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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Credit Agreement") is made and entered into as
of the 16th day of April, 1999, by and among BLACK HAWK/JACOBS ENTERTAINMENT,
LLC, a Colorado limited liability company ("BHJE"), BLACK HAWK GAMING &
DEVELOPMENT COMPANY, INC., a Colorado corporation ("BHGD"), GILPIN VENTURES,
INC., a Colorado corporation ("GVI") and GILPIN HOTEL VENTURE, a Colorado joint
venture partnership ("GHVP" and together with BHJE, BHGD and GVI, collectively
the "Borrowers"), each financial institution whose name is set forth on the
signature pages of this Credit Agreement and each lender which may hereafter
become a party to this Credit Agreement pursuant to Section 10.10(b) (each
individually a "Lender" and collectively the "Lenders"), WELLS FARGO BANK,
National Association, as the swingline lender (herein in such capacity, together
with its successors and assigns, the "Swingline Lender"), WELLS FARGO BANK,
National Association, as the issuer of letters of credit hereunder (herein in
such capacity, together with its successors and assigns, the "L/C Issuer") and
WELLS FARGO BANK, National Association, as the arranger and administrative and
collateral agent for the Lenders, Swingline Lender and L/C Issuer (herein, in
such capacity, called the "Agent Bank" and, together with the Lenders, Swingline
Lender and L/C Issuer, collectively referred to as the "Banks").
RECITALS:
WHEREAS:
A. In this Credit Agreement all capitalized words and terms shall have
the respective meanings and be construed herein as hereinafter provided in
Section 1.01 of this Credit Agreement and shall be deemed to incorporate such
words and terms as a part hereof in the same manner and with the same effect as
if the same were fully set forth.
B. BHJE and BHGD are substantially owned by the same Persons. GVI is a
wholly owned subsidiary of BHGD. GHVP is a joint venture partnership between
BHGD and GVI, each as to an undivided one-half (1/2) interest. BHJE is the owner
and operator of the Lodge Hotel/Casino Facilities. BHGD is the owner of the
Gilpin Hotel/Casino Facilities. The Gilpin Hotel/Casino Facilities are leased by
BHGD to GHVP pursuant to the Gilpin Land Lease.
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C. On March 7, 1997, BHJE and WFB, as lender and agent bank for the
lenders therein named, established a construction and reducing revolving credit
facility in the maximum principal amount of Forty Million Dollars
($40,000,000.00) (the "Existing BHJE Loan") as evidenced by that certain
Construction and Reducing Revolving Credit Agreement dated as of March 7, 1997,
executed by and between BHJE, as Borrower, and Wells Fargo Bank, as Lender and
Agent Bank (the "Existing BHJE Loan Agreement").
D. On or about April 24, 1998, BHGD, GVI and GHVP, as Borrowers, and
WFB, as Lender and agent bank for the lenders therein named, established a
reducing revolving credit facility in the maximum principal amount of Twenty
Million Dollars ($20,000,000.00) (the "Existing BHGD Loan") as evidenced by that
certain Credit Agreement dated April 24, 1998, executed by BHGD, GVI and GHVP,
as borrowers, and WFB, as a lender and agent bank for the lenders therein named
(the "Existing BHGD Loan Agreement").
E. BHJE, BHGD, GVI and GHVP desire to consolidate the Existing BHJE
Loan and Existing BHGD Loan and establish a revolving line of credit as
co-borrowers in the principal amount of Sixty-Five Million Dollars
($65,000,000.00).
F. Lenders are willing, subject to the terms, covenants and conditions
and for the purposes and uses hereinafter set forth, to establish the Credit
Facility in the initial principal amount of Sixty-Five Million Dollars
($65,000,000.00), including the L/C Facility, as a subfacility for the issuance
of standby letters of credit by the L/C Issuer in the maximum aggregate amount
of Ten Million Dollars ($10,000,000.00) in Letters of Credit at any time
outstanding and further including the Swingline Facility to be funded by the
Swingline Lender, as a subfacility in the maximum aggregate amount of Five
Million Dollars ($5,000,000.00) at any time outstanding, all on the terms and
subject to the conditions, covenants and understandings hereinafter set forth
and contained in each of the Loan Documents.
NOW, THEREFORE, in consideration of the foregoing, and other valuable
considerations as hereinafter described, the parties hereto do promise, covenant
and agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For the purposes of this Credit Agreement,
each of the following terms shall have the meaning specified with respect
thereto, unless a different meaning clearly appears from the context:
"Access Laws" shall have the meaning set forth in Section 5.21.
"Affiliate(s)" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. A Person shall be deemed to be "controlled by" any other Person if such
other Person possesses, directly or indirectly, power to:
(a) vote ten percent (10%) or more of the equity securities
(on a fully diluted basis) having ordinary voting power for the
election of directors or managing general partners; or
(b) direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agent Bank" shall mean WFB in its capacity as administrative and
collateral agent for Lenders, Swingline Lender and L/C Issuer.
"Aggregate Commitment" shall mean reference to the aggregate amount
committed by Lenders for advance to or on behalf of the Borrower Consolidation
as Borrowings under the Credit Facility in the initial principal amount of
Sixty-Five Million Dollars ($65,000,000.00), subject to the limitations for
advance as set forth in the definition of Maximum Permitted Balance.
"Aggregate Commitment Reduction Schedule" shall mean the Aggregate
Commitment Reduction Schedule marked "Schedule 2.01(c)", affixed hereto and by
this reference incorporated herein and made a part hereof, setting forth the
Scheduled Reductions and Maximum Scheduled Balance as of each Reduction Date
under the Credit Facility.
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"Aggregate Outstandings" shall mean collective reference to the sum of
the Funded Outstandings, Swingline Outstandings and L/C Exposure as of any given
date of determination.
"Applicable Margin" means for any Base Rate Loan or LIBOR Loan during
the period commencing on the Closing Date and continuing until the Maturity
Date, the applicable percentage amount to be added to the Base Rate or LIBO
Rate, as the case may be, as set forth in Table One below, or so long as no
Default or Event of Default has occurred and remains continuing, as set forth in
TABLE TWO below during each Reduced Margin Period, in each instance based on the
Leverage Ratio calculated with regard to the Borrower Consolidation as of each
Fiscal Quarter end, any change in the applicable percentage amount by reason
thereof to be effective as of the 1st day of the third (3rd) month immediately
following each such Fiscal Quarter end:
=========================================================================================================================
TABLE
TABLE ONE TABLE TWO THREE
=========================================================================================================================
LIBO LIBO
BASE RATE RATE BASE RATE RATE COMMITMENT
LEVERAGE RATIO MARGIN MARGIN MARGIN MARGIN PERCENTAGE
- -------------------------------------------------------------------------------------------------------------------------
Greater than 3.00 to Default Not Not Not 0.500%
1.0 Rate Applicable Applicable Applicable
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Greater than 2.50 to 2.00% 3.25% 1.75% 3.00% 0.500%
1.0 but less than or
equal to 3.00 to
1.00
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Greater than 2.00 to 1.50% 2.75% 1.25% 2.50% 0.500%
1.0 but less than or
equal to 2.50 to
1.00
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Greater than 1.50 to 1.00% 2.25% .75% 2.00% 0.375%
1.0 but less than or
equal to 2.00 to
1.00
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Less than or equal 0.75% 2.00% .50% 1.75% 0.375%
to 1.50 to 1.00
=========================================================================================================================
"Assets" shall mean the total assets of the Borrower Consolidation
determined in accordance with GAAP.
"Assignment and Assumption Agreement" shall mean the document
evidencing an assignment of a Syndication Interest by any Lender to an Eligible
Assignee in the form of the Assignment, Assumption and Consent Agreement marked
"Exhibit L", affixed hereto and by this reference incorporated herein and made a
part hereof.
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"Assignment of Parking Garage Lease" shall mean the Assignment executed
by GHVP on or before the Closing Date as additional security for the Bank
Facilities, pursuant to which GHVP assigns to Agent Bank on behalf of the
Lenders all of its right, title and interest under the Parking Garage Documents.
"Assignments" shall mean collective reference to the Assignments of
Spaceleases, Contracts, Rents and Revenues, Assignments of Permits, Licenses and
Contracts and Assignment of Parking Garage Lease.
"Assignments of Permits, Licenses and Contracts" shall mean collective
reference to the Lodge Assignment of Permits, Licenses and Contracts and Gilpin
Assignment of Permits, Licenses and Contracts.
"Assignments of Spaceleases, Contracts, Rents and Revenues" shall mean
collective reference to the Lodge Assignment of Spaceleases, Contracts, Rents
and Revenues and Gilpin Assignment of Spaceleases, Contracts, Rents and
Revenues.
"Authorized Representative Certificate" shall have the meaning set
forth in Section 3.05(c).
"Authorized Representative(s)" shall mean, relative to the Borrowers,
those of the respective officers whose signatures and incumbency shall have been
certified to Agent Bank and the Banks as required in Section 3.05(c) of the
Credit Agreement with the authority and responsibility to deliver Notices of
Borrowing, Continuation/Conversion Notices, Pricing Certificates, Notices of
Swingline Advances, Compliance Certificates, requests for the issuance of
Letters of Credit and all other requests, notices, reports, consents,
certifications and authorizations on behalf of Borrowers, or any of them.
"Available Borrowings" shall mean, at any time, and from time to time,
the aggregate amount available to Borrowers for a Borrowing, a Swingline Advance
or issuance of a Letter of Credit not exceeding the amount of the Maximum
Availability, as of each date of determination.
"BHGD" shall have the meaning ascribed to such term in the Preamble to
the Credit Agreement.
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"BHJE" shall have the meaning ascribed to such term in the Preamble to
the Credit Agreement.
"Bank Facilities" shall mean collective reference to the Credit
Facility, Swingline Facility and L/C Facility.
"Bank Facility Termination" or "Bank Facilities Termination" shall mean
indefeasible payment in full of all sums owing under the Notes and each of the
other Loan Documents, the occurrence of the Stated Expiry Date or other
termination of all outstanding Letters of Credit, and the irrevocable
termination of the obligation to advance Borrowings, to advance Swingline
Advances and to issue Letters of Credit.
"Banking Business Day" means (a) with respect to any Borrowing, payment
or rate determination of LIBOR Loans, a day, other than a Saturday or Sunday, on
which Agent Bank is open for business in San Francisco and on which dealings in
Dollars are carried on in the London interbank market, and (b) for all other
purposes any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the States of California, Nevada and/or New York, or is a day
on which banking institutions located in California, Nevada and/or New York are
required or authorized by law or other governmental action to close.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as
amended, 11 U.S.C. Section 101, et seq.
"Banks" shall have the meaning set forth in the Preamble to this Credit
Agreement.
"Base Rate" shall mean, as of any date of determination, the rate per
annum equal to the higher of (a) the Prime Rate in effect on such date and (b)
the Federal Funds Rate in effect on such date plus one-half of one percent (1/2
of 1%) (fifty basis points).
"Base Rate Loan" shall mean reference to that portion of the unpaid
principal balance of the Credit Facility bearing interest with reference to the
Base Rate plus the Applicable Margin.
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"Bond Documents" shall mean collective reference to the Special
Assessment Bonds and the Official Bond Statement.
"Bond Issuer" shall mean Black Hawk Business Improvement District,
Gilpin County, Colorado.
"Borrower Consolidation" shall mean collective reference to Borrowers
and each Restricted Subsidiary on a consolidated basis, without regard to any
Unrestricted Subsidiary or other Affiliate.
"Borrowers" shall mean collective reference to BHJE, BHGD, GVI and
GHVP.
"Borrowing(s)" shall mean such amounts as Borrowers may request by
Notice of Borrowing to Agent Bank from time to time to be advanced under the
Credit Facility in accordance with the provisions of Section 2.03 or at the
request of Agent Bank pursuant to Section 2.08 or Section 2.09.
"Breakage Charges" shall have the meaning ascribed to such term in
Section 2.07(c) of the Credit Agreement.
"Capital Expenditures" shall mean, for any period, without duplication,
the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during that period and including Capitalized Lease Liabilities) by
the Borrower Consolidation during such period that, in conformity with GAAP, are
required to be included in or reflected by the property, plant or equipment or
similar fixed or capital asset accounts reflected in the consolidated balance
sheet of the Borrower Consolidation (including equipment which is purchased
simultaneously with the trade-in of existing equipment owned by Borrowers to the
extent of (a) the gross amount of such purchase price less (b) the cash proceeds
of trade-in credit of the equipment being traded in at such time), but excluding
capital expenditures made in connection with the replacement or restoration of
assets, to the extent reimbursed or refinanced from insurance proceeds paid on
account of the loss of or damage to the assets being replaced or restored, or
from awards of compensation arising from the taking by condemnation of or the
exercise of the power of eminent domain with respect to such assets being
replaced or restored.
