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Parent on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Parent and whose initial assumption of office resulted
from such contest or the settlement thereof.
"Control Agreement" means a control agreement, in form and
substance satisfactory to Agent, executed and delivered by the Administrative
Borrower or one of its Restricted Subsidiaries, Agent, and the applicable
securities intermediary (with respect to a Securities Account) or a bank (with
respect to a Deposit Account).
"Copyright Security Agreement" means a copyright security
agreement executed and delivered by each Borrower and Agent, the form and
substance of which is satisfactory to Agent.
"Daily Balance" means, as of any date of determination and
with respect to any Obligation, the amount of such Obligation owed at the end of
such day.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"Defaulting Lender Rate" means (a) for the first 3 days from
and after the date the relevant payment is due, the Base Rate, and (b)
thereafter, the interest rate then applicable to Advances that are Base Rate
Loans (inclusive of the Base Rate Margin applicable thereto).
"Deposit Account" means any deposit account (as that term is
defined in the Code).
"Designated Account" means the Deposit Account of
Administrative Borrower identified on Schedule D-1.
"Designated Account Bank" has the meaning ascribed thereto on
Schedule D-1.
"Disbursement Letter" means an instructional letter executed
and delivered by Administrative Borrower to Agent regarding the extensions of
credit to be made on the Closing Date, the form and substance of which is
satisfactory to Agent.
"Disqualified Capital Stock" means any Stock that (a) either
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable) is or upon the happening of an event would be
required to be redeemed or repurchased prior to the Maturity Date or is
redeemable at the option of the holder thereof at any time prior to the Maturity
Date, or (b) is convertible into or exchangeable at the option of the issuer
thereof or any other Person for debt securities.
"Dollars" or "$" means United States dollars.
"EBITDA" means, with respect to any fiscal period, (a)
Parent's and its Restricted Subsidiaries consolidated net earnings (or loss),
minus (b) extraordinary gains, plus (c) non-cash extraordinary losses, plus (d)
interest expense, income taxes, and depreciation and amortization for such
period, plus, (e) to the extent such amounts are deducted in calculating such
consolidated net earnings (or loss) for such fiscal period, without duplication,
losses from the retirement of Indebtedness incurred during Borrowers' fourth
fiscal quarter of their 2003 fiscal year, plus (f) to the extent such amounts
are deducted in calculating such consolidated net earnings (or loss) for such
fiscal period, without duplication, the sum of (i) marine crew severance
payments that were made by such Person during Parent's third fiscal quarter of
its 2002 fiscal year, in an aggregate amount not in excess of $222,000, (ii)
payments on account of legal fees and expenses and claim reserves that were made
by such Person during Parent's fourth fiscal quarter of its 2002 fiscal year, in
an aggregate amount not in excess of $703,000, (iii) payments on account of
retention bonuses that were made by such Person during Parent's fourth fiscal
quarter of its 2002 fiscal year, in an aggregate amount not in excess of
$196,000, and (iv) retroactive gaming tax payments that were made by such Person
during Parent's second fiscal quarter of its 2003 fiscal year, in an aggregate
amount not in excess of $2,072,000, in each case as determined in accordance
with GAAP.
"Eligible Transferee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of
a Lender, (e) so long as no Event of Default has occurred and is continuing, any
other Person approved by Agent and Administrative Borrower (which approval of
Administrative Borrower shall not be unreasonably, withheld,
delayed, or conditioned), and (f) during the continuation of an Event of
Default, any other Person approved by Agent.
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or (c)
from or onto any facilities which received Hazardous Materials generated by any
Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest.
"Environmental Law" means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy or
rule of common law now or hereafter in effect and in each case as amended, or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, to the extent binding on any
Borrower or any Subsidiary of a Borrower, relating to the environment, employee
health and safety, or Hazardous Materials, including CERCLA; RCRA; the Federal
Water Pollution Control Act, 33 USC Section 1251 et seq; the Toxic Substances
Control Act, 15 USC Section 2601 et seq; the Clean Air Act, 42 USC Section 7401
et seq.; the Safe Drinking Water Act, 42 USC Section 3803 et seq.; the Oil
Pollution Act of 1990, 33 USC Section 2701 et seq.; the Emergency Planning and
the Community Right-to-Know Act of 1986, 42 USC Section 11001 et seq.; the
Hazardous Material Transportation Act, 49 USC Section 1801 et seq.; and the
Occupational Safety and Health Act, 29 USC Section 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants,
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"Equipment" means equipment (as that term is defined in the
Code), and includes machinery, machine tools, motors, furniture, furnishings,
fixtures, vehicles (including motor vehicles), computer hardware, tools, parts,
and goods (other than consumer goods, farm products, or Inventory), wherever
located, including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"Equity Holder" means (a) with respect to a corporation, each
holder of stock of such corporation, (b) with respect to a limited liability
company or similar entity, each member of such limited liability company or
similar entity (in each case, which is not disregarded for Federal income tax
purposes), (c) with respect to a partnership, each partner of such partnership,
(d) with respect to an entity described in clause (a)(iv) of the definition of
"Flow Through Entity," the owner of such entity, and (e) with respect to a trust
described in clause (a)(v) of the definition of "Flow Through Entity," the
persons treated for Federal income tax purposes as the owners of the trust
property.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Borrower or a Subsidiary of a Borrower under IRC Section 414(b), (b) any trade
or business subject to ERISA whose employees are treated as employed by the same
employer as the employees of a Borrower or a Subsidiary of a Borrower under IRC
Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412
of the IRC, any organization subject to ERISA that is a member of an affiliated
service group of which a Borrower or a Subsidiary of a Borrower is a member
under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any Person subject to ERISA that is a party to an
arrangement with a Borrower or a Subsidiary of a Borrower and whose employees
are aggregated with the employees of a Borrower or a Subsidiary of a Borrower
under IRC Section 414(o).
"Event of Default" has the meaning set forth in Section 8.
"Event of Loss" means, with respect to any property or asset,
any (a) loss, destruction, or damage of such property or asset, or (b) any
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such property or asset or confiscation or requisition of the use
of such property or asset.
"Excess Availability" means, as of any date of determination,
the amount equal to Availability minus the aggregate amount, if any, of all
trade payables of Borrowers and their Subsidiaries more than 60 days past due
and all book overdrafts of Borrowers and their Subsidiaries more than 60 days
past due, in each case as determined by Agent in its Permitted Discretion.
"Excess Proceeds" has the meaning set forth in Section
7.4(b)(iv) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
in effect from time to time.
"Excluded Assets" means (a) Cage Cash, (b) assets securing
Purchase Money Indebtedness or Capitalized Lease Obligations permitted to be
incurred under this Agreement, (c) all Gaming Licenses and any license, contract
or agreement to which such debtor is a party, to the extent, but only to the
extent, that a grant of a Lien on such license
(other than any Gaming License or license issued under any Liquor Laws),
contract or agreement is prohibited by law, results in a breach or termination
of the terms of, or constitutes a default under or termination of any such
license, contract or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Section 9-406, 9-407, or 9-408 of the
Uniform Commercial Code (or any successor provision or provisions) of any
relevant jurisdiction) and, in any event, immediately upon the ineffectiveness,
lapse or termination of any such terms or default under such license, contract
or agreement, the Excluded Assets shall not include, and the applicable Borrower
shall be deemed to have granted a security interest in, all such licenses,
contracts, or agreements as if such terms or defaults had never been in effect,
and (d) the Stock in BNG, so long as it is an Unrestricted Subsidiary; provided,
however, that Excluded Assets shall not include (and, accordingly, Borrower
Collateral shall include) any and all proceeds of any of such assets; provided,
further, that, any agreement, permit, license, or the like qualifying as an
Excluded Asset under clause (c) above no longer shall constitute an Excluded
Asset (and instead shall constitute Borrower Collateral) from and after such
time as the lessor, licensor, or other party to such agreement, permit, license,
or the like consents to the grant of a Lien in favor of Agent in such agreement,
permit, license, or the like or the prohibition against granting a Lien therein
in favor of Agent shall cease to be effective.
"Excluded Transactions" means (a) the sale, distribution or
liquidation of BNG, (b) the redemption, repurchase, or repayment of any
Indebtedness of Parent or its Restricted Subsidiaries with cash proceeds of or
in exchange for Indebtedness described in clause (h) of the definition of
Permitted Indebtedness, (c) the Investment described in clause (n) of the
definition of Permitted Investments, and (d) the acquisition of all of the Stock
in AMB Parking.
"Existing Lender" means WFF.
"Existing Loan Agreements" means (a) that certain Loan and
Security Agreement, dated as of August 2, 1999, between Parent and WFF, and (b)
that certain Loan and Security Agreement, dated as of December 6, 2001, between
Majestic Investor Holdings, BNG, BMG, and BCG.
"Existing Indentures" means (a) the Majestic Star Existing
Indenture, and (b) the Majestic Investor Existing Indenture.
"Expense Reimbursement Agreement" means that certain Expense
Reimbursement Agreement, dated as of the Closing Date, by and between Parent and
BNG, pursuant to which BNG reimburses Parent for certain expenses, in an amount
equal to the greater of $500,000 and the actual out-of-pocket expenses incurred
by Parent for that fiscal year.
"Family Member" means, with respect to any individual, any
other individual having a relationship by blood (to the second degree of
consanguinity), marriage, or adoption to such individual.
"Family Trusts" means, with respect to any individual, trusts
or other estate planning vehicles established for the benefit of such individual
or Family Members of such individual and in respect of which such individual
serves as trustee or in a similar capacity.
"Fee Letter" means that certain fee letter, dated as of even
date herewith, between Borrowers and Agent, in form and substance satisfactory
to Agent.
"FEIN" means Federal Employer Identification Number.
"FF&E" means furniture, fixture, and Equipment acquired by any
Borrower or any Restricted Subsidiary of a Borrower in the ordinary course of
business.
"FF&E Financing" means Purchase Money Obligations, Capital
Lease Obligations or Industrial Revenue Bond Obligations incurred solely to
acquire or lease, respectively, FF&E; provided, that the principal amount of
such Indebtedness does not exceed the cost (including sales and excise taxes,
installation, and delivery charges and other direct costs and expenses) of the
FF&E purchased or leased with the proceeds thereof.
"FF&E Lender" means a Person that is not an Affiliate of a
Borrower and is a lender under FF&E Financing.
"Flow Through Entity" means an entity that (a) for Federal
income tax purposes constitutes (i) an "S corporation" (as defined in Section
1361(a) of the IRC), (ii) a "qualified subchapter S subsidiary" (as defined in
Section 1361(b)(3)(B) of the IRC), (iii) a "partnership" (within the meaning of
Section 7701(a)(2) of the IRC) other than a "publicly traded partnership" (as
defined in Section 7704 of the IRC), (iv) a business entity that is disregarded
as an entity separate from its owners under the IRC, the Treasury Regulations,
or any published administrative guidance of the Internal Revenue Service, or (v)
a trust to the extent its income is includible in the taxable income of the
grantor or another person under Sections 671 through 679 of the IRC (each of the
entities described in the preceding clauses (i), (ii), (iii), (iv), and (v), a
"Federal Flow Through Entity"), and (b) for state and local jurisdictions is
subject to treatment on a basis under applicable state or local income tax law
substantially similar to a Federal Flow Through Entity.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section
2.13(b)(ii).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"Gaming Authority" means the Indiana Gaming Commission, the
Mississippi Gaming Commission, the Colorado Limited Gaming Control Commission,
and any agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever of the United States of America or
foreign government (including Native American governments), any state, province
or city or other political subdivision thereof,
whether now or hereafter existing, or any officer or official thereof,
including, without limitation, any other agency with authority to regulate any
gaming operation (or proposed gaming operation) owned, managed or operated by
Parent or any of its Subsidiaries.
"Gaming License" means any finding of suitability,
registration, license, franchise, or other finding of qualification, or other
approval or authorization required to own, lease, operate or otherwise conduct
or manage riverboat, dockside or land-based gaming activities in any state or
jurisdiction in which any Borrower or any of their Restricted Subsidiaries
conduct business (including, without limitation, all such licenses granted by
the Gaming Authorities, and the rules and regulations promulgated thereunder),
and all applicable Liquor Licenses.
"General Intangibles" means general intangibles (as that term
is defined in the Code), including payment intangibles, contract rights, rights
to payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trade secrets, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, infringement claims,
computer programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, insurance premium rebates, tax refunds, and tax
refund claims, and any and all supporting obligations in respect thereof, and
any other personal property other than Accounts, Deposit Accounts, goods,
Investment Property, and Negotiable Collateral.
"GNC Land" means approximately 150 acres of land located
adjacent to the Buffington Harbor gaming complex.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or
other governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Guarantor" means Capital Corp., Majestic Investor, Majestic
Investor Capital Corp., Majestic Investor Holdings, and all of the current or
future other Restricted Subsidiaries of Parent.
"Guarantor Security Agreement" means one or more security
agreements executed and delivered by each Guarantor in favor of Agent, in each
case, in form and substance satisfactory to Agent.
"Guaranty" means that certain general continuing guaranty
executed and delivered by each Guarantor in favor of Agent, for the benefit of
the Lender Group and the Bank Product Providers, in form and substance
satisfactory to Agent.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hedge Agreement" means any and all agreements, or documents
now existing or hereafter entered into by Administrative Borrower or its
Restricted Subsidiaries that provide for an interest rate, credit, commodity or
equity swap, cap, floor, collar, forward foreign exchange transaction, currency
swap, cross currency rate swap, currency option, or any combination of, or
option with respect to, these or similar transactions, for the purpose of
hedging Administrative Borrower's or its Subsidiaries' exposure to fluctuations
in interest or exchange rates, loan, credit exchange, security or currency
valuations or commodity prices.
"Hedging Obligations" means, with respect to any Person, the
Indebtedness of such Person under Hedge Agreements.
"Holdout Lender" has the meaning set forth in Section 15.2(a).
"Indebtedness" means, with respect to any Person (without
duplication): (a) all liabilities and obligations, contingent or otherwise, of
such Person (i) in respect of borrowed money (regardless of whether the recourse
of the lender is to the whole of the assets of such Person or only to a portion
thereof), (ii) evidenced by bonds, debentures, notes or other similar
instruments, (iii) representing the deferred purchase price of property or
services (other than trade payables on customary terms incurred in the ordinary
course of business), (iv) created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (v)
representing Capital Lease Obligations, (vi) under bankers' acceptance and
letter of credit facilities, (vii) to purchase, redeem, retire, defease or
otherwise acquire for value any Disqualified Capital Stock, or (viii) in respect
of Hedging Obligations; (b) all Indebtedness of others that is guaranteed by
such Person; and (c) all Indebtedness of others that is secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property (including, without limitation, Accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, provided, that
the amount of such Indebtedness shall (to the extent such Person has not assumed
or become liable for the payment of such Indebtedness) be the lesser of (i) the
fair market value of such property at the time of determination and (ii) the
amount of such Indebtedness. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date. Notwithstanding the
foregoing, the term Indebtedness shall not include obligations arising from the
honoring by a bank or other financial institution of a check, draft or similar
instrument drawn against insufficient funds in the ordinary course of business,
provided, that such obligation is extinguished within two Business Days of its
incurrence. The principal amount outstanding of any Indebtedness issued with
original issue discount is the accreted value of such Indebtedness.
"Indemnified Liabilities" has the meaning set forth in Section
11.3.
"Indemnified Person" has the meaning set forth in Section
11.3.
"Indenture" means that certain Indenture, dated as of October
7, 2003, among Parent, each of its Restricted Subsidiaries, Majestic Capital,
and Indenture Trustee.
"Indenture Trustee" means (a) Bank of New York, in its
capacity as trustee under the Indenture, or (b) any successor trustee under the
Indenture from time to time.
"Industrial Revenue Bond Obligations" means obligations of
Parent or any of its Restricted Subsidiaries in connection with industrial
revenue bonds issued by the Mississippi Business Finance Corporation ("MBFC"),
all of the proceeds of which are loaned by the MBFC to Parent or its Restricted
Subsidiaries for the acquisition, construction or development of hotels or other
improvements at the Parent's or its Restricted Subsidiaries' Casino located in
Tunica County, Mississippi.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Intercompany Subordination Agreement" means a subordination
agreement executed and delivered by Borrowers and each of their Subsidiaries and
Agent, the form and substance of which is satisfactory to Agent.
"Intercreditor Agreement" means that certain Intercreditor
Agreement between Agent and the Indenture Trustee, in the form of Exhibit I-1
attached hereto.
"Interest Coverage Ratio" means with respect to any Person for
any period, the ratio of (a) such Person's EBITDA, to (b) Consolidated Interest
Expense of such Person, in each case, for such period. In calculating the
Interest Coverage Ratio for any period, pro forma effect shall be given to the
incurrence, assumption, guarantee, repayment, repurchase, redemption, or
retirement by such Person or any of its Restricted Subsidiaries of any
Indebtedness, or the issuance of any Disqualified Capital Stock, subsequent to
the
commencement of the period for which the Interest Coverage Ratio is being
calculated, as if the same had occurred at the beginning of such period. For
purposes of making the computation referred to above, acquisitions that have
been made by any Borrower or any Restricted Subsidiary of such Borrower,
including all mergers and consolidations, subsequent to the commencement of such
period shall be calculated on a pro forma basis, assuming that all such
acquisitions, mergers, and consolidations had occurred on the first day of such
period, including giving effect to reductions in costs for such period that are
directly attributable to the elimination of duplicative functions and expenses
(regardless of whether such cost savings could be reflected in the pro forma
financial statements under GAAP) as a result of such acquisition, merger or
consolidation, provided that (x) such cost savings were identified and
quantified in an officer's certificate delivered to Agent at the time of the
consummation of such acquisition, merger or consolidation, such officer's
certificate states that such officer believes in good faith that actions will be
commenced or initiated within 90 days of the consummation of such acquisition,
merger or consolidation to accomplish such cost savings, and such officer's
certificate is in form and substance satisfactory to Agent, and (y) with respect
to each acquisition, merger or consolidation completed prior to the 90th day
preceding such date of determination, actions were commenced or initiated by
Parent or any of its Restricted Subsidiaries within 90 days of such acquisition,
merger or consolidation to effect the cost savings identified in such officer's
certificate (regardless, however, of whether the corresponding cost savings have
been achieved during such period). Without limiting the foregoing, the financial
information of Borrowers with respect to any portion of such period that falls
before the Issue Date (as that term is defined in the Indenture) shall be
adjusted to give pro forma effect to the issuance of the Notes and the
application of the proceeds therefrom as if they had occurred at the beginning
of such period.
"Interest Expense" means, for any period, the aggregate of the
interest expense of Parent and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Interest Period" means, with respect to each LIBOR Rate Loan,
a period commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, however,
that (a) if any Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended (subject to clauses (c)-(e) below) to the
next succeeding Business Day, (b) interest shall accrue at the applicable rate
based upon the LIBOR Rate from and including the first day of each Interest
Period to, but excluding, the day on which any Interest Period expires, (c) any
Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (d) with respect to an Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, or 3 months after the date on which the Interest Period
began, as applicable, and (e) Borrowers
(or Administrative Borrower on behalf thereof) may not elect an Interest Period
which will end after the Maturity Date.
"Inventory" means inventory (as that term is defined in the
Code).
"Investment" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practice), purchases or other
acquisitions of Indebtedness, Stock, or all or substantially all of the assets
of such other Person (or of any division or business line of such other Person),
and any other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.
"Investment Property" means investment property (as that term
is defined in the Code), and any and all supporting obligations in respect
thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
"Issue Date" means the date the Notes were issued.
"Issuing Lender" means WFF or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent, agrees, in
such Lender's sole discretion, to become an Issuing Lender for the purpose of
issuing L/Cs or L/C Undertakings pursuant to Section 2.12.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section
2.12(a).
"Lender" and "Lenders" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by a Borrower or
its Subsidiaries under any of the Loan Documents that are paid, advanced, or
incurred by the Lender Group, (b) out of pocket fees or charges paid or incurred
by Agent in connection with the Lender Group's transactions with Borrowers or
their Subsidiaries, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public
record searches (including tax lien, litigation, and UCC searches and including
searches with the patent and trademark office, the copyright office, or the
department of motor vehicles), filing, recording, publication, appraisal
(including periodic collateral appraisals or business valuations to the extent
of the fees and charges (and up to the amount of any limitation) contained in
this Agreement, real estate surveys, real estate title policies and
endorsements, and environmental audits, (c) costs and expenses incurred by Agent
in the disbursement of funds to or for the account of Borrowers or other members
of the Lender Group (by wire transfer or otherwise), (d) charges paid or
incurred by Agent resulting from the dishonor of checks, (e) reasonable costs
and expenses paid or incurred by the Lender Group to correct any default or
enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses of
Agent related to audit examinations of the Books to the extent of the fees and
charges (and up to the amount of any limitation) contained in this Agreement,
(g) reasonable costs and expenses of third party claims or any other suit paid
or incurred by the Lender Group in enforcing or defending the Loan Documents or
in connection with the transactions contemplated by the Loan Documents or the
Lender Group's relationship with any Borrower or any Subsidiary of a Borrower,
(h) Agent's and each Lender's reasonable costs and expenses (including outside
counsel attorneys fees) incurred in advising, structuring, drafting, reviewing,
administering, syndicating, or amending the Loan Documents, and (i) Agent's and
each Lender's reasonable costs and expenses (including outside counsel
attorneys, accountants, consultants, and other advisors fees and expenses)
incurred in terminating, enforcing (including attorneys, accountants,
consultants, and other advisors fees and expenses incurred in connection with a
"workout," a "restructuring," or an Insolvency Proceeding concerning any
Borrower or any Subsidiary of a Borrower or in exercising rights or remedies
under the Loan Documents), or defending the Loan Documents, irrespective of
whether suit is brought, or in taking any Remedial Action concerning the
Collateral.
"Lender-Related Person" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, officers, directors,
employees, attorneys, and agents.
"Letter of Credit" means an L/C or an L/C Undertaking, as the
context requires.
"Letter of Credit Fee" means, as of any date of determination,
the following margin based upon Parent's most recent EBITDA calculation
(determined as set forth in the following paragraph); provided, however, that
for the period from the Closing Date through the date Agent receives the
certified calculation of Parent's EBITDA in respect of the period ended on
October 31, 2003 delivered by Parent pursuant to Section 6.3, the applicable
Letter of Credit Fee shall be 2.75 percentage points:
Level EBITDA Letter of Credit Fee
- ----- ------ --------------------
I greater than $65,000,000 2.50 percentage points
II equal to or greater than $55,000,000 and less 2.75 percentage points
than or equal to $65,000,000
III less than $55,000,000 3.00 percentage points
Except as set forth in the foregoing proviso, the Letter of
Credit Fee shall be based upon Parent's most recent EBITDA calculation, which
will be calculated monthly based upon the 12 consecutive fiscal months then
ended. Except as set forth in the initial proviso in this definition, the Letter
of Credit Fee shall be re-determined each month on the first day of the month
following the date Parent delivers to Agent the certified calculation of EBITDA
pursuant to Section 6.3 hereof; provided, however, that if Parent fails to
provide such certification when such certification is due, the applicable Letter
of Credit Fee shall be set at the margin in the row styled "Level III" as of the
first day of the month following the date on which the certification was
required to be delivered until the date on which such certification is delivered
(on which date (but not retroactively), without constituting a waiver of any
Default or Event of Default occasioned by the failure to timely deliver such
certification, the Letter of Credit Fee shall be set at the margin based upon
the EBITDA calculation disclosed by such certification).
"Letter of Credit Usage" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of
Credit.
"LIBOR Deadline" has the meaning set forth in Section
2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit
L-1.
"LIBOR Rate" means, for each Interest Period for each LIBOR
Rate Loan, the rate per annum determined by Agent (rounded upwards, if
necessary, to the next 1/100%) by dividing (a) the Base LIBOR Rate for such
Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage.
"LIBOR Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means, as of any date of determination,
the following margin based upon Parent's most recent EBITDA calculation
(determined as set forth in the following paragraph); provided, however, that
for the period from the Closing Date through the date Agent receives the
certified calculation of Parent's EBITDA in respect of the period ended on
October 31, 2003 delivered by Parent pursuant to Section 6.3, the applicable
LIBOR Base Rate Margin shall be 3.25 percentage points:
Level EBITDA LIBOR Rate Margin
- ----- ------ -----------------
I greater than $65,000,000 3.00 percentage points
II equal to or greater than $55,000,000 and less 3.25 percentage points
than or equal to $65,000,000
III less than $55,000,000 3.50 percentage points
Except as set forth in the foregoing proviso, the LIBOR Rate
Margin shall be based upon Parent's most recent EBITDA calculation, which will
be calculated monthly based upon the 12 consecutive fiscal months then ended.
Except as set forth in the initial proviso in this definition, the LIBOR Rate
Margin shall be re-determined each month on the first day of the month following
the date Parent delivers to Agent the certified calculation of EBITDA pursuant
to Section 6.3 hereof; provided, however, that if Parent fails to provide such
certification when such certification is due, the applicable LIBOR Rate Margin
shall be set at the margin in the row styled "Level III" as of the first day of
the month following the date on which the certification was required to be
delivered until the date on which such certification is delivered (on which date
(but not retroactively), without constituting a waiver of any Default or Event
of Default occasioned by the failure to timely deliver such certification, the
LIBOR Rate Margin shall be set at the margin based upon the EBITDA calculation
disclosed by such certification).
"Lien" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset,
irrespective of whether (a) such interest is based on the common law, statute,
or contract, (b) such interest is recorded or perfected, and (c) such interest
is contingent upon the occurrence of some future event or events or the
existence of some future circumstance or circumstances. Without limiting the
generality of the foregoing, the term "Lien" includes the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also includes reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Limited Recourse Guarantor" means BDI.
"Limited Recourse Guaranty" means that certain limited
recourse guaranty executed and delivered by Limited Recourse Guarantor in favor
of Agent, for the benefit of the Lender Group and the Bank Product Providers, in
form and substance satisfactory to Agent.
"Liquor Authorities" means the State of Mississippi State Tax
Commission, the Mississippi Alcoholic Beverage Control Division of the
Mississippi State Tax
Commission, the State of Colorado, City of Black Hawk, the State of Colorado
Liquor Enforcement Division, State Licensing Authority of the State of Colorado,
the State of Indiana Alcohol and Tobacco Commission, the Department of the
Treasury Bureau of Alcohol, Tobacco and Firearms, and any agency, authority,
board, bureau, commission, department, office or instrumentality or any nature
whatsoever of the United States or foreign government, any state, province or
any city or other political subdivision, whether now or hereafter existing, or
any officer or official thereof, including without limitation, any other agency
with authority to regulate the sale or distribution of alcoholic beverages.
"Liquor Laws" means the statutes regarding the sale and
distribution of alcoholic beverages enforced by the Liquor Authorities and the
rules and regulations of the Liquor Authorities.
"Liquor License" means any license, permit, registration,
qualification or other approval required to sell, dispense or distribute
alcoholic beverages under the Liquor Laws.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the Bank Product
Agreements, the Control Agreements, the Disbursement Letter, the Due Diligence
Letter, the Fee Letter, the Guarantor Security Agreement, the Guaranty, the
Intercompany Subordination Agreement, the Intercreditor Agreement, the Letters
of Credit, the Limited Recourse Guaranty, the Majestic Star Ship Mortgage, the
Mortgages, the Officers' Certificate, the Stock Pledge Agreement, the
Subordination of Colorado Mortgage, the Subordination of Majestic Star Ship
Mortgage, the Subordination of Mississippi Mortgage, the Subordination of
Preferred Fleet Mortgage, the Syndication Side Letter, the Trademark Security
Agreement, the Tunica Ship Mortgage, any note or notes executed by a Borrower in
connection with this Agreement and payable to a member of the Lender Group, and
any other agreement entered into, now or in the future, by a Borrower and the
Lender Group in connection with this Agreement.
"Long-Term Capital Loss" shall mean, with respect to each
fiscal year of the Borrower, the product of (i) Net Long-Term Capital Loss and
(ii) the Applicable Capital Gain Tax Rate.
"Majestic Corporation" means Majestic Investor Capital
Corporation, a Delaware corporation.
"Majestic Investor" means Majestic Investor, LLC, a Delaware
limited liability company.
"Majestic Investor Existing Indenture" means that certain
Indenture, dated as of December 6, 2001, among Majestic Holdings, Majestic
Investor, BNG, BMG, BCG, and The Bank of New York.
"Majestic Investor Capital Corp." means Majestic Investor
Capital Corp., a Delaware corporation.
"Majestic Investor Existing Notes" shall mean the "Notes" as
that term is defined in the Majestic Investor Existing Indenture.
"Majestic Investor Holdings" means Majestic Investor Holdings,
LLC, a Delaware limited liability company.
"Majestic Investor Lien Release Letter" means a letter, in
form and substance satisfactory to Agent, from The Bank of New York to Agent
respecting the amount necessary to obtain a release of all of the Liens existing
in favor of The Bank of New York with respect to the Majestic Investor Existing
Notes in and to the assets of Borrowers and their Subsidiaries.
"Majestic Star Existing Indenture" means that certain
Indenture, dated as of June 18, 1999, among Parent, Capital Corp., and IBJ
Whitehall Bank & Trust.
"Majestic Star Existing Notes" shall mean the "Notes" as that
term is defined in the Majestic Star Existing Indenture.
"Majestic Star Lien Release Letter" means a letter, in form
and substance satisfactory to Agent, from The Bank of New York to Agent
respecting the amount necessary to obtain a release of all of the Liens existing
in favor of The Bank of New York with respect to the Majestic Star Existing
Notes in and to the assets of Borrowers and their Subsidiaries.
"Majestic Star Ship Mortgage" means that certain Preferred
Ship Mortgage dated as of the date hereof and executed by Parent in favor of
Agent, encumbering the Majestic Star Casino Vessel and its related personal
property.
"Majestic Star Vessel" means that certain Majestic Star
riverboat casino owned and operated by Parent as of the Closing Date.
"Management Agreement" means that certain Management Agreement
dated as of the Closing Date, by and between Parent, and BDI.
"Manager" means (a) for so long as a Borrower is a limited
liability company, the managers of such Borrower appointed pursuant to its
operating agreements, or (b) otherwise, the board of directors of such Borrower.
"Manager Distributions" has the meaning set forth in Section
7.13(b)(iv) of this Agreement.
"Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrowers taken as a whole,
(b) a material impairment of any Borrower's ability to perform its obligations
under the Loan Documents to which it is a party or of Agent's or the Lenders'
ability to enforce the Obligations or realize upon the Collateral, or
(c) a material impairment of the enforceability or priority of the Agent's Liens
with respect to the Collateral as a result of an action or failure to act on the
part of any Borrower.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means the lesser of (a) $80,000,000
and (b) the maximum amount of Indebtedness hereunder permitted pursuant to the
terms of the Indenture.
"Member" shall mean any Person having any interest in or to
the assets or earnings of a limited liability company within the meaning of the
laws of Delaware in the case of a Delaware limited liability company, the laws
of Colorado in the case of a Colorado limited liability company, and the laws of
Mississippi in the case of a Mississippi limited liability company.
"Mississippi Mortgage" means the Mortgage executed by BMG in
favor of Agent encumbering the Real Property of BMG located in Mississippi.
"Mortgages" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, including, without
limitation, the Colorado Mortgage and the Mississippi Mortgage, executed and
delivered by a Borrower or a Subsidiary of Borrower in favor of Agent, in form
and substance satisfactory to Agent, that encumber the Real Property Collateral
and the related improvements thereto.
"Negotiable Collateral" means letters of credit, letter of
credit rights, instruments, promissory notes, drafts, documents, and chattel
paper (including electronic chattel paper and tangible chattel paper), and any
and all supporting obligations in respect thereof.
"Net Capital Gain" has the meaning set forth in IRC Section
1222.
"Net Income" means, with respect to any Person for any period,
the net income (loss) of such Person for such period, determined in accordance
with GAAP, reduced by the maximum amount of Permitted Tax Distributions for such
period, excluding (to the extent included in calculating such net income) (i)
any gain or loss, together with any related taxes paid or accrued on such gain
or loss, realized in connection with any Asset Sales and dispositions pursuant
to sale-leaseback transactions, and (ii) any extraordinary gain or loss,
together with any taxes paid or accrued on such gain or loss.
"Net Long-Term Capital Loss" has the meaning set forth in IRC
Section 1222.
"Net Short-Term Capital Gain" has the meaning set forth in IRC
Section 1222.
"Net Short-Term Capital Loss" has the meaning set forth in IRC
Section 1222.
"Net Proceeds" means, with respect to any Asset Sale, the
aggregate amount of proceeds received in the form of cash or Cash Equivalents
(including issuance or other
payments in an Event of Loss and payments in respect of deferred payment
obligations and any cash or Cash Equivalents received upon the sale or other
disposition of any non-cash consideration received in such Asset Sale, in each
case when received), net of:
(a) the reasonable and customary direct out-of-pocket
costs relating to such Asset Sale, other than any such costs payable to an
Affiliate of Parent;
(b) taxes required to be paid by any Borrower, any of its
Subsidiaries, or any Equity Holder of such Borrower (or, in the case of any
Equity Holder of such Borrower that is a Flow Through Entity, the Upper Tier
Equity Holder of such Flow Through Entity) in connection with such Asset Sale in
the taxable year in which such sale is consummated or in the immediately
succeeding taxable year, or any Permitted Tax Distributions during the taxable
year within which such Asset Sale is consummated or in the immediately
succeeding taxable year that would not otherwise be permitted to be distributed
but for such Asset Sale;
(c) amounts required to be applied to the permanent
repayment of Purchase Money Obligations and Capital Lease Obligations in
connection with such Asset Sale; and
(d) appropriate amounts provided as a reserve by any
Borrower or any Restricted Subsidiary of a Borrower, in accordance with GAAP,
against any liabilities associated with such Asset Sale and retained by such
Borrower or its Restricted Subsidiary, as applicable, after such Asset Sale
(including without limitation, as applicable, pension and other post-employment
benefit liabilities, liabilities related to environmental matters, and
liabilities under any indemnification arising from such Asset Sale).
"Note" and "Notes" shall have the meanings ascribed thereto in
the Indenture.
"Obligations" means (a) all loans, Advances, debts, principal,
interest (including any interest that, but for the commencement of an Insolvency
Proceeding, would have accrued), contingent reimbursement obligations with
respect to outstanding Letters of Credit, premiums, liabilities (including all
amounts charged to Borrowers' Loan Account pursuant hereto), obligations
(including indemnification obligations), fees (including the fees provided for
in the Fee Letter), charges, costs, Lender Group Expenses (including any fees or
expenses that, but for the commencement of an Insolvency Proceeding, would have
accrued), lease payments, guaranties, covenants, and duties of any kind and
description owing by Borrowers to the Lender Group pursuant to or evidenced by
the Loan Documents and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and including all interest not paid when due and all
Lender Group Expenses that Borrowers are required to pay or reimburse by the
Loan Documents, by law, or otherwise, and (b) all Bank Product Obligations. Any
reference in this Agreement or in the Loan Documents to the Obligations shall
include all extensions, modifications, renewals, or alterations thereof, both
prior and subsequent to any Insolvency Proceeding.
"Officers' Certificate" means the representations and
warranties of officers form submitted by Agent to Administrative Borrower,
together with Borrowers' completed
responses to the inquiries set forth therein, the form and substance of such
responses to be satisfactory to Agent.
"Ordinary Loss" shall mean with respect to each fiscal year of
a Borrower the excess of (i) all items of taxable income or gain (other than
capital gain) allocated by a Borrower to its Equity Holders over (ii) all items
of taxable deduction or loss (but not including capital loss) allocated by a
Borrower to its Equity Holders.
"Originating Lender" has the meaning set forth in Section
14.1(e).
"Operating Agreement" means the Limited Liability Company
Agreement of Parent, as amended from time to time.
"Overadvance" has the meaning set forth in Section 2.5.
"Overdistribution" has the meaning set forth in Section
7.20(c).
"Parent" has the meaning set forth in the preamble to this
Agreement.
"Parking Lease" means that certain Parking Lease by and
between Buffington Harbor Parking Associates, LLC, as lessor, and Parent, as
Lessee, dated as of June 19, 2000.
"Participant" has the meaning set forth in Section 14.1(e).
"Permitted Discretion" means a determination made in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.
"Permitted Holders" means, individually and collectively, BDI,
Barden, Family Members of Barden, and Family Trusts of Barden.
"Permitted Indebtedness" means:
(a) Indebtedness evidenced by this Agreement;
(b) Indebtedness in respect of FF&E Financing in
an aggregate amount outstanding, at any one time, not to
exceed $10,000,000;
(c) Indebtedness in respect of performance
bonds, appeal bonds, surety bonds, insurance obligations or
bonds, and other similar bonds and obligations incurred in the
ordinary course of business and any guaranties thereof;
(d) Hedging Obligations incurred to fix the
interest rate on any variable rate Indebtedness otherwise
permitted by this Agreement, provided, that the notional
principal amount of each such Hedging Obligation does not
exceed the principal amount of the Indebtedness to which such
Hedging
Obligations relates and such Hedging Obligations shall not
have been incurred for speculative purposes;
(e) Indebtedness set forth in Schedule 5.20;
(f) Indebtedness (other than the Notes) of
Borrowers in an aggregate principal amount outstanding, at any
one time, not to exceed $10,000,000;
(g) Indebtedness outstanding under the Notes or
guaranties in respect thereof in an aggregate principal amount
not to exceed $270,000,000 at any one time outstanding; and
(h) refinancings, renewals, or extensions of
Indebtedness permitted under clauses (b)-(g) of this
definition, or otherwise permitted under Section 7.1 (and
continuance or renewal of any Permitted Liens associated
therewith) so long as: (i) the terms and conditions of such
refinancings, renewals, or extensions do not materially impair
the prospects of repayment of the Obligations by Borrower,
(ii) the net cash proceeds of such refinancings, renewals, or
extensions do not result in an increase in the aggregate
principal amount of the Indebtedness so refinanced, renewed,
or extended, (iii) such refinancings, renewals, refundings, or
extensions do not result in a shortening of the average
weighted maturity of the Indebtedness so refinanced, renewed,
or extended, and (iv) to the extent that Indebtedness that is
refinanced was subordinated in right of payment to the
Obligations, then the subordination terms and conditions of
the refinancing Indebtedness must be at least as favorable to
the Lender Group as those applicable to the refinanced
Indebtedness.
"Permitted Investments" means:
(a) Investments in Parent, each Borrower, or any
Restricted Subsidiary that is a Wholly Owned Subsidiary of a Borrower;
(b) Investments in Cash Equivalents;
(c) Investments in a Person (the "Designated
Person"), if, as a result of such Investment, such Person (i) becomes a Wholly
Owned Subsidiary of any Borrower, or (ii) is, subject to the terms and
conditions of Section 7.3, merged, consolidated, or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
any Borrower or a Wholly Owned Subsidiary of such Borrower, so long as (A) no
Default or Event of Default has occurred and is continuing or would result from
any such Investment, (B) the Designated Person is engaged solely in a Related
Business, (C) the Interest Coverage Ratio for Borrowers' most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such Investment is made would have been
not less than 1.80:1.00, determined on a pro forma
basis, as if such Investment had been made at the beginning of such four-quarter
period, and (D) not later than 3 Business Days prior to the date of such
Investment, Agent shall have received a certificate from Parent's chief
financial officer which sets forth the calculation of the Interest Coverage
Ratio described above in clause (C) for the period described in such clause,
which attaches the internal financial statements for Parent and its Subsidiaries
which support such calculation, and which is otherwise in form and substance
satisfactory to Agent;
(d) Hedging Obligations;
(e) Investments as a result of consideration
received in connection with an Asset Sale made in compliance with Section 7.4.
(f) Investments existing as of the Closing Date
and set forth on Schedule P-1 attached hereto;
(g) credit extensions to gaming customers in the
ordinary course of business consistent with industry practice;
(h) Investments paid for solely with common
Stock (other than Disqualified Capital Stock) of any Borrower;
(i) stock, obligations, or securities received
in settlement of debts created in the ordinary course of business and owing to
any Borrower in satisfaction of judgments;
(j) Investments in a joint venture that is
engaged in a Related Business between Parent or any of its Restricted
Subsidiaries and the municipality of Black Hawk, Colorado, in an amount not to
exceed $2,500,000, so long as Parent or the applicable Restricted Subsidiary
grants a Lien to Agent in and to such Investment;
(k) contributions by Parent or any of its
Restricted Subsidiaries of Undeveloped Land to a joint venture between Parent or
any of its Restricted Subsidiaries, on the one hand, and the municipality of
Gary, Indiana, on the other hand, for the purposes of developing on such
Undeveloped Land non-gaming facilities; provided that for the avoidance of
doubt, for purposes of determining the amount of any such Permitted Investment
pursuant to this clause (k), (i) the amount of such contribution attributable to
the amount or value of any Investments in, or capital expenditures or other
payments with respect to, or development of or improvement on, such Undeveloped
Land after the Closing Date (other than minor improvements and other than
payments for reasonable costs incurred in connection with such contribution,
which costs would customarily be incurred by a seller of unimproved land,
including, without limitation, for title charges, environmental studies, surveys
and legal fees) shall not constitute a Permitted Investment, and (ii) any
Investments in, or capital expenditures or other payments with respect to, such
joint venture after the Closing Date shall not constitute a Permitted
Investment;
(l) loans or advances to Affiliates and to
employees of any Borrower and their Subsidiaries made in the ordinary course of
business in an aggregate amount not to exceed $1,000,000 at any one time
outstanding;
(m) cash capital contributions, loans, or
advances to the BHR Joint Venture that are used by the BHR Joint Venture to make
capital expenditures in the ordinary course of business; provided, that (a)
concurrently with any such contribution, loan, or advance all other members of
the BHR Joint Venture make cash capital contributions, loans, or advances, as
the case may be, on a pro rata basis, based on each member's ownership interest
in the BHR Joint Venture, and (b) at the time of such contribution, loan, or
advance, and after giving effect thereto, Borrower shall have unrestricted cash
(it being understood that all cash Borrower is required to maintain on its
premises pursuant to Applicable Gaming Laws shall be deemed to be restricted
cash), cash equivalents, or Excess Availability of not less than $1,000,000 in
the aggregate;
(n) Investments involving the purchase of the
GNC Land by Parent or its Restricted Subsidiaries, so long as (i) Agent shall
have received a copy of a written appraisal by a nationally recognized
independent appraisal firm which is acceptable to Agent, which appraisal sets
forth the fair market value of the GNC Land (the "Appraised Value") as of a date
no earlier than 90 days prior to the date of the purchase of the GNC Land by
Parent or its Restricted Subsidiaries, and which appraisal is in form and
substance satisfactory to Agent, (ii) the value of the aggregate consideration
to be paid or given by Parent and its Restricted Subsidiaries for the GNC Land
shall not exceed 80% of the Appraised Value of the GNC Land, (iii) the other
terms of such transaction shall be on terms no less favorable to Parent and its
Restricted Subsidiaries than those that would have been obtained in a comparable
transaction at such time by Parent and its Restricted Subsidiaries on an
arm's-length basis from a Person that is not an Affiliate of Parent or such
Restricted Subsidiary, (iv) Agent has received a certificate from an officer of
Parent demonstrating compliance with clauses (n)(ii) and (n)(iii) of this
definition, which certificate is in form and substance satisfactory to Agent,
and (v) Parent or the applicable Restricted Subsidiary has executed a Mortgage
in favor of Agent with respect to its interest in the GNC Land and the GNC Land
becomes part of the Real Property Collateral;
(o) Investments in Parent's Unrestricted
Subsidiaries and Affiliates, provided, that (i) the aggregate amount of all such
Investments outstanding at any time after the Closing Date pursuant to this
clause (m) shall not exceed $5,000,000 in the aggregate (measured by the value
attributed to the Investment at the time outstanding), and (ii) Parent or the
applicable Restricted Subsidiary grants a Lien to Agent in and to such
Investment;
(p) the contribution of the GNC Land to a
Subsidiary of Parent or a Subsidiary of a Restricted Subsidiary of Parent in
exchange for Stock in such Subsidiary, so long as Parent or the applicable
Restricted Subsidiary grants a Lien to Agent in and to such Stock; provided,
that Agent shall, and the Lenders hereby authorize Agent to, release its Lien on
the GNC Land in connection with such contribution;
(q) Investments consisting of Indebtedness
described in clause (h) of the definition of "Permitted Indebtedness"; and
(r) Investments consisting of redemptions or
repurchases of Stock or Indebtedness of Parent or any of its Subsidiaries to the
extent required by any Gaming Authority or, if determined in the good faith
judgment of the managers of Parent as evidenced by a resolution of the managers
that has been delivered to the trustee, to prevent the loss, or to secure the
grant or establishment, of any Gaming License or other right to conduct lawful
gaming operations.
"Permitted Liens" means:
(a) Liens held by Agent;
(b) Liens for unpaid taxes (other than Liens in favor
of the United States Government) that either (i) are not
overdue by more than 30 days or (ii) are the subject of
Permitted Protests;
(c) Liens set forth on Schedule P-2;
(d) (i) the interests of lessors under operating
leases, and (ii) purchase money Liens or the interests of
lessors under leases classified as capital leases under GAAP
to the extent that such Liens or interests secure Purchase
Money Indebtedness permitted under Section 7.1 hereof and so
long as such Liens attach only to the asset purchased or
acquired and the proceeds thereof and only secures the
purchase price of the asset;
(e) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of
business of each Borrower and not in connection with the
borrowing of money, and which Liens either (i) are not overdue
for a period of more than 30 days, or (ii) are the subject of
Permitted Protests;
(f) Liens arising from pledges or deposits made in
the ordinary course of business in connection with obtaining
worker's compensation, unemployment insurance, or other types
of social security legislation;
(g) Liens or deposits to secure performance of bids,
tenders, contracts (other than contracts for the payment of
money), or leases (to the extent permitted under this
Agreement), surety bonds, and other obligations of a like
nature, in each case, incurred in the ordinary course of
business of each Borrower and not in connection with the
borrowing of money;
(h) Liens of or resulting from any judgment or award
for an amount and for a period not resulting in an Event of
Default with respect thereto, so long as such judgment or
award is being contested in good faith and is
adequately bonded, and any appropriate legal proceedings that
may have been duly initiated for the review of such judgment,
decree, or order shall not have been finally and adversely
terminated or the period within which such proceedings may be
initiated shall not have expired;
(i) Liens with respect to the Real Property
Collateral that are exceptions to the commitments for title
insurance issued in connection with the Mortgages, as accepted
by Agent;
(j) with respect to any Real Property that is not
part of the Real Property Collateral, easements, rights of
way, zoning and similar covenants, conditions and
restrictions, and other similar encumbrances that customarily
exist on properties of Persons engaged in similar activities
and similarly situated and that in any event do not materially
interfere with or impair the use or operation of the
Collateral by Borrowers or the value of Agent's Lien thereon
or therein, or materially interfere with the ordinary conduct
of the businesses of Borrowers; provided, that such Liens are
not incurred in connection with any borrowing of money or any
commitment to loan any money or to extend any credit;
(k) Liens in favor of the Indenture Trustee relative
to the Senior Note Documents, so long as and to the extent
such Liens remain the subject of the Intercreditor Agreement;
(l) with respect to any Vessel included in the
Collateral, certain maritime liens including liens for crew's
wages and salvage;
(m) Liens that secure Acquired Debt, provided, that
such Liens do not extend to or cover any property or assets
other than those of the Person being acquired and were not put
in place in anticipation of such acquisition;
(n) Liens securing Indebtedness refinanced pursuant
to clause (h) of the definition of Permitted Indebtedness,
incurred in compliance with the terms hereof to refinance
Indebtedness secured by Permitted Liens, provided, that (i)
such Liens do not extend to any property or assets other than
such property or assets as were subject to Liens in respect of
the Indebtedness being refinanced, (ii) if the Liens securing
the Indebtedness being refinanced were subordinated to or pari
passu with the Liens of Agent or any intercompany loans, as
applicable, such new Liens are subordinated to or pari passu
with such Liens to the same extent, and any related
subordination or intercreditor agreement is confirmed on terms
reasonably satisfactory to Agent; and (iii) such Liens are no
more adverse to the interests of Agent than the Liens replaced
or extended thereby; and
(o) Liens on the GNC Land securing Permitted
Indebtedness, so long as the aggregate outstanding amount at
any one time of the Indebtedness secured
by such Liens shall not exceed 50% of the lesser of (i) the
aggregate amount paid by Parent and its Restricted
Subsidiaries for the GNC Land, and (ii) the fair market value
of the GNC Land, so long as (w) the GNC Land is owned by a
Subsidiary of Parent, (x) 100% of the Stock of such Subsidiary
is owned by Parent or a Restricted Subsidiary, (y) Agent has
been granted a Lien in and to the Stock in such Subsidiary to
secure the Obligations, and (z) such Subsidiary does not
conduct any operations or have any Indebtedness other than
operations conducted and Indebtedness incurred in connection
with the development of the GNC Land and the operation of any
business that is located thereon.
"Permitted Protest" means the right of any Borrower to protest
any Lien (other than any such Lien that secures the Obligations), taxes (other
than payroll taxes or taxes that are the subject of a United States federal tax
lien), or rental payment, provided that (a) a reserve with respect to such
obligation is established on the Books of each Borrower in such amount as is
required under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by such Borrower in good faith, and (c) Agent is satisfied that,
while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Agent's Liens.
"Permitted Tax Distributions" shall mean an amount equal to
the positive balance of each Borrower's Tax Liability Account, until such
positive balances are reduced to zero.
"Person" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"Pre-opening Expenses" means all costs of start-up activities
that are required to be expensed (and are not capitalized) in accordance with
SOP 98-5.
"Projections" means Parent's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with Parent's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share" means, as of any date of determination:
(a) with respect to a Lender's obligation to make
Advances and receive payments of principal, interest, fees, costs, and expenses
with respect thereto, (i) prior to the Revolver Commitments being terminated or
reduced to zero, the percentage obtained by dividing (y) such Lender's Revolver
Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and (ii)
from and after the time that the Revolver Commitments have been terminated or
reduced to zero, the percentage obtained by dividing (y) the
aggregate outstanding principal amount of such Lender's Advances by (z) the
aggregate outstanding principal amount of all Advances,
(b) with respect to a Lender's obligation to participate
in Letters of Credit, to reimburse the Issuing Lender, and to receive payments
of fees with respect thereto, (i) prior to the Revolver Commitments being
terminated or reduced to zero, the percentage obtained by dividing (y) such
Lender's Revolver Commitment, by (z) the aggregate Revolver Commitments of all
Lenders, and (ii) from and after the time that the Revolver Commitments have
been terminated or reduced to zero, the percentage obtained by dividing (y) the
aggregate outstanding principal amount of such Lender's Advances by (z) the
aggregate outstanding principal amount of all Advances,
(c) with respect to all other matters as to a particular
Lender (including the indemnification obligations arising under Section 16.7),
the percentage obtained by dividing (i) such Lender's Revolver Commitment, by
(ii) the aggregate amount of Revolver Commitments of all Lenders; provided,
however, that in the event the Revolver Commitments have been terminated or
reduced to zero, Pro Rata Share under this clause shall be the percentage
obtained by dividing (A) the outstanding principal amount of such Lender's
Advances plus such Lender's ratable portion of the Risk Participation Liability
with respect to outstanding Letters of Credit, by (B) the outstanding principal
amount of all Advances plus the aggregate amount of the Risk Participation
Liability with respect to outstanding Letters of Credit.
"Purchase Money Indebtedness" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 180 days after, the acquisition of any fixed assets (and the
construction or build-out of facilities (including Purchase Money Indebtedness
of any other Person at the time such other Person is merged with or into or is
otherwise acquired by the Borrowers)) for the purpose of financing all or any
part of the acquisition cost thereof; provided, that (x) the principal amount of
such Indebtedness does not exceed 80% of such cost, including construction
charges, and (y) any Lien securing such Indebtedness does not extend to or cover
any other asset or property other than the asset or property being so acquired,
constructed or built.
"Qualified Cash" means, as of any date of determination, the
amount of unrestricted cash and Cash Equivalents of Borrowers and their
Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any
combination thereof, and which such Deposit Account or Securities Account is the
subject of a Control Agreement and is maintained by a branch office of the bank
or securities intermediary located within the United States.
"Qualifying Casino" means a Casino owned by any Borrower or a
Restricted Subsidiary of any Borrower that contains at least 400 gaming devices
and at least 10,000 square feet of space dedicated to the operation of games of
chance.
"Real Property" means any estates or interests in real
property now owned or hereafter acquired by any Borrower or a Subsidiary of any
Borrower and the improvements thereto.
"Real Property Collateral" means the parcel or parcels of Real
Property identified on Schedule R-1 and any Real Property hereafter acquired by
a Borrower or any Subsidiary of a Borrower.
"Record" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Related Business" means the gaming, entertainment and hotel
businesses conducted by any Borrower and its Restricted Subsidiaries as of the
Closing Date and any and all other businesses that in the good faith judgment of
the Managers of any Borrower are materially related or incidental businesses.
"Remedial Action" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
"Replacement Lender" has the meaning set forth in Section
15.2(a).
"Report" has the meaning set forth in Section 16.17.
"Required Availability" means that the sum of (a) Excess
Availability, plus (b) Qualified Cash exceeds $40,000,000.
"Required Lenders" means, at any time, Lenders whose aggregate
Pro Rata Shares (calculated under clause (c) of the definition of Pro Rata
Shares) equal or exceed 50.1%.
"Reserve Percentage" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Restricted Payments" has the meaning set forth in Section
7.10 hereof.
"Restricted Subsidiary" means a Subsidiary of Parent and
Borrowers other than an Unrestricted Subsidiary.
"Return from Unrestricted Subsidiaries" means (a) 50% of any
dividends or distributions received by a Borrower or a Restricted Subsidiary
from an Unrestricted
Subsidiary, to the extent that such dividends or distributions were not
otherwise included in Consolidated Net Income of such Borrower, plus (b) to the
extent not otherwise included in Consolidated Net Income of such Borrower, an
amount equal to the net reduction in Investments in Unrestricted Subsidiaries
resulting from (i) repayments of the principal of loans or advances or other
transfers of assets to such Borrower or any Restricted Subsidiary from
Unrestricted Subsidiaries or (ii) the sale or liquidation of any Unrestricted
Subsidiaries (other than the sale, distribution, or liquidation of an
Unrestricted Subsidiary that as of the Closing Date was designated as an
Unrestricted Subsidiary), plus (c) to the extent that any Unrestricted
Subsidiary is designated to be a Restricted Subsidiary, the fair market value of
any Borrower's Investment in such Unrestricted Subsidiary on the date of such
designation.
"Revenue-Based Manager Distributions" means the distributions
payable by Parent to BDI, which fees shall not exceed 1% of net revenues of
Borrowers for any fiscal quarter.
"Revolver Commitment" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 14.1.
"Revolver Usage" means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, plus (b) the then
extant amount of the Letter of Credit Usage.
"Risk Participation Liability" means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
by Borrowers, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"Securities Account" means a "securities account" as that term
is defined in the Code.
"Securities Act" means the Securities Act of 1933 as now in
effect or as hereafter amended, or any similar statute hereafter adopted with
similar purpose or effect.
"Senior Note Documents" means, collectively, the Indenture,
the Notes, and the Security Documents (as such term is defined in the
Indenture).
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section
2.3(f)(i).
"Short-Term Capital Loss" shall mean, with respect to each
fiscal year of a Borrower, the product of (i) Net Short-Term Capital Loss and
(ii) the Applicable Capital Gain Tax Rate.
"Solvent" means, with respect to any Person on a particular
date, that, at fair valuations, the sum of such Person's assets is greater than
all of such Person's debts.
"Stock" means all shares, options, warrants, limited
liability, membership or other interests, participations, or other equivalents
(regardless of how designated) of or in a Person, whether voting or nonvoting,
including common stock, preferred stock, or any other "equity security" (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the SEC under the Exchange Act); provided, however, that Stock shall not
include any debt security that is convertible into or exchangeable for Stock.
"Stock Pledge Agreement" means a stock pledge agreement, in
form and substance satisfactory to Agent, executed and delivered by each
Borrower, Guarantor or Limited Recourse Guarantor that owns Stock of a
Restricted Subsidiary of Parent.
"Subordination of Colorado Mortgage" means those
Subordinations of Mortgages dated as of the date hereof and executed by BCG and
the Indenture Trustee in favor of Agent.
"Subordination of Majestic Star Ship Mortgage" means that
Subordination of Preferred Fleet Mortgage Upon Majestic Star (Official No.
1057517) dated as of the date hereof and executed by the Indenture Trustee in
favor of Agent.
"Subordination of Mississippi Mortgage" means those
Subordinations of Mortgages dated as of the date hereof and executed by BMG and
the Indenture Trustee in favor of Agent.
"Subordination of Preferred Fleet Mortgage" means that
Subordination of Preferred Fleet Mortgage Upon Fitzgerald's Tunica (Official No.
262757) dated as of the date hereof and executed by the Indenture Trustee in
favor of Agent.
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
"Swing Lender" means WFF or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender under Section 2.3(d).
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Syndication Side Letter" means that certain letter agreement
between each Borrower and Agent which is in form and substance satisfactory to
Agent.
"Tax Calculation Event" has the meaning set forth in Section
7.20(c).
"Taxes" has the meaning set forth in Section 16.11.
"Tax Liability Account" shall mean a memorandum account
maintained by the Company with respect to each Borrower. The initial balance of
the Tax Liability Account is zero. At the end of each fiscal year, the Tax
Liability Account must be increased in the amount of the Assumed Tax Liability
of the Borrower for such year and must be decreased in the amount of the Assumed
Tax Benefit of such Borrower for the year. The Tax Liability Account will also
be decreased by any Tax Distributions to the Borrower.
"Trademark Security Agreement" means a trademark security
agreement executed and delivered by each Borrower and Agent, the form and
substance of which is satisfactory to Agent.
"Tunica Ship Mortgage" means that certain Preferred Ship
Mortgage dated as of the date hereof and executed by BMG in favor of Agent,
encumbering the Tunica Vessel and its related personal property.
"Tunica Vessel" means BMG's riverboat casino which is
documented under the laws and flag of the United States with Official Number
262757, and which has as its hailing port Tunica, Mississippi.
"Underdistribution" has the meaning set forth in Section
7.20(c).
"UCC Filing Authorization Letter" means a letter duly executed
by each Borrower and each Guarantor authorizing Agent to file appropriate
financing statements on Form UCC-1 without the signature of such Borrower or
Guarantor, as applicable, in such office or offices as may be necessary or, in
the opinion of Agent, desirable to perfect the security interests purported to
be created by the Loan Documents.
"Underlying Issuer" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the benefit of Borrowers.
"Underlying Letter of Credit" means a letter of credit that
has been issued by an Underlying Issuer.
"Undeveloped Land" means any unimproved land owned by Parent
or any of its Restricted Subsidiaries.
"United States" means the United States of America.
"Unrestricted Subsidiary" means (a) BNG, and (b) any
Subsidiary of a Borrower that, at or prior to the time of determination, shall
have been designated by the Managers as an Unrestricted Subsidiary; provided,
that such Subsidiary (w) does not hold any Indebtedness or capital Stock of, or
any Lien on any assets of, such Borrower or any Restricted Subsidiary of such
Borrower, (x) is not a party to any agreement, contract, arrangement, or
understanding with Parent or any Restricted Subsidiary unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable to
Parent or such Restricted Subsidiary that those that might be obtained at the
time from Persons who are not Affiliates of Parent, (y) is a Person with respect
to which neither Parent nor any of its Restricted Subsidiaries has any direct or
indirect obligation (i) to subscribe for additional Stock or (ii) to maintain or
preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results, and (z) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
Parent or any of its Restricted Subsidiaries. If, at any time, any Unrestricted
Subsidiary of a Borrower would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Agreement and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of such
date. The Managers may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under the Interest Coverage
Ratio test set forth in Section 7.1 hereof calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period, and (ii) no Default or Event of Default would be in existence following
such designation. Each Borrower shall be deemed to make an Investment in each of
its Subsidiaries designated as an Unrestricted Subsidiary immediately following
such designation in an amount equal to the Investment in such Subsidiary and its
Subsidiaries immediately prior to such designation. Any such designation by the
Managers shall be evidenced to Agent by filing with Agent a certified copy of
the resolution of the Managers giving effect to such designation and a
certificate from an officer of such Borrower certifying that such designation
complies with the foregoing conditions and is permitted by Section 7.1 hereof.