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"Capital Proceeds" shall mean the net proceeds (after deducting all
reasonable expenses incurred in connection therewith) available to Borrowers
from (i) partial or total condemnation or destruction of any part of the
Collateral, (ii) insurance proceeds (other than rent insurance and business
interruption insurance) received in connection with damage to or destruction of
the Collateral, and (iii) the sale or other disposition of any portion of the
Collateral in accordance with the provisions of this Credit Agreement (not
including, however, any proceeds received by Borrowers, or any of them, from a
sale, condemnation, damage or destruction of FF&E or other personal property if
such FF&E or other personal property is replaced by items of equivalent value or
utility, in each case such exclusion to apply only during any period in which no
Default in the payment of any principal or interest owing under the terms of the
Bank Facilities or an Event of Default has occurred and is continuing).
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrowers, or any of them, under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, and, for
purposes of this Credit Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Cash" shall mean, when used in connection with any Person, all
monetary and non-monetary items owned by that Person that are treated as cash or
the equivalent of cash in accordance with GAAP, consistently applied.
"Cash Collateral Account" shall mean the restricted depository savings
account to be established by Borrowers or Agent Bank on behalf of Borrowers with
L/C Issuer at its offices located at 3800 Howard Hughes Parkway, Las Vegas,
Nevada, or at such other office located in the United States as may be
designated from time to time by L/C Issuer, for the purpose of depositing cash
collateral for the aggregate L/C Exposure upon the occurrence of any Event of
Default.
"Cash Collateral Pledge Agreement" shall mean the Pledge and Assignment
of Savings Account Agreement to be
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executed by Borrowers in favor of L/C Issuer as of the Closing Date as the same
may be amended or modified from time to time under the terms of which all sums
held from time to time in the Cash Collateral Account are pledged in favor of
L/C Issuer to secure repayment of any funding required under any outstanding
Letters of Credit, a copy of which Cash Collateral Pledge Agreement is marked
"Exhibit M", affixed hereto and by this reference incorporated herein and made a
part hereof.
"Cash Equivalents" shall mean, when used in connection with any Person,
that Person's Investments in:
(a) Government Securities maturing within one (1) year after
the date of the making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America given on the date of such Investment a credit
rating of at least Aa by Moody's Investors Service, Inc. or AA by
Standard & Poor's Corporation, in each case maturing within one (1)
year from the making of the Investment;
(c) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by, any Lender or,
if not a Lender, any bank incorporated under the laws of the United
States of America or any State thereof and having on the date of such
Investment combined capital, surplus and undivided profits of at least
Two Hundred Fifty Million Dollars ($250,000,000.00), or total assets of
at least Five Billion Dollars ($5,000,000,000.00), in each case
maturing within one (1) year after the date of the making of the
Investment;
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by, any branch or
office located in the United States of America of a bank incorporated
under the laws of any jurisdiction outside the United States of America
having on the date of such Investment combined
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capital, surplus and undivided profits of at least Five Hundred Million
Dollars ($500,000,000.00), or total assets of at least Fifteen Billion
Dollars ($15,000,000,000.00) in each case maturing within one year
after the date of the making of the Investment;
(e) repurchase agreements covering Government Securities
executed by a broker or dealer registered under Section 15(b) of the
Securities Exchange Act of 1934 having on the date of the Investment
capital of at least One Hundred Million Dollars ($100,000,000.00),
maturing within thirty (30) days after the date of the making of the
Investment; provided that the maker of the Investment receives written
confirmation of the transfer to it of record ownership of the
Government Securities on the books of a "primary dealer" in such
Government Securities on the books of such registered broker or dealer,
as soon as practicable after the making of the Investment;
(f) readily marketable commercial paper of corporations doing
business in and incorporated under the laws of the United States of
America or any State thereof or of any corporation that is the holding
company for a bank described in clauses (c) or (d) above given on the
date of such Investment a credit rating of at least P-1 by Moody's
Investors Service, Inc. or A-1 by Standard & Poor's Corporation, in
each case maturing within three hundred sixty-five (365) days after the
date of the making of the Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the laws of the United States of America or any
State thereof given on the date of such Investment a credit rating of
at least Aa by Moody's Investors Service, Inc. or AA by Standard &
Poor's Corporation, in each case having an investment period not to
exceed fifty (50) days; provided that (i) the amount of all such
Investments issued by the same issuer does not exceed Five Million
Dollars ($5,000,000.00) and (ii) the aggregate amount of all such
Investments does not exceed Fifteen Million Dollars ($15,000,000.00);
and
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(h) a readily redeemable "money market mutual fund" advised by
a bank described in clauses (c) or (d) hereof, or an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
that has and maintains an investment policy limiting its investments
primarily to instruments of the types described in clauses (a) through
(g) hereof and having on the date of such Investment total assets of at
least One Billion Dollars ($1,000,000,000.00).
"Change in Control" shall mean the date on which any one or more of the
following statements are true:
(a) the Jacobs Family Group owns less than twenty-five percent
(25%) of the total voting power of all classes of voting stock of BHGD;
(b) the Jacobs Family Group owns less than twenty-five percent
(25%) of the membership interest in BHJE, save and except as a
consequence of the sale or transfer of such membership interests in
exchange for additional voting stock of BHGD;
(c) BHGD, either directly or through wholly owned
subsidiaries, fails to own one hundred percent (100%) of the Gilpin
Hotel/Casino Facilities; or
(d) BHGD, together with the Jacobs Family Group, either
directly or through wholly owned subsidiaries, partnership or limited
liability companies, fail to own one hundred percent (100%) of the
Lodge Hotel/Casino Facilities.
"Closing Certificate" shall have the meaning ascribed to such term in
Section 3.05(d).
"Closing Date" shall mean the date upon which: (i) each condition
precedent required under Article IIIA of this Credit Agreement has been
satisfied or waived and (ii) the Security Documentation has been filed and/or
recorded in accordance with and in the manner required by the Closing
Instructions, or such other date as to which Agent Bank and Borrowers agree in
writing.
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"Closing Disbursement" shall mean the Borrowing to be advanced on the
Closing Date for the uses and purposes set forth in Section 2.02(a).
"Closing Instructions" shall mean the Closing Instructions to be given
by Agent Bank to the Title Company on or before the Closing Date setting forth
the requirement of Lenders for issuance of the Title Insurance Policy and other
conditions for the occurrence of the Closing Date, as may be amended or modified
prior to the Closing Date to the reasonable satisfaction of Agent Bank.
"Collateral" shall mean: (a) a collective reference to the Lodge
Collateral and the Gilpin Collateral; and (b) any and all other property and/or
intangible rights, interests or benefits inuring to or in favor of Borrowers
which are in any manner assigned, pledged, encumbered or otherwise hypothecated
in favor of Lenders or Agent Bank on behalf of the Lenders to secure repayment
of the Bank Facilities, but shall not include the Gaming Permits.
"Collateral Properties" shall mean collective reference to the real
properties, improvements and associated FF&E which are pledged and encumbered as
Collateral securing repayment of the Bank Facilities from time to time, which
shall consist of the Lodge Real Property, the Gilpin Real Property and the
Parking Garage Leasehold, together with any other real property or interests
therein which may be held by Agent Bank from time to time to secure repayment of
the Bank Facilities.
"Commercial L/C Fee" shall have the meaning ascribed to such term in
Section 2.10(d).
"Commercial Letter(s) of Credit" shall mean a letter or letters of
credit issued by L/C Issuer pursuant to Section 2.09 of this Credit Agreement
for the purpose of assuring payment for goods or equipment supplied to
Borrowers, or any of them.
"Commitment Fee(s)" shall have the meaning ascribed to such term in
Section 2.10(b) of this Credit Agreement.
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"Commitment Letter" shall mean the confidential letter dated January 8,
1999, from WFB to BHGD and accepted on January 25, 1999, together with the
Summary of Terms and Conditions and exhibits thereto, setting forth the terms
and conditions upon which WFB has committed to establish the Bank Facilities in
favor of Borrowers, as may be amended from time to time by written instrument
executed by WFB and BHGD.
"Commitment Percentage" shall mean the per annum percentage to be used
in the calculation of the Commitment Fee based on the Leverage Ratio of the
Borrower Consolidation, determined as set forth in Table Three of the definition
of Applicable Margin.
"Compliance Certificate" shall mean a compliance certificate as
described in Section 5.08(a)(vi) substantially in the form of "Exhibit F",
affixed hereto and by this reference incorporated herein and made a part hereof.
"Contingent Liability(ies)" shall mean, as to any Person, without
duplication among Persons, collectively, any obligation of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness,
leases or dividends ("primary obligations") of any other Person (the "primary
obligor") (other than Indebtedness of the Borrower Consolidation, or any of
them) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (by means of loans,
capital contributions or otherwise) (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or support the solvency
or level of any balance sheet item of the primary obligor or any "keep well,"
"make well" or other arrangement of whatever nature given for the purpose of
assuring or holding harmless an obligee against loss with respect to any
obligation of such primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, (d) to make payment in respect of any net liability arising in
connection with any Interest Rate Hedges, foreign currency exchange agreement,
commodity hedging agreement or any similar agreement or arrangement in any such
case if the purpose or intent of such agreement is to provide assurance
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that such primary obligation will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such primary
obligation will be protected (in whole or in part) against loss in respect
thereof or (e) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Liability shall not include endorsements of instruments for deposit
or collection in the ordinary course of business or indemnification of
directors, officers or employees. The amount of any Contingent Liability shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Liability is made (unless
the Contingent Liability is limited by its terms to a lesser amount, in which
case to the extent of such amount) or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
Borrowers in good faith, provided that (y) the amount of any Contingent
Liability consisting of a completion guaranty shall be deemed to be zero unless
and until Borrowers' independent auditors have quantified the amount of the
exposure thereunder (and thereafter shall be deemed to be the amount so
quantified from time to time), and (z) the amount of any Contingent Liability
consisting of a "keep- well", "make well" or other similar arrangement shall be
deemed to be zero unless and until any Borrower or any Restricted Subsidiary is
required to make payment with respect thereto (and shall thereafter be deemed
during the relevant period to be the amount required to be paid and after paid
in full, zero).
"Continuation/Conversion Notice" shall mean a notice of continuation or
conversion of or to a LIBOR Loan and certificate duly executed by an Authorized
Representative substantially in the form of that certain exhibit marked "Exhibit
D", affixed hereto and by this reference incorporated herein and made a part
hereof.
"Contractual Obligation" means, as to any Person, any provision of any
outstanding securities issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its assets is bound.
"Convert, Conversion and Converted" shall refer to a Borrowing at or
continuation of a particular interest rate basis or conversion of one interest
rate basis to another pursuant to Section 2.05(c).
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"Credit Agreement" shall mean this Credit Agreement, together with all
Schedules and Exhibits attached hereto, executed by and among Borrowers and
Banks setting forth the terms and conditions of the Credit Facility, Swingline
Facility and L/C Facility, together with all other attachments thereto, as may
be amended, modified, extended, renewed or restated from time to time.
"Credit Facility" shall mean the agreement of Lenders to fund a
revolving line of credit, subject to the terms and conditions set forth in this
Credit Agreement and the Revolving Credit Note, up to the Maximum Permitted
Balance. "Deeds of Trust" mean collective reference to the Gilpin Deed of Trust
and the Lodge Deed of Trust.
"Default" shall mean the occurrence or non-occurrence, as the case may
be, of any event that with the giving of notice or passage of time, or both,
would become an Event of Default.
"Default Rate" shall have the meaning set forth in Section 2.11(b).
"Defaulting Lender" means any Lender which fails or refuses to perform
its obligations under the Credit Facility within the time period specified for
performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of five (5) Banking Business Days
after notice from Agent Bank.
"Deferred Assessment Obligations" shall mean collective reference to
the obligation of BHJE to pay all sums of principal and interest owing under the
terms of the Bond Documents.
"Deferred Funding Amount" shall mean that portion of the Credit
Facility that shall not be available for Borrowing until the occurrence of the
Prime Termination Date in the following amounts:
From the Closing Date
through December 31, 1999 $1,250,000.00
From January 1, 2000 through
June 30, 2000 $ 925,000.00
From July 1, 2000 through
the occurrence of the Prime
Termination Date $ 675,000.00
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"Designated Deposit Account" shall mean a deposit account to be
maintained by Borrowers with Agent Bank, as from time to time designated in
writing by an Authorized Representative.
"Dispute" shall have the meaning set forth in Section 10.14(a).
"Distributions" shall mean and collectively refer to any and all Cash
or Cash Equivalent dividends, loans, Management Fees, payments, advances or
other distributions, fees or compensation of any kind or character whatsoever,
other than within the Borrower Consolidation, paid by any member of the Borrower
Consolidation, but shall not include: (i) cost of acquisition by BHGD of the JE
Membership Interests and Investments in Unrestricted Subsidiaries, in each case
to the extent permitted in the Credit Agreement, (ii) consideration paid for
tangible and intangible assets in an arms length exchange for fair value, (iii)
trade payments made and other payments for liabilities incurred in the ordinary
course of business, or (iv) compensation to officers, directors and employees of
Borrowers in the ordinary course of business.