"Upper Tier Equity Holder" means, in the case of any Flow
Through Entity, the Equity Holder of which is, in turn, a Flow Through Entity,
the Person that is ultimately subject to tax on a net income basis on the items
of taxable income, gain, deduction, and loss of such Flow Through Entity.
"Vessel" means (a) the Majestic Star Vessel (and any
substitution or replacement therefor), and (b) the Tunica Vessel (and any
substitution or replacement therefor).
"Voidable Transfer" has the meaning set forth in Section 17.7.
"Wells Fargo" means Wells Fargo Bank, National Association, a
national banking association.
"WFF" means Wells Fargo Foothill, Inc., a California
corporation.
"Wholly Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all the capital Stock of which (other than directors'
qualifying shares) is owned directly or indirectly by such Person; provided,
that with respect to a Borrower, Wholly Owned Subsidiary shall exclude
Unrestricted Subsidiaries.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrowers" or the term "Parent" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to the repayment in full of the
Obligations shall mean the repayment in full in cash of all Obligations other
than contingent indemnification Obligations and other than any Bank Product
Obligations that, at such time, are allowed by the applicable Bank Product
Provider to remain outstanding and are not required to be repaid or cash
collateralized pursuant to the provisions of this Agreement. Any reference
herein to any Person shall be construed to include such Person's successors and
assigns. Any requirement of a writing contained herein or in the other Loan
Documents shall be satisfied by the transmission of a Record and any Record
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.
1.6 INDENTURE. Any terms defined in the Indenture that are incorporated
herein by reference shall be construed and defined as set forth in the Indenture
as in effect on the Closing Date.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances ("Advances")
to Borrowers in an amount at any one time outstanding not to exceed such
Lender's Pro Rata Share of an amount equal to the lesser of (i) the Maximum
Revolver Amount less the Letter of Credit Usage, or (ii) the Borrowing Base less
the Letter of Credit Usage.
(b) Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (i) sums that Borrowers are required to pay (such as
taxes, assessments, insurance premiums, or, in the case of leased assets, rents
or other amounts payable under such leases) and has failed to pay under any
Section of this Agreement or any other Loan Document, and (ii) amounts owing by
Borrowers or their Subsidiaries to any Person to the extent secured by a Lien
on, or trust over, any of the Collateral (other than any existing Permitted Lien
set forth on Schedule P-1 which is specifically identified thereon as entitled
to have priority over the Agent's Liens), which Lien or trust, in the Permitted
Discretion of Agent likely would have a priority superior to the Agent's Liens
(such as Liens or trusts in favor of landlords, warehousemen, carriers,
mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad
valorem, excise, sales, or other taxes where given priority under applicable
law) in and to such item of the Collateral.
(c) The Lenders with Revolver Commitments shall have no
obligation to make additional Advances hereunder to the extent such additional
Advances would cause the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this Section 2.1 may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed at
any time during the term of this Agreement.
2.2 [INTENTIONALLY OMITTED].
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by
an irrevocable written request by an Authorized Person delivered to Agent (which
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day prior to the date that is the requested Funding Date specifying
(i) the amount of such Borrowing, and (ii) the requested Funding Date, which
shall be a Business Day; provided, however, that in the case of a request for
Swing Loan in an amount of $5,000,000, or less, such notice will be timely
received if it is received by Agent no later than 10:00 a.m. (California time)
on the Business Day that is the requested Funding Date). At Agent's election, in
lieu of delivering the above-described written request, any Authorized Person
may give Agent telephonic notice of such request by the required time. In such
circumstances, Borrowers agree that any such telephonic notice will be confirmed
in writing within 24 hours of the giving of such notice and the failure to
provide such written confirmation shall not affect the validity of the request.
(b) AGENT'S ELECTION. Promptly after receipt of a request for
a Borrowing pursuant to Section 2.3(a), Agent shall elect, in its discretion,
(i) to have the terms of Section 2.3(c) apply to such requested Borrowing, or
(ii) if the Borrowing is for an Advance, to request Swing Lender to make a Swing
Loan pursuant to the terms of Section 2.3(d) in the amount of the requested
Borrowing; provided, however, that if Swing Lender declines in its sole
discretion to make a Swing Loan pursuant to Section 2.3(d), Agent shall elect to
have the terms of Section 2.3(c) apply to such requested Borrowing.
(c) MAKING OF LOANS.
(i) In the event that Agent shall elect to have the terms
of this Section 2.3(c) apply to a requested Borrowing as described in
Section 2.3(b), then promptly after receipt of a request for a
Borrowing pursuant to Section 2.3(a), Agent shall notify the Lenders,
not later than 1:00 p.m. (California time) on the Business Day
immediately preceding the Funding Date applicable thereto, by telecopy,
telephone, or other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender's Pro Rata
Share of the requested Borrowing available to Agent in immediately
available funds, to Agent's Account, not later than 10:00 a.m.
(California time) on the Funding Date applicable thereto. After Agent's
receipt of the proceeds of such Advances, Agent shall make the proceeds
thereof available to Administrative Borrower on the applicable Funding
Date by transferring immediately available funds equal to such proceeds
received by Agent to Administrative Borrower's Designated Account;
provided, however, that, subject to the provisions of Section 2.3(i),
Agent shall not request any Lender to make, and no Lender shall have
the obligation to make, any Advance if Agent shall have actual
knowledge that (1) one or more of the applicable conditions precedent
set forth in Section 3 will not be satisfied on the requested Funding
Date for the applicable Borrowing unless such condition has been
waived, or (2) the requested Borrowing would exceed the Availability on
such Funding Date.
(ii) Unless Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after the
Closing Date, prior to 9:00 a.m. (California time) on the date of such
Borrowing, that such Lender will not make available as and when
required hereunder to Agent for the account of Borrowers the amount of
that Lender's Pro Rata Share of the Borrowing, Agent may assume that
each Lender has made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may (but
shall not be so required), in reliance upon such assumption, make
available to Borrowers on such date a corresponding amount. If and to
the extent any Lender shall not have made its full amount available to
Agent in immediately available funds and Agent in such circumstances
has made available to Borrowers such amount, that Lender shall on the
Business Day following such Funding Date make such amount available to
Agent, together with interest at the Defaulting Lender Rate for each
day during such period. A notice submitted by Agent to any Lender with
respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available, such
payment to Agent shall constitute such Lender's Advance on the date of
Borrowing for all purposes of this Agreement. If such amount is not
made available to Agent on the Business Day following the Funding Date,
Agent will notify Administrative Borrower of such failure to fund and,
upon demand by Agent, Borrowers shall pay such amount to Agent for
Agent's account, together with interest thereon for each day elapsed
since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Advances composing such
Borrowing. The failure of any Lender to make any Advance on any Funding
Date shall not relieve any other Lender of any obligation hereunder to
make an Advance on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on any Funding Date.
(iii) Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrowers to Agent for the
Defaulting Lender's benefit, and, in the absence of such transfer to
the Defaulting Lender, Agent shall transfer any such payments to each
other non-Defaulting Lender member of the Lender Group ratably in
accordance with their Commitments (but only to the extent that such
Defaulting Lender's Advance was funded by the other members of the
Lender Group) or, if so directed by Administrative Borrower and if no
Default or Event of Default had occurred and is continuing (and to the
extent such Defaulting Lender's Advance was not funded by the Lender
Group), retain same to be re-advanced to Borrowers as if such
Defaulting Lender had made Advances to Borrowers. Subject to the
foregoing, Agent may hold and, in its Permitted Discretion, re-lend to
Borrowers for the account of such Defaulting Lender the amount of all
such payments received and retained by Agent for the account of such
Defaulting Lender. Solely for the purposes of voting or consenting to
matters with respect to the Loan
Documents, such Defaulting Lender shall be deemed not to be a "Lender"
and such Lender's Commitment shall be deemed to be zero. This Section
shall remain effective with respect to such Lender until (x) the
Obligations under this Agreement shall have been declared or shall have
become immediately due and payable, (y) the non-Defaulting Lenders,
Agent, and Administrative Borrower shall have waived such Defaulting
Lender's default in writing, or (z) the Defaulting Lender makes its Pro
Rata Share of the applicable Advance and pays to Agent all amounts
owing by Defaulting Lender in respect thereof. The operation of this
Section shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations
hereunder, or to relieve or excuse the performance by Borrowers of
their duties and obligations hereunder to Agent or to the Lenders other
than such Defaulting Lender. Any such failure to fund by any Defaulting
Lender shall constitute a material breach by such Defaulting Lender of
this Agreement and shall entitle Administrative Borrower at its option,
upon written notice to Agent, to arrange for a substitute Lender to
assume the Commitment of such Defaulting Lender, such substitute Lender
to be acceptable to Agent. In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse
to be replaced hereunder, and agrees to execute and deliver a completed
form of Assignment and Acceptance in favor of the substitute Lender
(and agrees that it shall be deemed to have executed and delivered such
document if it fails to do so) subject only to being repaid its share
of the outstanding Obligations (other than Bank Product Obligations,
but including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind
whatsoever; provided however, that any such assumption of the
Commitment of such Defaulting Lender shall not be deemed to constitute
a waiver of any of the Lender Groups' or Borrowers' rights or remedies
against any such Defaulting Lender arising out of or in relation to
such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the consent of
Swing Lender, as a Lender, to have the terms of this Section 2.3(d)
apply to a requested Borrowing as described in Section 2.3(b), Swing
Lender as a Lender shall make such Advance in the amount of such
Borrowing (any such Advance made solely by Swing Lender as a Lender
pursuant to this Section 2.3(d) being referred to as a "Swing Loan" and
such Advances being referred to collectively as "Swing Loans")
available to Borrowers on the Funding Date applicable thereto by
transferring immediately available funds to Administrative Borrower's
Designated Account. Each Swing Loan shall be deemed to be an Advance
hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that no such Swing Loan shall be
eligible to be a LIBOR Rate Loan and all payments on any Swing Loan
shall be payable to Swing Lender as a Lender solely for its own account
(and for the account of the holder of any participation interest with
respect to such Swing Loan). Subject to the provisions of Section
2.3(i), Agent shall not request Swing Lender as a Lender to make, and
Swing Lender as a Lender shall not make, any Swing Loan if Agent has
actual knowledge that (i) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the requested
Funding Date for the applicable Borrowing unless such condition has
been waived, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date. Swing Lender as a Lender shall not
otherwise be required to determine whether the applicable conditions
precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making, in its sole discretion, any
Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's
Liens, constitute Obligations hereunder, and bear interest at the rate
applicable from time to time to Advances that are Base Rate Loans.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrowers and the
Lenders, from time to time in Agent's sole discretion, (1) after the
occurrence and during the continuance of a Default or an Event of
Default, or (2) at any time that any of the other applicable conditions
precedent set forth in Section 3 have not been satisfied, to make
Advances to Borrowers on behalf of the Lenders that Agent, in its
Permitted Discretion deems necessary or desirable (A) to preserve or
protect the Collateral, or any portion thereof, (B) to enhance the
likelihood of repayment of the Obligations (other than the Bank Product
Obligations), or (C) to pay any other amount chargeable to Borrowers
pursuant to the terms of this Agreement, including Lender Group
Expenses and the costs, fees, and expenses described in Section 10 (any
of the Advances described in this Section 2.3(e) shall be referred to
as "Agent Advances"). Each Agent Advance shall be deemed to be an
Advance hereunder, except that no such Agent Advance shall be eligible
to be a LIBOR Rate Loan and all payments thereon shall be payable to
Agent solely for its own account.
(ii) The Agent Advances shall be repayable on demand,
secured by the Agent's Liens granted to Agent under the Loan Documents,
constitute Obligations hereunder, and bear interest at the rate
applicable from time to time to Advances that are Base Rate Loans.
(f) SETTLEMENT. It is agreed that each Lender's funded portion
of the Advances is intended by the Lenders to equal, at all times, such Lender's
Pro Rata Share of the outstanding Advances. Such agreement notwithstanding,
Agent, Swing Lender, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan
Documents, settlement among them as to the Advances, the Swing Loans, and the
Agent Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) Agent shall request settlement ("Settlement") with
the Lenders on a weekly basis, or on a more frequent basis if so
determined by Agent, (1) on behalf of Swing Lender, with respect to
each outstanding Swing Loan, (2) for itself, with respect to each Agent
Advance, and (3) with respect to Borrowers' or their Subsidiaries'
Collections received, as to each by notifying the Lenders by telecopy,
telephone, or other similar form of transmission, of such requested
Settlement, no later than 2:00 p.m. (California time) on the Business
Day immediately prior to the date of such requested Settlement (the
date of such requested Settlement being the "Settlement Date"). Such
notice of a Settlement Date shall include a summary statement of the
amount of outstanding Advances, Swing Loans, and Agent Advances for the
period since the prior Settlement Date. Subject to the terms and
conditions contained herein (including Section 2.3(c)(iii)): (y) if a
Lender's balance of the Advances (including Swing Loans and Agent
Advances) exceeds such Lender's Pro Rata Share of the Advances
(including Swing Loans and Agent Advances) as of a Settlement Date,
then Agent shall, by no later than 12:00 p.m. (California time) on the
Settlement Date, transfer in immediately available funds to a Deposit
Account of such Lender (as such Lender may designate), an amount such
that each such Lender shall, upon receipt of such amount, have as of
the Settlement Date, its Pro Rata Share of the Advances (including
Swing Loans and Agent Advances), and (z) if a Lender's balance of the
Advances (including Swing Loans and Agent Advances) is less than such
Lender's Pro Rata Share of the Advances (including Swing Loans and
Agent Advances) as of a Settlement Date, such Lender shall no later
than 12:00 p.m. (California time) on the Settlement Date transfer in
immediately available funds to the Agent's Account, an amount such that
each such Lender shall, upon transfer of such amount, have as of the
Settlement Date, its Pro Rata Share of the Advances (including Swing
Loans and Agent Advances). Such amounts made available to Agent under
clause (z) of the immediately preceding sentence shall be applied
against the amounts of the applicable Swing Loans or Agent Advances
and, together with the portion of such Swing Loans or Agent Advances
representing Swing Lender's Pro Rata Share thereof, shall constitute
Advances of such Lenders. If any such amount is not made available to
Agent by any Lender on the Settlement Date applicable thereto to the
extent required by the terms hereof, Agent shall be entitled to recover
for its account such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the
Advances, Swing Loans, and Agent Advances is less than, equal to, or
greater than such Lender's Pro Rata Share of the Advances, Swing Loans,
and Agent Advances as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply
to such balance the portion of payments actually received in good funds
by Agent with respect to principal, interest, fees payable by Borrowers
and allocable to the Lenders hereunder, and proceeds of Collateral. To
the extent that a net amount is owed to any such Lender after such
application, such net amount shall be distributed by Agent to that
Lender as part of such next Settlement.
(iii) Between Settlement Dates, Agent, to the extent no
Agent Advances or Swing Loans are outstanding, may pay over to Swing
Lender any payments received by Agent, that in accordance with the
terms of this Agreement would be applied to the reduction of the
Advances, for application to Swing Lender's Pro Rata Share of the
Advances. If, as of any Settlement Date, Collections of Borrowers or
their Subsidiaries received since the then immediately preceding
Settlement Date have been applied to Swing Lender's Pro Rata Share of
the Advances other than to Swing Loans, as provided for in the previous
sentence, Swing Lender shall pay to Agent for the accounts of the
Lenders, and Agent shall pay to the Lenders, to be applied to the
outstanding Advances of such Lenders, an amount such that each Lender
shall, upon receipt of such amount, have, as of such Settlement Date,
its Pro Rata Share of the Advances. During the period between
Settlement Dates, Swing Lender with respect to Swing Loans, Agent with
respect to Agent Advances, and each Lender (subject to the effect of
letter agreements between Agent and individual Lenders) with respect to
the Advances other than Swing Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent,
or the Lenders, as applicable.
(g) NOTATION. Agent shall record on its books the principal
amount of the Advances owing to each Lender, including the Swing Loans owing to
Swing Lender, and Agent Advances owing to Agent, and the interests therein of
each Lender, from time to time and such records shall, absent manifest error,
conclusively be presumed to be correct and accurate. In addition, each Lender is
authorized, at such Lender's option, to note the date and amount of each payment
or prepayment of principal of such Lender's Advances in its books and records,
including computer records.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other than
Swing Loans and Agent Advances) shall be made by the Lenders contemporaneously
and in accordance with their Pro Rata Shares. It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Advance (or other extension of credit) hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligations hereunder, and (ii) no
failure by any Lender to perform its obligations hereunder shall excuse any
other Lender from its obligations hereunder.
(i) OPTIONAL OVERADVANCES. Any contrary provision of this
Agreement notwithstanding, the Lenders hereby authorize Agent or Swing Lender,
as applicable, and Agent or Swing Lender, as applicable, may, but is not
obligated to, knowingly and intentionally, continue to make Advances (including
Swing Loans) to Borrowers notwithstanding that an Overadvance exists or thereby
would be created, so long as (i) after giving effect to such Advances, the
outstanding Revolver Usage does not exceed the Borrowing Base by more than
$5,000,000, (ii) after giving effect to such Advances, the outstanding Revolver
Usage (except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver
Amount, and (iii) at the time of the making of any such Advance, Agent does not
believe, in good faith, that the Overadvance created by such Advance will be
outstanding for more than 90 days. The foregoing provisions are for the
exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended
to benefit Borrowers in any way. The Advances and Swing Loans, as applicable,
that are made pursuant to this Section 2.3(i) shall be subject to the same terms
and conditions as any other Advance or Swing Loan, as applicable, except that
they shall not be eligible for the LIBOR Option and the rate of interest
applicable thereto shall be the rate applicable to Advances that are Base Rate
Loans under Section 2.6(c) hereof without regard to the presence or absence of a
Default or Event of Default.
A. In the event Agent obtains actual knowledge that
the Revolver Usage exceeds the amounts permitted by the
preceding paragraph, regardless of the amount of, or reason
for, such excess, Agent shall notify the Lenders as soon as
practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice
would result in imminent harm to the Collateral or its value),
and the Lenders with Revolver Commitments thereupon shall,
together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrowers intended
to reduce, within a reasonable time, the outstanding principal
amount of the Advances to Borrowers to an amount permitted by
the preceding paragraph. In the event Agent or any Lender
disagrees over the terms of reduction or repayment of any
Overadvance, the terms of reduction or repayment thereof shall
be implemented according to the determination of the Required
Lenders.
B. Each Lender with a Revolver Commitment shall be
obligated to settle with Agent as provided in Section 2.3(f)
for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender,
any intentional Overadvances made as permitted under this
Section 2.3(i), and any Overadvances resulting from the
charging to the Loan Account of interest, fees, or Lender
Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWERS.
(i) Except as otherwise expressly provided
herein, all payments by Borrowers shall be made to Agent's Account for
the account of the Lender Group and shall be made in immediately
available funds, no later than 11:00 a.m. (California time) on the date
specified herein. Any payment received by Agent later than 11:00 a.m.
(California time), shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall
continue to accrue until such following Business Day.
(ii) Unless Agent receives notice from
Administrative Borrower prior to the date on which any payment is due
to the Lenders that Borrowers will not make such payment in full as and
when required, Agent may assume that Borrowers have made (or will make)
such payment in full to Agent on such date in immediately available
funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent
Borrowers do not make such payment in full to Agent on the date when
due, each Lender severally shall repay to Agent on demand such amount
distributed to such Lender, together with interest thereon at the
Defaulting Lender Rate for each day from the date such amount is
distributed to such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION.
(i) Except as otherwise provided with respect to
Defaulting Lenders and except as otherwise provided in the Loan
Documents (including letter agreements between Agent and individual
Lenders), aggregate principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid
principal balance of the Obligations to which such payments relate held
by each Lender) and payments of fees and expenses (other than fees or
expenses that are for Agent's separate account, after giving effect to
any letter agreements between Agent and individual Lenders) shall be
apportioned ratably among the Lenders having a Pro Rata Share of the
type of Commitment or Obligation to which a particular fee relates. All
payments shall be remitted to Agent and all such payments, and all
proceeds of Collateral received by Agent, shall be applied as follows:
A. first, to pay any Lender Group Expenses then due
to Agent under the Loan Documents, until paid in full,
B. second, to pay any Lender Group Expenses then due
to the Lenders under the Loan Documents, on a ratable basis,
until paid in full,
C. third, to pay any fees then due to Agent (for its
separate accounts, after giving effect to any letter
agreements between Agent and the individual Lenders) under the
Loan Documents until paid in full,
D. fourth, to pay any fees then due to any or all of
the Lenders (after giving effect to any letter agreements
between Agent and individual Lenders) under the Loan
Documents, on a ratable basis, until paid in full,
E. fifth, to pay interest due in respect of all Agent
Advances, until paid in full,
F. sixth, ratably to pay interest due in respect of
the Advances (other than Agent Advances), and the Swing Loans
until paid in full,
G. seventh, to pay the principal of all Agent
Advances until paid in full,
H. eighth, to pay the principal of all Swing Loans
until paid in full,
I. ninth, so long as no Event of Default has occurred
and is continuing, and at Agent's election (which election
Agent agrees will not be made if an Overadvance would be
created thereby), to pay amounts then due and owing by
Administrative Borrower or its Subsidiaries in respect of Bank
Products, until paid in full,
J. tenth, so long as no Event of Default has occurred
and is continuing, to pay the principal of all Advances until
paid in full,
K. eleventh, if an Event of Default has occurred and
is continuing, ratably (i) to pay the principal of all
Advances until paid in full, (ii) to Agent, to be held by
Agent, for the ratable benefit of Issuing Lender and those
Lenders having a Revolver Commitment, as cash collateral in an
amount up to 105% of the then extant Letter of Credit Usage
until paid in full, and (iii) to Agent, to be held by Agent,
for the benefit of the Bank Product Providers, as cash
collateral in an amount up to the amount of the Bank Product
Reserve established prior to the occurrence of, and not in
contemplation of, the subject Event of Default until
Administrative Borrower's and its Subsidiaries' obligations in
respect of the then extant Bank Products have been paid in
full or the cash collateral amount has been exhausted,
L. twelfth, if an Event of Default has occurred and
is continuing, to pay any other Obligations (including the
provision of
amounts to Agent, to be held by Agent, for the benefit of the
Bank Product Providers, as cash collateral in an amount up to
the amount determined by Agent in its Permitted Discretion as
the amount necessary to secure Administrative Borrower's and
its Subsidiaries' obligations in respect of the then extant
Bank Products), and
M. thirteenth, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto
under applicable law.
(ii) Agent promptly shall distribute to each Lender,
pursuant to the applicable wire instructions received from each Lender
in writing, such funds as it may be entitled to receive, subject to a
Settlement delay as provided in Section 2.3(f).
(iii) In each instance, so long as no Event of Default has
occurred and is continuing, this Section 2.4(b) shall not be deemed to
apply to any payment by Borrowers specified by Borrowers to be for the
payment of specific Obligations then due and payable (or prepayable)
under any provision of this Agreement.
(iv) For purposes of the foregoing, "paid in full" means
payment of all amounts owing under the Loan Documents according to the
terms thereof, including loan fees, service fees, professional fees,
interest (and specifically including interest accrued after the
commencement of any Insolvency Proceeding), default interest, interest
on interest, and expense reimbursements, whether or not any of the
foregoing would be or is allowed or disallowed in whole or in part in
any Insolvency Proceeding.
(v) In the event of a direct conflict between the
priority provisions of this Section 2.4 and other provisions contained
in any other Loan Document, it is the intention of the parties hereto
that such priority provisions in such documents shall be read together
and construed, to the fullest extent possible, to be in concert with
each other. In the event of any actual, irreconcilable conflict that
cannot be resolved as aforesaid, the terms and provisions of this
Section 2.4 shall control and govern.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrowers to the
Lender Group pursuant to Section 2.1 or Section 2.12 is greater than either the
Dollar or percentage limitations set forth in Section 2.1 or Section 2.12, as
applicable (an "Overadvance"), Borrowers immediately shall pay to Agent, in
cash, the amount of such excess, which amount shall be used by Agent to reduce
the Obligations in accordance with the priorities set forth in Section 2.4(b).
In addition, Borrowers (and each of them, jointly and severally) hereby promise
to pay the Obligations (including principal, interest, fees, costs, and
expenses) in Dollars in full as and when due and payable under the terms of this
Agreement and the other Loan Documents.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c) below,
all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof as follows (i) if
the relevant Obligation is an Advance that is a LIBOR Rate Loan, at a per annum
rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and (ii) otherwise, at
a per annum rate equal to the Base Rate plus the Base Rate Margin.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the
ratable benefit of the Lenders with a Revolver Commitment, subject to any letter
agreement between Agent and individual Lenders), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in Section
2.12(e)) which shall accrue at a rate equal to the Letter of Credit Fee per
annum times the Daily Balance of the undrawn amount of all outstanding Letters
of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Agent or the
Required Lenders),
(i) all Obligations (except for undrawn Letters
of Credit and except for Bank Product Obligations) that have
been charged to the Loan Account pursuant to the terms hereof
shall bear interest on the Daily Balance thereof at a per
annum rate equal to 2 percentage points above the per annum
rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for above
shall be increased to 2 percentage points above the per annum
rate otherwise applicable hereunder.
(d) PAYMENT. Except as provided to the contrary in Section
2.12(a), interest, Letter of Credit fees, and all other fees payable hereunder
shall be due and payable, in arrears, on the first day of each month at any time
that Obligations or Commitments are outstanding. Borrowers hereby authorize
Agent, from time to time, without prior notice to Borrowers, to charge such
interest and fees, all Lender Group Expenses (as and when incurred), the
charges, commissions, fees, and costs provided for in Section 2.12(e) (as and
when accrued or incurred), the fees and costs provided for in Section 2.11 (as
and when accrued or incurred), and all other payments as and when due and
payable under any Loan Document (including any amounts due and payable to the
Bank Product Providers in respect of Bank Products up to the amount of the then
extant Bank Product Reserve) to Borrowers' Loan Account, which amounts
thereafter shall constitute Advances hereunder and shall accrue interest at the
rate then applicable to Advances hereunder. Any interest not paid when due shall
be compounded by being charged to Borrowers' Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Base Rate Loans hereunder.
(e) COMPUTATION. All interest and fees chargeable under the
Loan Documents shall be computed on the basis of a 360 day year for the actual
number of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrowers and the Lender Group, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; provided, however, that,
anything contained herein to the contrary notwithstanding, if said rate or rates
of interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Borrowers in excess of such legal maximum, whenever received,
shall be applied to reduce the principal balance of the Obligations to the
extent of such excess.
2.7 [INTENTIONALLY OMITTED].
2.8 CREDITING PAYMENTS. The receipt of any payment item by Agent shall
not be considered a payment on account unless such payment item is a wire
transfer of immediately available federal funds made to the Agent's Account or
unless and until such payment item is honored when presented for payment. Should
any payment item not be honored when presented for payment, then Borrowers shall
be deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the contrary contained herein notwithstanding, any
payment item shall be deemed received by Agent only if it is received into the
Agent's Account on a Business Day on or before 11:00 a.m. (California time). If
any payment item is received into the Agent's Account on a non-Business Day or
after 11:00 a.m. (California time) on a Business Day, it shall be deemed to have
been received by Agent as of the opening of business on the immediately
following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances, and
Issuing Lender is authorized to issue the Letters of Credit, under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person, or without instructions if pursuant to
Section 2.6(d). Administrative Borrower agrees to establish and maintain the
Designated Account with the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Borrowers and made by Agent or the
Lenders hereunder. Unless otherwise agreed by Agent and Administrative Borrower,
any Advance, Agent Advance, or Swing Loan requested by Borrowers and made by
Agent or the Lenders hereunder shall be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrowers (the "Loan
Account") on which
Borrowers will be charged with all Advances (including Agent Advances and Swing
Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for
Borrowers' account, the Letters of Credit issued by Issuing Lender for
Borrowers' account, and with all other payment Obligations hereunder or under
the other Loan Documents (except for Bank Product Obligations), including,
accrued interest, fees and expenses, and Lender Group Expenses. In accordance
with Section 2.8, the Loan Account will be credited with all payments received
by Agent from Borrowers or for Borrowers' account. Agent shall render statements
regarding the Loan Account to Administrative Borrower, including principal,
interest, fees, and including an itemization of all charges and expenses
constituting Lender Group Expenses owing, and such statements, absent manifest
error, shall be conclusively presumed to be correct and accurate and constitute
an account stated between Borrowers and the Lender Group unless, within 30 days
after receipt thereof by Administrative Borrower, Administrative Borrower shall
deliver to Agent written objection thereto describing the error or errors
contained in any such statements.
2.11 FEES. Borrowers shall pay to Agent the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter) and shall be apportioned among
the Lenders in accordance with the terms of letter agreements between Agent and
individual Lenders:
(a) UNUSED LINE FEE. On the first day of each January, April,
July, and October during the term of this Agreement, an unused line fee in the
amount equal to the Applicable Unused Line Fee Percentage (calculated for the
immediately preceding quarter) per annum times the result of (i) the Maximum
Revolver Amount, less (ii) the sum of (A) the average Daily Balance of Advances
that were outstanding during the immediately preceding quarter, plus (B) the
average Daily Balance of the Letter of Credit Usage during the immediately
preceding quarter,
(b) FEE LETTER FEES. As and when due and payable under the
terms of the Fee Letter, the fees set forth in the Fee Letter, and
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. Audit, appraisal,
and valuation fees and charges as follows (i) a fee of $850 per day, per auditor
(each such day for each such auditor, an "Examiner Day"), plus out-of-pocket
expenses for each financial audit of Borrowers performed by personnel employed
by Agent; provided, however, that, so long as no Event of Default has occurred
or is continuing, Borrowers shall not be obligated to pay such fees, expenses,
and charges for more than 5 Examiner-Days during any 12-month period; (ii) a fee
of $1,500 per day per appraiser, plus out-of-pocket expenses, for each appraisal
of the Collateral or business valuation performed by personnel employed by Agent
or the actual charges paid or incurred by Agent if it elects to employ the
services of one or more third Persons to appraise the Collateral or perform such
business valuation; provided, however, that, so long as no Event of Default has
occurred or is continuing, Borrowers shall have no obligation to reimburse Agent
for more than one appraisal of the Collateral or business valuation in any 12
month period, and the reimbursement amount for each such appraisal or business
valuation shall not exceed $25,000.