"Diversified" shall mean Diversified Opportunities Group, Ltd., an Ohio
limited liability company.
"Documents" shall have the meaning set forth in Section 10.14(a).
"Dollars" and "$" means the lawful money of the United States of
America.
"EBITDA" shall mean with reference to any Person, for any fiscal period
under review, the sum of (i) Net Income for that period, plus (ii) any
non-recurring extraordinary loss reflected in such Net Income, minus (iii) any
non-recurring extraordinary gain reflected in such Net Income, plus (iv)
Interest Expense for that period, plus (v) the aggregate amount of federal and
state taxes on or measured by income or profit for that period (whether or not
payable
- 16 -
17
during that period), plus (vi) depreciation, amortization and all other non-cash
expenses for that period, less (vii) all other non-cash gains for that period,
plus (viii) pre-opening expenses and expenses incurred in connection with the
acquisition of a New Venture by any member of the Borrower Consolidation for
that period in each case determined in accordance with GAAP and, in the case of
items (ii), (iv), (v), (vi) and (viii), only to the extent deducted in the
determination of Net Income for that period; provided, however, that: (x) for
the Fiscal Quarter ending December 31, 1998, EBITDA of the Lodge Hotel/Casino
Facilities shall be determined only with reference to the two (2) consecutive
full Fiscal Quarters ending December 31, 1998, which EBITDA as so determined
shall be multiplied by two (2), and (y) for the Fiscal Quarter ending March 31,
1999, EBITDA of the Lodge Hotel/Casino Facilities shall be determined only with
reference to the three (3) consecutive full Fiscal Quarters ending March 31,
1999, which EBITDA as so determined shall be multiplied by four thirds (4/3).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eligible Assignee" means (a) another Lender, (b) with respect to any
Lender, any Affiliate of that Lender, (c) any commercial bank having a combined
capital and surplus of Fifty Million Dollars ($50,000,000.00) or more that is
(i) organized under the Laws of the United States of America, any State thereof
or the District of Columbia or (ii) organized under the Laws of any other
country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of such a country, provided that (A)
such bank is acting through a branch or agency located in the United States of
America and (B) such Bank is otherwise exempt from withholding of tax on
interest and delivers Form 1001 or Form 4224 at the time of any assignment, (d)
a financial institution which is an accredited investor as defined by the
Securities Act of 1934 and is otherwise exempt from withholding tax on interest
at the time of any assignment, and (e) with respect to such commercial bank or
financial institution as described in (a) through (d) above, no finding of
unsuitability has been made or determined by any Gaming Authority or the gaming
authorities of any other States of the United States of America.
- 17 -
18
"Eligible Subparticipant" shall mean any Person which is a bank,
savings and loan association or other financial or lending institution which has
not been found unsuitable as a lender by the Gaming Authorities.
"Entertainment" shall mean BH Entertainment Ltd., an Ohio limited
liability company.
"Environmental Certificate" shall mean the Certificate and
Indemnification Regarding Hazardous Materials to be executed by Borrowers on or
before the Closing Date and delivered to Agent Bank as a further inducement to
the Banks to establish the Bank Facilities, as it may be amended, modified,
extended, renewed or restated from time to time.
"Equipment Leases and Contracts" shall mean collective reference to the
Gilpin Equipment Leases and Contracts and the Lodge Equipment Leases and
Contracts.
"Equity Offering" shall mean the issuance and sale of shares of common
voting stock by BHGD through a private offering or to the public after the
Closing Date in exchange for Cash or Cash Equivalents and/or the issuance and
sale of shares of common voting stock of a Restricted Subsidiary of BHGD through
a private offering or to the public in exchange for Cash or Cash Equivalents.
"Event of Default" shall mean any event of default as defined in
Section 7.01 hereof.
"Existing BHGD Loan" shall have the meaning ascribed to such term in
Recital Paragraph D.
"Existing BHGD Loan Agreement" shall have the meaning ascribed to such
term in Recital Paragraph D.
"Existing BHGD Loan Security Documents" shall mean collective reference
to all pledges, security agreements, deeds of trust, financing statements and
other documents and instruments securing repayment of the Existing BHGD Loan,
including, without limitation, those documents and instruments set forth on the
Schedule of Existing BHGD Loan Security Documents marked "Schedule 3.17(a)",
affixed hereto and by this reference incorporated herein and made a part hereof.
"Existing BHJE Loan" shall have the meaning ascribed to such term in
Recital Paragraph C.
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19
"Existing BHJE Loan Agreement" shall have the meaning ascribed to such
term in Recital Paragraph C.
"Existing BHJE Loan Security Documents" shall mean collective reference
to all pledges, security agreements, deeds of trust, financing statements and
other documents and instruments securing repayment of the Existing BHJE Loan,
including, without limitation, those documents and instruments set forth on the
Schedule of Existing BHJE Loan Security Documents marked "Schedule 3.17(b)",
affixed hereto and by this reference incorporated herein and made a part hereof.
"FF&E" shall mean reference to the Gilpin FF&E and the Lodge FF&E and
any other furniture, fixtures and equipment, including, without limitation, all
gaming devices and associated equipment, inventories and supplies used in
connection with the Hotel/Casino Facilities.
"FIRREA" shall mean the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
"Federal Funds Rate" means, as of any date of determination, the rate
set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such date opposite the caption "Federal Funds
(Effective)". If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any successor, the "Composite 3:30 p.m.
Quotation") for such date under the caption "Federal Funds Effective Rate". If
on any relevant date the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such date
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York City time) on that date by
each of three leading brokers of Federal funds transactions in New York City
selected by the Agent Bank. For purposes of the Credit Agreement, any change in
the Base Rate due to a change in the Federal Funds Rate shall be effective as of
the opening of business on the effective date of such change.
- 19 -
20
"Fee Side Letter" shall mean the Confidential Fee Letter dated January
8, 1999, executed by and between Borrowers and Agent Bank, concerning payment of
the fees more particularly therein described.
"Financial Covenants" shall mean collective reference to the financial
covenants set forth in Article VI of this Credit Agreement.
"Financing Statements" shall mean collective reference to the Gilpin
Financing Statements and Lodge Financing Statements.
"Fiscal Quarter" shall mean the consecutive three (3) month periods
during each Fiscal Year beginning on January 1, April 1, July 1 and October 1
and ending on March 31, June 30, September 30 and December 31, respectively.
"Fiscal Year" shall mean the fiscal year period beginning January 1 of
each calendar year and ending on the following December 31.
"Fiscal Year End" shall mean December 31 of each calendar year.
"Fixed Charge Coverage Ratio" as of the end of any Fiscal Quarter shall
mean with reference to the Borrower Consolidation:
For the Fiscal Quarter under review, together with the most recently
ended three (3) preceding Fiscal Quarters, unless otherwise noted, the
sum of: (i) EBITDA, less (ii) the aggregate amount of actually paid
federal and state taxes on or measured by income, less (iii)
Distributions actually paid, less (iv) the amount of principal and
interest becoming due and payable on the Deferred Assessment
Obligations during the four (4) consecutive Fiscal Quarters immediately
following the Fiscal Quarter under review, less (v) the amount expended
for Non-Financed Capital Expenditures
Divided by (/)
- 20 -
21
The sum of: (i) the aggregate amount of Interest Expense (expensed and
capitalized), but excluding amounts attributable to the Deferred
Assessment Obligations, plus (ii) the aggregate amount of Scheduled
Reductions actually paid, plus (iii) the aggregate amount of principal
payments or reductions (without duplication) required to be made on all
other Indebtedness, including Capitalized Lease Liabilities to the
extent not included in (i) above, but excluding amounts attributable to
the Deferred Assessment Obligations; in each case of (i) through (iii)
determined for the Fiscal Quarter under review together with the most
recently ended three (3) preceding Fiscal Quarters.
"Funded Debt" shall mean with reference to the Borrower Consolidation
for any period the daily average of the Aggregate Outstandings for such period,
plus the total as of the last day of such period of both the long-term and
current portions (without duplication) of all other Indebtedness (including
Capitalized Lease Liabilities and Contingent Liabilities, but excluding the
Deferred Assessment Obligations).
"Funded Outstandings" shall mean the unpaid principal amount
outstanding on the Credit Facility as of any given date of determination, not
including Swingline Outstandings or the amount of any L/C Exposure.
"Funding Date" shall mean each date upon which Lenders fund Borrowings
requested by Borrowers in accordance with the provisions of Section 2.03 or at
the request of Agent Bank pursuant to Section 2.08 or Section 2.09.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination, in each instance consistently applied.
"GHVP" shall mean have the meaning ascribed to such term in the
Preamble to the Credit Agreement.
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22
"GVI" shall mean have the meaning ascribed to such term in the Preamble
to the Credit Agreement.
"Gaming Authorities" means collective reference to the Division of
Gaming of the Colorado Department of Revenue, the Colorado Limited Gaming
Control Commission and each other agency or other political subdivision which
has jurisdiction over the gaming activities of Borrower at the Hotel/Casino
Facilities.
"Gaming Devices" shall mean slot machines and other devices which
constitute gaming devices and related equipment as defined by the Gaming
Authorities and Gaming Laws.
"Gaming Laws" shall mean the Colorado Limited Gaming Act and the
regulations relating thereto and all other rules, regulations, statutes and
ordinances having authority or with which compliance is required for the conduct
of gambling, gaming and casino activities at the Hotel/Casino Facilities.
"Gaming Permits" shall mean collective reference to every license,
permit or other authorization required to own, operate and otherwise conduct
gambling, gaming and casino activities at the Hotel/Casino Facilities,
including, without limitation, all licenses granted by the Gaming Authorities
and all other applicable Governmental Authorities.
"Gilpin Assignment of Permits, Licenses and Contracts" shall mean the
assignment to be executed by BHGD, GVI and GHVP on or before the Closing Date,
pursuant to which BHGD, GVI and GHVP assign to Agent Bank on behalf of the
Lenders, as additional security for the Bank Facilities, all of their right,
title and interest in and to all permits, licenses and contracts relating to the
Gilpin Hotel/Casino Facilities, except Gaming Permits and those permits, lease
agreements and license agreements which are unassignable, as such assignment may
be amended, modified, extended, renewed or restated from time to time.
"Gilpin Assignment of Spaceleases, Contracts, Rents and Revenues" shall
mean the assignment to be executed by BHGD, GVI and GHVP on or before the
Closing Date, pursuant
- 22 -
23
to which BHGD, GVI and GHVP assign to Agent Bank on behalf of the Lenders, as
additional security for the Bank Facilities: (a) all of their right, title and
interest under all Gilpin Equipment Leases and Contracts and Gilpin Space Leases
relating to the Gilpin Hotel/Casino Facilities, and (b) all rents, issues,
profits, revenues and income from the Gilpin Hotel/Casino Facilities and any
other business activity conducted thereon, together with any future expansions
thereof, related thereto or used in connection therewith, as such assignment may
be amended, modified, extended, renewed or restated from time to time.
"Gilpin Collateral" shall mean collective reference to: (i) all of the
Gilpin Real Property, Gilpin FF&E and the contract rights, leases, intangibles
and other interests of BHGD, GVI and GHVP, which are subject to the liens and
security interests of the Gilpin Security Documents; (ii) all rights of BHGD,
GVI and GHVP assigned as additional security pursuant to the terms of the Gilpin
Security Documents; and (iii) any and all other property and/or intangible
rights, interest or benefits inuring to or in favor of BHGD, GVI and GHVP, which
are in any manner assigned, pledged, encumbered or otherwise hypothecated in
favor of Agent Bank on behalf of Lenders to secure payment of the Bank
Facilities.
"Gilpin Deed of Trust" shall mean the Deed of Trust, Fixture Filing and
Security Agreement with Assignment of Rents to be executed, as of the Closing
Date, by BHGD, GVI and GHVP, as trustors and debtors, to the Public Trustee of
Gilpin County, Colorado, as trustee, in favor of Agent Bank on behalf of
Lenders, as beneficiary, for the purpose of providing security for the Credit
Facility, encumbering the Gilpin Real Property, Parking Garage Leasehold and
other Collateral more particularly therein described as a first mortgage lien,
as the same may be amended, modified, supplemented, replaced, renewed or
restated from time to time.
"Gilpin Equipment Leases and Contracts" shall mean the executed leases
and purchase contracts pertaining to the Gilpin FF&E wherein BHGD, GVI and GHVP
is the lessee or vendee, as the case may be, as set forth on that certain
scheduled marked "Schedule 4.16(B)", affixed hereto and by this reference
incorporated herein and made a part hereof.
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24
"Gilpin FF&E" shall mean the furniture, fixtures and equipment and all
gaming equipment and devices which have been installed or are to be installed
and used or owned by BHGD, GVI and/or GHVP in connection with the operation of
the Gilpin Hotel/Casino Facilities.
"Gilpin Financing Statements" shall mean the Uniform Commercial Code
Financing Statements to be filed in the office of the Secretary of State of the
State of Colorado, and in the office of the County Recorder of Gilpin County,
Colorado, in order to perfect the security interest granted to Agent Bank on
behalf of the Lenders under the Gilpin Security Documents in accordance with the
requirements of the Colorado Uniform Commercial Code, as they may be amended,
modified, extended, renewed or restated from time to time.
"Gilpin Hotel/Casino Facilities" shall mean collective reference to the
Gilpin Real Property and the Parking Garage Leasehold, the hotel and casino
businesses and related activities conducted by BHGD, GVI and GHVP in and on the
Gilpin Real Property and the Parking Garage Leasehold under the name and style
of Gilpin Hotel Casino and all improvements now or hereafter situate thereon,
together with any other real property, personal property or interests therein
which are used by BHGD, GVI and/or GHVP as a part of the operation of the hotel
and casino business conducted by BHGD, GVI and GHVP on the Gilpin Real Property
and the Parking Garage Leasehold.
"Gilpin Land Lease" shall mean the Gilpin Land Lease executed on or
about April 24, 1998, wherein BHGD leases the Gilpin Real Property to GHVP and
GHVP leases the Gilpin Real Property from BHGD, for a term of thirty-five (35)
years and for rental considerations more particularly therein described, as
further evidenced by that certain Memorandum of Gilpin Land Lease recorded April
24, 1998, in the Official Records of Gilpin County, Colorado, in Book 639, at
Page 124, as Document No. 95479.
"Gilpin Lease Subordination" shall mean the Subordination Agreement
under the terms of which the Gilpin Land Lease is subordinated to the lien of
the Gilpin Deed of Trust and other Gilpin Security Documents, which Gilpin Lease
Subordination shall be in a form and content acceptable to Agent Bank.
- 24 -
25
"Gilpin Permitted Encumbrances" shall mean, at any particular time, (i)
liens for taxes, assessments or governmental charges not then due and payable or
not then delinquent, (ii) statutory liens for labor and/or materials and liens
for taxes, assessments or governmental charges the validity of which, in either
instance, are being contested in good faith by Borrowers by appropriate
proceedings, and as provided in Sections 5.03 and 5.10 hereof, respectively,
provided that, Borrowers shall have maintained adequate reserves in accordance
with GAAP for payment of same, (iii) liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money); (iv) leases or subleases granted to others (including, without
limitation, any Subsidiary) not interfering in any material respect with the
ordinary conduct of the business of the Gilpin Hotel/Casino Facilities; (v)
liens created or contemplated by the Gilpin Security Documents, (vi) the liens,
encumbrances and restrictions on the Gilpin Real Property, Gilpin FF&E and
existing improvements which are shown as exceptions on Schedule B of the Title
Insurance Policy to be issued by the Title Insurance Company as of the Closing
Date, (vii) liens consented to in writing by Agent Bank upon the approval of
Requisite Lenders, (viii) the Prime Financing Statements and liens of legally
valid capital leases and purchase money security interests for Gilpin FF&E to
the extent permitted by Section 6.08(d), including, without limitation, the
items set forth on the Schedule of Gilpin Equipment Leases and Contracts,
Schedule 4.16(B), (ix) each and every easement, license, restriction or
right-of-way that (A) is hereafter granted to any Governmental Authority or
public utility providing services to the Gilpin Hotel/Casino Facilities and/or
Gilpin Real Property and (B) does not interfere in any material respect with the
Gilpin Hotel/Casino Facilities; and (xii) judgment liens, writs, warrants,
levies, distraints, attachments and other similar process which do not
constitute an Event of Default.
"Gilpin Real Property" shall mean the real property owned by BHGD which
is described on that certain exhibit marked "Exhibit Q", affixed hereto and by
this reference incorporated herein and made a part hereof.
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26
"Gilpin Security Documents" shall mean collective reference to the
Gilpin Deed of Trust, Gilpin Financing Statements, Gilpin Assignment of Permits,
Licenses and Contracts, Gilpin Assignment of Spaceleases, Contracts, Rents and
Revenues, the Assignment of Parking Garage Lease and all other documents,
instruments or agreements encumbering or assigning, assets related to the Gilpin
Hotel/Casino Facilities which are executed or delivered by or on behalf of BHGD,
GVI and/or GHVP and accepted by Agent Bank, on behalf of Lenders, as security
for payment of the Bank Facilities.
"Gilpin Spaceleases" shall mean the executed leases and concession
agreements pertaining to the Gilpin Hotel/Casino Facilities, or any portion
thereof, wherein BHGD, GVI and/or GHVP is the lessor as set forth on the certain
schedule marked "Schedule 4.15(B)", affixed hereto and by this reference
incorporated herein and made a part hereof.
"Government Securities" means readily marketable (a) direct full faith
and credit obligations of the United States of America or obligations guaranteed
by the full faith and credit of the United States of America and (b) obligations
of an agency or instrumentality of, or corporation owned, controlled or
sponsored by, the United States of America that are generally considered in the
securities industry to be implicit obligations of the United States of America.
"Governmental Authority" or "Governmental Authorities" shall mean any
federal, state, regional, county or municipal governmental agency, board,
commission, officer or official whose consent or approval is required or whose
regulations must be followed as a prerequisite to (i) the continued operation
and occupancy of the Hotel/Casino Facilities or (ii) the performance of any act
or obligation or the observance of any agreement, provision or condition of
whatever nature herein contained.
"Hazardous Materials Claims" shall have the meaning set forth in
Section 5.20.
"Hazardous Materials Laws" shall have the meaning set forth in Section
5.20.
"Hotel/Casino Facilities" shall mean collective reference to the Lodge
Hotel/Casino Facilities and the Gilpin Hotel/Casino Facilities.
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27
"Indebtedness" shall mean, as to any Person, without duplication, (a)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money, (b) the deferred purchase price of property or
services (other than accrued expenses, tax liability, deferred taxes, and trade
accounts payable less than ninety (90) days past due, or if more than ninety
(90) days past due not more than Fifty Thousand Dollars ($50,000.00) in the
aggregate, and other accrued or deferred liabilities incurred in the ordinary
course of business) which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (c) the face amount of all
letters of credit to the extent not secured with Cash, issued for the account of
such Person and all drafts drawn thereunder, (d) all obligations under
conditional sale or other title retention agreements relating to property
purchased by such Person, (e) all liabilities of the type described in clauses
(a) through (d) or (f) of this definition secured by (or for which the holder of
any such liability has an existing right, contingent or otherwise, to be secured
by) any lien or encumbrance on any property owned by such Person, whether or not
such liabilities have been assumed by such Person, (f) all Capitalized Lease
Liabilities of such Person, and (g) all Contingent Liabilities of such Person in
respect of any indebtedness, obligations or liabilities of any other Person of
the type referred to in clauses (a)-(f) of this definition.
"Intangibles" shall mean the aggregate goodwill, trademarks, patents,
organizational expense and other similar intangible items of the Borrower
Consolidation determined on a consolidated basis in accordance with GAAP.
"Interest Expense" shall mean with respect to any Person, as of the
last day of any fiscal period under review, the sum of (i) all interest (without
duplication but including capitalized interest), fees and other charges for that
fiscal period by such Person to a lender in connection with borrowed money
(including any obligations for fees payable to the issuer of any letter of
credit, but excluding, however, interest and premium, if any, paid or to be paid
on the Deferred Assessment Obligations) or the deferred purchase price of assets
that are considered "interest expense" under GAAP, plus (ii) the portion of the
up front costs and expenses for Interest Rate Hedges (to the extent not included
- 27 -
28
in (i)) fairly allocated to such interest rate hedges as expenses for such
period, plus (iii) the portion of Capital Lease Liabilities that should be
treated as interest in accordance with GAAP.
"Interest Period(s)" shall have the meaning set forth in Section
2.05(d).
"Interest Rate Hedges" shall mean, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements, basis swap, forward rate agreements and interest collar or floor
agreements and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.
"Interest Rate Option" shall have the meaning ascribed to such term in
Section 2.05(b) of the Credit Agreement.
"Invest" or "Investment" shall mean, when used in connection with any
Person, any investment by or of that Person, whether by means of purchase or
other acquisition of stock or other securities of any other Person or by means
of a loan, advance creating a debt, capital contribution, payment under a
guaranty or other debt or equity participation or interest in any other Person,
including any partnership and joint venture interests of such Person. The amount
of any Investment shall be the amount actually invested without adjustment for
subsequent increases or decreases in the value of such Investment.
"JE Membership Interests" shall mean collective reference to membership
interests in BHJE held by Entertainment and Diversified as set forth on the
Schedule of BHJE Membership Interests.
"JE Permitted Distribution" shall mean the maximum aggregate amount of
Distributions which may be made by BHJE to the holders of the JE Membership
Interests, exclusive of JE Tax Distributions, during any Fiscal Year, as defined
and determined in Section 6.09(b).
"JE Tax Distribution" shall mean a Distribution made by BHJE to the
holders of the JE Membership Interests to enable to such holders to pay taxes on
the Net Income of BHJE, computed on the net earnings of BHJE.
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29
"Jacobs Family Group" shall mean collective reference to Richard E.
Jacobs, Jeffrey P. Jacobs, their children, grandchildren and their respective
executors, administrators, testamentary trustees, heirs, legatees and
beneficiaries.
"L/C Agreement(s)" shall mean collective reference to the Application
and Agreement for Standby Letter of Credit and Application for Commercial Letter
of Credit and addendum(s) thereto executed by an Authorized Representative of
Borrowers in favor of L/C Issuer in L/C Issuer's standard form, setting forth
the terms and conditions upon which L/C Issuer shall issue a Letter(s) of
Credit, as the same may be amended or modified from time to time.
"L/C Exposure" shall mean the aggregate amount which L/C Issuer may be
required to fund or is contingently liable for disbursement under all issued and
outstanding Letter(s) of Credit, which amount shall be determined by subtracting
from the aggregate of the Stated Amount of each such Letter(s) of Credit (to the
extent such Letter of Credit is not secured by Cash deposited into the Cash
Collateral Account and subject to the Cash Collateral Pledge Agreement), the
principal amount of all L/C Reimbursement Obligations which have accrued and
have been fully satisfied as of each date of determination.
"L/C Facility" shall mean the agreement of L/C Issuer to issue Letters
of Credit subject to the terms and conditions and up to the maximum amounts and
duration as set forth in Section 2.09 of this Credit Agreement.
"L/C Fee" shall mean individual reference and "L/C Fees" shall mean
collective reference to a Standby L/C Fee and/or Commercial L/C Fee, as the
context may require.
"L/C Issuer" shall have the meaning set forth in the Preamble of this
Credit Agreement.
"L/C Reimbursement Obligation(s)" shall mean the obligation of
Borrowers to reimburse L/C Issuer for amounts funded or disbursed under a
Letter(s) of Credit, together with accrued interest thereon.
"LIBO Rate" means, relative to any Interest Period for any LIBOR Loan,
the per annum rate (reserve adjusted as
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30
hereinbelow provided) of interest quoted by Agent Bank, rounded upwards, if
necessary, to the nearest one-sixteenth of one percent (0.0625%) at which Dollar
deposits in immediately available funds are offered to Agent Bank by leading
banks in the London interbank market at approximately 11:00 a.m. London time two
(2) Banking Business Days prior to the beginning of such Interest Period, for
delivery on the first day of such Interest Period for a period approximately
equal to such Interest Period and in an amount equal or comparable to the LIBOR
Loan to which such Interest Period relates. The foregoing rate of interest shall
be reserve adjusted by dividing the applicable LIBO Rate by a one (1.00) minus
the LIBOR Reserve Percentage, with such quotient to be rounded upward to the
nearest whole multiple of one-hundredth of one percent (0.01%). All references
in this Credit Agreement or other Loan Documents to a LIBO Rate include the
aforesaid reserve adjustment.
"LIBOR Loan" shall mean each portion of the total unpaid principal
under the Credit Facility which bears interest at a rate determined by reference
to the LIBO Rate plus the Applicable Margin.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBOR Loans made by any Lender, the reserve percentage (expressed as a decimal)
equal to the actual aggregate reserve requirements (including all basic,
emergency, supplemental, marginal and other reserves and taking into account any
transactional adjustments or other scheduled changes in reserve requirements)
announced within Agent Bank as the reserve percentage applicable to Agent Bank
as specified under regulations issued from time to time by the Federal Reserve
Board. The LIBOR Reserve Percentage shall be based on Regulation D of the
Federal Reserve Board or other regulations from time to time in effect
concerning reserves for "Eurocurrency Liabilities" from related institutions as
though Agent Bank were in a net borrowing position.
"Laws" means, collectively, all international, foreign, federal, state
and local statutes, maritime laws, treaties, rules, regulations, ordinances,
codes and administrative or judicial precedents.
"Lender Reply Period" shall have the meaning set forth in Section
9.10(d).