2.12 LETTERS OF CREDIT
(a) Subject to the terms and conditions of this Agreement, the
Issuing Lender agrees to issue letters of credit for the account of Borrowers
(each, an "L/C") or to purchase participations or execute indemnities or
reimbursement obligations (each such undertaking, an "L/C Undertaking") with
respect to letters of credit issued by an Underlying Issuer (as of the Closing
Date, the prospective Underlying Issuer is to be Wells Fargo) for the account of
Borrowers. To request the issuance of an L/C or an L/C Undertaking (or the
amendment, renewal, or extension of an outstanding L/C or L/C Undertaking),
Administrative Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Lender) to the Issuing Lender and Agent (reasonably in advance of the
requested date of issuance, amendment, renewal, or extension) a notice
requesting the issuance of an L/C or L/C Undertaking, or identifying the L/C or
L/C Undertaking to be amended, renewed, or extended, the date of issuance,
amendment, renewal, or extension, the date on which such L/C or L/C Undertaking
is to expire, the amount of such L/C or L/C Undertaking, the name and address of
the beneficiary thereof (or of the Underlying Letter of Credit, as applicable),
and such other information as shall be necessary to prepare, amend, renew, or
extend such L/C or L/C Undertaking. If requested by the Issuing Lender,
Borrowers also shall be an applicant under the application with respect to any
Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The
Issuing Lender shall have no obligation to issue a Letter of Credit if any of
the following would result after giving effect to the requested Letter of
Credit:
(i) the Letter of Credit Usage would exceed the Borrowing
Base less the then extant amount of outstanding Advances, or
(ii) the Letter of Credit Usage would exceed $5,000,000,
or
(iii) the Letter of Credit Usage would exceed the Maximum
Revolver Amount less the then extant amount of outstanding Advances.
Borrowers and the Lender Group acknowledge and agree that
certain Underlying Letters of Credit may be issued to support letters of credit
that already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing
Lender by paying to Agent an amount equal to such L/C Disbursement not later
than 11:00 a.m., California time, on the date that such L/C Disbursement is
made, if Administrative Borrower shall have received written or telephonic
notice of such L/C Disbursement prior to 10:00 a.m., California time, on such
date, or, if such notice has not been received by Administrative Borrower prior
to such time on such date, then not later than 11:00 a.m., California time, on
(i) the Business Day that Administrative Borrower receives such notice,
if such notice is received prior to 10:00 a.m., California time, on the date of
receipt, and, in the absence of such reimbursement, the L/C Disbursement
immediately and automatically shall be deemed to be an Advance hereunder and,
thereafter, shall bear interest at the rate then applicable to Advances that are
Base Rate Loans under Section 2.6. To the extent an L/C Disbursement is deemed
to be an Advance hereunder, Borrowers' obligation to reimburse such L/C
Disbursement shall be discharged and replaced by the resulting Advance. Promptly
following receipt by Agent of any payment from Borrowers pursuant to this
paragraph, Agent shall distribute such payment to the Issuing Lender or, to the
extent that Lenders have made payments pursuant to Section 2.12(c) to reimburse
the Issuing Lender, then to such Lenders and the Issuing Lender as their
interest may appear.
(b) Promptly following receipt of a notice of L/C
Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment
agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the
foregoing subsection on the same terms and conditions as if Borrowers had
requested such Advance and Agent shall promptly pay to Issuing Lender the
amounts so received by it from the Lenders. By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Lender or the Lenders with
Revolver Commitment, the Issuing Lender shall be deemed to have granted to each
Lender with a Revolver Commitment, and each Lender with a Revolver Commitment
shall be deemed to have purchased, a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of the Risk Participation Liability of
such Letter of Credit, and each such Lender agrees to pay to Agent, for the
account of the Issuing Lender, such Lender's Pro Rata Share of any payments made
by the Issuing Lender under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Revolver Commitment hereby
absolutely and unconditionally agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by
the Issuing Lender and not reimbursed by Borrowers on the date due as provided
in clause (a) of this Section, or of any reimbursement payment required to be
refunded to Borrowers for any reason. Each Lender with a Revolver Commitment
acknowledges and agrees that its obligation to deliver to Agent, for the account
of the Issuing Lender, an amount equal to its respective Pro Rata Share of each
L/C Disbursement made by the Issuing Lender pursuant to this Section 2.12(b)
shall be absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of Default or Default
or the failure to satisfy any condition set forth in Section 3 hereof. If any
such Lender fails to make available to Agent the amount of such Lender's Pro
Rata Share of each L/C Disbursement made by the Issuing Lender in respect of
such Letter of Credit as provided in this Section, such Lender shall be deemed
to be a Defaulting Lender and Agent (for the account of the Issuing Lender)
shall be entitled to recover such amount on demand from such Lender together
with interest thereon at the Defaulting Lender Rate until paid in full.
(c) Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless from any loss, cost, expense, or
liability, and reasonable attorneys fees incurred by the Lender Group arising
out of or in connection with any Letter of Credit; provided, however, that no
Borrower shall be obligated hereunder to indemnify for
any loss, cost, expense, or liability to the extent that it is caused by the
gross negligence or willful misconduct of the Issuing Lender or any other member
of the Lender Group. Each Borrower agrees to be bound by the Underlying Issuer's
regulations and interpretations of any Underlying Letter of Credit or by Issuing
Lender's interpretations of any L/C issued by Issuing Lender to or for such
Borrower's account, even though this interpretation may be different from such
Borrower's own, and each Borrower understands and agrees that the Lender Group
shall not be liable for any error, negligence, or mistake, whether of omission
or commission, in following Borrowers' instructions or those contained in the
Letter of Credit or any modifications, amendments, or supplements thereto. Each
Borrower understands that the L/C Undertakings may require Issuing Lender to
indemnify the Underlying Issuer for certain costs or liabilities arising out of
claims by Borrowers against such Underlying Issuer. Each Borrower hereby agrees
to indemnify, save, defend, and hold the Lender Group harmless with respect to
any loss, cost, expense (including reasonable attorneys fees), or liability
incurred by the Lender Group under any L/C Undertaking as a result of the Lender
Group's indemnification of any Underlying Issuer; provided, however, that no
Borrower shall be obligated hereunder to indemnify for any loss, cost, expense,
or liability to the extent that it is caused by the gross negligence or willful
misconduct of the Issuing Lender or any other member of the Lender Group.
(d) Each Borrower hereby authorizes and directs any
Underlying Issuer to deliver to the Issuing Lender all instruments, documents,
and other writings and property received by such Underlying Issuer pursuant to
such Underlying Letter of Credit and to accept and rely upon the Issuing
Lender's instructions with respect to all matters arising in connection with
such Underlying Letter of Credit and the related application.
(e) Any and all charges, commissions, fees, and costs
incurred by the Issuing Lender relating to Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, as of the Closing Date, the
usage charge imposed by the prospective Underlying Issuer is .825% per annum
times the face amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
(f) If by reason of (i) any change after the Closing
Date in any applicable law, treaty, rule, or regulation or any change in the
interpretation or application thereof by any Governmental Authority, or (ii)
compliance by the Underlying Issuer or the Lender Group with any direction,
request, or requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
(i) any reserve, deposit, or similar requirement
is or shall be imposed or modified in respect of any Letter of
Credit issued hereunder, or
(ii) there shall be imposed on the Underlying
Issuer or the Lender Group any other condition regarding any
Underlying Letter of Credit or any Letter of Credit issued
pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
2.13 LIBOR OPTION.
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu of
having interest charged at the rate based upon the Base Rate, Borrowers shall
have the option (the "LIBOR Option") to have interest on all or a portion of the
Advances be charged at a rate of interest based upon the LIBOR Rate. Interest on
LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto, (ii) the occurrence of an Event of Default
in consequence of which the Required Lenders or Agent on behalf thereof have
elected to accelerate the maturity of all or any portion of the Obligations, or
(iii) termination of this Agreement pursuant to the terms hereof. On the last
day of each applicable Interest Period, unless Administrative Borrower properly
has exercised the LIBOR Option with respect thereto, the interest rate
applicable to such LIBOR Rate Loan automatically shall convert to the rate of
interest then applicable to Base Rate Loans of the same type hereunder. At any
time that an Event of Default has occurred and is continuing, Borrowers no
longer shall have the option to request that Advances bear interest at the LIBOR
Rate and Agent shall have the right to convert the interest rate on all
outstanding LIBOR Rate Loans to the rate then applicable to Base Rate Loans
hereunder.
(b) LIBOR Election.
(i) Administrative Borrower may, at any time and
from time to time, so long as no Event of Default has occurred
and is continuing, elect to exercise the LIBOR Option by
notifying Agent prior to 11:00 a.m. (California time) at least
3 Business Days prior to the commencement of the proposed
Interest Period (the "LIBOR Deadline"). Notice of
Administrative Borrower's election of the LIBOR Option for a
permitted portion of the Advances and an Interest Period
pursuant to this Section shall be made by delivery to Agent of
a LIBOR Notice received by Agent before the LIBOR Deadline, or
by
telephonic notice received by Agent before the LIBOR Deadline
(to be confirmed by delivery to Agent of a LIBOR Notice
received by Agent prior to 5:00 p.m. (California time) on the
same day). Promptly upon its receipt of each such LIBOR
Notice, Agent shall provide a copy thereof to each of the
Lenders having a Revolver Commitment.
(ii) Each LIBOR Notice shall be irrevocable and
binding on Borrowers. In connection with each LIBOR Rate Loan,
each Borrower shall indemnify, defend, and hold Agent and the
Lenders harmless against any loss, cost, or expense incurred
by Agent or any Lender as a result of (a) the payment of any
principal of any LIBOR Rate Loan other than on the last day of
an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any LIBOR Rate
Loan other than on the last day of the Interest Period
applicable thereto, or (c) the failure to borrow, convert,
continue or prepay any LIBOR Rate Loan on the date specified
in any LIBOR Notice delivered pursuant hereto (such losses,
costs, and expenses, collectively, "Funding Losses"). Funding
Losses shall, with respect to Agent or any Lender, be deemed
to equal the amount determined by Agent or such Lender to be
the excess, if any, of (i) the amount of interest that would
have accrued on the principal amount of such LIBOR Rate Loan
had such event not occurred, at the LIBOR Rate that would have
been applicable thereto, for the period from the date of such
event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest
Period therefor), minus (ii) the amount of interest that would
accrue on such principal amount for such period at the
interest rate which Agent or such Lender would be offered were
it to be offered, at the commencement of such period, Dollar
deposits of a comparable amount and period in the London
interbank market. A certificate of Agent or a Lender delivered
to Administrative Borrower setting forth any amount or amounts
that Agent or such Lender is entitled to receive pursuant to
this Section 2.13 shall be conclusive absent manifest error.
(iii) Borrowers shall have not more than 5 LIBOR
Rate Loans in effect at any given time. Borrowers only may
exercise the LIBOR Option for LIBOR Rate Loans of at least
$1,000,000 and integral multiples of $500,000 in excess
thereof.
(c) PREPAYMENTS. Borrowers may prepay LIBOR Rate
Loans at any time; provided, however, that in the event that LIBOR Rate Loans
are prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any automatic prepayment through
the required application by Agent of proceeds of Borrowers' and their
Subsidiaries' Collections in accordance with Section 2.4(b) or for any other
reason, including early termination of the term of this Agreement or
acceleration of all or any portion of the Obligations pursuant to the terms
hereof, each Borrower shall indemnify, defend, and
hold Agent and the Lenders and their Participants harmless against any and all
Funding Losses in accordance with clause (b) above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Agent with
respect to any Lender on a prospective basis to take into
account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased
costs due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general
applicability in corporate income tax laws) and changes in the
reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), excluding the
Reserve Percentage, which additional or increased costs would
increase the cost of funding loans bearing interest at the
LIBOR Rate. In any such event, the affected Lender shall give
Administrative Borrower and Agent notice of such a
determination and adjustment and Agent promptly shall transmit
the notice to each other Lender and, upon its receipt of the
notice from the affected Lender, Administrative Borrower may,
by notice to such affected Lender (y) require such Lender to
furnish to Administrative Borrower a statement setting forth
the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (z) repay the
LIBOR Rate Loans with respect to which such adjustment is made
(together with any amounts due under clause (b)(ii) above).
(ii) In the event that any change in market
conditions or any law, regulation, treaty, or directive, or
any change therein or in the interpretation of application
thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Advances
or to continue such funding or maintaining, or to determine or
charge interest rates at the LIBOR Rate, such Lender shall
give notice of such changed circumstances to Agent and
Administrative Borrower and Agent promptly shall transmit the
notice to each other Lender and (y) in the case of any LIBOR
Rate Loans of such Lender that are outstanding, the date
specified in such Lender's notice shall be deemed to be the
last day of the Interest Period of such LIBOR Rate Loans, and
interest upon the LIBOR Rate Loans of such Lender thereafter
shall accrue interest at the rate then applicable to Base Rate
Loans, and (z) Borrowers shall not be entitled to elect the
LIBOR Option until such Lender determines that it would no
longer be unlawful or impractical to do so.
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to
the contrary contained herein notwithstanding, neither Agent, nor any Lender,
nor any of their Participants, is required actually to acquire eurodollar
deposits to fund or otherwise match fund any Obligation as to which interest
accrues at the LIBOR Rate. The provisions of this
Section shall apply as if each Lender or its Participants had match funded any
Obligation as to which interest is accruing at the LIBOR Rate by acquiring
eurodollar deposits for each Interest Period in the amount of the LIBOR Rate
Loans.
2.14 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender's or
such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof. Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
2.15 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each Borrower is accepting joint and several
liability hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Agent and the Lenders under this
Agreement, for the mutual benefit, directly and indirectly, of each Borrower and
in consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.
(b) Each Borrower, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.15), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each Person composing Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of Borrowers shall fail
to make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Persons composing Borrowers will make such payment
with respect to, or perform, such Obligation.
(d) The Obligations of each Person composing Borrowers
under the provisions of this Section 2.15 constitute the absolute and
unconditional, full recourse Obligations of each Person composing Borrowers
enforceable against each such Borrower to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this
Agreement, each Person composing Borrowers hereby waives notice of acceptance of
its joint and several liability, notice of any Advances or Letters of Credit
issued under or pursuant to this Agreement, notice of the occurrence of any
Default, Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by Agent or Lenders
under or in respect of any of the Obligations, any requirement of diligence or
to mitigate damages and, generally, to the extent permitted by applicable law,
all demands, notices and other formalities of every kind in connection with this
Agreement (except as otherwise provided in this Agreement). Each Person
composing Borrowers hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Person
composing Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by Agent or Lenders in respect of any of the Obligations, and the
taking, addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Obligations or the addition, substitution
or release, in whole or in part, of any Person composing Borrowers. Without
limiting the generality of the foregoing, each Borrower assents to any other
action or delay in acting or failure to act on the part of any Agent or Lender
with respect to the failure by any Person composing Borrowers to comply with any
of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 2.15 afford grounds for terminating, discharging or
relieving any Person composing Borrowers, in whole or in part, from any of its
Obligations under this Section 2.15, it being the intention of each Person
composing Borrowers that, so long as any of the Obligations hereunder remain
unsatisfied, the Obligations of such Person composing Borrowers under this
Section 2.15 shall not be discharged except by performance and then only to the
extent of such performance. The Obligations of each Person composing Borrowers
under this Section 2.15 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Person composing Borrowers or any Agent or
Lender. The joint and several liability of the Persons composing Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
constitution or place of formation of any of the Persons composing Borrowers or
any Agent or Lender.
(f) Each Person composing Borrowers represents and
warrants to Agent and Lenders that such Borrower is currently informed of the
financial condition of Borrowers
and of all other circumstances which a diligent inquiry would reveal and which
bear upon the risk of nonpayment of the Obligations. Each Person composing
Borrowers further represents and warrants to Agent and Lenders that such
Borrower has read and understands the terms and conditions of the Loan
Documents. Each Person composing Borrowers hereby covenants that such Borrower
will continue to keep informed of Borrowers' financial condition, the financial
condition of other guarantors, if any, and of all other circumstances which bear
upon the risk of nonpayment or nonperformance of the Obligations.
(g) The provisions of this Section 2.15 are made for the
benefit of the Agent, the Lenders and their respective successors and assigns,
and may be enforced by it or them from time to time against any or all of the
Persons composing Borrowers as often as occasion therefor may arise and without
requirement on the part of any such Agent, Lender, successor or assign first to
marshal any of its or their claims or to exercise any of its or their rights
against any of the other Persons composing Borrowers or to exhaust any remedies
available to it or them against any of the other Persons composing Borrowers or
to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
Section 2.15 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Agent or Lender upon the insolvency,
bankruptcy or reorganization of any of the Persons composing Borrowers, or
otherwise, the provisions of this Section 2.15 will forthwith be reinstated in
effect, as though such payment had not been made.
(h) Each of the Persons composing Borrowers hereby agrees
that it will not enforce any of its rights of contribution or subrogation
against the other Persons composing Borrowers with respect to any liability
incurred by it hereunder or under any of the other Loan Documents, any payments
made by it to the Agent or the Lenders with respect to any of the Obligations or
any collateral security therefor until such time as all of the Obligations have
been paid in full in cash. Any claim which any Borrower may have against any
other Borrower with respect to any payments to any Agent or Lender hereunder or
under any other Loan Documents are hereby expressly made subordinate and junior
in right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Borrower, its debts or its assets, whether
voluntary or involuntary, all such Obligations shall be paid in full in cash
before any payment or distribution of any character, whether in cash, securities
or other property, shall be made to any other Borrower therefor.
(i) Each of the Persons composing Borrowers hereby agrees
that, after the occurrence and during the continuance of any Default or Event of
Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Borrower hereby agrees that
after the occurrence and during the continuance of any
Default or Event of Default, such Borrower will not demand, sue for or otherwise
attempt to collect any indebtedness of any other Borrower owing to such Borrower
until the Obligations shall have been paid in full in cash. If, notwithstanding
the foregoing sentence, such Borrower shall collect, enforce or receive any
amounts in respect of such indebtedness, such amounts shall be collected,
enforced and received by such Borrower as trustee for the Agent, and such
Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.4(b).
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise to extend any credit provided for hereunder), is subject
to the fulfillment, to the satisfaction of Agent, of each of the conditions
precedent set forth below:
(a) the Closing Date shall occur on or before October
7, 2003;
(b) Agent shall have received a UCC Filing
Authorization Letter, duly executed by each Borrower and each Guarantor,
together with appropriate financing statements on Form UCC-1 duly filed in such
office or offices as may be necessary or, in the opinion of Agent, desirable to
perfect the Agent's Liens in and to the Collateral, and Agent shall have
received searches reflecting the filing of all such financing statements;
(c) Agent shall have received each of the following
documents, in form and substance satisfactory to Agent, duly executed, and each
such document shall be in full force and effect:
(i) the Disbursement Letter,
(ii) the Fee Letter,
(iii) the Guarantor Security Agreement,
(iv) the Guaranty,
(v) the Intercompany Subordination Agreement,
(vi) the Intercreditor Agreement,
(vii) the Limited Recourse Guaranty,
(viii) the Majestic Star Ship Mortgage,
(ix) the Mortgages,
(x) the Officers' Certificate,
(xi) the Majestic Investor Lien Release Letter,
together with UCC termination statements and other
documentation evidencing the termination by The Bank of New
York of its Liens in and to the properties and assets of
Borrowers and their Subsidiaries,
(xii) the Majestic Star Lien Release Letter,
together with UCC termination statements and other
documentation evidencing the termination by The Bank of New
York of its Liens in and to the properties and assets of
Borrowers and their Subsidiaries,
(xiii) the Stock Pledge Agreement, together with
all certificates representing the shares of Stock pledged
thereunder, as well as Stock powers with respect thereto
endorsed in blank,
(xiv) the Subordination of Preferred Fleet
Mortgage,
(xv) the Subordination of Colorado Mortgage,
(xvi) the Subordination of Mississippi Mortgage,
(xvii) the Subordination of Majestic Star Ship
Mortgage,
(xviii) the Syndication Side Letter,
(xix) the Trademark Security Agreement, and
(xx) the Tunica Ship Mortgage;
(d) Agent shall have received a certificate from the
Secretary of each Borrower attesting to the resolutions of such Borrower's Board
of Directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Borrower is a party and
authorizing specific officers of such Borrower to execute the same;
(e) Agent shall have received copies of each
Borrower's Governing Documents, as amended, modified, or supplemented to the
Closing Date, certified by the Secretary of such Borrower;
(f) Agent shall have received a certificate of status
with respect to each Borrower, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Borrower, which certificate shall indicate that such
Borrower is in good standing in such jurisdiction;
(g) Agent shall have received certificates of status
with respect to each Borrower, each dated within 30 days of the Closing Date,
such certificates to be issued by the appropriate officer of the jurisdictions
(other than the jurisdiction of organization of such Borrower) in which its
failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that such Borrower is in good
standing in such jurisdictions;
(h) Agent shall have received a certificate from the
Secretary of each Guarantor attesting to the resolutions of such Guarantor's
Board of Directors authorizing its execution, delivery, and performance of the
Loan Documents to which such Guarantor is a party and authorizing specific
officers of such Guarantor to execute the same;
(i) Agent shall have received copies of each
Guarantor's Governing Documents, as amended, modified, or supplemented to the
Closing Date, certified by the Secretary of such Guarantor;
(j) Agent shall have received a certificate of status
with respect to each Guarantor, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Guarantor, which certificate shall indicate that such
Guarantor is in good standing in such jurisdiction;
(k) Agent shall have received certificates of status
with respect to each Guarantor, each dated within 30 days of the Closing Date,
such certificates to be issued by the appropriate officer of the jurisdictions
(other than the jurisdiction of organization of such Guarantor) in which its
failure to be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that such Guarantor is in good
standing in such jurisdictions;
(l) Agent shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
6.8, the form and substance of which shall be satisfactory to Agent;
(m) Agent shall have received opinions of Borrowers'
counsel in form and substance satisfactory to Agent;
(n) Agent shall have received satisfactory evidence
that the Obligations hereunder have received a rating of at least B from S&P or
at least B2 from Moody's;
(o) Agent shall have received satisfactory evidence
(including a certificate of the chief financial officer of Parent) that all tax
returns required to be filed by Borrowers and their Subsidiaries have been
timely filed and all taxes upon Borrowers and their Subsidiaries or their
properties, assets, income, and franchises (including Real Property taxes, sales
taxes, and payroll taxes) have been paid prior to delinquency, except such taxes
that are the subject of a Permitted Protest;
(p) Borrowers shall have the Required Availability
after giving effect to the initial extensions of credit hereunder and the
payment of all fees and expenses required to be paid by Borrowers on the Closing
Date under this Agreement or the other Loan Documents;
(q) Agent shall have completed its business, legal,
and collateral due diligence, including (i) a collateral audit and review of
Borrowers' books and records and verification of Borrowers' representations and
warranties to the Lender Group, the results of which shall be satisfactory to
Agent, and (ii) an inspection of each of the locations where Borrowers' and
their Subsidiaries' Inventory is located, the results of which shall be
satisfactory to Agent;
(r) Agent shall have received Borrowers' Closing Date
Business Plan;
(s) Borrowers shall have paid all Lender Group
Expenses incurred in connection with the transactions evidenced by this
Agreement;
(t) Agent shall have received mortgagee title
insurance policies (or marked commitments to issue the same) for the Real
Property Collateral issued by a title insurance company satisfactory to Agent
(each a "Mortgage Policy" and, collectively, the "Mortgage Policies") in amounts
reasonably satisfactory to Agent assuring Agent that, after giving effect to the
Intercreditor Agreement, the Mortgages on such Real Property Collateral are
valid and enforceable first priority mortgage Liens on such Real Property
Collateral free and clear of all defects and encumbrances except Permitted
Liens, and the Mortgage Policies otherwise shall be in form and substance
reasonably satisfactory to Agent;
(u) Agent shall have received copies of each of (i)
the Senior Note Documents, (ii) the Management Agreement, (iii) the Expense
Reimbursement Agreement, (iv) the BHR Operating Agreement, (v) the Berthing
Agreement, and (vi) the Parking Lease, together with a certificate of the
Secretary of the applicable Borrower certifying each such document as being a
true, correct, and complete copy thereof;
(v) Borrowers shall have provided Agent with
sufficient evidence to demonstrate that (i) the offering of the Notes described
in the Indenture has closed, (ii) the proceeds from such offering (in
combination with the proceeds of the Advances made hereunder on the Closing
Date) are being concurrently used to (A) repay, in full, the Majestic Star
Notes, and (B) repay not less than 66-2/3rds percent of the Majestic Investor
Notes, and (iii) an amendment to the Majestic Investor Existing Indenture has
been executed and delivered and is in full force and effect, which amendment is
in form and substance satisfactory to Agent;
(w) Borrowers and each of their Subsidiaries shall
have received all licenses, approvals or evidence of other actions required by
any Governmental Authority in connection with the execution and delivery by
Borrowers or their Subsidiaries of the Loan Document or with the consummation of
the transactions contemplated thereby; and
(x) all other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance satisfactory
to Agent.
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to make
Advances (or otherwise extend credit hereunder) is subject to the fulfillment,
on or before the date applicable thereto, of each of the conditions subsequent
set forth below (the failure by Borrowers to so perform or cause to be performed
constituting an Event of Default):
(a) within 2 Business Days of the Closing Date, the
Majestic Star Ship Mortgage shall have been recorded in the applicable filing
office of the United States Coast Guard and such other governmental agency as
shall be necessary, and Agent shall have received confirmation, satisfactory to
Agent, of such recordation;
(b) within 2 Business Days of the Closing Date, the
Tunica Ship Mortgage shall have been recorded in the applicable filing office of
the United States Coast Guard and such other governmental agency as shall be
necessary, and Agent shall have received confirmation, satisfactory to Agent, of
such recordation;
(c) within 20 days of the Closing Date, Agent shall
have received the Control Agreements, duly executed and delivered by each party
thereto;
(d) within 30 days of the Closing Date, deliver to
Agent certified copies of the policies of insurance, together with the
endorsements thereto, as are required by Section 6.8, the form and substance of
which shall be satisfactory to Agent and its counsel; and
(e) within 210 days of the Closing Date, either (i)
100% of the Stock in BNG shall have been transferred to BDI, and the Nevada
Gaming Commission shall have approved such transfer, or (ii) the Nevada Gaming
Commission shall have approved the grant of a Lien to Agent in 100% of the Stock
in Parent, Majestic Investor, and Majestic Investor Holdings to secure the
Obligations.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of
the Lender Group (or any member thereof) to make any Advances hereunder at any
time (or to extend any other credit hereunder) shall be subject to the following
conditions precedent:
(a) the representations and warranties contained in
this Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the date of such extension of credit, as though
made on and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have
occurred and be continuing on the date of such extension of credit, nor shall
either result from the making thereof;
(c) no injunction, writ, restraining order, or other
order of any nature restricting or prohibiting, directly or indirectly, the
extending of such credit shall have been
issued and remain in force by any Governmental Authority against any Borrower,
Agent, any Lender, or any of their Affiliates; and
(d) no Material Adverse Change shall have occurred.
3.4 TERM. This Agreement shall continue in full force and effect for a
term ending on October 7, 2007 (the "Maturity Date"). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders,
shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrowers with respect to any outstanding Letters of Credit and including all
Bank Products Obligations) immediately shall become due and payable without
notice or demand (including (a) either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing
the original Letters of Credit to be returned to the Issuing Lender, and (b)
providing cash collateral (in an amount determined by Agent as sufficient to
satisfy the reasonably estimated credit exposure) to be held by Agent for the
benefit of the Bank Product Providers with respect to the then extant Bank
Products Obligations). No termination of this Agreement, however, shall relieve
or discharge Borrowers or their Subsidiaries of their duties, Obligations, or
covenants hereunder and the Agent's Liens in the Collateral shall remain in
effect until all Obligations (other than contingent indemnification Obligations
that are not then due and payable) have been paid in full and the Lender Group's
obligations to provide additional credit hereunder have been terminated. When
this Agreement has been terminated and all of the Obligations (other than
contingent indemnification Obligations that are not then due and payable) have
been paid in full and the Lender Group's obligations to provide additional
credit under the Loan Documents have been terminated irrevocably, Agent will, at
Borrowers' sole expense, execute and deliver any UCC termination statements,
lien releases, mortgage releases, re-assignments of trademarks, discharges of
security interests, and other similar discharge or release documents (and, if
applicable, in recordable form) as are reasonably necessary to release, as of
record, the Agent's Liens and all notices of security interests and liens
previously filed by Agent with respect to the Obligations.
3.6 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at any
time upon 90 days prior written notice by Administrative Borrower to Agent, to
terminate this Agreement by paying to Agent, in cash, the Obligations (including
(a) either (i) providing cash collateral to be held by Agent for the benefit of
those Lenders with a Revolver Commitment in an amount equal to 105% of the then
extant Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender, and (b) providing cash collateral (in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Agent for the benefit of the Bank Product
Providers with respect to the then extant Bank Products Obligations), in full,
together with the
Applicable Prepayment Premium (to be allocated based upon letter agreements
between Agent and individual Lenders). If Administrative Borrower has sent a
notice of termination pursuant to the provisions of this Section, then the
Commitments shall terminate and Borrowers shall be obligated to repay the
Obligations (including (a) either (i) providing cash collateral to be held by
Agent for the benefit of those Lenders with a Revolver Commitment in an amount
equal to 105% of the then extant Letter of Credit Usage, or (ii) causing the
original Letters of Credit to be returned to the Issuing Lender, and (b)
providing cash collateral (in an amount determined by Agent as sufficient to
satisfy the reasonably estimated credit exposure) to be held by Agent for the
benefit of the Bank Product Providers with respect to the then extant Bank
Products Obligations), in full, together with the Applicable Prepayment Premium,
on the date set forth as the date of termination of this Agreement in such
notice. In the event of the termination of this Agreement and repayment of the
Obligations at any time prior to the Maturity Date, for any other reason,
including (a) termination upon the election of the Required Lenders to terminate
after the occurrence and during the continuation of an Event of Default, (b)
foreclosure and sale of Collateral, (c) sale of the Collateral in any Insolvency
Proceeding, or (d) restructure, reorganization or compromise of the Obligations
by the confirmation of a plan of reorganization, or any other plan of
compromise, restructure, or arrangement in any Insolvency Proceeding, then, in
view of the impracticability and extreme difficulty of ascertaining the actual
amount of damages to the Lender Group or profits lost by the Lender Group as a
result of such early termination, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrowers shall pay the Applicable Prepayment Premium to Agent (to
be allocated based upon letter agreements between Agent and individual Lenders),
measured as of the date of such termination.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Borrower hereby grants to Agent,
for the benefit of the Lender Group and the Bank Product Providers, a continuing
security interest in all of its right, title, and interest in all currently
existing and hereafter acquired or arising Borrower Collateral in order to
secure prompt repayment of any and all of the Obligations in accordance with the
terms and conditions of the Loan Documents and in order to secure prompt
performance by Borrowers of each of their covenants and duties under the Loan
Documents. The Agent's Liens in and to the Borrower Collateral shall attach to
all Borrower Collateral without further act on the part of Agent or Borrowers.
Anything contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Borrowers and their
Subsidiaries have no authority, express or implied, to dispose of any item or
portion of the Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Borrower Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral, and if
and to the extent that Agent determines that perfection or priority of Agent's
security interest is dependent on or enhanced by possession, the applicable
Borrower, immediately upon the request of Agent, shall endorse and deliver
physical possession of such Negotiable Collateral to Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the continuation of an
Event of Default, Agent or Agent's designee may (a) notify Account Debtors of
Borrowers that the Borrowers' Accounts, chattel paper, or General Intangibles
have been assigned to Agent or that Agent has a security interest therein, or
(b) collect the Borrowers' Accounts, chattel paper, or General Intangibles
directly and charge the collection costs and expenses to the Loan Account. Each
Borrower agrees that it will hold in trust for the Lender Group, as the Lender
Group's trustee, any of its or its Subsidiaries' Collections that it receives
and immediately will deliver such Collections to Agent in their original form as
received by such Borrower or its Subsidiaries.
4.4 FILING OF FINANCING STATEMENTS; COMMERCIAL TORT CLAIMS; DELIVERY OF
ADDITIONAL DOCUMENTATION REQUIRED.
(a) Borrowers authorize Agent to file any financing
statement necessary or desirable to effectuate the transactions contemplated by
the Loan Documents, and any continuation statement or amendment with respect
thereto, in any appropriate filing office without the signature of Borrowers
where permitted by applicable law. Borrowers hereby ratify the filing of any
financing statement filed without the signature of Borrowers prior to the date
hereof.
(b) If Borrowers or their Restricted Subsidiaries
acquire any commercial tort claims after the date hereof, Borrowers shall
promptly (but in any event within 3 Business Days after such acquisition)
deliver to Agent a written description of such commercial tort claim and shall
deliver a written agreement, in form and substance satisfactory to Agent,
pursuant to which the applicable Borrower or its Restricted Subsidiary shall
pledge and collaterally assign all of its right, title and interest in and to
such commercial tort claim to Agent, as security for the Obligations (a
"Commercial Tort Claim Assignment").
(c) At any time upon the request of Agent, Borrowers
shall execute or deliver to Agent and shall cause their Restricted Subsidiaries
to execute or deliver to Agent any and all financing statements, original
financing statements in lieu of continuation statements, fixture filings,
security agreements, pledges, Mortgages, assignments, Commercial Tort Claim
Assignments, endorsements of certificates of title, and all other documents
(collectively, the "Additional Documents") that Agent may request in its
Permitted Discretion, in form and substance satisfactory to Agent, to create,
perfect, and continue perfected or to better perfect the Agent's Liens in the
assets of Borrowers and their Restricted Subsidiaries (whether now owned or
hereafter arising or acquired, tangible or intangible, real or personal), to
create and perfect Liens in favor of Agent +in any Real Property acquired after
the Closing Date, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, each Borrower authorizes Agent to execute any such
Additional Documents in the applicable Borrower's name and authorizes Agent to
file such executed Additional Documents in any appropriate filing office. In
addition, on such
periodic basis as Agent shall require, Borrowers shall (i) provide Agent with a
report of all new material patentable, copyrightable, or trademarkable materials
acquired or generated by any Borrower or its Restricted Subsidiaries during the
prior period, (ii) cause all material patents, copyrights, and trademarks
acquired or generated by Borrowers or their Restricted Subsidiaries that are not
already the subject of a registration with the appropriate filing office (or an
application therefor diligently prosecuted) to be registered with such
appropriate filing office in a manner sufficient to impart constructive notice
of a Borrower's or a Restricted Subsidiary of a Borrower's ownership thereof,
and (iii) cause to be prepared, executed, and delivered to Agent supplemental
schedules to the applicable Loan Documents to identify such patents, copyrights,
and trademarks as being subject to the security interests created thereunder.
4.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as such Borrower's true and lawful attorney, with
power to (a) if such Borrower refuses to, or fails timely to execute and deliver
any of the documents described in Section 4.4, sign the name of such Borrower on
any of the documents described in Section 4.4, (b) at any time that an Event of
Default has occurred and is continuing, sign such Borrower's name on any invoice
or bill of lading relating to the Borrower Collateral, drafts against Account
Debtors, or notices to Account Debtors, (c) send requests for verification of
Borrowers' or their Restricted Subsidiaries' Accounts, (d) after the occurrence
and during the continuance of an Event of Default, endorse such Borrower's name
on any of its payment items (including all of its Collections) that may come
into the Lender Group's possession, (e) at any time that an Event of Default has
occurred and is continuing, make, settle, and adjust all claims under such
Borrower's policies of insurance and make all determinations and decisions with
respect to such policies of insurance, and (f) at any time that an Event of
Default has occurred and is continuing, settle and adjust disputes and claims
respecting Borrowers' or their Restricted Subsidiaries' Accounts, chattel paper,
or General Intangibles directly with Account Debtors, for amounts and upon terms
that Agent determines to be reasonable, and Agent may cause to be executed and
delivered any documents and releases that Agent determines to be necessary. The
appointment of Agent as each Borrower's attorney, and each and every one of its
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully and finally repaid and performed and the Lender
Group's obligations to extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their
respective officers, employees, or agents) shall have the right, from time to
time hereafter to inspect the Books and make copies or abstracts thereof and to
check, test, and appraise the Collateral, or any portion thereof, in order to
verify Borrowers' and their Restricted Subsidiaries' financial condition or the
amount, quality, value, condition of, or any other matter relating to, the
Collateral.
4.7 CONTROL AGREEMENTS. Borrowers agree that they will not, and will
not permit their Restricted Subsidiaries to, transfer assets out of any of their
Deposit Accounts or Securities Accounts; provided, however, that so long as no
Event of Default has occurred and
is continuing or would result therefrom, Borrowers and their Restricted
Subsidiaries may use such assets (and the proceeds thereof) to the extent not
prohibited by this Agreement or the other Loan Documents and, if the transfer is
to another bank or securities intermediary, so long as the applicable Borrower
or Restricted Subsidiary, Agent, and the substitute bank or securities
intermediary have entered into a Control Agreement (except to the extent
otherwise permitted pursuant to Section 7.12). Borrowers agree that they will
and will cause their Restricted Subsidiaries to take any or all reasonable steps
that Agent requests in order for Agent to obtain control in accordance with
Sections 9-104, 9-105, 9-106, and 9-107 of the Code with respect to any of its
or their Securities Accounts, Deposit Accounts, electronic chattel paper,
Investment Property, and letter-of-credit rights. No arrangement contemplated
hereby or by any Control Agreement in respect of any Securities Accounts or
other Investment Property shall be modified by Borrowers without the prior
written consent of Agent. Upon the occurrence and during the continuance of a
Default or Event of Default, Agent may notify any bank or securities
intermediary to liquidate the applicable Deposit Account or Securities Account
or any related Investment Property maintained or held thereby and remit the
proceeds thereof to the Agent's Account.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, each Borrower makes the following representations and warranties to
the Lender Group which shall be true, correct, and complete, in all material
respects, as of the date hereof, and shall be true, correct, and complete, in
all material respects, as of the Closing Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter, as though
made on and as of the date of such Advance (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Each Borrower and its Restricted Subsidiaries has
good and indefeasible title to their personal property assets and good and
marketable title to their Real Property, in each case, free and clear of Liens
except for Permitted Liens.
5.2 [INTENTIONALLY OMITTED].
5.3 [INTENTIONALLY OMITTED].
5.4 EQUIPMENT. All of the Equipment of Borrowers and their Restricted
Subsidiaries is used or held for use in their business and is fit for such
purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment of
Borrowers and their Restricted Subsidiaries are not stored with a bailee,
warehouseman, or similar party and are located only at, or in-transit between,
the locations identified on Schedule 5.5 (as such Schedule may be updated
pursuant to Section 6.9).
5.6 INVENTORY RECORDS. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Restricted Subsidiaries' Inventory and the book value thereof.
5.7 STATE OF INCORPORATION; LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN;
ORGANIZATIONAL ID NUMBER; COMMERCIAL TORT CLAIMS.
(a) The jurisdiction of organization of Limited
Recourse Guarantor, each Borrower and each of its Restricted Subsidiaries is set
forth on Schedule 5.7(a).
(b) The chief executive office of Limited Recourse
Guarantor, each Borrower and each of its Restricted Subsidiaries is located at
the address indicated on Schedule 5.7(b) (as such Schedule may be updated
pursuant to Section 6.9).
(c) Limited Recourse Guarantor's, each Borrower's and
each of its Restricted Subsidiaries' FEIN and organizational identification
number, if any, are identified on Schedule 5.7(c).
(d) As of the Closing Date, Borrowers and their
Restricted Subsidiaries do not hold any commercial tort claims, except as set
forth on Schedule 5.7(d).
5.8 DUE ORGANIZATION AND QUALIFICATION; RESTRICTED SUBSIDIARIES
(a) Limited Recourse Guarantor and each Borrower is
duly organized and existing and in good standing under the laws of the
jurisdiction of its organization and qualified to do business in any state where
the failure to be so qualified reasonably could be expected to have a Material
Adverse Change.
(b) Set forth on Schedule 5.8(b), is a complete and
accurate description of the authorized capital Stock of each Borrower, by class,
and, as of the Closing Date, a description of the number of shares of each such
class that are issued and outstanding. Other than as described on Schedule
5.8(b), there are no subscriptions, options, warrants, or calls relating to any
shares of each Borrower's capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. No Borrower is
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital Stock or any security convertible
into or exchangeable for any of its capital Stock.
(c) Set forth on Schedule 5.8(c), is a complete and
accurate list of each Borrower's direct and indirect Restricted Subsidiaries and
Limited Recourse Guarantor, showing: (i) the jurisdiction of their organization;
(ii) the number of shares of each class of common and preferred Stock authorized
for each of Limited Recourse Guarantor and such Restricted Subsidiaries; and
(iii) the number and the percentage of the outstanding shares of each such class
owned directly or indirectly by the applicable Borrower or a Permitted Holder.
All of the outstanding capital Stock of each such Restricted Subsidiary has been
validly issued and is fully paid and non-assessable.
(d) Except as set forth on Schedule 5.8(c), there are
no subscriptions, options, warrants, or calls relating to any shares of any
Borrower's Restricted Subsidiaries' capital Stock, including any right of
conversion or exchange under any outstanding security or other instrument. No
Borrower or any of its respective Restricted Subsidiaries is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of any Borrower's Restricted Subsidiaries' capital Stock or
any security convertible into or exchangeable for any such capital Stock.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the other Loan Documents to
which it is a party have been duly authorized by all necessary action on the
part of such Borrower.
(b) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the other Loan Documents to
which it is a party do not and will not (i) violate any provision of federal,
state, or local law or regulation applicable to any Borrower, the Governing
Documents of any Borrower, or any order, judgment, or decree of any court or
other Governmental Authority binding on any Borrower, (ii) conflict with, result
in a breach of, or constitute (with due notice or lapse of time or both) a
default under any material contractual obligation of any Borrower, (iii) result
in or require the creation or imposition of any Lien of any nature whatsoever
upon any properties or assets of Borrower, other than Permitted Liens, or (iv)
require any approval of any Borrower's interestholders or any approval or
consent of any Person under any material contractual obligation of any Borrower,
other than consents or approvals that have been obtained and that are still in
force and effect.
(c) Other than the filing of financing statements,
fixture filings, Tunica Ship Mortgage, Mortgages, the approvals of Applicable
Gaming Authorities with respect to the Stock Pledge Agreement, such other
approvals of Applicable Gaming Authorities that have been obtained, and periodic
informational filings required under Applicable Gaming Laws, the execution,
delivery, and performance by each Borrower of this Agreement and the Loan
Documents to which each Borrower is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority or other Person, except that pursuant to
Mississippi Gaming Commission Regulation II.I. Section 11, BMG will be required
to file loan reports with the Mississippi Gaming Commission within thirty (30)
days of the Closing Date.
(d) As to each Borrower, this Agreement and the other
Loan Documents to which such Borrower is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by such Borrower
will be the legally valid and binding obligations of such Borrower, enforceable
against such Borrower in accordance with their respective terms, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting
creditors' rights generally and as enforcement with respect to the Collateral
subject to the Applicable Gaming Laws may be limited or delayed under the
Applicable Gaming Laws.
(e) The Agent's Liens are validly created, perfected,
and first priority Liens, subject only to Permitted Liens.
(f) The execution, delivery, and performance by
Limited Recourse Guarantor and each Guarantor of the Loan Documents to which it
is a party have been duly authorized by all necessary action on the part of such
Guarantor.
(g) The execution, delivery, and performance by
Limited Recourse Guarantor and each Guarantor of the Loan Documents to which it
is a party do not and will not (i) violate any provision of federal, state, or
local law or regulation applicable to Limited Recourse Guarantor or such
Guarantor, the Governing Documents of Limited Recourse Guarantor or such
Guarantor, or any order, judgment, or decree of any court or other Governmental
Authority binding on Limited Recourse Guarantor or such Guarantor, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of Limited Recourse
Guarantor or such Guarantor, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
Limited Recourse Guarantor or such Guarantor, other than Permitted Liens, or
(iv) require any approval of Limited Recourse Guarantor or such Guarantor's
interestholders or any approval or consent of any Person under any material
contractual obligation of Limited Recourse Guarantor or such Guarantor, other
than consents or approvals that have been obtained and that are still in force
and effect.
(h) Other than the filing of financing statements,
fixture filings, the approvals of Applicable Gaming Authorities with respect to
the Stock Pledge Agreement, such other approvals of Applicable Gaming
Authorities that have been obtained, and periodic informational filings required
under Applicable Gaming Laws, the execution, delivery, and performance by
Limited Recourse Guarantor and each Guarantor of this Agreement and the Loan
Documents to which Limited Recourse Guarantor and each Guarantor is a party do
not and will not require any registration with, consent, or approval of, or
notice to, or other action with or by, any Governmental Authority or other
Person, except that pursuant to Mississippi Gaming Commission Regulation II.I,
Section 11, BMG will be required to file loan reports with the Mississippi
Gaming Commission within thirty (30) days of the Closing Date.
(i) The Loan Documents to which Limited Recourse
Guarantor and each Guarantor is a party, and all other documents contemplated
hereby and thereby, when executed and delivered by such Guarantor will be the
legally valid and binding obligations of Limited Recourse Guarantor and such
Guarantor, enforceable against Limited Recourse Guarantor and such Guarantor in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally.
5.10 LITIGATION. Other than those matters disclosed on Schedule
5.10, there are no actions, suits, or proceedings pending or, to the best
knowledge of Borrowers, threatened against Limited Recourse Guarantor,
Borrowers, or any of their Restricted Subsidiaries, as applicable, except for
(a) matters that are fully covered by insurance (subject to customary
deductibles), and (b) matters arising after the Closing Date that, if decided
adversely to Borrowers, or any of their Restricted Subsidiaries, as applicable,
reasonably could not be expected to result in a Material Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating
to Borrowers and their Restricted Subsidiaries that have been delivered by
Borrowers to the Lender Group have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly in
all material respects, Borrowers' and their Restricted Subsidiaries' financial
condition as of the date thereof and results of operations for the period then
ended. There has not been a Material Adverse Change with respect to Borrowers
and their Restricted Subsidiaries since the date of the latest financial
statements submitted to the Lender Group on or before the Closing Date.
5.12 FRAUDULENT TRANSFER.
(a) Limited Recourse Guarantor, each Borrower and
each Restricted Subsidiary of a Borrower is Solvent.
(b) No transfer of property is being made by Limited
Recourse Guarantor, any Borrower or any Restricted Subsidiary of a Borrower and
no obligation is being incurred by Limited Recourse Guarantor, any Borrower or
any Restricted Subsidiary of a Borrower in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of Limited Recourse
Guarantor, Borrowers or their Restricted Subsidiaries.
5.13 EMPLOYEE BENEFITS. None of Borrowers, any of their Restricted
Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any
Benefit Plan.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on Schedule 5.14,
(a) to Borrowers' knowledge, none of Borrowers' or their Restricted
Subsidiaries' properties or assets has ever been used by Borrowers, their
Restricted Subsidiaries, or by previous owners or operators in the disposal of,
or to produce, store, handle, treat, release, or transport, any Hazardous
Materials, where such production, storage, handling, treatment, release or
transport was in violation, in any material respect, of applicable Environmental
Law, (b) to Borrowers' knowledge, none of Borrowers' nor their Restricted
Subsidiaries' properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) none of Borrowers nor any of their Restricted Subsidiaries
have received notice that a Lien arising under any Environmental Law has
attached to any revenues or to any Real Property owned or operated by Borrowers
or their Restricted Subsidiaries, and (d) none of Borrowers nor any of their
Restricted Subsidiaries have received a summons, citation, notice, or directive
from the Environmental Protection Agency or any other federal or state
governmental agency concerning any action or omission by any Borrower or any
Restricted Subsidiary of a Borrower resulting in the releasing or disposing of
Hazardous Materials into the environment.
5.15 BROKERAGE FEES. Except as set forth on Schedule 5.15,
Borrowers and their Restricted Subsidiaries have not utilized the services of
any broker or finder in connection with obtaining financing from the Lender
Group under this Agreement and no brokerage commission or finders fee is payable
by Borrowers or their Restricted Subsidiaries in connection herewith.
5.16 INTELLECTUAL PROPERTY. Each Borrower and each Restricted
Subsidiary of a Borrower owns, or holds licenses in, all trademarks, trade
names, copyrights, patents, patent rights, and licenses that are necessary to
the conduct of its business as currently conducted.. Attached hereto as Schedule
5.16 (as updated from time to time) is a true, correct, and complete listing of
all material patents, patent applications, trademarks, trademark applications,
copyrights, and copyright registrations as to which each Borrower or one of its
Restricted Subsidiaries is the owner or is an exclusive licensee.
5.17 LEASES. Borrowers and their Restricted Subsidiaries enjoy
peaceful and undisturbed possession under all leases material to their business
and to which they are parties or under which they are operating. All of such
leases are valid and subsisting and no material default by Borrowers or their
Restricted Subsidiaries exists under any of them.
5.18 DDAS. Set forth on Schedule 5.18 are all of Borrowers' and
their Restricted Subsidiaries' Deposit Accounts and Securities Accounts,
including, with respect to each bank or securities intermediary (i) the name and
address of such Person, and (ii) the account numbers of the Deposit Accounts or
Securities Accounts maintained with such Person.
5.19 COMPLETE DISCLOSURE. All factual information (taken as a
whole) furnished by or on behalf of Borrowers or their Restricted Subsidiaries
in writing to Agent or any Lender (including all information contained in the
Schedules hereto or in the other Loan Documents) for purposes of or in
connection with this Agreement, the other Loan 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 Borrowers or their Restricted
Subsidiaries in writing to the Agent or any Lender 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. On the Closing Date, the Closing Date Projections represent, and as of
the date on which any other Projections are delivered to Agent, such additional
Projections represent Borrowers' good faith best estimate of their and their
Restricted Subsidiaries' future performance for the periods covered thereby.
5.20 INDEBTEDNESS. Set forth on Schedule 5.20 is a true and
complete list of all Indebtedness of each Borrower and each Restricted
Subsidiary of a Borrower outstanding immediately prior to the Closing Date that
is to remain outstanding after the Closing Date and such Schedule accurately
reflects the aggregate principal amount of such Indebtedness and the principal
terms thereof.
5.21 LICENSES AND PERMITS.
(a) (i) All material licenses (including all
necessary Gaming Licenses and Liquor Licenses), permits, and consents and
similar rights required from any federal, state, or local governmental body
(including the Gaming Authorities and Liquor Authorities), for the ownership,
use, or operation of the businesses or properties now owned or operated by
Parent or any Borrower, or any of their respective Restricted Subsidiaries, have
been validly issued and are in full force and effect; (ii) Parent and each
Borrower, and each of their respective Restricted Subsidiaries is in compliance,
in all material respects, with all of the provisions thereof applicable to it;
and (iii) none of such licenses, permits, or consents is the subject of any
pending or, to the best of Parent's or any Borrower's, knowledge, threatened
proceeding for the revocation, cancellation, suspension, or non-renewal thereof.
As of the Closing Date (and as of each subsequent date on which Parent or any
Borrower delivers to Agent an updated schedule pursuant to Section 6 below), set
forth on Schedule 5.21 is a complete and accurate list of all such licenses,
permits, and consents that are necessary and appropriate for the operation of
Parent and such Borrower's businesses, and the businesses of their respective
Restricted Subsidiaries, and such schedule identifies the date by which an
application for the renewal of such license, permit, or consent must be filed
and describes the status of each such pending application.
(b) Parent and each Borrower, and their respective
Restricted Subsidiaries, have obtained (i) all material licenses, permits, and
consents necessary or appropriate to conduct their businesses and operations and
(ii) as of the Closing Date, all required approvals from the Gaming Authorities
and Liquor Authorities of the transactions contemplated hereby and by the other
Loan Documents.
(c) Parent and each Borrower, and each of their
respective Restricted Subsidiaries, owns or possesses all patents, trademarks,
trade names, copyrights, and other similar rights necessary for the conduct of
their businesses as now carried on or proposed to be conducted, without any
known conflict of the rights of others.
6. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, until termination of
all of the Commitments and payment in full of the Obligations, Borrowers shall
and shall cause each of their respective Restricted Subsidiaries to do all of
the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Borrowers to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information as from time to
time reasonably may be requested by
Agent. Borrowers also shall keep an inventory reporting system that shows all
additions, sales, claims, returns, and allowances with respect to their and
their Restricted Subsidiaries' Inventory.
6.2 COLLATERAL REPORTING. Provide Agent (and if so requested by Agent,
with copies for each Lender) with the following documents at the following times
in form satisfactory to Agent: (a) copies of each report in respect of each
Borrower's, and each of their respective Restricted Subsidiaries', businesses
issued by a Gaming Authority or made by any Borrower, or any of their respective
Restricted Subsidiaries, to a Gaming Authority within 15 days of their
respective issuance or filing date; and (b) copies of all operating and capital
budgets, and all other budgets, summaries of sources and uses of funds,
projections, and financial information prepared by or on behalf of any Borrower
(including in respect of any Casino operated by any Borrower or its Restricted
Subsidiaries), or any of their respective Restricted Subsidiaries, promptly upon
the preparation and delivery thereof by the chief financial officer of any
Borrower, or any of their respective Restricted Subsidiaries, to any third
party, but in any event operating and capital budgets shall be delivered to
Agent no less frequently than annually.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent, with
copies to each Lender:
(a) as soon as available, but in any event within 30
days (45 days in the case of a month that is the end of one of Parent's fiscal
quarters) after the end of each month during each of Parent's fiscal years,
(i) a company prepared consolidated balance
sheet, income statement, and statement of cash flow covering
Parent's and its Restricted Subsidiaries' operations during
such period,
(ii) a certificate signed by the chief financial
officer of Parent to the effect that:
A. the financial statements delivered
hereunder have been prepared in accordance with GAAP
(except for the lack of footnotes and being subject
to year-end audit adjustments) and fairly present in
all material respects the financial condition of
Parent and its Restricted Subsidiaries,
B. the representations and warranties of
Borrowers contained in this Agreement and the other
Loan Documents are true and correct in all material
respects on and as of the date of such certificate,
as though made on and as of such date (except to the
extent that such representations and warranties
relate solely to an earlier date), and
C. as of the date of such certificate, there
does not exist any condition or event that
constitutes a Default or Event of Default (or, to
the extent of any non-compliance, describing such
non-compliance as to which he or she may have
knowledge and what action Borrowers have taken, are
taking, or propose to take with respect thereto), and
(iii) for each month that is the date on which a
financial covenant in Section 7.18 is to be tested, a
Compliance Certificate demonstrating, in reasonable detail,
compliance at the end of such period with the applicable
financial covenants contained in Section 7.18,
(b) as soon as available, but in any event within 90
days after the end of each of Parent's fiscal years,
(i) financial statements of Parent and its
Restricted Subsidiaries for each such fiscal year, audited by
independent certified public accountants reasonably acceptable
to Agent and certified, without any qualifications, by such
accountants to have been prepared in accordance with GAAP
(such audited financial statements to include a balance sheet,
income statement, and statement of cash flow and, if prepared,
such accountants' letter to management), and
(ii) a certificate of such accountants addressed
to Agent and the Lenders stating that such accountants do not
have knowledge of the existence of any Default or Event of
Default under Section 7.18,
(c) as soon as available, but in any event within 30
days prior to the start of each of Parent's fiscal years, copies of Borrowers'
Projections, in form and substance (including as to scope and underlying
assumptions) satisfactory to Agent, in its sole discretion, for the forthcoming
3 years, year by year, and for the forthcoming fiscal year, month by month,
certified by the chief financial officer of Parent as being such officer's good
faith best estimate of the financial performance of Parent and its Restricted
Subsidiaries during the period covered thereby,
(d) if and when filed by any Borrower,
(i) 10-Q quarterly reports, Form 10-K annual
reports, and Form 8-K current reports,
(ii) any other filings made by any Borrower with
the SEC,
(iii) copies of Borrowers' federal income tax
returns, and any amendments thereto, filed with the Internal
Revenue Service, and
(iv) any other information that is provided by
Parent to its shareholders generally,
(e) if and when filed by any Borrower or any
Restricted Subsidiary of a Borrower and as requested by Agent, satisfactory
evidence of payment of applicable excise taxes in each jurisdiction in which (i)
any Borrower or any Restricted Subsidiary of a Borrower conducts business or is
required to pay any such excise tax, (ii) where any Borrower's or any Restricted
Subsidiary of a Borrower's failure to pay any such applicable excise tax would
result in a Lien on the properties or assets of such Borrower or such Restricted
Subsidiary, or (iii) where any Borrower's or any Restricted Subsidiary of a
Borrower's failure to pay any such applicable excise tax reasonably could be
expected to result in a Material Adverse Change,
(f) as soon as a Borrower has knowledge of any event
or condition that constitutes a Default or an Event of Default, notice thereof
and a statement of the curative action that Borrowers propose to take with
respect thereto,
(g) promptly after the commencement thereof, but in
any event within 5 days after the service of process with respect thereto on any
Borrower or any Restricted Subsidiary of a Borrower, notice of all actions,
suits, or proceedings brought by or against any Borrower or any Restricted
Subsidiary of a Borrower before any Governmental Authority which, if determined
adversely to such Borrower or such Restricted Subsidiary, reasonably could be
expected to result in a Material Adverse Change, and
(h) upon the request of Agent, any other report
reasonably requested relating to the financial condition of Borrowers or their
Restricted Subsidiaries.
In addition to the financial statements referred to above,
Parent agrees to deliver to Agent within 30 days of the end of each month,
Parent's calculation of its EBITDA for such month and for the twelve month
period ending on the last day of such month, financial statements prepared on
both a consolidated and consolidating basis for the immediately preceding month,
and a borrowing base certificate as of the last day of such month. Parent agrees
that no Restricted Subsidiary of Parent will have a fiscal year different from
that of Parent. Borrowers agree to cooperate with Agent to allow Agent to
consult with their independent certified public accountants if Agent reasonably
requests the right to do so and that, in such connection, their independent
certified public accountants are authorized to communicate with Agent and to
release to Agent whatever financial information concerning Borrowers or their
Restricted Subsidiaries that Agent reasonably may request.
6.4 [INTENTIONALLY OMITTED].
6.5 [INTENTIONALLY OMITTED].
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of their
material properties (including the Vessels) which are necessary or useful in the
proper conduct of their businesses in good working order and condition, ordinary
wear and tear excepted, and comply, in all material respects, at all times with
the provisions of all material leases to which they are a party as lessee so as
to prevent any loss or forfeiture thereof or thereunder. Other than those items
of Equipment that constitute fixtures on the Closing Date, Borrowers
shall not permit, and shall not permit their respective Restricted Subsidiaries
to permit, any item of Equipment to become a fixture to real estate or an
accession to other property (other than accessions to the Vessels) and such
Equipment shall at all times remain personal property. Upon Agent's request,
Borrowers immediately shall deliver to Agent, properly endorsed, any and all
evidences of ownership of, certificates of title to, or applications for title
to any items of Equipment (including, without limitation, the Vessels).
6.7 TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrowers,
their Restricted Subsidiaries, or any of their respective assets to be paid in
full, before delinquency or before the expiration of any extension period,
except to the extent that the validity of such assessment or tax shall be the
subject of a Permitted Protest. Borrowers will and will cause their Restricted
Subsidiaries to make timely payment or deposit of all tax payments and
withholding taxes required of them by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Agent with proof satisfactory to
Agent indicating that the applicable Borrower or Restricted Subsidiary of a
Borrower has made such payments or deposits.
6.8 INSURANCE.
(a) At each Borrower's, and each of their respective
Restricted Subsidiaries', expense, maintain insurance respecting their assets
wherever located, covering loss or damage by fire, theft, explosion, and all
other hazards and risks as ordinarily are insured against by other Persons
engaged in the same or similar businesses. Each Borrower, and each of their
respective Restricted Subsidiaries, also shall maintain business interruption,
public liability, and product liability insurance, as well as insurance against
larceny, embezzlement, and criminal misappropriation.