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31
"Lenders" means WFB and any other bank, finance company, insurance or
other financial institution which is or becomes a party to this Credit Agreement
by execution of a counterpart signature page hereto or an Assignment and
Assumption Agreement, as assignee. At all times that there are no Lenders other
than WFB, the terms "Lender" and "Lenders" means WFB in its individual capacity.
With respect to matters requiring the consent to or approval of all Lenders at
any given time, all then existing Defaulting Lenders will be disregarded and
excluded, and, for voting purposes only, "all Lenders" shall be deemed to mean
"all Lenders other than Defaulting Lenders".
"Letter(s) of Credit" shall mean collective reference to Letter of
Credit No. NZS304740 dated December 21, 1998, in the amount of Five Hundred
Twenty-Six Thousand Four Hundred Twenty Dollars ($526,420.00) issued for the
benefit of the City of Black Hawk, Colorado, as amended, having an expiry date
of December 17, 1999, together with the Standby Letter(s) of Credit and/or
Commercial Letter(s) of Credit, as the case may be, issued by L/C Issuer on
behalf of Borrowers, or any of them, as the same may be extended, renewed or
reissued from time to time.
"Leverage Ratio" as of the end of any Fiscal Quarter shall mean the
ratio resulting by dividing (a) Funded Debt for the Fiscal Quarter under review
by (b) the sum of EBITDA for the Fiscal Quarter under review plus EBITDA for
each of the most recently ended three (3) preceding Fiscal Quarters.
"Liabilities" shall mean the total liabilities of the Borrower
Consolidation determined in accordance with GAAP.
"Liabilities and Costs" means all claims, judgments, liabilities,
obligations, responsibilities, losses, damages (including lost profits),
punitive or treble damages, costs, disbursements and expenses (including,
without limitation, reasonable attorneys', experts' and consulting fees and
costs of investigation and feasibility studies), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other
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32
preferential arrangement having the practical effect of any of the foregoing.
"Loan Documents" shall mean the collective reference to this Credit
Agreement, the Revolving Credit Note, the Swingline Note, the Security
Documentation, Environmental Certificate and all other instruments and
agreements required to be executed by or on behalf of Borrowers, or any of them,
or any other Person in connection with the Bank Facilities for the benefit of
Banks or Agent Bank on behalf of the Lenders, the Swingline Lender and the L/C
Issuer.
"Lodge Assignment of Permits, Licenses and Contracts" shall mean the
assignment to be executed by BHJE on or before the Closing Date, pursuant to
which BHJE assigns to Agent Bank on behalf of the Lenders, as additional
security for the Bank Facilities, all of its right, title and interest in and to
all assignable permits, licenses and contracts relating to the Lodge
Hotel/Casino Facilities, except Gaming Permits and those permits, licenses and
contracts which are unassignable, as such assignment may be amended, modified,
extended, renewed or restated from time to time.
"Lodge Assignment of Spaceleases, Contracts, Rents and Revenues" shall
mean the Assignment to be executed by BHJE on or before the Closing Date,
pursuant to which BHJE assigns to Agent Bank on behalf of the Lenders, as
additional security for the Bank Facilities: (a) all of its right, title and
interest under all Lodge Equipment Leases and Contracts and Lodge Spaceleases
relating to the Lodge Hotel/Casino Facilities, and (b) all rents, issues,
profits, revenues and income from the Lodge Hotel/Casino Facilities and any
other business activity conducted at the Lodge Hotel/Casino Facilities, together
with any future expansions thereof, related thereto or used in connection
therewith, as such assignment may be amended, modified, extended, renewed or
restated from time to time.
"Lodge Collateral" shall mean collective reference to: (i) all of the
Lodge Real Property, Lodge FF&E and the contract rights, leases, intangibles and
other interests of BHJE, which are subject to the liens and security interests
of the Lodge Security Documents; (ii) all rights of BHJE assigned as additional
security pursuant to the terms of the Lodge Security Documents; and (iii) any
and all other property and/or intangible rights, interest or benefits inuring to
or in favor of BHJE, which are in any manner assigned, pledged, encumbered or
otherwise hypothecated in
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33
favor of Agent Bank on behalf of Lenders to secure payment of the Bank
Facilities.
"Lodge Deed of Trust" shall mean the Deed of Trust, Fixture Filing and
Security Agreement with Assignment of Rents to be executed, as of the Closing
Date, by BHJE, as trustor and debtor, to the Public Trustee of Gilpin County,
Colorado, as trustee, in favor of Agent Bank on behalf of Lenders, as
beneficiary, for the purposes of providing security for the Credit Facility
encumbering the Collateral more particularly therein described as a first
mortgage lien, as the same may be amended, modified, supplemented, replaced,
renewed or restated from time to time.
"Lodge Equipment Leases and Contracts" shall mean the executed leases
and purchase contracts pertaining to the Lodge FF&E wherein BHJE is the lessee
or vendee, as the case may be, as set forth on that certain schedule marked
"Schedule 4.16(A)", affixed hereto and by this reference incorporated herein and
made a part hereof.
"Lodge FF&E" shall mean the furniture, fixtures and equipment and all
gaming equipment and devices which have been installed or are to be installed
and used or owned by BHJE in connection with the operation of the Lodge
Hotel/Casino Facilities.
"Lodge Financing Statements" shall mean the Uniform Commercial Code
Financing Statements to be filed in the office of the Secretary of State of the
State of Colorado, and in the office of the County Recorder of Gilpin County,
Colorado, in order to perfect the security interest granted to Agent Bank on
behalf of the Lenders under the Lodge Security Documents in accordance with the
requirements of the Colorado Uniform Commercial Code, as such financing
statements may be amended, modified, extended, renewed or restated from time to
time.
"Lodge Hotel/Casino Facilities" shall mean collective reference to the
Lodge Real Property, the hotel and casino business and related activities
conducted by BHJE in and on the Lodge Real Property and all improvements now or
hereafter situate thereon, together with any other real property, personal
property or interests therein which are used by BHJE as a part of the operation
of the hotel and casino business conducted by BHJE on the Lodge Real Property.
"Lodge Permitted Encumbrances" shall mean, at any particular time, (i)
Liens for taxes, assessments or governmental charges not then due and payable or
not then
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34
delinquent, (ii) statutory liens for labor and/or materials and liens for taxes,
assessments or governmental charges the validity of which, in either instance,
are being contested in good faith by Borrowers by appropriate proceedings, and
as provided in Sections 5.03 and 5.10 hereof, respectively, provided that,
Borrowers shall have maintained adequate reserves in accordance with GAAP for
payment of same, (iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money); (iv) leases or subleases granted to others (including, without
limitation, any Subsidiary) not interfering in any material respect with the
ordinary conduct of the business of the Lodge Hotel/Casino Facilities; (v) Liens
created or contemplated by the Lodge Security Documents, (vi) the liens,
encumbrances and restrictions on the Lodge Real Property, Lodge FF&E and
existing improvements which are shown as exceptions on Schedule B of the Title
Insurance Policy to be issued by Title Insurance Company as of the Closing Date,
(vii) Liens consented to in writing by Agent Bank upon the approval of Requisite
Lenders, (viii) Liens of legally valid capital leases and purchase money
security interests for Lodge FF&E to the extent permitted by Section 6.08(d),
(ix) each and every easement, license, restriction or right-of-way that (A) is
hereafter granted to any Governmental Authority or public utility providing
services to the Real Property or (B) does not interfere in any material respect
with the Lodge Hotel/Casino Facilities; and (x) judgment liens, writs, warrants,
levies, distraints, attachments and other similar process which do not
constitute an Event of Default.
"Lodge Real Property" shall mean the real property owned by BHJE which
is described on that certain exhibit marked "Exhibit P", affixed hereto and by
this reference incorporated herein and made a part hereof.
"Lodge Security Documents" shall mean collective reference to the Lodge
Deed of Trust, Lodge Financing Statements, Lodge Assignment of Permits, Licenses
and Contracts, Lodge Assignment of Spaceleases, Contracts, Rents and Revenues
and all other documents, instruments or agreements encumbering or assigning
assets related to the
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35
Gilpin Hotel/Casino Facilities which are executed or delivered by or on behalf
of BHJE, and accepted by Agent Bank, on behalf of Lenders, as security for
payment of the Bank Facilities.
"Lodge Spaceleases" shall mean the executed leases and concession
agreements pertaining to the Lodge Hotel/Casino Facilities, or any portion
thereof, wherein BHJE is the lessor as set forth on the certain schedule marked
"Schedule 4.15(A)", affixed hereto and by this reference incorporated herein and
made a part hereof.
"Management Agreement" shall mean the Amendment to Operating Agreement
of Black Hawk/Jacobs Entertainment, LLC dated as of January 22, 1997, a copy of
which is marked "Exhibit R", affixed hereto and by this reference incorporated
herein and made a part hereof.
"Management Fee(s)" shall mean for any fiscal period, fees payable by
BHJE to Entertainment or to any other holder of the JE Membership Interests
pursuant to the Management Agreement.
"Management Subordination Agreement" shall mean the Subordination
Agreement with reference to the Management Agreement to be executed by BHJE and
Entertainment in favor of Agent Bank on behalf of Lenders pursuant to which the
Management Agreement and the payment of all Management Fees are structurally and
contractually subordinated to the Credit Agreement, Bank Facilities and Loan
Documents on the terms more particularly set forth therein to the satisfaction
of Agent Bank, as such agreement may be amended, modified, supplemented,
replaced, renewed, or restated from time to time.
"Margin Stock" shall have the meaning provided in Regulation U of the
Board of Governors of the Federal Reserve System.
"Material Adverse Change" shall mean: (i) any set of circumstances or
events which is material and adverse to the Collateral or the condition
(financial or otherwise), business operations or prospects of (a) the Borrower
Consolidation taken as a whole, or (b) the ability of Borrowers to perform their
respective Obligations under the Loan Documents, or (c) the ability of any of
the Lenders to enforce any of their material rights or remedies under any of
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36
the Loan Documents, or (ii) any event or change which has or results in a
material adverse effect upon (a) the value of the Gilpin Hotel/Casino Facilities
or the Lodge Hotel/Casino Facilities, (b) the validity or priority of any of the
Loan Documents, or (c) the use, occupancy or operation of the Gilpin
Hotel/Casino Facilities or the Lodge Hotel/Casino Facilities.
"Maturity Date" shall mean April 16, 2003.
"Maximum Availability" shall mean the Maximum Permitted Balance less
the Aggregate Outstandings.
"Maximum Permitted Balance" shall mean the maximum amount of Aggregate
Outstandings which may be outstanding on the Bank Facilities from time to time
which shall be the lesser of: (a) the Maximum Scheduled Balance less the
Deferred Funding Amount until the occurrence of the Prime Termination Date, or
(b) the amount to which the Maximum Scheduled Balance is voluntarily reduced by
Borrowers pursuant to Section 2.01(c) or is otherwise reduced or limited
pursuant to Sections 5.01, 5.12 or 8.02 or by Scheduled Reductions during the
term of the Bank Facilities and by the Deferred Funding Amount until the
occurrence of the Prime Termination Date.
"Maximum Scheduled Balance" shall mean the maximum amount of scheduled
principal which may be outstanding on the Credit Facility from time to time as
set forth on the Aggregate Commitment Reduction Schedule.
"Member" shall mean individual reference to, and "Members" shall mean
collective reference to, the members holding equity interests in BHJE and as
more particularly described on the Schedule of BHJE Member's Interests, Schedule
4.01(a) hereto, as such Members may change from time to time, subject to the
restrictions on transfer of ownership set forth in Section 6.09(c) of the Credit
Agreement.
"Net Equity Proceeds" shall mean collective reference to the aggregate
proceeds received by the Borrower Consolidation in Cash or Cash Equivalents from
each Equity Offering, net of reasonable costs and expenses, including, without
limitation, legal and accounting costs, if any, incurred in connection with such
Equity Offering.
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37
"Net Equity Proceeds Expenditure Basket" shall mean the amount of Net
Equity Proceeds which as of each date of determination have not been expended
for Capital Expenditures or expended as a Distribution or Investment in
Restricted Subsidiaries or Unrestricted Subsidiaries as of such date of
determination.
"Net Income" shall mean with respect to any Person for any fiscal
period, the net income of such Person during such fiscal period determined in
accordance with GAAP, consistently applied.
"New Venture" means a casino, casino/hotel, resort, casino/resort,
riverboat casino, dock casino, entertainment center or similar facility operated
as an appurtenance to a casino facility (or any site or proposed site for any of
the foregoing or entity that provides management or other services or goods to
any of the foregoing) owned or to be owned in whole or in part by any New
Venture Subsidiary (or owned or to be owned by a Person in which BHGD or a New
Venture Subsidiary is an owner or equity investor).
"New Venture Subsidiary" shall mean a Subsidiary of BHGD or any of its
Subsidiaries (other than BHJE, GVI or GHVP) that is the direct or indirect owner
in whole or part of a New Venture.