(b) At each Borrower's expense, obtain and maintain
(i) insurance of the type necessary to insure the Real Property Collateral, for
the full replacement cost thereof, against any loss by fire, lightning,
windstorm, hail, explosion, aircraft, smoke damage, vehicle damage, earthquakes,
elevator collision, and other risks from time to time included under "extended
coverage" polices, in such amounts as Agent may reasonably require, but in any
event in amounts sufficient to prevent each Borrower, and their respective
Restricted Subsidiaries, from becoming a co-insurer under such policies, (ii)
combined single limit bodily injury and property damages insurance against any
loss, liability, or damages on, about, or relating to each parcel of Real
Property Collateral, in such amounts as may be reasonably satisfactory to Agent;
(iii) business rental insurance covering annual receipts for a 12-month period
for each parcel of Real Property Collateral; and (iv) insurance for such other
risks as Agent reasonably may require. Replacement costs, at Agent's option, may
be re-determined by an insurance appraiser, reasonably satisfactory to Agent,
not more frequently than once every 12 months at each Borrower's expense.
(c) All such policies of insurance shall be in such
amounts and with such insurance companies as are reasonably satisfactory to
Agent. All hazard insurance shall
contain an endorsement reasonably satisfactory to Agent showing Agent as the
loss payee thereof as its interest may appear. Every policy of insurance
referred to in this Section 6.8 shall contain an agreement by the insurer that
it will not cancel such policy except after 30 days prior written notice to
Agent (or, in the case of non-payment of premiums, 10 days) and that any loss
payable thereunder shall be payable to Agent as its interest may appear
notwithstanding any act or omission of any Borrower which might, absent such
agreement, result in a forfeiture of all or a part of such insurance. Each
Borrower shall deliver to Agent certified copies of such policies of insurance
and evidence of the payment of all premiums therefor.
(d) Borrowers shall give, and shall cause their
respective Restricted Subsidiaries to give, Agent prompt notice of any loss
covered by such insurance, and Agent shall have the right to adjust any loss in
excess of $1,000,000. Agent shall have the exclusive right to adjust all such
losses payable under any such insurance policies without any liability to
Borrowers, or any of their respective Restricted Subsidiaries, whatsoever in
respect of such adjustments. Any monies received as payment for any loss under
any insurance policy including the insurance policies mentioned above, shall be
paid over to Agent to be applied at the option of Agent either to the prepayment
of the Obligations without premium, in such order or manner as Agent may elect,
or shall be disbursed to Borrowers under staged payment terms satisfactory to
Agent for application to the cost of repairs, replacements, or restorations. All
repairs, replacements, or restorations shall be effected with reasonable
promptness and shall be of a value at least equal to the value of the items or
property destroyed prior to such damage or destruction. Upon the occurrence of
an Event of Default, Agent shall have the right to apply all prepaid premiums to
the payment of the Obligations in such order or form as Agent shall determine.
(e) Each Borrower acknowledges and agrees that Agent
shall have no obligation to disburse any insurance proceeds received by Agent
following the occurrence of a casualty loss to any Borrower, or to any of their
respective Restricted Subsidiaries, for the repair, replacement, or restoration
of the items of property damaged or destroyed.
(f) Each Borrower agrees not take out, and shall
cause its respective Restricted Subsidiaries not to take out, separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained under this Section 6.8, unless Agent is included thereon as named
insured with the loss payable to Agent under a Agent's loss payable endorsement
or its equivalent. Each Borrower immediately shall notify, and shall cause its
respective Restricted Subsidiaries to notify, Agent whenever such separate
insurance is taken out, specifying the insurer thereunder and full particulars
as to the policies evidencing the same, and copies of such policies promptly
shall be provided to Agent.
6.9 LOCATION OF INVENTORY AND EQUIPMENT. Keep Borrowers' and their
Restricted Subsidiaries' Inventory and Equipment only at the locations
identified on Schedule 5.5 and their chief executive offices only at the
locations identified on Schedule 5.7(b); provided, however, that Administrative
Borrower may amend Schedule 5.5 and Schedule 5.7 so long as such amendment
occurs by written notice to Agent not less than 30 days prior to the date on
which such Inventory or Equipment is moved to such new location or such chief
executive office is relocated, so long as such new location is within the
continental United States, and so long as, at the time of such written
notification, the applicable Borrower provides Agent a Collateral Access
Agreement with respect thereto.
6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Change.
6.11 LEASES. Pay when due all rents and other amounts payable under
any leases to which any Borrower or any Restricted Subsidiary of a Borrower is a
party or by which any Borrower's or any Restricted Subsidiary of a Borrower's
properties and assets are bound, unless such payments are the subject of a
Permitted Protest.
6.12 EXISTENCE. At all times preserve and keep in full force and
effect each Borrower's and each Restricted Subsidiary of a Borrower's valid
existence and good standing and any rights and franchises material to their
businesses.
6.13 ENVIRONMENTAL.
(a) Keep any property either owned or operated by any
Borrower or any Restricted Subsidiary of a Borrower free of any Environmental
Liens or post bonds or other financial assurances sufficient to satisfy the
obligations or liability evidenced by such Environmental Liens, (b) comply, in
all material respects, with Environmental Laws and provide to Agent
documentation of such compliance which Agent reasonably requests, (c) promptly
notify Agent of any release of a Hazardous Material of any reportable quantity
from or onto property owned or operated by any Borrower or any Restricted
Subsidiary of a Borrower and take any Remedial Actions required to abate said
release or otherwise to come into compliance with applicable Environmental Law,
and (d) promptly, but in any event within 10 days of its receipt thereof,
provide Agent with written notice of any of the following: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of any Borrower or any Restricted Subsidiary of a Borrower, (ii) commencement of
any Environmental Action or notice that an Environmental Action will be filed
against any Borrower or any Subsidiary of a Borrower, and (iii) notice of a
violation, citation, or other administrative order arising under Environmental
Laws which reasonably could be expected to result in a Material Adverse Change.
6.14 DISCLOSURE UPDATES. Promptly and in no event later than 5
Business Days after obtaining knowledge thereof, notify Agent if any written
information, exhibit, or report furnished to the Lender Group contained any
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made. The foregoing to the contrary notwithstanding,
any notification pursuant to the foregoing provision will not cure or remedy the
effect of
prior untrue statement of a material fact or omission of any material fact nor
shall any such notification have the affect of amending or modifying this
Agreement or any of the Schedules hereto.
6.15 GOVERNMENTAL AUTHORIZATION. Each Borrower shall deliver, and shall
cause their respective Restricted Subsidiaries to deliver, to Agent, as soon as
practicable, and in any event within 10 days after the receipt by any Borrower,
or its respective Restricted Subsidiaries, from any Gaming Authority or other
Governmental Authority having jurisdiction over the operations of such Borrower,
or its respective Restricted Subsidiaries, or filing or receipt thereof by such
Borrower, or its respective Restricted Subsidiaries (i) copies of any order or
notice of such Gaming Authority or such other Governmental Authority or court of
competent jurisdiction which designates any Gaming License or other material
franchise, permit, or other governmental operating authorization of such
Borrower, or its respective Restricted Subsidiaries, or any application
therefor, for a hearing or which refuses renewal or extension of, or revokes or
suspends the authority of such Borrower, or its respective Restricted
Subsidiaries, to construct, own, manage, or operate its businesses (or portion
thereof), and (ii) a copy of any competing application filed with respect to any
such Gaming License or other authorization, or application therefor, of such
Borrower, or any of its respective Restricted Subsidiaries, or any citation,
notice of violation, or order to show cause issued by any Gaming Authority, any
Liquor Authority or other governmental authority or any complaint filed by any
Gaming Authority or other governmental authority which is applicable to such
Borrower, or to its respective Restricted Subsidiaries.
6.16 LICENSE RENEWALS. Commencing on the date twelve months following
the Closing Date and continuing every twelve months thereafter, each Borrower
shall deliver, and shall cause its respective Restricted Subsidiaries to
deliver, to Agent an updated Schedule 5.21 reflecting thereon, as of the date of
such delivery, the information described in Section 5.21.
6.17 LICENSES AND PERMITS. (a) Ensure that all material licenses
(including all necessary Gaming Licenses and Liquor Licenses), permits, and
consents and similar rights required from any federal, state, or local
governmental body (including the Gaming Authorities and Liquor Authorities) for
the ownership, use, or operation of the businesses or properties now owned or
operated by each Borrower have been validly issued and are in full force and
effect, and (b) comply, in all material respects, with all of the provisions
thereof applicable to it.
6.18 SUBSIDIARY GUARANTEES. Each Borrower shall cause each Restricted
Subsidiary of such Borrower that is formed or acquired after the date hereof,
concurrently therewith: (i) to become a Guarantor hereunder and execute and
deliver to Agent a Guaranty pursuant to which such Restricted Subsidiary shall
unconditionally guarantee all of the Obligations; and (ii) to execute a
Guarantor Security Agreement and such other agreements or documents necessary or
reasonably requested by Agent to grant Agent a valid, enforceable, perfected
Lien on the collateral described therein, subject only to Permitted Liens; and
(iii) to cause such Restricted Subsidiary to deliver to Agent an opinion of
counsel,
in form reasonably satisfactory to Agent, opining that (a) such guaranty,
security agreement, and other agreements and documents have been duly
authorized, executed and delivered by such Restricted Subsidiary and (b) such
guaranty, security agreement, and such other agreements and documents constitute
a legal, valid, binding and enforceable obligation of such Restricted
Subsidiary, subject to customary assumptions and exceptions, including for
bankruptcy, fraudulent transfer and equitable principles.
7. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, until termination of
all of the Commitments and payment in full of the Obligations, Borrowers will
not and will not permit any of their respective Restricted Subsidiaries to do
any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except for Permitted Indebtedness, or issue any Disqualified
Capital Stock. The foregoing to the contrary notwithstanding, each Borrower may
incur Indebtedness (other than Disqualified Capital Stock) (including, without
limitation, Acquired Debt) or issue Disqualified Capital Stock if (a) Parent's
consolidated Interest Coverage Ratio for Parent's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Capital Stock is issued would have been not less than
2.0:1.0, determined on a pro forma basis (including the pro forma application of
the net proceeds therefrom), as if such additional Indebtedness had been
incurred or such Disqualified Capital Stock had been issued at the beginning of
such four-quarter period, (b) the final stated maturity of such Indebtedness or
of the Indebtedness into which such Disqualified Capital Stock is convertible or
exchangeable, or the earliest date on which such Disqualified Capital Stock may
be redeemed or repurchased, in each case is after the Maturity Date (except for
Purchase Money Indebtedness, Capitalized Lease Obligations, or Acquired Debt),
and (c) no Event of Default shall have occurred and be continuing at the time
such Indebtedness is incurred or such Disqualified Capital Stock is issued, or
would occur after giving effect on a pro forma basis to such incurrence.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of their assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced, renewed, or
extended under clause (i) of the definition of "Permitted Indebtedness" and so
long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify their Stock,
or liquidate, wind up, or dissolve themselves (or suffer any liquidation or
dissolution), or convey, sell, assign, lease, transfer, or otherwise dispose of,
in one transaction or a series of transactions, all or substantially all of
their property or assets; provided, however, that:
(a) a Borrower or any Restricted Subsidiary may
enter into a merger or consolidation so long as:
(i) such Borrower or such Restricted Subsidiary,
as applicable, is the surviving Person;
(ii) immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of
Default exists;
(iii) such transaction would not result in the
loss or suspension or material impairment of any Gaming
License unless a comparable replacement Gaming License is
effective prior to or simultaneously with such loss,
suspension, or material impairment;
(iv) (i) such Borrower or Restricted Subsidiary
has Consolidated Net Worth (immediately after the transaction
but prior to any purchase accounting adjustments resulting
from the transaction) equal to or greater than the
Consolidated Net Worth of such Borrower or Restricted
Subsidiary, as applicable, immediately preceding such
transaction, and (ii) Borrowers, on a consolidated basis,
shall have an Interest Coverage Ratio of not less than 2.0:1.0
for their most recently ended four full fiscal quarters for
which internal financial statements are available immediately
preceding the date of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at
the beginning of the applicable four-quarter period; and
(v) such Borrower or Restricted Subsidiary, as
applicable, prior to the consummation of any proposed
transaction, shall deliver to Agent a certificate of an
officer of such Borrower or Restricted Subsidiary, as
applicable, to the foregoing effect, an opinion of counsel,
stating that all conditions precedent to the proposed
transaction provided for herein have been complied with and a
written statement from a firm of independent public
accountants of established national reputation reasonably
satisfactory to Agent that the proposed transaction complies
with the foregoing clause (iv).
(b) A Borrower or any Restricted Subsidiary may
sell, transfer, assign, lease or otherwise dispose of its assets in a
transaction that is permitted by Section 7.4; and
(c) Any Restricted Subsidiary of a Borrower may
liquidate or dissolve if such Borrower determines in good faith that such
liquidation or dissolution is in the best interests of such Borrower and is not
materially disadvantageous to Agent.
7.4 OWNERSHIP AND DISPOSAL OF ASSETS.
(a) Make any Asset Sale of either or both of the
Vessels;
(b) Make any Asset Sale, provided, however, that
an Asset Sale may be made (other than an Asset Sale that comprises a Vessel) if:
(i) no Default or Event of Default
shall have occurred and be continuing or would result
therefrom (other than a Default or Event of Default arising
from an Asset Sale that is a consequence of an Event of Loss);
(ii) such Borrower or Restricted
Subsidiary, as applicable, receives consideration of not less
than the fair market value, as of the time of such Asset Sale,
of the assets that are the subject of such Asset Sale (other
than an Asset Sale that is a consequence of an Event of Loss);
(iii) such Borrower or such Restricted
Subsidiary, as applicable, receives (A) 75% of the
consideration for such Asset Sale (other than an Asset Sale
that is a consequence of an Event of Loss) in the form of cash
or Cash Equivalents, or (B) the assumption by the transferee
of liabilities (other than liabilities that, by their terms,
are subordinated to the Obligations) of such Borrower or
Restricted Subsidiary, as applicable (provided, that following
such Asset Sale there is no further recourse to such Borrower
or its Restricted Subsidiaries with respect to such
liabilities), or (C) fixed assets or property that, in the
good faith judgment of the Managers, at the time of such Asset
Sale, will be used in a Related Business of the applicable
Borrower or its Restricted Subsidiary;
(iv) within 270 days of such Asset Sale
(or within 30 days in the case of an Asset Sale or series of
related Asset Sales with Net Proceeds of $15,000,000 or more),
the Net Proceeds thereof are (A) invested in fixed assets or
property that, in the good faith judgment of the Managers, at
the time of such Asset Sale, will be used in a Related
Business of the applicable Borrower or its Restricted
Subsidiary, (B) applied to repay Indebtedness under Purchase
Money Indebtedness incurred in connection with the asset sold,
(C) at the option of Agent, to the extent not invested or
applied as provided in clauses (A) or (B) above (Net Proceeds
not being so invested or applied, "Excess Proceeds"), applied
to repay Indebtedness under this Agreement and to permanently
reduce the amount set forth in clause (a) of the definition of
Maximum Revolver Amount by the amount of Indebtedness so
repaid, provided that such Borrower shall have no obligation
to so prepay Indebtedness under this Agreement and to so
permanently reduce the amount set forth in clause (a) of the
definition of the Maximum Revolver Amount unless the aggregate
amount of Excess Proceeds shall exceed $1,500,000; or (D)
applied to make an offer to purchase Notes as provided in the
Indenture, provided, that such Borrower shall not make an
offer to so purchase Notes unless the aggregate amount of
Excess Proceeds minus the amount applied to repay Indebtedness
under this Agreement pursuant to the foregoing clause (C)
shall exceed $5,000,000.
(c) Pending the final application of any Net
Proceeds of any Asset Sale in accordance with Section 7.4(b), Borrowers shall
apply such Net Proceeds to the outstanding Obligations or retain such Net
Proceeds, in each case, in accordance with the terms hereof.
7.5 CHANGE NAME. Change any Borrower's or any Restricted Subsidiary of
a Borrower's name, FEIN, organizational identification number, state of
organization, or organizational identity; provided, however, that a Borrower or
a Restricted Subsidiary of a Borrower may change its name upon at least 30 days
prior written notice by Administrative Borrower to Agent of such change and so
long as, at the time of such written notification, such Borrower or such
Restricted Subsidiary provides any financing statements necessary to perfect and
continue perfected Agent's Liens.
7.6 NATURE OF BUSINESS. Directly or indirectly engage to any material
extent in any line or lines of business activity other than that which, in the
reasonable good faith judgment of the Managers of Borrowers, is a Related
Business.
7.7 PREPAYMENTS AND AMENDMENTS.
(a) Prepay, redeem, retire, defease, purchase,
or otherwise acquire any Indebtedness of any Borrower or its Restricted
Subsidiaries owing to any third Person, other than the Obligations in accordance
with this Agreement; except: (i) in connection with a refinancing permitted by
clause (i) of the definition of Permitted Indebtedness, (ii) as may be necessary
to comply with mandatory provisions of Applicable Gaming Laws (including a
Required Regulatory Redemption in accordance with Section 3.8 of the Indenture),
and (iii) the repurchase of Notes in accordance with Section 7.4(b)(iv)(D); and
(b) Except as may be necessary to comply with
mandatory provisions of Applicable Gaming Laws, directly or indirectly, amend,
modify, alter, increase, or change any of the terms or conditions of (i) any
Senior Note Document, provided, however, that additional Notes may be issued
pursuant to the terms thereof to the extent the Indebtedness evidenced by such
Notes is permitted hereunder and under the Applicable Gaming Laws, (ii) the
Operating Agreement, (iii) the Management Agreement, or (iv) any agreement,
instrument, document, indenture, or other writing evidencing or concerning (A)
Indebtedness permitted under clause (e) of the definition of "Permitted
Indebtedness", or (B) Indebtedness refinanced in accordance with clause (i) of
the definition of "Permitted Indebtedness" in respect of any Indebtedness
permitted under clause (e) of the definition of "Permitted Indebtedness", if the
effect of such amendment, modification, alteration, or change would materially
increase the obligations of Borrowers or their Restricted Subsidiaries or confer
additional material rights on the holder of such Indebtedness in a manner
adverse to Borrowers, their Restricted Subsidiaries, or Agent.
7.8 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.9 CONSIGNMENTS. Consign any of their Inventory or sell any of their
Inventory on bill and hold, sale or return, sale on approval, or other
conditional terms of sale.
7.10 DISTRIBUTIONS. Except as set forth in Sections 7.13 and 7.20, make
any distribution or declare or pay any dividends (in cash or other property) on,
or purchase, acquire, redeem, or retire any of Parent's or any Borrower's, or
any of their respective Restricted Subsidiaries' Stock, of any class, whether
now or hereafter outstanding (collectively, "Restricted Payments"); provided,
however, that:
(a) A Borrower may redeem, purchase, retire, or
otherwise acquire such Borrower's Stock in exchange for, or out of the proceeds
of, the substantially concurrent sale (other than to a Restricted Subsidiary of
such Borrower) of, other Stock of such Borrower (other than Disqualified Capital
Stock of such Borrower),
(b) A Borrower may make distributions or pay
dividends to its Members in an amount not to exceed the amount of Investments
that such Borrower could otherwise make pursuant to Section 7.12(b) (provided
that each of the requirements set forth in Section 7.12(b) have been satisfied)
at the time such distribution or dividend is made, minus the amount of
Investments that are made pursuant to Section 7.12(b), provided, that after
giving effect to such distribution or dividend, such Borrower shall have
Availability of not less than $1,000,000;
(c) Restricted Subsidiaries may make
distributions and pay dividends to a Borrower or to other Restricted
Subsidiaries;
(d) Majestic Investor may make a distribution of
the Stock of BNG to BDI; and
(e) Parent and its Restricted Subsidiaries may
make distributions which result from the making of Investments described in
clause (r) of the definition of "Permitted Investments."
7.11 ACCOUNTING METHODS. Modify or change their fiscal year or their
method of accounting (other than as may be required to conform to GAAP) or enter
into, modify, or terminate any agreement currently existing, or at any time
hereafter entered into with any third party accounting firm or service bureau
for the preparation or storage of Borrowers' or their Restricted Subsidiaries'
accounting records without said accounting firm or service bureau agreeing to
provide Agent information regarding Borrowers' and their Restricted
Subsidiaries' financial condition.
7.12 INVESTMENTS.
(a) Other than Permitted Investments, directly
or indirectly make, acquire, or incur any liabilities (including contingent
obligations) for or in connection with any Investment (including, without
limitation, (i) the acquisition of the securities (whether debt or equity) of,
or other interests in, a Person, (ii) loans, advances, capital contributions, or
transfers of property to a Person, or (iii) the acquisition of all or
substantially all of the properties or assets of a Person); provided, however,
that Borrowers and their respective Restricted Subsidiaries shall not have
Permitted Investments in Deposit Accounts or Securities Accounts (other than
with respect to Cage Cash) in an aggregate amount in excess of $5,000,000 at any
one time unless the applicable Borrower or Restricted Subsidiary and the
applicable securities intermediary or bank have entered into Control Agreements
governing such Permitted Investments in order to perfect (and further establish)
the Agent's Liens in such Permitted Investments.
(b) The foregoing to the contrary
notwithstanding, a Borrower may make or acquire an Investment not otherwise
permitted in Section 7.12(a) above if:
(i) such Borrowers' consolidated Interest
Coverage Ratio for Borrowers' most recently ended four full
fiscal quarters for which internal financial statements are
available immediately preceding the date on which such
Investment is made would have been not less than 2.0:1.0,
determined on a pro forma basis, as if such Investment had
been made at the beginning of such four-quarter period;
(ii) no Event of Default shall have occurred and
be continuing at the time such Investment is made or would
occur as a consequence thereof;
(iii) the amount of such Investment, together with
all other Investments made pursuant to this Section 7.12(b)
and all dividends or distributions made pursuant to Section
7.10(b) (in each case, so long as a Default or an Event of
Default has not occurred and is not continuing and would not
result therefrom, excluding Investments, dividends or
distributions made in connection with an Excluded
Transaction), in each case, after the Closing Date, is less
than the lesser of (A) the amount of Investments such Borrower
is then permitted to make pursuant to Section 4.7 of the
Indenture (without regard to any waiver of the restrictions
contained in such section), and (B) the sum of (1) 50% of the
Consolidated Net Income of such Borrower for the period (taken
as one accounting period) from the beginning of the first
fiscal quarter commencing immediately after the Closing Date
to the end of such Borrower's then most recently ended fiscal
quarter for which internal financial statements are available
(or, if such Consolidated Net Income for such period is a
deficit, 100% of such deficit), plus, (2) 100% of the
aggregate net cash proceeds (or of the net cash proceeds
received upon the conversion of non-cash proceeds into cash)
received by such Borrower from the issuance or sale, other
than to a Restricted Subsidiary of such Borrower, of Stock of
such Borrower (other than Disqualified Capital Stock) after
the Closing Date and on or prior to the time of such
Investment, plus (3) 100% of the aggregate net cash proceeds
(or of the net cash proceeds received upon the conversion of
non-cash proceeds into cash) received by such Borrower from
the issuance or sale, other than to a Restricted Subsidiary of
such Borrower, of any convertible or exchangeable debt
security of such Borrower that has been converted or exchanged
into Stock of such Borrower (other than Disqualified Capital
Stock) pursuant to the terms thereof after the Closing Date
and on or prior to the time of such Investment (including any
additional net cash proceeds received by such Borrower upon
such conversion or exchange), plus (4) the aggregate Return
from Unrestricted Subsidiaries after the Closing Date and on
or prior to the time of such Investment; and
(iv) not later than 3 Business Days prior to the
date of such Investment, dividend or distribution, Parent
delivers to Agent a certificate from its chief financial
officer which demonstrates the satisfaction of each of the
requirements set forth in this Section 7.12(b) for the making
of an Investment, dividend or distribution, which attaches the
internal financial statements for Parent and its Restricted
Subsidiaries which support such certification, and which is in
form and substance satisfactory to Agent.
7.13 TRANSACTIONS WITH AFFILIATES.
(a) Directly or indirectly sell, lease,
transfer, or otherwise dispose of any of their properties or assets to, or
purchase any property or assets from, or enter into or permit to exist any
contract, agreement, understanding, loan, advance or guaranty with, or for the
benefit of, any Affiliate of a Borrower or any Affiliate of any Restricted
Subsidiary (each of the foregoing, an "Affiliate Transaction") except for:
(i) Affiliate Transactions (A) entered into in
the ordinary course of business, or (B) set forth on Schedule
7.13, that, together with all related Affiliate Transactions,
have an aggregate value of not more than $2,000,000; provided,
that (A) such transactions are conducted in good faith and on
terms that are no less favorable to such Borrower or the
relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction at such time by such
Borrower or Restricted Subsidiary on an arm's-length basis
from a Person that is not an Affiliate of such Borrower or
Restricted Subsidiary and (B) prior to entering into such
transaction such Borrower shall have delivered to Agent a
certificate from an officer of such Borrower certifying to
such effect;
(ii) Affiliate Transactions (A) entered into in
the ordinary course of business, or (B) set forth on Schedule
7.13, that, together with all related Affiliate Transactions,
have an aggregate value of not more than $5,000,000; provided,
that (A) a majority of the disinterested Managers or, if none,
a disinterested representative appointed by the Managers of
the applicable Borrower for such purpose determine that such
transactions are conducted in good faith and on terms that are
no less favorable to such Borrower or the relevant Restricted
Subsidiary than those that would have been obtained in a
comparable transaction at such time by such Borrower or
Restricted
Subsidiary on an arm's-length basis from a Person that is not
an Affiliate of such Borrower or Restricted Subsidiary and (B)
prior to entering into such transaction such Borrower shall
have delivered to Agent a certificate from an officer of such
Borrower certifying to such effect; or
(iii) Affiliate Transactions (A) entered into in
the ordinary course of business, or (B) set forth on Schedule
7.13, for which such Borrower delivers to Agent an opinion as
to the fairness to such Borrower or such Restricted Subsidiary
from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing.
(b) Anything in Section 7.13(a) to the contrary
notwithstanding, the following shall be deemed not to be Affiliate Transactions:
(i) Permitted Investments permitted by Section
7.12 hereof,
(ii) Dividends or Distributions permitted under
Section 7.10 hereof,
(iii) the nonexclusive licensing of any service
mark of any Borrower to an Affiliate or Affiliates of a
Borrower,
(iv) the payment of the Cash Flow-Based Manager
Distributions and Revenue-Based Manager Distributions
(collectively, the "Manager Distributions") provided for in
the Management Agreement as of the Closing Date, so long as
(A) no Default or Event of Default has occurred and is
continuing or would result from the payment of such Manager
Distributions, (B) the aggregate amount of such Manager
Distributions does not exceed $10,000,000 in any given fiscal
year of Parent and Borrowers, and (C) the terms and conditions
of the payment of such Manager Distributions set forth in the
Management Agreements are satisfied,
(v) payments pursuant to the Berthing Agreement,
as in effect on the Closing Date,
(vi) the Expense Reimbursement Agreement, in each
case as in effect on the Closing Date, and all receipts which
are received thereunder, and
(vii) transactions between Parent and its Wholly
Owned Subsidiaries.
7.14 -SUSPENSION. Suspend or go out of a substantial portion of their
business.
7.15 COMPENSATION. Increase the annual fee or per-meeting fees paid to
the members of their Boards of Directors during any year by more than 15% over
the prior year.
7.16 USE OF PROCEEDS. Use the proceeds of the Advances for any purpose
other than (a) on the Closing Date, (i) to repay in full the outstanding
principal, accrued interest,
and accrued fees and expenses owing to Existing Lender in respect of the
Existing Loan Agreements, (ii) to repay, in part, the obligations of the
Borrowers owing under the Existing Indentures, and (iii) to pay transactional
fees, costs, and expenses incurred in connection with this Agreement, the other
Loan Documents, and the transactions contemplated hereby and thereby, and (b)
thereafter, consistent with the terms and conditions hereof, for its lawful and
permitted purposes.
7.17 INVENTORY AND EQUIPMENT WITH BAILEES. Store the Inventory or
Equipment of Borrowers or their Restricted Subsidiaries at any time now or
hereafter with a bailee, warehouseman, or similar party without Agent's prior
written consent.
7.18 FINANCIAL COVENANTS.
(a) Fail to maintain or achieve:
(i) MINIMUM EBITDA. EBITDA, measured on a
month-end basis, of at least the required amount set forth in the
following table for the applicable period set forth opposite
thereto:
Applicable Amount Applicable Period
- ---------------------------------------------------------------------------
$13,900,000 For the 3 month period
ending March 31, 2004
- ---------------------------------------------------------------------------
$26,400,000 For the 6 month period
ending June 30, 2004
- ---------------------------------------------------------------------------
$39,600,000 For the 9 month period
ending September 30, 2004
- ---------------------------------------------------------------------------
$51,000,000 For the 12 month period
ending December 31, 2004
- ---------------------------------------------------------------------------
$52,000,000 For the 12 month period
ending March 31, 2005
- ---------------------------------------------------------------------------
$53,000,000 For the 12 month period
ending June 30, 2005
- ---------------------------------------------------------------------------
$54,000,000 For the 12 month period
ending September 30, 2005
- ---------------------------------------------------------------------------
$55,000,000 For the 12 month period
ending December 31, 2005
- ---------------------------------------------------------------------------
$56,000,000 For the 12 month period
ending March 31, 2006
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
$56,000,000 For the 12 month period
ending June 30, 2006
- ---------------------------------------------------------------------------
$57,000,000 For the 12 month period
ending September 30, 2006
- ---------------------------------------------------------------------------
$57,000,000 For the 12 month period
ending December 31, 2006
- ---------------------------------------------------------------------------
$58,000,000 For the 12 month period
ending March 31, 2007
- ---------------------------------------------------------------------------
$58,000,000 For the 12 month period
ending June 30, 2007
- ---------------------------------------------------------------------------
$59,000,000 For the 12 month period
ending September 30, 2007
- ---------------------------------------------------------------------------
(ii) INTEREST COVERAGE RATIO. An Interest
Coverage Ratio, measured on a month-end basis, of at least the
required amount set forth in the following table for the
applicable period set forth opposite thereto:
Applicable Ratio Applicable Period
- -----------------------------------------------------------------------------------
1.80:1.0 For the 3 month period
ending March 31, 2004
- -----------------------------------------------------------------------------------
1.80:1.0 For the 6 month period
ending June 30, 2004
- -----------------------------------------------------------------------------------
1.80:1.0 For the 9 month period
ending September 30, 2004
- -----------------------------------------------------------------------------------
1.80:1.0 For the 12 month period
ending December 31, 2004
- -----------------------------------------------------------------------------------
1.80:1.0 For the 12 month period
ending March 31, 2005
- -----------------------------------------------------------------------------------
1.80:1.0 For the 12 month period
ending June 30, 2005
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
1.90:1.0 For the 12 month period
ending September 30, 2005
- -----------------------------------------------------------------------------------
1.90:1.0 For the 12 month period
ending December 31, 2005
- -----------------------------------------------------------------------------------
2.00:1.0 For the 12 month period ending
March 31, 2006
- -----------------------------------------------------------------------------------
2.00:1.0 For the 12 month period ending
June 30, 2006
- -----------------------------------------------------------------------------------
2.00:1.0 For the 12 month period ending
September 30, 2006
- -----------------------------------------------------------------------------------
2.00:1.0 For the 12 month period ending
December 31, 2006
- -----------------------------------------------------------------------------------
2.10:1.0 For the 12 month period ending
March 31, 2007 and on the last day of each
fiscal quarter of Borrowers thereafter
- -----------------------------------------------------------------------------------
(b) Make:
(i) CAPITAL EXPENDITURES. Capital expenditures
in any fiscal year in excess of the amount set forth in the
following table for the applicable period:
9 months ending on the
Fiscal Year 2004 Fiscal Year 2005 Fiscal Year 2006 Maturity Date
- -------------------------------------------------------------------------------------------------
$18,000,000 $12,000,000 $12,000,000 $9,000,000
The foregoing to the contrary notwithstanding, in the event
the Borrowers and their Restricted Subsidiaries do not expend the full amount of
the capital expenditures permitted hereunder for any period, the Borrowers and
their Restricted Subsidiaries may expend 25% of the unutilized portion thereof
in the immediately succeeding period.