"Non-Financed Capital Expenditures" shall mean Capital Expenditures to
the Hotel/Casino Facilities which are paid by Borrowers from Borrowers' assets
or from advances under the Bank Facilities and not through any other loan,
credit arrangement, lease or other financing from any source or third party.
"Non Pro Rata Borrowing" means a Borrowing with respect to which fewer
than all Lenders have funded their respective Pro Rata Shares of such Borrowing
and the failure of the non-funding Lender or Lenders to fund its or their
respective Pro Rata Shares of such Borrowing constitutes a breach of this Credit
Agreement.
"Notes" shall mean collective reference to the Revolving Credit Note
and the Swingline Note.
"Notice of Borrowing" shall have the meaning set forth in Section 2.03.
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"Notice of Swingline Advance" shall have the meaning set forth in
Section 2.08(b).
"Obligations" means, from time to time, all Indebtedness of Borrowers
owing to Agent Bank, any Lender or any Person entitled to indemnification
pursuant to Section 5.14, or any of their respective successors, transferees or
assigns, of every type and description, whether or not evidenced by any note,
guaranty or other instrument, arising under or in connection with this Credit
Agreement or any other Loan Document, whether or not for the payment of money,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, reasonable attorneys' fees and disbursements, reasonable fees
and disbursements of expert witnesses and other consultants, and any other sum
now or hereinafter chargeable to Borrowers under or in connection with Credit
Agreement or any other Loan Document. Notwithstanding the foregoing definition
of "Obligations", Borrowers' obligations under any environmental indemnity
agreement constituting a Loan Document, or any environmental representation,
warranty, covenant, indemnity or similar provision in this Credit Agreement or
any other Loan Document, shall be secured by the Collateral only to the extent,
if any, specifically provided in the Security Documentation.
"Official Bond Statement" shall mean the Official Statement, including,
the cover page and appendices, dated March 5, 1999, Black Hawk Business
Improvement District, Gilpin County, Colorado, Special Improvement District No.
1997-2 Special Assessment Bonds.
"Operating Agreement" shall mean the Operating Agreement of Black
Hawk/Jacobs Entertainment, LLC, a Colorado Limited Liability Company Effective
as of November 12, 1996, executed by and among the Members, as may be amended
from time to time upon the prior written consent of Agent Bank.
"Parking Garage Documents" shall mean a collective reference to the
Parking Garage Lease, the Parking Garage Lease Subordination Agreement and all
extensions, renewals, amendments, restatements and other modifications of either
such document.
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"Parking Garage Lease" shall mean the Parking Garage Lease Agreement
dated April 24, 1998, executed by and between BHJE, as landlord, and GHVP, as
tenant, under the terms of which the Parking Garage Leasehold is leased by BHJE
to GHVP together with other provisions therein contained relating to the
construction, operation and maintenance of the Parking Garage Leasehold, all as
more particularly therein described, together with all schedules and exhibits
attached thereto.
"Parking Garage Lease Subordination Agreement" shall mean a
subordination and attornment agreement to be executed on or before the Closing
Date by GHVP and Agent Bank pursuant to which, among other things: (i) the
interest of GHVP under the Parking Garage Lease is subordinated to the lien of
the Lodge Deed of Trust; and (ii) Agent Bank agrees that upon acquisition of the
lessors interest under the Parking Garage Lease (pursuant to foreclosure under
the Lodge Deed of Trust or a conveyance in lieu thereof) it will attorn to the
interest of GHVP under the Parking Garage Lease.
"Parking Garage Leasehold" shall mean the third (3rd) story of the
parking garage located in the Lodge Real Property, together with an access ramp
from the Gilpin Real Property for ingress and egress to and from such third
(3rd) story of the parking garage.
"Pension Plan" means any "employee pension benefit plan" that is
subject to Title IV of ERISA and which is maintained for employees of Borrowers,
or any of them, or any of their respective ERISA Affiliates.
"Permitted Encumbrances" shall mean collective reference to the Gilpin
Permitted Encumbrances, the Restricted Subsidiary Permitted Encumbrances and the
Lodge Permitted Encumbrances.
"Person" means an individual, firm, corporation, limited liability
company, trust, association, partnership, joint venture, tribunal or other
entity.
"Policies of Insurance" shall mean the insurance to be obtained and
maintained by Borrowers throughout the term of this Credit Agreement as provided
by Schedule 5.09(a) herein.
"Post Foreclosure Plan" shall have the meaning set forth in Section
9.11(e).
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40
"Pricing Certificate" shall have the meaning set forth in Section
5.08(a)(iii).
"Prime" shall mean Prime Leasing, Inc., an Illinois corporation.
"Prime Financing Documents" shall mean collective reference to the
Master Loan and Security Agreement No. 2936 dated January 18, 1996, the Loan
Schedule/Promissory Note dated January 18, 1996 and the Prime Financing
Statement, each executed between GHVP as debtor and Prime as secured party,
together with all attachments, schedules and amendments thereto.
"Prime Financing Obligations" shall mean all payments of principal and
interest and other obligations owing by GHVP under the terms of the Prime
Financing Documents.
"Prime Financing Statement" shall mean the Uniform Commercial Code
Financing Statement executed by GHVP, as debtor, and Prime, as secured party,
and Bankers Trust Company, as assigned party, filed in the office of the
Secretary of State of the State of Colorado on March 1, 1996, under File No.
962016162.
"Prime Rate" means at any time, and from time to time, the rate of
interest most recently announced within WFB at its principal office in San
Francisco, California, as its "Prime Rate", with the understanding that WFB's
"Prime Rate" is one of its base rates and serves as the basis upon which
effective rates of interest are calculated for those loans and extensions of
credit making reference thereto, and is evidenced by the recording thereof after
its announcement in such internal publication or publications as WFB may
designate. Each change in the Prime Rate shall be effective on the day the
change is announced within WFB.
"Prime Termination Date" shall mean the date upon which all of the
Prime Financing Obligations, have been fully paid and the Prime Financing
Statement has been terminated in the Office of the Secretary of State of the
State of Colorado.
"Principal Prepayments" shall have the meaning set forth in Section
2.07(a) of this Credit Agreement.
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41
"Pro Rata Share" shall mean with respect to any Lender, a percentage
equal to such Lender's Syndication Interest in the Credit Facility as set forth
on the Schedule of Lenders' Proportions in Credit Facility.
"Protective Advance" means all sums expended as determined by Agent
Bank to be necessary to: (a) protect the priority, validity and enforceability
of the Security Documentation on, and security interests in, any Collateral and
the instruments evidencing or securing the Obligations, or (b) prevent the value
of any Collateral from being materially diminished (assuming the lack of such a
payment within the necessary time frame could potentially cause such Collateral
to lose value), or (c) protect any of the Collateral from being materially
damaged, impaired, mismanaged or taken, including, without limitation, any
amounts expended in accordance with Section 10.20 or post-foreclosure ownership,
maintenance, operation or marketing of any Collateral.
"Qualified Appraisal" shall mean reference to an appraisal or
appraisals of the Hotel/Casino Facilities and Collateral, or any portion
thereof, acceptable to Agent Bank, prepared at Borrowers' expense in compliance
with FIRREA by an appraiser acceptable to Agent Bank, with sufficient copies
delivered to Agent Bank for distribution to each of the Lenders.
"Reduced Margin Period" shall mean, commencing with the fifth (5th)
full Fiscal Quarter end following the Closing Date, each three (3) month period
commencing on the first (1st) day of the third (3rd) month immediately following
each Fiscal Quarter end for which the Borrower Consolidation has realized EBITDA
during such Fiscal Quarter, together with the immediately preceding three (3)
consecutive Fiscal Quarters, of no less than Twenty-Two Million Dollars
($22,000,000.00) in the aggregate.
"Reduction Date(s)" shall mean reference to each date or the dates, as
the context may require upon which the Maximum Scheduled Balance is reduced by a
Scheduled Reduction as set forth on the Aggregate Commitment Reduction Schedule.
"Related Entities" shall mean collective reference to all stockholders,
Affiliates and Subsidiaries of the Borrowers, or any of them, other than another
Borrower.
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42
"Replacement Note(s)" shall have the meaning set forth in Section
2.05(i) of this Credit Agreement.
"Reportable Event" shall mean a reportable event as defined in Title IV
of ERISA, except actions of general applicability by the Secretary of Labor
under Section 110 of ERISA.
"Requisite Lenders" means, as of any date of determination prior to the
occurrence of an Event of Default, Lenders holding Syndication Interests equal
to or in excess of sixty-six and two-thirds percent (66-2/3%) of the Credit
Facility; and at all times during which an Event of Default has occurred and
remains continuing, Lenders holding a percentage equal to or in excess of
sixty-six and two-thirds percent (66-2/3%) of the Funded Outstandings; provided
that, (i) in determining such percentage at any given time, all then existing
Defaulting Lenders will be disregarded and excluded and the Pro Rata Shares of
Lenders shall be redetermined, for voting purposes only, to exclude the Pro Rata
Shares of such Defaulting Lenders, and (ii) notwithstanding the foregoing, at
all times when two or more Lenders are party to this Credit Agreement, the term
Requisite Lenders shall in no event mean less than two (2) Lenders.
"Restricted Subsidiary" shall mean a New Venture Subsidiary which: (a)
has not incurred any Indebtedness other than in connection with a Subsidiary
Guaranty and accrued expenses, tax liability, deferred taxes and trade accounts
payable less than ninety (90) days past due and other accrued or deferred
liabilities incurred in the ordinary course of business, (b) is not subject to
any Liens except Restricted Subsidiary Permitted Encumbrances and in connection
with a Stock Pledge of its stock, (c) has executed and delivered to Agent Bank a
Subsidiary Guaranty, (d) all of the stock or other evidence of ownership thereof
has been pledged in favor of Agent Bank by a Stock Pledge, and (e) has been
designated by BHGD to be a Restricted Subsidiary by written notice thereof to
Agent Bank, subject to BHGD's right to redesignate such New Venture Subsidiary
as an Unrestricted Subsidiary so long as: (i) no Default or Event of Default has
occurred and remains continuing, and (ii) giving effect to such redesignation as
of the end of the most recently ended Fiscal Quarter on a pro forma basis, no
Default or Event of Default would exist under the Financial Covenants.
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"Restricted Subsidiary Permitted Encumbrances" shall mean, at any
particular time with respect to a Restricted Subsidiary, (i) liens for taxes,
assessments or governmental charges not then due, payable and delinquent, (ii)
liens for taxes, assessments or governmental charges not then required to be
paid pursuant to Section 5.10, (iii) liens in favor of Agent Bank or any Lender
created or contemplated by the Security Documentation, (iv) liens in favor of
Agent Bank for the benefit of the Lenders or consented to in writing by Agent
Bank upon the approval of Requisite Lenders, (v) purchase money security
interests for acquired FF&E up to the maximum amount permitted under Section
6.08(d), and only to the extent of the lesser of the purchase money loan or the
fair market value of the acquired FF&E, (vi) liens of legally valid leases for
FF&E, (vii) easements, licenses or rights-of-way, hereafter granted to any
Governmental Authority or public utility providing services to the Restricted
Subsidiary Venture which are first approved in writing by the Agent Bank upon
the approval of Requisite Lenders, (viii) judgment liens which do not constitute
an Event of Default, (ix) statutory liens of landlords and liens of carriers,
warehousemen, mechanics, customs and revenue authorities and materialmen and
other similar liens imposed by law incurred in the ordinary course of business
which could not reasonably be expected to cause a Material Adverse Change and
which are discharged in accordance with Section 5.04, (x) liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance and
return- of-money bonds and other similar obligations; (xi) leases or subleases
granted to others not interfering in any material respect with the ordinary
conduct of the business of such Restricted Subsidiary; and (xii) minor defects,
encroachments or irregularities in title not interfering in any material respect
with the ordinary conduct of the business of such Restricted Subsidiary.
"Restricted Subsidiary Stock Pledges" shall mean collective reference
to the Stock Pledge (Gaming) and the Stock Pledge (General).
"Restricted Subsidiary Venture" shall mean a New Venture owned in whole
or in part by a Restricted Subsidiary.
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44
"Revolving Credit Note" shall mean the Revolving Credit Note, a copy of
which is marked "Exhibit A", affixed hereto and by this reference incorporated
herein and made a part hereof, to be executed by Borrowers on the Closing Date,
payable to the order of Agent Bank on behalf of the Lenders, evidencing the
Credit Facility.
"Schedule of BHJE Membership Interests" shall mean the schedule setting
forth the equity interests of each Member holding equity interests in Borrower,
a copy of which is marked Schedule 4.01(a), affixed hereto and by this reference
incorporated herein and made a part hereof.
"Schedule of Lenders' Proportions in Credit Facility" shall mean the
Schedule of Lenders' Proportions in Credit Facility, a copy of which is marked
"Schedule 2.01(a), affixed hereto and by this reference incorporated herein and
made a part hereof, setting forth the respective Syndication Interest and
maximum amount to be funded under the Credit Facility by each Lender as such
schedule may be amended, modified or restated from time to time in connection
with an Assignment and Assumption Agreement.
"Schedule of Restricted and Unrestricted Subsidiaries" shall mean the
Schedule of Restricted and Unrestricted Subsidiaries, a copy of which is marked
"Schedule 4.22", affixed hereto and by this reference incorporated herein and
made a part hereof, setting forth the name of each Subsidiary of BHGD as of the
Closing Date, stating whether each such Subsidiary is a Restricted Subsidiary or
an Unrestricted Subsidiary.
"Schedule of Significant Litigation" shall mean the Schedule of
Significant Litigation, a copy of which is set forth as Schedule 3.20, affixed
hereto and by this reference incorporated herein and made a part hereof, setting
forth the information described in Section 3.20 with respect to each Significant
Litigation.
"Scheduled Reductions" shall mean the amount by which the Aggregate
Commitment is reduced on each Reduction Date as set forth on the Aggregate
Commitment Reduction Schedule.
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"Secured Interest Rate Hedge(s)" shall mean any Interest Rate Hedge
entered into between any Borrower and any Lender, or Affiliate of any Lender,
which is secured by the Security Documentation.
"Security Documentation" shall mean a collective reference to the
Gilpin Security Documents, the Lodge Security Documents and Stock Pledges,
Subsidiary Guaranties, the Trademark Security Agreement and all other
instruments and agreements to be executed by or on behalf of members of the
Borrower Consolidation or other applicable Persons, in favor of Agent Bank on
behalf of the Lenders securing repayment of the Bank Facilities.
"Series 1999A Bonds" shall mean the Special Improvement District No.
1997-2 Special Assessment Bonds, Series 1999A, in the aggregate principal amount
of Two Million Dollars ($2,000,000.00) issued by the Bond Issuer pursuant to the
Official Bond Statement.
"Series 1999B Bonds" shall mean the Special Improvement District No.
1997-2 Special Assessment Bonds, Series 1999B, in the aggregate principal amount
of Four Million Dollars ($4,000,000.00) issued by the Bond Issuer pursuant to
the Official Bond Statement.
"Significant Litigation" shall mean each action, suit, proceeding,
litigation and controversy involving Borrowers, or any of them, not fully
covered by insurance or that is subject to a reservation of rights and involving
claims in excess of One Million Dollars ($1,000,000.00) or which if determined
adverse to the interests of Borrowers, or any of them, could result or a
Material Adverse Change.
"Spaceleases" shall mean collective reference to the Gilpin Spaceleases
and Lodge Spaceleases.
"Special Assessment Bonds" shall mean collective reference to the
Series 1999A Bonds and the Series 1999B Bonds.
"Standby Letter(s) of Credit" shall mean a letter or letters of credit
issued by L/C Issuer pursuant to Section 2.09 of the Credit Agreement for the
purpose of securing payment or performance of a financial obligation of
Borrowers, or any of them, other than in connection with the payment for goods
or equipment.
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"Stated Amount" shall mean the maximum amount which L/C Issuer may be
required to disburse to the beneficiary(ies) of a Letter(s) of Credit under the
terms thereof.
"Stated Expiry Date(s)" shall mean the date set forth on the face of a
Letter(s) of Credit as the date when all obligations of L/C Issuer to advance
funds thereunder will terminate, as the same may be extended from time to time.
"Stock Pledge (Gaming)" shall mean the Security Agreement and Stock
Pledge, the form of which is marked "Exhibit N", affixed hereto and by this
reference incorporated herein and made a part hereof, pursuant to which the
stock of each Restricted Subsidiary and Unrestricted Subsidiary which is a
gaming licensee in any jurisdiction within the United States of America is
pledged by BHGD to Agent Bank on behalf of Lender as security for the Note and
all other sums which may be owing by Borrowers to the Banks from time to time
under the terms of the Credit Agreement.
"Stock Pledge (General)" shall mean the Security Agreement and Stock
Pledge, the form of which is marked "Exhibit O", affixed hereto and by this
reference incorporated herein and made a part hereof, to be executed by BHGD
from time to time for the purpose of pledging the stock of each Restricted
Subsidiary and Unrestricted Subsidiary which is not a gaming licensee as
security for the Bank Facilities and all other sums which may be owing by
Borrowers to the Banks from time to time under the terms of the Credit
Agreement.
"Subsidiary" shall mean, on the date in question, any Person of which
an aggregate of more than 50% of the stock of any class or classes (or
equivalent interests) is owned of record or beneficially, directly or
indirectly, by another Person and/or any of its Subsidiaries, if the holders of
the stock of such class or classes (or equivalent interests) (a) are ordinarily,
in the absence of contingencies, entitled to vote for the election of a majority
of the directors (or individuals performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are entitled, as such holders, to vote for the election of a
majority of the directors (or individuals performing similar functions) of such
Person, whether or not the right so to vote exists by reason of the happening of
a contingency.
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"Subsidiary Guarantor" shall mean each Restricted Subsidiary which has
executed the Subsidiary Guaranty.
"Subsidiary Guaranty" shall mean the General Continuing Subsidiary
Guaranty to be executed by each Restricted Subsidiary in favor of the Agent Bank
on behalf of Banks in the form of the General Continuing Subsidiary Guaranty
marked "Exhibit K" affixed hereto and by this reference incorporated herein and
made a part hereof, under the terms of which each Restricted Subsidiary
irrevocably and unconditionally guaranties to Agent Bank on behalf of the Banks
the full and prompt payment and performance of all obligations, promises,
covenants and agreements of Borrowers under the Credit Agreement, Notes and
other Loan Documents.
"Swingline Advance" shall mean each advance made by Swingline Lender to
Borrowers under the Swingline Facility.
"Swingline Facility" shall mean the agreement of Swingline Lender to
make Swingline Advances to Borrowers subject to the terms and conditions and up
to the maximum amounts and for the duration as set forth in Section 2.08 of this
Credit Agreement.
"Swingline Lender" shall have the meaning set forth in the Preamble of
this Credit Agreement.
"Swingline Note" shall mean the Swingline Note, a copy of which is
marked "Exhibit B", affixed hereto and by this reference incorporated herein and
made a part hereof, to be executed by Borrowers on the Closing Date, payable to
the order of Swingline Lender evidencing the Swingline Facility.
"Swingline Outstandings" shall mean the aggregate amount of all
outstanding and unpaid Swingline Advances as of each date of determination.
"Syndication Interest" shall mean the proportionate interest of each
Lender in the Credit Facility as set forth on the Schedule of Lenders'
Proportions in Credit Facility, a copy of which is marked Schedule 2.01(a),
affixed hereto and by this reference incorporated herein and made a part hereof,
as the same may be amended or restated from time to time.
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"Tangible Net Worth" shall mean Assets, excluding Intangibles, less
Liabilities.
"Taxes" shall have the meaning set forth in Section 2.12.
"Title Insurance Company" shall mean First American Title Insurance
Company and its issuing agent, Clear Creek- Gilpin Abstract & Title Corporation,
with offices located at 619 Fifth Street, P.O. Box 545, Georgetown, Colorado
80444, together with such reinsurers with direct access as are requested by
Agent Bank or other title insurance company or companies as may be acceptable to
Agent Bank.
"Title Insurance Policy" shall mean the ALTA Extended Coverage Lenders
Policy of Title Insurance, and the endorsements thereto, which is to be issued
by the Title Insurance Company, as of the Closing Date, in the aggregate amount
of Sixty-Five Million Dollars ($65,000,000.00), in favor of Agent Bank, insuring
the Gilpin Deed of Trust as a first priority Lien encumbering the Gilpin Real
Property and the Lodge Deed of Trust as a first priority Lien encumbering the
Lodge Real Property, in each case subject only to the exceptions shown therein
in Schedule B, Part One, together with such endorsements thereto as are required
by Agent Bank, all in accordance with the Closing Instructions.
"Title Report" shall refer to the Commitment for Title Insurance
Commitment issued by Title Insurance Company, as its Commitment No. FG13006.C.
"Trademark Security Agreement" shall mean the security agreement to be
executed by Borrowers as of the Closing Date, for the purpose of granting a
security interest in favor of Agent Bank on behalf of Lenders in all trademarks,
tradenames, copyrights and servicemarks used in connection with the Hotel/Casino
Facilities, including, without limitation each registration and application set
forth on Schedule 4.27 or otherwise described on Schedule A to the Trademark
Security Agreement, as the same may be amended, modified, supplemented,
replaced, renewed or restated from time to time.
"Unrestricted Subsidiary" shall mean each New Venture Subsidiary which
is not a Restricted Subsidiary.
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"Unsuitable Lender" shall have the meaning set forth in Section
10.10(d).
"Voluntary Permanent Reduction" shall have the meaning set forth in
Section 2.01(c).
"WFB" shall mean Wells Fargo Bank, National Association.
Section 1.02. Interpretation and Construction. In this Credit
Agreement, unless the context otherwise requires:
(a) Articles and Sections mentioned by number only are the
respective Articles and Sections of this Credit Agreement as so numbered;
(b) Words importing a particular gender mean and include every
other gender, and words importing the singular number mean and include the
plural number and vice versa;
(c) All times specified herein, unless otherwise specifically
referred, shall be the time in San Francisco, California;
(d) Any headings preceding the texts of the several Articles
and Sections of this Credit Agreement, and any table of contents or marginal
notes appended to copies hereof, shall be solely for convenience of reference
and shall not constitute a part of this Credit Agreement, nor shall they affect
its meaning, construction or effect;
(e) If any clause, provision or Section of this Credit
Agreement shall be ruled invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any of
the remaining provisions hereof;
(f) The terms "herein", "hereunder", "hereby", "hereto",
"hereof" and any similar terms as used in the Credit Agreement refer to this
Credit Agreement; the term "heretofore" means before the date of the execution
of this Credit Agreement; and the term "hereafter" means after the date of the
execution of this Credit Agreement;
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(g) The parties hereto agree that each has contributed to the
drafting of this Credit Agreement and each of the Loan Documents and that the
provisions herein contained shall not be construed against Borrowers or Banks as
having been the person or persons responsible for the preparation thereof;
(h) All accounting terms used herein which are not otherwise
specifically defined shall be used in accordance with GAAP;
(i) Each reference to a Loan Document or the Security
Documentation, or any of them, as used in this Credit Agreement shall be deemed
a reference to such Loan Document or the Security Documentation as the same may
be amended, modified, supplemented, replaced or restated from time to time; and
(j) Every affirmative duty, covenant and obligation of
Borrowers hereunder shall be equally applicable to each of the Borrowers
individually and where the context would result in the best interests or rights
of Banks shall be construed to mean "Borrowers or any of them" or "Borrowers and
each of them", as applicable.
Section 1.03. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this Credit
Agreement shall have such meanings when used in the Notes and in each Loan
Document and other communication delivered from time to time in connection with
this Credit Agreement or any other Loan Document.
Section 1.04. Cross-References. Unless otherwise specified, references
in this Credit Agreement and in each other Loan Document to any Article or
Section are references to such Article or Section of this Credit Agreement or
such other Loan Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references to
such clause of such Article, Section or definition.
Section 1.05. Exhibits and Schedules. All Exhibits and Schedules to
this Credit Agreement, either as originally existing or as the same may from
time to time be supplemented, modified or amended, are incorporated herein by
this reference.
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ARTICLE II
AMOUNT, TERMS AND SECURITY OF THE BANK FACILITIES
Section 2.01. The Credit Facility.
a. Subject to the conditions and upon the terms hereinafter set
forth and in accordance with the terms and provisions of the Revolving Credit
Note on and after the Closing Date Lenders severally agree in the proportions
set forth on the Schedule of Lenders' Proportions in Credit Facility to lend and
advance Borrowings to Borrowers, up to the Maximum Permitted Balance in the
initial amount of Sixty- Five Million Dollars ($65,000,000.00), the Closing
Disbursement on the Closing Date and such amounts as Borrowers may request by
Notice of Borrowing duly executed by an Authorized Representative and delivered
to Agent Bank from time to time as provided in Section 2.03; provided, however,
notwithstanding anything herein contained to the contrary, the Deferred Funding
Amount shall not be available for advance to Borrowers until the occurrence of
the Prime Termination Date.
b. Subject to the uses and purposes set forth in Section 2.02, on
and after the Closing Date Borrowers may borrow, repay and reborrow the
Borrowings up to the Available Borrowings from time to time. Provided, however,
amounts of Funded Outstandings bearing interest with reference to a LIBO Rate
shall be subject to Breakage Charges incident to prepayment as provided in
Section 2.07(c) hereinbelow and such prepayment may only be made upon three (3)
Banking Business Days prior written notice to Agent Bank with sufficient copies
for distribution to each of the Lenders. The Credit Facility shall be for a term
commencing on the Closing Date and terminating on the Maturity Date, on which
date the entire outstanding balance of the Credit Facility shall be fully paid
and Bank Facility Termination shall occur. In no event shall any Lender be
liable to fund any amounts under the Credit Facility in excess of its respective
Syndication Interest in any Borrowing.
c. Borrowers may voluntarily reduce the Maximum Permitted Balance
from time to time (a "Voluntary Permanent Reduction") on the following
conditions:
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(i) that each such Voluntary Permanent Reduction be in the
minimum amount of Three Million Dollars ($3,000,000.00) and in
increments of One Million Dollars ($1,000,000.00) and made in writing by
an Authorized Representative, effective on the fifth (5th) Banking
Business Day following receipt by Agent Bank;
(ii) that each such Voluntary Permanent Reduction shall be
irrevocable and a permanent reduction to the Maximum Permitted Balance;
and
(iii) in the event any Voluntary Permanent Reduction reduces
the Maximum Permitted Balance to less than the sum of the Aggregate
Outstandings, the Borrowers shall immediately cause the Aggregate
Outstandings to be reduced by such amount as may be necessary to cause
the Aggregate Outstandings to be equal to or less than the Maximum
Permitted Balance.