7.19 OPERATION OF VESSELS. At any time operate the Vessels outside the
navigation limits of the insurance carried pursuant to the Majestic Star Ship
Mortgage or Tunica Ship Mortgage, as applicable.
7.20 PERMITTED TAX DISTRIBUTIONS.
(a) Notwithstanding Section 7.10, Parent and
each Borrower, at its option, may declare and pay Permitted Tax Distributions to
its Equity Holders; provided, that (i) no Event of Default shall have occurred
and be continuing at the time of any such Permitted Tax Distribution or would
result therefrom, (ii) prior to the payment of any such Permitted Tax
Distribution, Parent or each such Borrower (as the case may be) shall provide
Agent with a certificate from an officer of Parent and/or such Borrower and an
opinion of counsel to the effect that Parent, such Borrower and each Restricted
Subsidiary of such Borrower in respect of which such Permitted Tax Distributions
are being made, qualify as Flow Through Entities for federal income tax purposes
and for the states in respect of which such distributions are being made, (iii)
at the time of any such Permitted Tax Distribution, the most recent audited
financial statements of such Borrower provided to Agent pursuant to Section 6.3
provide that such Borrower and each such Restricted Subsidiary were treated as
Flow Through Entities for the period of such financial statements, and (iv)
Parent or each such Borrower (as the case may be) provide to Agent a certificate
from the applicable Person's chief financial officer which sets forth the
calculation of such Permitted Tax Distribution that it proposes to make, which
certifies such calculation as being reasonably determined or estimated in good
faith by the applicable Borrower, and which is in form and substance
satisfactory to Agent.
(b) Estimated tax distributions shall be made
within thirty days following March 15, May 15, August 15, and December 15 based
upon an estimate of the excess of (x) the tax distributions that would be
payable for the period beginning on January 1 of such year and ending on March
15, May 15, August 15, and December 15 if such period were a taxable year
(computed as provided above) over (y) distributions attributable to all prior
periods during such taxable year. The excess of the Permitted Tax Distributions
for a taxable year over the amounts previously distributed as estimated tax
distributions may be distributed to Equity Holders within thirty days of the
date on which Borrower has filed its federal income tax return with respect to
such taxable years. To the extent that the estimated tax distributions
previously paid to an Equity Holder in respect of any taxable year are greater
than the Permitted Tax Distributions for such year, such excess shall be treated
for all purposes of this Agreement as if distributed as an estimated tax
distribution on March 15 of the next succeeding year for the purpose of
determining amounts permitted to be distributed in such succeeding taxable year.
(c) The amount of the Permitted Tax
Distributions shall be re-computed promptly after (i) the filing by each
Borrower of its annual tax return, and (ii) the appropriate Federal or state
taxing authority finally determines that the amount of the items of taxable
income, gain, deduction, or loss of such Borrower which affected the calculation
of the Permitted Tax Distributions for any year should be changed or adjusted,
including the determination that such Borrower or any other entity is not a Flow
Through Entity (a "Tax Calculation Event"). In the event of a Tax Calculation
Event, the amount by which the Permitted Tax Distributions would have been
reduced had they been calculated in accordance with the Tax Calculation Event
(an "Overdistribution") shall offset the amounts permitted to be distributed
through the next two successive estimated tax payment dates (and such amounts
permitted to be distributed shall be, for purposes of this Agreement, treated as
if distributed to Equity Holders and used to repay the Overdistribution). If the
amount of any Overdistribution has not been repaid in full by the end of the
second estimated tax payment date following the Tax Calculation Event, such
Borrower will use its best efforts to collect the remaining Overdistribution
Amount from the Equity Holders. If following a Tax Calculation Event, the amount
by which the Permitted Tax Distributions would have been increased had they been
calculated in accordance with the Tax Calculation Event (an
"Underdistribution"), the amount of such Underdistribution shall be distributed
to Equity Holders within 90 days of the date of the Tax Calculation Event.
(d) Prior to making any estimated tax
distribution, each Borrower or Parent, as the case may be, shall require each
Equity Holder to agree to make any payment required under Section 7.22(c)
hereof.
(e) To the extent that any tax distribution
would otherwise be made to any Equity Holder at a time when an obligation of
such Equity Holder to make a payment to a Borrower or Parent pursuant to Section
7.22(c) remains outstanding, the amount of any tax distribution to be made shall
be reduced by the amounts such Equity Holder is obligated to pay such Borrower
or Parent.
7.21 RESTRICTIONS ON SALE AND ISSUANCE OF SUBSIDIARY STOCK. Sell, nor
permit any Restricted Subsidiary to issue or sell, any Stock (other than
directors" qualifying shares) of any Restricted Subsidiary to any Person other
than a Borrower or a Wholly Owned Subsidiary of such Borrower; provided, that
such Borrower and its Restricted Subsidiaries, subject to compliance with
Applicable Gaming Laws, may sell all (but not less than all) of the capital
Stock of a Restricted Subsidiary owned by such Borrower and its Restricted
Subsidiaries if the Net Proceeds from such Asset Sale are used in accordance
with the terms of Section 7.4 hereof.
7.22 MEMBERSHIP INTERESTS. Authorize or issue certificates evidencing
the membership interests in each Borrowers.
7.23 LIMITATION ON RESTRICTED SUBSIDIARY DIVIDENDS. Directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(a) pay dividends or make any other
distributions to a Borrower or any of its Restricted Subsidiaries (i) on such
Restricted Subsidiary's capital Stock or (ii) with respect to any other interest
or participation in, or measured by, such Restricted Subsidiary's profits, or
(b) pay any Indebtedness owed to a Borrower or
any of its Restricted Subsidiaries, or
(c) make loans or advances to a Borrower or any
of its Restricted Subsidiaries, or
(d) transfer any of its assets to a Borrower or
any of its Restricted Subsidiaries,
except, with respect to clauses (a) through (d) above, for
such encumbrances or restrictions existing under or by reason of:
(i) this Agreement or the other Loan Documents;
(ii) the Senior Note Documents;
(iii) applicable law;
(iv) Acquired Debt; provided, that such
encumbrances and restrictions are not applicable to any
Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so
acquired;
(v) customary non-assignment and net worth
provisions of any contract, lease or license entered into in
the ordinary course of business;
(vi) customary restrictions on the transfer of
assets subject to a Permitted Lien imposed by the holder of
such Lien; and
(vii) the agreements governing permitted
refinancing Indebtedness; provided, that such restrictions
contained in any agreement governing such refinancing
Indebtedness are no more restrictive than those contained in
any agreements governing the Indebtedness being refinanced.
7.24 BHR JOINT VENTURE. Permit the BHR Joint Venture to, directly or
indirectly:
(a) incur any Indebtedness or issue any
Disqualified Capital Stock; provided that, the BHR Joint Venture may incur:
(i) Indebtedness if immediately after giving
effect to such incurrence on a pro forma basis, the Company could incur at least
$1.00 of additional Indebtedness pursuant to the second sentence of Section 7.1;
(ii) Indebtedness if immediately after giving
effect to the incurrence of such Indebtedness, the aggregate principal amount of
BHR Attributed Debt does not exceed the Maximum Amount less the aggregate
principal amount of the Obligations then outstanding, and
(iii) Indebtedness incurred to refinance any
Indebtedness incurred pursuant to clause (i) above or Indebtedness of the BHR
Joint Venture outstanding on the Closing Date;
(b) create, incur, assume or suffer to exist any
Lien on any asset of the BHR Joint Venture, or on any income or profits
therefrom, or assign or convey any right to receive income therefrom, except
Permitted Liens;
(c) declare or pay any dividend or make any
distribution on account of any Stock of the BHR Joint Venture, unless such
distributions are made on a pro rata basis to all members of the BHR Joint
Venture, based on each member's ownership interest therein;
(d) purchase, redeem or otherwise acquire or
retire for value any Stock of the BHR Joint Venture (other than any such Stock
owned by Parent or any Restricted Subsidiary); or
(e) transfer, other than in the ordinary course
of business, any assets of the BHR Joint Venture, unless:
(i) the BHR Joint Venture receives consideration
at the time of such transfer not less than the fair market value of the assets
subject to such transfer,
(ii) at least 75% of the consideration for such
transfer is in the form of cash or Cash Equivalents or liabilities of the BHR
Joint Venture that are assumed by the transferee of such assets (provided that,
following such transfer there is no further recourse to the BHR Joint Venture
with respect to such liabilities), and
(iii) within 270 days of such transfer, the net
proceeds thereof are (A) invested in assets related to the business of the BHR
Joint Venture, (B) applied to permanently repay Indebtedness of the BHR Joint
Venture, or (C) distributed to the members of the BHR Joint Venture in
accordance with Section 7.24(c).
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 If Borrowers fail to pay when due and payable or when declared due
and payable, all or any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due the Lender
Group, reimbursement of Lender Group Expenses, or other amounts constituting
Obligations);
8.2 If any Borrowers or Guarantors fail or neglect to perform, keep, or
observe (a) any term, provision, condition, covenant, or agreement: (i)
contained in Sections 6.2 (Collateral Reporting), 6.3 (Financial Statements,
Reports, Certificates), 6.7 (Tax Returns), 6.10 (Compliance with Laws), 6.11
(Leases), and 6.12 (Existence) of this Agreement and such failure continues for
a period of 5 Business Days; (ii) contained in Sections 6.1 (Accounting System),
6.6 (Maintenance of Properties), or 6.9 (Location of Inventory and
Equipment), 6.13 (exclusive of clause (d) thereof) (Environmental), 6.16
(License Renewals), or 6.18 (Subsidiary Guarantees) of this Agreement and such
failure continues for a period of 15 Business Days; or (b) any other term,
provision, condition, covenant, or agreement contained in this Agreement or any
material term, provision, condition, covenant or agreement contained in any of
the other Loan Documents (giving effect to any grace periods, cure periods, or
required notices, if any, expressly provided for in such other Loan Documents;
in each case, other than any term, provision, condition, covenant, or agreement
that is the subject of another provision of this Section 8, in which event such
other provision of this Section 8 shall govern); provided, that, during any
period of time that any such failure or neglect of any Borrower or any Guarantor
referred to in this Section 8.2 exists, even if such failure or neglect is not
yet an Event of Default by virtue of the existence of a grace or cure period or
the pre-condition of the giving of a notice, Lenders shall not be required to
make Advances (or otherwise extend credit) hereunder;
8.3 If any material portion of any Borrower's or any Restricted
Subsidiary of a Borrower's assets is attached, seized, subjected to a writ or
distress warrant, levied upon, or comes into the possession of any third Person;
8.4 If an Insolvency Proceeding is commenced by Limited Recourse
Guarantor, any Borrower or any Restricted Subsidiary of a Borrower;
8.5 If an Insolvency Proceeding is commenced against Limited Recourse
Guarantor, any Borrower or any Restricted Subsidiary of a Borrower, and any of
the following events occur: (a) Limited Recourse Guarantor, the applicable
Borrower or Restricted Subsidiary consents to the institution of the Insolvency
Proceeding against it, (b) the petition commencing the Insolvency Proceeding is
not timely controverted; provided, however, that, during the pendency of such
period, each member of the Lender Group shall be relieved of its obligations to
extend credit hereunder, (c) the petition commencing the Insolvency Proceeding
is not dismissed within 45 calendar days of the date of the filing thereof;
provided, however, that, during the pendency of such period, each member of the
Lender Group shall be relieved of its obligation to extend credit hereunder, (d)
an interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, Limited Recourse Guarantor, any Borrower or any
Restricted Subsidiary of a Borrower, or (e) an order for relief shall have been
entered therein;
8.6 If any Borrower or any Restricted Subsidiary of a Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs;
8.7 If a notice of Lien, levy, or assessment is filed of record with
respect to Limited Recourse Guarantor's, any Borrower's or any Restricted
Subsidiary of a Borrower's assets by the United States, or any department,
agency, or instrumentality thereof, or by any state, county, municipal, or
governmental agency, or if any taxes or debts owing at any time hereafter to any
one or more of such entities becomes a Lien, whether choate or otherwise,
upon any Borrower's or any Restricted Subsidiary of a Borrower's assets and the
same is not paid before such payment is delinquent;
8.8 If a final non-appealable judgment or judgments for the payment of
money (other than judgments as to which a reputable insurance company has
accepted full liability) is or are entered by a court of competent jurisdiction
against Limited Recourse Guarantor, Guarantors or Borrowers, or any of their
Restricted Subsidiaries, and such judgment or judgments remain undischarged,
unbonded, or unstayed for a period of 60 days after entry; provided, that the
aggregate amount of all such judgments exceeds $5,000,000;
8.9 If there is a default in one or more agreements to which Limited
Recourse Guarantor, any Borrower or any of its Restricted Subsidiaries is a
party relative to Indebtedness of Limited Recourse Guarantor, such Borrower or
Restricted Subsidiary involving an aggregate amount of $5,000,000 or more or any
other material agreement to which Limited Recourse Guarantor, any Guarantor or
Borrower, or any of their Restricted Subsidiaries, is a party with one or more
third Persons, and, in either case, such default (a) occurs at the final
maturity of the obligations thereunder, or (b) results in a right by the other
party thereto, irrespective of whether exercised, to accelerate the maturity of
Limited Recourse Guarantor's, such Guarantor's or Borrower's, or their
respective Restricted Subsidiaries' obligations thereunder, to terminate such
agreement, or to refuse to renew such agreement pursuant to an automatic renewal
right therein;
8.10 If Limited Recourse Guarantor, any Borrower or any Restricted
Subsidiary of a Borrower makes any payment on account of Indebtedness that has
been contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.11 If any misstatement or misrepresentation exists now or hereafter
in any warranty, representation, statement, or Record made to the Lender Group
by Limited Recourse Guarantor, any Borrower, any Restricted Subsidiary of a
Borrower, or any officer, employee, agent, or director of Limited Recourse
Guarantor, any Borrower or any Restricted Subsidiary of a Borrower;
8.12 If the obligation of any Guarantor under the Guaranty is limited
or terminated by operation of law or by such Guarantor thereunder;
8.13 If the obligation of Limited Recourse Guarantor under the Limited
Recourse Guaranty is limited or terminated by operation of law or by Limited
Recourse Guarantor thereunder;
8.14 If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby;
8.15 Any provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by Limited Recourse Guarantor, any Borrower or any
Restricted Subsidiary of a Borrower, or a proceeding shall be commenced by
Limited Recourse Guarantor, any Borrower or any Restricted Subsidiary of a
Borrower, or by any Governmental Authority having jurisdiction over Limited
Recourse Guarantor, any Borrower or any Restricted Subsidiary of a Borrower,
seeking to establish the invalidity or unenforceability thereof, or Limited
Recourse Guarantor, any Borrower or any Restricted Subsidiary of a Borrower
shall deny that it has any liability or obligation purported to be created under
any Loan Document;
8.16 If there is an "Event of Default" under, and as defined in, the
Indenture;
8.17 If any Guarantor or Borrower, or any of their Restricted
Subsidiaries, fails to keep in full force and effect, suffers the termination,
revocation, forfeiture, nonrenewal or suspension of, or suffers a material
adverse amendment to, any Gaming License, franchise, registration,
qualification, finding of suitability or other approval or authorization
required to enable such Guarantor or Borrower, or any such Restricted
Subsidiary, to own, operate, or otherwise conduct or manage their businesses,
including the riverboat, dockside or land based gaming activities of Guarantors
and Borrowers and any other location where Guarantors and Borrowers conduct such
business;
8.18 If any Governmental Authority terminates, suspends, amends,
revokes, repeals or fails to renew any law, license, franchise, registration,
qualification, finding of suitability or other approval or authorization
required to enable any Guarantor or Borrower, or any of their Restricted
Subsidiaries, to own, operate, or otherwise conduct or manage their businesses,
including the riverboat, dockside or land-based gaming activities and any other
location where Guarantors and Borrowers conduct such business; or
8.19 If there is a Material Adverse Change.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), subject to the provisions of the last
paragraph of this Section 9.1, all of which are authorized by Borrowers:
(a) Declare all Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable;
(b) Cease advancing money or extending credit to
or for the benefit of Borrowers under this Agreement, under any of the Loan
Documents, or under any other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the
other Loan Documents as to any future liability or obligation of the Lender
Group, but without affecting any of the Agent's Liens in the Collateral and
without affecting the Obligations;
(d) Settle or adjust disputes and claims
directly with Borrowers' Account Debtors for amounts and upon terms which Agent
considers advisable, and in such cases, Agent will credit the Loan Account with
only the net amounts received by Agent in payment of such disputed Accounts
after deducting all Lender Group Expenses incurred or expended in connection
therewith;
(e) [intentionally omitted]
(f) Without notice to or demand upon any
Borrower, make such payments and do such acts as Agent considers necessary or
reasonable to protect its security interests in the Collateral. Each Borrower
agrees to assemble the Collateral if Agent so requires, and to make the
Collateral available to Agent at a place that Agent may designate which is
reasonably convenient to both parties. Each Borrower authorizes Agent to enter
the premises where the Collateral is located, to take and maintain possession of
the Collateral, or any part of it, and to pay, purchase, contest, or compromise
any Lien that in Agent's determination appears to conflict with the Agent's
Liens in and to the Collateral and to pay all expenses incurred in connection
therewith and to charge Borrowers' Loan Account therefor. With respect to any of
Borrowers' owned or leased premises, each Borrower hereby grants Agent a license
to enter into possession of such premises and to occupy the same, without
charge, in order to exercise any of the Lender Group's rights or remedies
provided herein, at law, in equity, or otherwise;
(g) Without notice to any Borrower (such notice
being expressly waived), and without constituting an acceptance of any
collateral in full or partial satisfaction of an obligation (within the meaning
of the Code), set off and apply to the Obligations any and all (i) balances and
deposits of any Borrower held by the Lender Group, or (ii) Indebtedness at any
time owing to or for the credit or the account of any Borrower held by the
Lender Group;
(h) Hold, as cash collateral, any and all
balances and deposits of any Borrower held by the Lender Group to secure the
full and final repayment of all of the Obligations;
(i) Ship, reclaim, recover, store, finish,
maintain, repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Borrower Collateral. Each Borrower hereby grants to
Agent a license or other right to use, without charge, such Borrower's labels,
patents, copyrights, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the
Borrower Collateral, in completing production of, advertising for sale, and
selling any Borrower Collateral and such Borrower's rights under all licenses
and all franchise agreements shall inure to the Lender Group's benefit;
(j) Sell the Borrower Collateral at either a
public or private sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places (including
Borrowers' premises) as Agent determines is commercially reasonable. It is not
necessary that the Borrower Collateral be present at any such sale;
(k) Agent shall give notice of the disposition
of the Borrower Collateral as follows:
(i) Agent shall give Administrative Borrower
(for the benefit of the applicable Borrower) a notice in
writing of the time and place of public sale, or, if the sale
is a private sale or some other disposition other than a
public sale is to be made of the Borrower Collateral, the time
on or after which the private sale or other disposition is to
be made; and
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Administrative Borrower as
provided in Section 12, at least 10 days before the earliest
time of disposition set forth in the notice; no notice needs
to be given prior to the disposition of any portion of the
Borrower Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily sold on a
recognized market;
(l) Agent, on behalf of the Lender Group may
credit bid and purchase at any public sale;
(m) Agent may seek the appointment of a receiver
or keeper to take possession of all or any portion of the Borrower Collateral or
to operate same and, to the maximum extent permitted by law, may seek the
appointment of such a receiver without the requirement of prior notice or a
hearing; and
(n) The Lender Group shall have all other rights
and remedies available to it at law or in equity pursuant to any other Loan
Documents; provided, however, that upon the occurrence of any Event of Default
described in Section 8.4 or Section 8.5, in addition to the remedies set forth
above, without any notice to Borrowers or any other Person or any act by the
Lender Group, the Commitments shall automatically terminate and the Obligations
then outstanding, together with all accrued and unpaid interest thereon, and all
fees and all other amounts due under this Agreement and the other Loan
Documents, shall automatically and immediately become due and payable, without
presentment, demand, protest, or notice of any kind, all of which are expressly
waived by Borrowers.
(o) Borrowers, and each of their Subsidiaries,
agree that, upon the occurrence of and during the continuance of an Event of
Default and at Agent's request, Borrowers will, and will cause each of their
Restricted Subsidiaries to (and, by its execution and delivery of a Guaranty or
a joinder thereto, each of Borrowers' Restricted Subsidiaries agrees to),
immediately file such applications for approval and shall take all other and
further actions required by Agent to obtain such approvals or consents of
regulatory authorities as are necessary to transfer ownership and control to
Agent, of the Gaming Licenses held by it,
or its interest in any Person holding any such Gaming License. To enforce the
provisions of this Section 9.1(o), Agent is empowered to request the appointment
of a receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the applicable Gaming Authority an involuntary transfer
of control of any Gaming License for the purpose of seeking a bona fide
purchaser to whom control will ultimately be transferred. Borrowers hereby agree
to authorize, and to cause each of their Restricted Subsidiaries to authorize
(and, by its execution and delivery of a Guaranty or a joinder thereto, each
Restricted Subsidiary of Parent and Borrowers agrees to authorize) such an
involuntary transfer of control upon the request of the receiver so appointed
and, if Borrowers or any such Restricted Subsidiary shall refuse to authorize
the transfer, its approval may be required by the court. Upon the occurrence and
continuance of an Event of Default, Borrowers shall further use, and shall cause
their Subsidiaries to use, their reasonable best efforts to assist in obtaining
approval of the applicable Gaming Authority, if required, for any action or
transactions contemplated by this Agreement or the Loan Documents, including,
preparation, execution, and filing with the applicable Gaming Authority of the
assignor's or transferor's portion of any application or applications for
consent to the assignment of any Gaming License or transfer of control necessary
or appropriate under the applicable Gaming Authority's rules and regulations for
approval of the transfer or assignment of any portion of the Collateral,
together with any Gaming License or other authorization. Borrowers acknowledge
that the assignment or transfer of Gaming Licenses is integral to Agent's
realization of the value of the Collateral, that there is no adequate remedy at
law for failure by Borrowers to comply with the provisions of this Section
9.1(o) and that such failure would not be adequately compensable in damages, and
therefore agree that the agreements contained in this Section 9.1(o) may be
specifically enforced.
All rights, remedies, and powers provided in this Agreement
may be exercised only to the extent that the exercise thereof does not violate
any applicable mandatory provision of the applicable gaming laws, rules, and
regulations enacted by the applicable Gaming Authority (the "Applicable Gaming
Laws") or the Liquor Laws and all provisions of this Agreement are intended to
be subject to all applicable mandatory provisions of the Applicable Gaming Laws
and Liquor Laws and to be limited solely to the extent necessary to not render
the provisions of this Agreement invalid or unenforceable, in whole or in part.
Agent will timely apply for and receive all required approvals of the applicable
Gaming Authority for the sale or other disposition of gaming Equipment regulated
by Applicable Gaming Laws (including any such sale or disposition of gaming
Equipment consisting of slot machines, gaming tables, cards, dice, gaming chips,
player tracking systems, and all other "gaming devices" (as such term or words
of like import referring thereto are defined in the Applicable Gaming Laws), and
"associated equipment" (as such term or words of like import referring thereto
are defined in the Applicable Gaming Laws) and of the Liquor Authorities under
Liquor Laws for the sale of liquor and other alcoholic beverages.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or
remedy shall be deemed an election, and no waiver by the Lender Group of any
Event of Default shall be deemed a continuing waiver. No delay by the Lender
Group shall constitute a waiver, election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to any Borrower, may do any or all of the following:
(a) make payment of the same or any part thereof, (b) set up such reserves in
Borrowers' Loan Account as Agent deems necessary to protect the Lender Group
from the exposure created by such failure, or (c) in the case of the failure to
comply with Section 6.8 hereof, obtain and maintain insurance policies of the
type described in Section 6.8 and take any action with respect to such policies
as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Each Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any such Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR BORROWER COLLATERAL. Each
Borrower hereby agrees that: (a) so long as the Lender Group complies with its
obligations, if any, under the Code, Agent shall not in any way or manner be
liable or responsible for: (i) the safekeeping of the Borrower Collateral, (ii)
any loss or damage thereto occurring or arising in any manner or fashion from
any cause, (iii) any diminution in the value thereof, or (iv) any act or default
of any carrier, warehouseman, bailee, forwarding agency, or other Person, and
(b) all risk of loss, damage, or destruction of the Borrower Collateral shall be
borne by Borrowers.
11.3 INDEMNIFICATION. Each Borrower shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an "Indemnified Person") harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, and damages, and all reasonable attorneys fees and
disbursements and other costs and expenses actually incurred
in connection therewith (as and when they are incurred and irrespective of
whether suit is brought), at any time asserted against, imposed upon, or
incurred by any of them (a) in connection with or as a result of or related to
the execution, delivery, enforcement, performance, or administration (including
any restructuring or workout with respect hereto) of this Agreement, any of the
other Loan Documents, or the transactions contemplated hereby or thereby or the
monitoring of Borrowers' and their Subsidiaries' compliance with the terms of
the Loan Documents, and (b) with respect to any investigation, litigation, or
proceeding related to this Agreement, any other Loan Document, or the use of the
proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto (all the foregoing, collectively, the
"Indemnified Liabilities"). The foregoing to the contrary notwithstanding,
Borrowers shall have no obligation to any Indemnified Person under this Section
11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrowers were required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrowers or Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Administrative Borrower or Agent, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Borrowers
in care of Administrative Borrower or to Agent, as the case may be, at its
address set forth below:
If to Administrative
Borrower: THE MAJESTIC STAR CASINO, LLC
301 Fremont Street, 12th Floor
Las Vegas, NV 89101
Attn: Michael E. Kelly
Fax No. 702-382-5562
with copies to: DYKEMA GOSSETT, PLLC
315 East Eisenhower, Suite 100
Ann Arbor, Michigan 48108
Attn: Barbara A. Kaye, Esq.
Fax No. 734.214.7696
and: BARDEN DEVELOPMENT, INC.
400 Renaissance Center
Detroit, Michigan 48243-1668
Attn: Michelle Sherman
Fax No. 313.259.0154
If to Agent: WELLS FARGO FOOTHILL, INC.
One Boston Place, 18th Floor
Boston, Massachusetts 02108
Attn: Business Finance Manager
Fax No. 617-523-1697
with copies to: PAUL, HASTINGS, JANOFSKY & WALKER LLP
515 South Flower Street, 25th Floor
Los Angeles, California 90071
Attn: John Francis Hilson, Esq.
Fax No. 213-996-3300
Agent and Borrowers may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing manner given
to the other party. All notices or demands sent in accordance with this Section
12, other than notices by Agent in connection with enforcement rights against
the Borrower Collateral under the provisions of the Code, shall be deemed
received on the earlier of the date of actual receipt or 3 Business Days after
the deposit thereof in the mail. Each Borrower acknowledges and agrees that
notices sent by the Lender Group in connection with the exercise of enforcement
rights against Borrower Collateral under the provisions of the Code shall be
deemed sent when deposited in the mail or personally delivered, or, where
permitted by law, transmitted by telefacsimile or any other method set forth
above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY BORROWER COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH BORROWER COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
BORROWERS AND THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 13(b).
BORROWERS AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND THE LENDER GROUP REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may assign and delegate to one or
more assignees (each an "Assignee") that are Eligible Transferees all, or any
ratable part of all, of the Obligations, the Commitments and the other rights
and obligations of such Lender hereunder and under the other Loan Documents, in
a minimum amount of $5,000,000; provided, however, that Borrowers and Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Administrative Borrower and Agent by
such Lender and the Assignee, (ii) such Lender and its Assignee have delivered
to Administrative Borrower and Agent an Assignment and Acceptance, and (iii) the
assignor Lender or Assignee has paid to Agent for Agent's separate account a
processing fee in the amount of
$5,000. Anything contained herein to the contrary notwithstanding, the payment
of any fees shall not be required and the Assignee need not be an Eligible
Transferee if such assignment is in connection with any merger, consolidation,
sale, transfer, or other disposition of all or any substantial portion of the
business or loan portfolio of the assigning Lender.
(b) From and after the date that Agent notifies
the assignor Lender (with a copy to Administrative Borrower) that it has
received an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 11.3 hereof)
and be released from any future obligations under this Agreement (and in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement and the other
Loan Documents, such Lender shall cease to be a party hereto and thereto), and
such assignment shall effect a novation between Borrowers and the Assignee;
provided, however, that nothing contained herein shall release any assigning
Lender from obligations that survive the termination of this Agreement,
including such assigning Lender's obligations under Article 16 and Section 17.8
of this Agreement.
(c) By executing and delivering an Assignment
and Acceptance, the assigning Lender thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(1) other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto, (2) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrowers or the performance or observance by Borrowers
of any of their obligations under this Agreement or any other Loan Document
furnished pursuant hereto, (3) such Assignee confirms that it has received a
copy of this Agreement, together with such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance, (4) such Assignee will, independently and
without reliance upon Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement, (5) such Assignee appoints and authorizes Agent to take
such actions and to exercise such powers under this Agreement as are delegated
to Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon Agent's receipt of the
required processing fee payment and the fully executed Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
(e) Any Lender may at any time, with the written
consent of Agent, sell to one or more commercial banks, financial institutions,
or other Persons not Affiliates of such Lender (a "Participant") participating
interests in its Obligations, the Commitment, and the other rights and interests
of that Lender (the "Originating Lender") hereunder and under the other Loan
Documents (provided that no written consent of Agent shall be required in
connection with any sale of any such participating interests by a Lender to an
Eligible Transferee); provided, however, that (i) the Originating Lender shall
remain a "Lender" for all purposes of this Agreement and the other Loan
Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a "Lender" hereunder or under
the other Loan Documents and the Originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender, or (E) change
the amount or due dates of scheduled principal repayments or prepayments or
premiums; and (v) all amounts payable by Borrowers hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. The rights of any Participant only shall be
derivative through the Originating Lender with whom such Participant
participates and no Participant shall have any rights under this Agreement or
the other Loan Documents or any direct rights as to the other Lenders, Agent,
Borrowers, the Collections of Borrowers or their Subsidiaries, the Collateral,
or otherwise in respect of the
Obligations. No Participant shall have the right to participate directly in the
making of decisions by the Lenders among themselves.
(f) In connection with any such assignment or
participation or proposed assignment or participation, a Lender may, subject to
the provisions of Section 17.8, disclose all documents and information which it
now or hereafter may have relating to Borrowers and their Subsidiaries and their
respective businesses.
(g) Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S. Treasury Regulation 31 CFR Section 203.24, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 14.1 hereof and, except as expressly required pursuant to
Section 14.1 hereof, no consent or approval by any Borrower is required in
connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrowers therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Administrative Borrower (on behalf of all
Borrowers) and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all of the Lenders affected thereby and Administrative Borrower (on
behalf of all Borrowers) and acknowledged by Agent, do any of the following:
(a) increase or extend any Commitment of any
Lender,
(b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest,
fees, or other amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of
interest on, any loan or other extension of credit hereunder, or reduce any fees
or other amounts payable hereunder or under any other Loan Document,
(d) change the percentage of the Commitments
that is required to take any action hereunder,
(e) amend or modify this Section or any
provision of the Agreement providing for consent or other action by all Lenders,
(f) release Collateral other than as permitted
by Section 16.12,
(g) change the definition of "Required Lenders"
or "Pro Rata Share",
(h) contractually subordinate any of the Agent's
Liens,
(i) release any Borrower or Guarantor from any
obligation for the payment of money, or
(j) change the definition of Borrowing Base or
the definitions of Borrowing Base, EBITDA, Maximum Revolver Amount, or change
Section 2.1(b); or
(k) amend any of the provisions of Section 16.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, affect
the rights or duties of Agent, Issuing Lender, or Swing Lender, as applicable,
under this Agreement or any other Loan Document. The foregoing notwithstanding,
any amendment, modification, waiver, consent, termination, or release of, or
with respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers.
15.2 REPLACEMENT OF HOLDOUT LENDER If any action to be taken by the
Lender Group or Agent hereunder requires the unanimous consent, authorization,
or agreement of all Lenders, and a Lender ("Holdout Lender") fails to give its
consent, authorization, or agreement, then Agent, upon at least 5 Business Days
prior irrevocable notice to the Holdout Lender, may permanently replace the
Holdout Lender with one or more substitute Lenders (each, a "Replacement
Lender"), and the Holdout Lender shall have not right to refuse to be replaced
hereunder. Such notice to replace the Holdout Lender shall specify an effective
date for such replacement, which date shall not be later than 15 Business Days
after the date such notice is given.
Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance Agreement, subject only to the Holdout Lender being repaid its share
of the outstanding Obligations (including an assumption of its Pro Rata Share of
the Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such
Assignment and Acceptance. The replacement of any Holdout Lender shall be made
in accordance with the terms of Section 14.1. Until such time as the Replacement
Lenders shall have acquired all of the Obligations, the Commitments, and the
other rights and obligations of the Holdout Lender hereunder and under the other
Loan Documents, the Holdout Lender shall remain obligated to make the Holdout
Lender's Pro Rata Share of Advances and to purchase a participation in each
Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any Lender
to exercise any right, remedy, or option under this Agreement or, any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Borrowers of any
provision of this Agreement. Agent's and each Lender's rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints WFF as its representative under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes Agent to
execute and deliver each of the other Loan Documents on its behalf and to take
such other action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Section 16.
The provisions of this Section 16 (other than the proviso to Section 16.11(d))
are solely for the benefit of Agent, and the Lenders, and Borrowers and their
Subsidiaries shall have no rights as a third party beneficiary of any of the
provisions contained herein. Any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document notwithstanding, Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "Agent" is for convenience only, that WFF is
merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect:
(a) maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Collateral, the
Collections of Borrowers and their Subsidiaries, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections of
Borrowers and their Subsidiaries as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management accounts as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections of
Borrowers and their Subsidiaries, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or any Subsidiary or
Affiliate of any Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Books or properties of Borrowers or the books or
records or properties of any of Borrowers' Subsidiaries or Affiliates.
16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to Borrowers or counsel to any Lender), independent accountants and
other experts selected by Agent. Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless Agent shall first receive such advice or concurrence of the Lenders as it
deems appropriate and until such instructions are received, Agent shall act, or
refrain from acting, as it deems advisable. If Agent so requests, it shall first
be indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the requisite Lenders and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders
and, except with respect to Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Administrative Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a "notice of default." Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrowers
and their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person party to a Loan Document, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to Borrowers. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to
inform itself as to the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrowers and any other Person party to
a Loan Document. Except for notices, reports, and other documents expressly
herein required to be furnished to the Lenders by Agent, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Borrowers and any other Person party
to a Loan Document that may come into the possession of any of the Agent-Related
Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies,
auctioneer fees and expenses, and costs of security guards or insurance premiums
paid to maintain the Collateral, whether or not Borrowers are obligated to
reimburse Agent or Lenders for such expenses pursuant to the Loan Agreement or
otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Borrowers and their Subsidiaries received by
Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders. In the event Agent is not reimbursed for
such costs and expenses from the Collections of Borrowers and their Subsidiaries
received by Agent, each Lender hereby agrees that it is and shall be obligated
to pay to or reimburse Agent for the amount of such Lender's Pro Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of Borrowers and without limiting the obligation
of Borrowers to do so), according to their Pro Rata Shares, from and against any
and all Indemnified Liabilities; provided, however, that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make an Advance or other extension of credit
hereunder. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for such Lender's Pro Rata Share of any costs or out-of-pocket
expenses (including attorneys, accountants, advisors, and consultants fees and
expenses) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.
16.8 AGENT IN INDIVIDUAL CAPACITY. WFF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their
Subsidiaries and Affiliates and any other Person party to
any Loan Documents as though WFF were not Agent hereunder, and, in each case,
without notice to or consent of the other members of the Lender Group. The other
members of the Lender Group acknowledge that, pursuant to such activities, WFF
or its Affiliates may receive information regarding Borrowers or their
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrowers or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall not be under any obligation to provide such
information to them. The terms "Lender" and "Lenders" include WFF in its
individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice to
the Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person (other than
the Lender Group) party to any Loan Documents as though such Lender were not a
Lender hereunder without notice to or consent of the other members of the Lender
Group. The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Borrowers or their Affiliates and any other Person party to any Loan
Documents that is subject to confidentiality obligations in favor of Borrowers
or such other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver such
Lender will use its reasonable best efforts to obtain), such Lender not shall be
under any obligation to provide such information to them. With respect to the
Swing Loans and Agent Advances, Swing Lender shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the sub-agent of the Agent.
16.11 WITHHOLDING TAXES.
(a) If any Lender is a "foreign person" within
the meaning of the IRC and such Lender claims exemption from, or a reduction of,
U.S. withholding tax under Sections 1441 or 1442 of the IRC, such Lender agrees
with and in favor of Agent and Borrowers, to deliver to Agent and Administrative
Borrower:
(i) if such Lender claims an exemption from
withholding tax pursuant to its portfolio interest exception,
(A) a statement of the Lender, signed under penalty of
perjury, that it is not a (I) a "bank" as described in Section
881(c)(3)(A) of the IRC, (II) a 10% shareholder of a Borrower
(within the meaning of Section 871(h)(3)(B) of the IRC), or
(III) a controlled foreign corporation related to a Borrower
within the meaning of Section 864(d)(4) of the IRC, and (B) a
properly completed and executed IRS Form W-8BEN, before the
first payment of any interest under this Agreement and at any
other time reasonably requested by Agent or Administrative
Borrower;
(ii) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States tax
treaty, properly completed and executed IRS Form W-8BEN before
the first payment of any interest under this Agreement and at
any other time reasonably requested by Agent or Administrative
Borrower;
(iii) if such Lender claims that interest paid
under this Agreement is exempt from United States withholding
tax because it is effectively connected with a United States
trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before the first payment of
any interest is due under this Agreement and at any other time
reasonably requested by Agent or Administrative Borrower;
(iv) such other form or forms as may be required
under the IRC or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form W-8BEN and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of Borrowers to such Lender,
such Lender agrees to notify Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of Borrowers to such Lender. To
the extent of such percentage amount, Agent will treat such Lender's IRS Form
W-8BEN as no longer valid.
(c) If any Lender is entitled to a reduction in
the applicable withholding tax, Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to Agent, then Agent may
withhold from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that Agent
did not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify and hold
Agent harmless for all amounts paid, directly or indirectly, by Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent under this Section, together
with all costs and expenses (including attorneys fees and expenses). The
obligation of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of Agent.
(e) All payments made by Borrowers hereunder or
under any note or other Loan Document will be made without setoff, counterclaim,
or other defense, except as required by applicable law other than for Taxes (as
defined below). 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 (other than the United States) or by any political
subdivision or taxing authority thereof or therein (other than of the United
States) with respect to such payments (but excluding, any tax imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein (i) measured by or based on the net income or net profits of a Lender,
or (ii) to the extent that such tax results from a change in the circumstances
of the Lender, including a change in the residence, place of organization, or
principal place of business of the Lender, or a change in the branch or lending
office of the Lender participating in the transactions set forth herein) and all
interest, penalties or similar liabilities with respect thereto (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, each 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, including any amount paid pursuant to
this Section 16.11(e) after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein; provided, however,
that Borrowers shall not be required to increase any such amounts payable to
Agent or any Lender (i) that is not organized under the laws of the United
States, if such Person fails to comply with the other requirements of this
Section 16.11, or (ii) if the increase in such amount payable results from
Agent's or such
Lender's own willful misconduct or gross negligence. Borrowers will furnish to
Agent as promptly as possible after the date the payment of any Taxes is due
pursuant to applicable law certified copies of tax receipts evidencing such
payment by Borrowers.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize
Agent, at its option and in its sole discretion, to release any Lien on any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrowers of all Obligations, (ii) constituting property
being sold or disposed of if a release is required or desirable in connection
therewith and if Administrative Borrower certifies to Agent that the sale or
disposition is permitted under Section 7.4 of this Agreement or the other Loan
Documents (and Agent may rely conclusively on any such certificate, without
further inquiry), (iii) that Agent and the Lenders have agreed to release
pursuant to the provisions of this Agreement or any definition contained herein,
(iv) constituting property in which no Borrower or its Subsidiaries owned any
interest at the time the Agent's Lien was granted nor at any time thereafter, or
(v) constituting property leased to a Borrower or its Subsidiaries under a lease
that has expired or is terminated in a transaction permitted under this
Agreement. Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or
Administrative Borrower at any time, the Lenders will confirm in writing Agent's
authority to release any such Liens on particular types or items of Collateral
pursuant to this Section 16.12; provided, however, that (1) Agent shall not be
required to execute any document necessary to evidence such release on terms
that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrowers in respect of)
all interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to
any of the Lenders to assure that the Collateral exists or is owned by Borrowers
or is cared for, protected, or insured or has been encumbered, or that the
Agent's Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent's own interest in the Collateral in its capacity as
one of the Lenders and that Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing, except as otherwise
provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall
not, without the express written consent of Agent, and that it shall, to the
extent it is lawfully entitled to do so, upon the written request of Agent, set
off against the Obligations, any amounts owing by such Lender to Borrowers or
any deposit accounts of Borrowers now or hereafter maintained with such Lender.
Each of the Lenders further agrees that it shall not, unless specifically
requested to do so in writing by Agent, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings, to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral.
(b) If, at any time or times any Lender shall
receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations, except for any such
proceeds or payments received by such Lender from Agent pursuant to the terms of
this Agreement, or (ii) payments from Agent in excess of such Lender's ratable
portion of all such distributions by Agent, such Lender promptly shall (1) turn
the same over to Agent, in kind, and with such endorsements as may be required
to negotiate the same to Agent, or in immediately available funds, as
applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or
(2) purchase, without recourse or warranty, an undivided interest and
participation in the Obligations owed to the other Lenders so that such excess
payment received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Shares; provided, however, that to the extent that such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor shall
be returned to such purchasing party, but without interest except to the extent
that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender as
its agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the Code can be perfected only by possession or control. Should any Lender
obtain possession or control of any such Collateral, such Lender shall notify
Agent thereof, and, promptly upon Agent's request therefor shall deliver
possession or control of such Collateral to Agent or in accordance with Agent's
instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer of immediately
available funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member
of the Lender Group authorizes and directs Agent to enter into this Agreement
and the other
Loan Documents. Each member of the Lender Group agrees that any action taken by
Agent in accordance with the terms of this Agreement or the other Loan Documents
relating to the Collateral and the exercise by Agent of its powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent
furnish such Lender, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively, "Reports")
prepared by Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent
does not (i) make any representation or warranty as to the accuracy of any
Report, and (ii) shall not be liable for any information contained in any
Report,
(c) expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that Agent or other party
performing any audit or examination will inspect only specific information
regarding Borrowers and will rely significantly upon the Books, as well as on
representations of Borrowers' personnel,
(d) agrees to keep all Reports and other
material, non-public information regarding Borrowers and their Subsidiaries and
their operations, assets, and existing and contemplated business plans in a
confidential manner in accordance with Section 17.8, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or fail to take or any conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or other
credit accommodations that the indemnifying Lender has made or may make to
Borrowers, or the indemnifying Lender's participation in, or the indemnifying
Lender's purchase of, a loan or loans of Borrowers; and (ii) to pay and protect,
and indemnify, defend and hold Agent, and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including, attorneys fees and costs)
incurred by Agent and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
shall provide a copy of same to such
Lender, (y) to the extent that Agent is entitled, under any provision of the
Loan Documents, to request additional reports or information from Borrowers, any
Lender may, from time to time, reasonably request Agent to exercise such right
as specified in such Lender's notice to Agent, whereupon Agent promptly shall
request of Administrative Borrower the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from
Administrative Borrower, Agent promptly shall provide a copy of same to such
Lender, and (z) any time that Agent renders to Administrative Borrower a
statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain
of the Loan Documents now or hereafter may have been or will be executed only by
or in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
16.19 LEGAL REPRESENTATION OF AGENT. In connection with the
negotiation, drafting, and execution of this Agreement and the other Loan
Documents, or in connection with future legal representation relating to loan
administration, amendments, modifications, waivers, or enforcement of remedies,
Paul, Hastings, Janofsky & Walker LLP ("Paul, Hastings") only has represented
and only shall represent WFF in its capacity as Agent and as a Lender. Each
other Lender hereby acknowledges that Paul, Hastings does not represent it in
connection with any such matters.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrowers, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrowers, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing in accordance with Section 15.1.
17.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Borrower or Guarantor or the transfer to the
Lender Group of any property should for any reason subsequently be declared to
be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a "Voidable Transfer"), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or Guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
17.8 CONFIDENTIALITY. The Agent and the Lenders each individually (and
not jointly or jointly and severally) agree that material, non-public
information regarding Borrowers and their Subsidiaries, their operations,
assets, and existing and contemplated business plans shall be treated by Agent
and the Lenders in a confidential manner, and shall not be disclosed by Agent
and the Lenders to Persons who are not parties to this Agreement, except: (a) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group, (b) to Subsidiaries and Affiliates of any member of
the Lender Group (including the Bank Product Providers), provided that any such
Subsidiary or Affiliate shall
have agreed to receive such information hereunder subject to the terms of this
Section 17.8, (c) as may be required by statute, decision, or judicial or
administrative order, rule, or regulation, (d) as may be agreed to in advance by
Administrative Borrower or its Subsidiaries or as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process, (e) as
to any such information that is or becomes generally available to the public
(other than as a result of prohibited disclosure by Agent or the Lenders), (f)
in connection with any assignment, prospective assignment, sale, prospective
sale, participation or prospective participations, or pledge or prospective
pledge of any Lender's interest under this Agreement, provided that any such
assignee, prospective assignee, purchaser, prospective purchaser, participant,
prospective participant, pledgee, or prospective pledgee shall have agreed in
writing to receive such information hereunder subject to the terms of this
Section, and (g) in connection with any litigation or other adversary proceeding
involving parties hereto which such litigation or adversary proceeding involves
claims related to the rights or duties of such parties under this Agreement or
the other Loan Documents. The provisions of this Section 17.8 shall survive for
2 years after the payment in full of the Obligations. Anything contained herein
or in any other Loan Document to the contrary notwithstanding, the obligations
of confidentiality contained herein and therein, as they relate to the
transactions contemplated hereby, shall not apply to the federal tax structure
or federal tax treatment of such transactions, and each party hereto (and any
employee, representative, or agent of any party hereto) may disclose to any and
all Persons, without limitation of any kind, the federal tax structure and
federal tax treatment of such transactions (including all written materials
related to such tax structure and tax treatment). The preceding sentence is
intended to cause the transactions contemplated hereby to not be treated as
having been offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the IRC, and shall be construed in a manner
consistent with such purpose. In addition, each party hereto acknowledges that
it has no proprietary or exclusive rights to the tax structure of the
transactions contemplated hereby or any tax matter or tax idea related thereto.
17.9 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.10 PARENT AS AGENT FOR BORROWERS. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the "Administrative Borrower") which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide Agent with
all notices with respect to Advances and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement. It is understood
that the handling of the Loan Account and Collateral of Borrowers in a combined
fashion, as more fully set forth herein, is done solely as an accommodation to
Borrowers in order to utilize the collective borrowing powers of Borrowers in
the most efficient and economical manner and at their request, and that Lender
Group shall not incur liability to any Borrower as a result hereof. Each
Borrower expects to derive benefit, directly or indirectly, from the handling of
the Loan Account and the Collateral in a combined fashion since the successful
operation of each Borrower is dependent on the continued successful performance
of the integrated group. To induce the Lender Group to do so, and in
consideration thereof, each Borrower hereby jointly and severally agrees to
indemnify each member of the Lender Group and hold each member of the Lender
Group harmless against any and all liability, expense, loss or claim of damage
or injury, made against the Lender Group by any Borrower or by any third party
whosoever, arising from or incurred by reason of (a) the handling of the Loan
Account and Collateral of Borrowers as herein provided, (b) the Lender Group's
relying on any instructions of the Administrative Borrower, or (c) any other
action taken by the Lender Group hereunder or under the other Loan Documents,
except that Borrowers will have no liability to the relevant Agent-Related
Person or Lender-Related Person under this Section 17.9 with respect to any
liability that has been finally determined by a court of competent jurisdiction
to have resulted solely from the gross negligence or willful misconduct of such
Agent-Related Person or Lender-Related Person, as the case may be.
[Signature page to follow.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
THE MAJESTIC STAR CASINO, LLC
an Indiana limited liability company
By:____________________________
Title:
BARDEN MISSISSIPPI GAMING, LLC
a Mississippi limited liability company
By:____________________________
Title:
BARDEN COLORADO GAMING, LLC
a Colorado limited liability company
By:_____________________________
Title:
WELLS FARGO FOOTHILL, INC.
a California corporation, as Agent
and as a Lender
By:______________________________
Title:
TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION. ......................................................................... 1
1.1 Definitions................................................................................... 1
1.2 Accounting Terms.............................................................................. 44
1.3 Code.......................................................................................... 44
1.4 Construction.................................................................................. 44
1.5 Schedules and Exhibits........................................................................ 45
1.6 Indenture..................................................................................... 45
2. LOAN AND TERMS OF PAYMENT. ............................................................................ 45
2.1 Revolver Advances............................................................................. 45
2.2 [intentionally omitted]....................................................................... 45
2.3 Borrowing Procedures and Settlements.......................................................... 45
2.4 Payments...................................................................................... 52
2.5 Overadvances.................................................................................. 55
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations.................................................................................. 56
2.7 [intentionally omitted]....................................................................... 57
2.8 Crediting Payments............................................................................ 57
2.9 Designated Account............................................................................ 57
2.10 Maintenance of Loan Account; Statements of Obligations........................................ 57
2.11 Fees.......................................................................................... 58
2.12 Letters of Credit............................................................................. 59
2.13 LIBOR Option.................................................................................. 62
2.14 Capital Requirements.......................................................................... 65
2.15 Joint and Several Liability of Borrowers...................................................... 65
3. CONDITIONS; TERM OF AGREEMENT. ........................................................................ 68
3.1 Conditions Precedent to the Initial Extension of Credit....................................... 68
3.2 Conditions Subsequent to the Initial Extension of Credit...................................... 72
3.3 Conditions Precedent to all Extensions of Credit.............................................. 72
3.4 Term.......................................................................................... 73
3.5 Effect of Termination......................................................................... 73
3.6 Early Termination by Borrowers................................................................ 73
4. CREATION OF SECURITY INTEREST.......................................................................... 74
4.1 Grant of Security Interest.................................................................... 74
4.2 Negotiable Collateral......................................................................... 74
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral........................ 75
4.4 Filing of Financing Statements; Commercial Tort Claims; Delivery of
Additional Documentation Required............................................................. 75
4.5 Power of Attorney............................................................................. 76
4.6 Right to Inspect.............................................................................. 76
4.7 Control Agreements............................................................................ 76
5. REPRESENTATIONS AND WARRANTIES......................................................................... 77
5.1 No Encumbrances............................................................................... 77
5.2 [intentionally omitted]....................................................................... 77
5.3 [intentionally omitted]....................................................................... 77
5.4 Equipment..................................................................................... 77
5.5 Location of Inventory and Equipment........................................................... 77
5.6 Inventory Records............................................................................. 78
5.7 State of Incorporation; Location of Chief Executive Office; FEIN;
Organizational ID Number; Commercial Tort Claims.............................................. 78
5.8 Due Organization and Qualification; Restricted Subsidiaries................................... 78
5.9 Due Authorization; No Conflict................................................................ 79
5.10 Litigation.................................................................................... 81
5.11 No Material Adverse Change.................................................................... 81
5.12 Fraudulent Transfer........................................................................... 81
5.13 Employee Benefits............................................................................. 81
5.14 Environmental Condition....................................................................... 81
5.15 Brokerage Fees................................................................................ 82
5.16 Intellectual Property......................................................................... 82
5.17 Leases........................................................................................ 82
5.18 DDAs.......................................................................................... 82
5.19 Complete Disclosure........................................................................... 82
5.20 Indebtedness.................................................................................. 83
5.21 Licenses and Permits.......................................................................... 83
6. AFFIRMATIVE COVENANTS. ................................................................................ 83
6.1 Accounting System............................................................................. 83
6.2 Collateral Reporting.......................................................................... 84
6.3 Financial Statements, Reports, Certificates................................................... 84
6.4 [intentionally omitted]....................................................................... 86
6.5 [intentionally omitted]....................................................................... 86
6.6 Maintenance of Properties..................................................................... 86
6.7 Taxes......................................................................................... 87
6.8 Insurance..................................................................................... 87
6.9 Location of Inventory and Equipment........................................................... 88
6.10 Compliance with Laws.......................................................................... 89
6.11 Leases........................................................................................ 89
6.12 Existence..................................................................................... 89
6.13 Environmental................................................................................. 89
6.14 Disclosure Updates............................................................................ 89
6.15 Governmental Authorization.................................................................... 90
6.16 License Renewals.............................................................................. 90
6.17 Licenses and Permits.......................................................................... 90
6.18 Subsidiary Guarantees......................................................................... 90
7. NEGATIVE COVENANTS. ................................................................................... 91
7.1 Indebtedness.................................................................................. 91
7.2 Liens......................................................................................... 91
7.3 Restrictions on Fundamental Changes........................................................... 91
7.4 Ownership and Disposal of Assets.............................................................. 92
7.5 Change Name................................................................................... 94
7.6 Nature of Business............................................................................ 94
7.7 Prepayments and Amendments.................................................................... 94
7.8 Change of Control............................................................................. 94
7.9 Consignments.................................................................................. 95
7.10 Distributions................................................................................. 95
7.11 Accounting Methods............................................................................ 95
7.12 Investments................................................................................... 95
7.13 Transactions with Affiliates.................................................................. 97
7.14 Suspension.................................................................................... 98
7.15 Compensation.................................................................................. 98
7.16 Use of Proceeds............................................................................... 98
7.17 Inventory and Equipment with Bailees.......................................................... 99
7.18 Financial Covenants........................................................................... 99
7.19 Operation of Vessels.......................................................................... 101
7.20 Permitted Tax Distributions................................................................... 101
7.21 Restrictions on Sale and Issuance of Subsidiary Stock......................................... 103
7.22 Membership Interests.......................................................................... 103
7.23 Limitation on Restricted Subsidiary Dividends................................................. 103
8. EVENTS OF DEFAULT. .................................................................................... 105
9. THE LENDER GROUP'S RIGHTS AND REMEDIES................................................................. 108
9.1 Rights and Remedies........................................................................... 108
9.2 Remedies Cumulative........................................................................... 111
10. TAXES AND EXPENSES. ................................................................................... 112
11. WAIVERS; INDEMNIFICATION............................................................................... 112
11.1 Demand; Protest; etc.......................................................................... 112
11.2 The Lender Group's Liability for Borrower Collateral.......................................... 112
11.3 Indemnification............................................................................... 112
12. NOTICES. .............................................................................................. 113
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. ........................................................... 114
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS. ........................................................... 115
14.1 Assignments and Participations................................................................ 115
14.2 Successors.................................................................................... 118
15. AMENDMENTS; WAIVERS. .................................................................................. 118
15.1 Amendments and Waivers........................................................................ 118
15.2 Replacement of Holdout Lender................................................................. 119
15.3 No Waivers; Cumulative Remedies............................................................... 120
16. AGENT; THE LENDER GROUP................................................................................ 120
16.1 Appointment and Authorization of Agent........................................................ 120
16.2 Delegation of Duties.......................................................................... 121
16.3 Liability of Agent............................................................................ 121
16.4 Reliance by Agent............................................................................. 121
16.5 Notice of Default or Event of Default......................................................... 122
16.6 Credit Decision............................................................................... 122
16.7 Costs and Expenses; Indemnification........................................................... 123
16.8 Agent in Individual Capacity.................................................................. 123
16.9 Successor Agent............................................................................... 124
16.10 Lender in Individual Capacity................................................................. 124
16.11 Withholding Taxes............................................................................. 125
16.12 Collateral Matters............................................................................ 127
16.13 Restrictions on Actions by Lenders; Sharing of Payments....................................... 128
16.14 Agency for Perfection......................................................................... 128
16.15 Payments by Agent to the Lenders.............................................................. 128
16.16 Concerning the Collateral and Related Loan Documents.......................................... 128
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information........................................................ 129
16.18 Several Obligations; No Liability............................................................. 130
16.19 Legal Representation of Agent................................................................. 130
17. GENERAL PROVISIONS. ................................................................................... 130
17.1 Effectiveness................................................................................. 130
17.2 Section Headings.............................................................................. 130
17.3 Interpretation................................................................................ 131
17.4 Severability of Provisions.................................................................... 131
17.5 Amendments in Writing......................................................................... 131
17.6 Counterparts; Telefacsimile Execution......................................................... 131
17.7 Revival and Reinstatement of Obligations...................................................... 131
17.8 Confidentiality............................................................................... 131
17.9 Integration................................................................................... 132
17.10 Parent as Agent for Borrowers................................................................. 132
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
Exhibit I-1 Form of Intercreditor Agreement
Exhibit L-1 Form of LIBOR Notice
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule P-1 Permitted Investments
Schedule P-2 Permitted Liens
Schedule R-1 Real Property Collateral
Schedule 5.5 Locations of Inventory and Equipment
Schedule 5.7(a) States of Organization
Schedule 5.7(b) Chief Executive Offices
Schedule 5.7(c) FEINS
Schedule 5.7(d) Commercial Tort Claims
Schedule 5.8(b) Capitalization of Borrowers
Schedule 5.8(c) Capitalization of Borrowers' Subsidiaries
Schedule 5.10 Litigation
Schedule 5.14 Environmental Matters
Schedule 5.15 Brokerage Fees
Schedule 5.16 Intellectual Property
Schedule 5.18 Deposit Accounts and Securities Accounts
Schedule 5.20 Permitted Indebtedness
Schedule 7.13 Permitted Affiliate Transactions
SCHEDULE A-1
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as
the account into which Borrowers shall make all payments to Agent for the
benefit of the Lender Group and into which the Lender Group shall make all
payments to Agent under this Agreement and the other Loan Documents; unless and
until Agent notifies Administrative Borrower and the Lender Group to the
contrary, Agent's Account shall be that certain deposit account bearing account
number 323-266193 and maintained by Agent with JPMorgan Chase Bank, 4 New York
Plaza, 15th Floor, New York, New York 10004, ABA #021000021.
SCHEDULE C-1
COMMITMENTS
LENDER REVOLVER COMMITMENT
=======================================================
Wells Fargo Foothill, Inc. $80,000,000
===========
All Lenders $80,000,000
===========
SCHEDULE D-1
DESIGNATED ACCOUNT
Account number 11 56934 of Administrative Borrower maintained
with Administrative Borrower's Designated Account Bank, or such other deposit
account of Administrative Borrower (located within the United States) that has
been designed as such, in writing, by Administrative Borrower to Agent.
"Designated Account Bank" means Mercantile National Bank of
Indiana, whose office is located at 5243 Hohman Avenue, Hammond, Indiana 46320,
and whose ABA number is 071912813.