Section 2.02. Use of Proceeds of the Credit Facility. Available
Borrowings shall be used for the following purposes:
a. On the Closing Date, a Borrowing shall be advanced (the
"Closing Disbursement") for the purposes of:
(i) paying in full all amounts owing under the Existing BHJE
Loan and the Existing BHGD Loan as of the Closing Date;
(ii) paying in full the fees due Agent Bank as set forth in the
Fee Side Letter, the costs, fees and expenses of Title Company incurred
in connection with the issuance of the Title Insurance Policies, the
costs, fees and expenses of Henderson & Morgan, LLC, attorneys for Agent
Bank, and associate counsel and insurance consultants retained by them
incurred to the Closing Date; and
(iii) paying other costs, fees and expenses incurred by
Borrowers, including attorneys fees and related costs, incurred in
connection with the Bank Facilities.
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b. Subsequent to the Closing Date for the purposes of providing
financing for general corporate purposes, including Investments to the extent
permitted by Section 6.06, financing Capital Expenditures and working capital
requirements of the Borrower Consolidation subject to the terms, covenants and
limitations hereinafter set forth.
Section 2.03. Notice of Borrowings and Exercise of Interest Rate
Options.
a. An Authorized Representative shall give Agent Bank, no later
than 9:00 a.m. on a Banking Business Day at Agent Bank's office specified in
Section 2.07, three (3) full Banking Business Days prior written notice in the
form of the Notice of Borrowing ("Notice of Borrowing"), a copy of which is
marked "Exhibit C", affixed hereto and by this reference incorporated herein and
made a part hereof, for each proposed Borrowing to be made with reference to a
LIBO Rate and at least one (1) full Banking Business Days prior notice for all
other Borrowings, specifying the date and amount of each proposed Borrowing.
Agent Bank shall give prompt notice of each Notice of Borrowing to Lenders of
the amount to be funded and specifying the Funding Date. Not later than 11:00
a.m. on the Funding Date specified, each Lender shall disburse to Agent Bank its
Pro Rata Share of the amount to be advanced by each such Lender in lawful money
of the United States of America and in immediately available funds. Agent Bank
shall make the proceeds of such fundings received by it on or before 11:00 a.m.
from the Lenders available to Borrowers by depositing, prior to 1:00 p.m. on the
day so received (but not prior to the Funding Date), in the Designated Deposit
Account maintained with Agent Bank the amounts received from the Lenders. No
Borrowing may exceed the Available Borrowings. Each Borrowing shall be in a
minimum amount of One Million Dollars ($1,000,000.00) and in increments of One
Hundred Thousand Dollars ($100,000.00). Borrowers shall be entitled to no more
than five (5) Borrowings during each calendar month, exclusive of Borrowings
made for the sole purpose of funding repayment of a Swingline Advance or L/C
Reimbursement Obligation.
b. The failure of any Lender to fund its Pro Rata Share of any
Borrowing on any Funding Date shall neither relieve any other Lender of any
obligation hereunder to fund its Pro Rata Share of such Borrowing on such
Funding Date nor relieve the Lender which has failed to fund its Pro Rata Share
of its obligations to Borrowers hereunder. No Lender shall be responsible for
the failure of any other
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Lender to fund its Pro Rata Share of such Borrowing on any Funding Date nor
shall any Lender be responsible for the failure of any other Lender to perform
its respective obligations hereunder. The provisions set forth in Section
10.10(d) shall be applicable to a Defaulting Lender to the same extent as if
such Defaulting Lender was found to be an Unsuitable Lender.
Section 2.04. Conditions of Borrowings. Borrowings, other than
Borrowings made at the request of Agent Bank for the purpose of funding
repayment of Swingline Outstandings and/or L/C Reimbursement Obligations as
hereinafter provided, will only be made so long as Borrowers are in full
compliance with each of the requirements and conditions precedent set forth in
Article III of this Credit Agreement. Provided, however, upon the consent of the
Requisite Lenders, Lenders shall advance Borrowings notwithstanding the
existence of less than full compliance with the requirements of Article III and
Borrowings so made shall be deemed to have been made pursuant to this Credit
Agreement.
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Section 2.05. The Revolving Credit Note and Interest Rate Options.
a. The Credit Facility shall be further evidenced by the
Revolving Credit Note payable to the order of Agent Bank on behalf of the
Lenders. Agent Bank shall record manually or electronically the date and amount
of each Borrowing advanced by the Lenders together with the applicable Interest
Period in the case of portions of the unpaid principal under the Credit Facility
bearing interest with reference to a LIBO Rate, and the amount of each repayment
of principal made thereunder by Borrowers and the entry of such records shall be
conclusive absent manifest or demonstrable error; provided, however, the failure
to make such a record or notation with respect to any Borrowing or repayment
thereof, or an error in making such a record or notation, shall not limit or
otherwise affect the obligations of Borrowers hereunder or under the Revolving
Credit Note.
b. Interest shall accrue on the entire outstanding principal
balance of the Credit Facility at a rate per annum equal to the Base Rate plus
the Applicable Margin, unless Borrowers request a LIBOR Loan pursuant to Section
2.03 or elect pursuant to Section 2.05(c) hereinbelow to have interest accrue on
a portion or portions of the outstanding principal balance of the Credit
Facility at a LIBO Rate ("Interest Rate Option"), in which case interest on such
portion or portions shall accrue at a rate per annum equal to such LIBO Rate
plus the Applicable Margin, as long as: (i) each such LIBOR Loan is in a minimum
amount of Five Million Dollars ($5,000,000.00) and in increments of One Million
Dollars ($1,000,000.00), and (ii) no more than five (5) LIBOR Loans may be
outstanding at any one time. Interest accrued on each Base Rate Loan shall be
due and payable on the first day of each Fiscal Quarter following the Closing
Date, on the first day of each successive Fiscal Quarter thereafter, and on the
Maturity Date. For each LIBOR Loan, accrued interest shall be due and payable at
the end of each Interest Period applicable thereto, but in any event no less
frequently than at the end of each three (3) month period during the term of
such LIBOR Loan. Except as qualified above, the outstanding principal balance of
the Credit Facility may be a Base Rate Loan or one or more LIBOR Loans, or any
combination thereof, as Borrowers shall specify.
c. So long as no Default or Event of Default shall have
occurred and remains continuing, Borrowers
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may Convert from one Interest Rate Option to another Interest Rate Option or
continue an Interest Rate Option to another Interest Period by giving
irrevocable notice to Agent Bank of such Conversion by 9:00 a.m. on a day which
is at least three (3) Banking Business Days prior to the proposed date of such
Conversion to or continuation of each LIBOR Loan or one (1) Banking Business Day
prior to the proposed date of such Conversion to each Base Rate Loan. Each such
notice shall be made by an Authorized Representative by telephone or telex and
thereafter immediately confirmed in writing by delivery to Agent Bank of a
Continuation/Conversion Notice specifying the date of such Conversion, the
amounts to be so Converted and the initial Interest Period if the Conversion is
to a LIBOR Loan. Upon receipt of such Continuation/Conversion Notice, Agent Bank
shall promptly set the applicable interest rate (which in the case of a LIBOR
Loan shall be the LIBO Rate plus the Applicable Margin as of the second Banking
Business Day prior to the first day of the applicable Interest Period) and the
applicable Interest Period if the Conversion or continuation is being made with
reference to a LIBOR Loan and shall confirm the same in writing to Borrowers and
Lenders. Each Conversion or continuation shall be on a Banking Business Day. No
LIBOR Loan shall be converted to a Base Rate Loan or renewed on any day other
than the last day of the current Interest Period relating to such amounts
outstanding unless Borrowers pay any applicable Breakage Charges. All Borrowings
advanced at the request of Agent Bank under Sections 2.08 or 2.09 of the Credit
Agreement shall bear interest with reference to the Base Rate plus the
Applicable Margin, subject to Borrowers' right to Convert such Borrowing to a
LIBOR Loan or LIBOR Loans as provided herein. If Borrowers fail to give a
Continuation/Conversion Notice for the continuation of a LIBOR Loan as a LIBOR
Loan for a new Interest Period in accordance with this Section 2.05(c), such
LIBOR Loan shall automatically become a Base Rate Loan at the end of its then
current Interest Period.
d. Each interest period (each individually an "Interest Period"
and collectively the "Interest Periods") for a LIBOR Loan shall commence on the
date such LIBOR Loan is made or the date of Conversion of any amount or amounts
of the outstanding Borrowings hereunder to a LIBOR Loan, as the case may be, and
shall end on the date which is one (1), two (2), three (3) or six (6) months
thereafter, as elected by Borrowers. However, no Interest Period may extend
beyond the Maturity Date. Each Interest Period for a LIBOR Loan shall commence
and end on a Banking Business Day. If any Interest Period commences on a date
for which there is no corresponding date in the month in which it is scheduled
to end, such Interest Period shall end on the last Banking Business Day of such
month. If any Interest
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Period would otherwise expire on a day which is not a Banking Business Day, the
Interest Period shall be extended to expire on the next succeeding Banking
Business Day, unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding Banking Business Day.
e. The applicable LIBO Rate and Base Rate shall be determined
by the Agent Bank, and notice thereof shall be given promptly to Borrowers and
Lenders. Each determination of the applicable Base Rate and LIBO Rate shall be
conclusive and binding upon the Borrowers, in the absence of manifest or
demonstrable error. The Agent Bank shall, upon written request of Borrowers or
any Lender, deliver to Borrowers or such Lender, as the case may be, a statement
showing the computations used by the Agent Bank in determining any rate
hereunder.
f. Computation of interest on LIBOR Loans shall be calculated
on the basis of a year of three hundred sixty (360) days and the actual number
of days elapsed. Computation of interest on Base Rate Loans shall be calculated
on the basis of a year of three hundred sixty-five (365) or three hundred
sixty-six (366) days, as the case may be, and the actual number of days elapsed.
The applicable Base Rate shall be effective the same day as a change in the Base
Rate is announced by WFB as being effective.
g. If with respect to any Interest Period, (a) the Agent Bank
reasonably determines (which determination shall be binding and conclusive on
Borrowers) that by reason of circumstances affecting the inter-bank eurodollar
market adequate and reasonable means do not exist for ascertaining the
applicable LIBO Rate, or (b) Requisite Lenders advise Agent Bank that the LIBO
Rate as determined by Agent Bank will not adequately and fairly reflect the cost
to such Lenders of maintaining or funding, for such Interest Period, a LIBOR
Loan under the Credit Facility, then so long as such circumstances shall
continue: (i) Agent Bank shall promptly notify Borrowers thereof, (ii) the
Lenders shall not be under any obligation to make a LIBOR Loan or Convert a Base
Rate Loan into a LIBOR Loan for which such circumstances exist, and (iii) on the
last day of the then current Interest
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Period, the LIBOR Loan for which such circumstances exist shall, unless then
repaid in full, automatically Convert to a Base Rate Loan.
h. Notwithstanding any other provisions of the Credit
Agreement, if, after the Closing Date, any law, rule, regulation, treaty,
interpretation or directive (whether having the force of law or not) or any
change therein shall make it unlawful for any Lender to make or maintain LIBOR
Loans, then (i) the commitment and agreement to maintain LIBOR Loans as to such
Lender shall immediately be suspended, and (ii) unless required to be terminated
earlier, LIBOR Loans as to such Lender, if any, shall be Converted on the last
day of the then current Interest Period applicable thereto to Base Rate Loans.
If it shall become lawful for such Lender to again maintain LIBOR Loans, then
Borrowers may once again as to such Lender request Conversions to the LIBO Rate.
During any period of such suspension, such Lender shall make Base Rate Loans.
i. The Borrowers agree that upon written notice by: (y) Agent
Bank or (z) any Lender to the Borrowers (with a copy of such notice concurrently
delivered to Agent Bank) to the effect that a promissory note or other evidence
of indebtedness is required for such Lender by a Governmental Authority, banking
regulatory agency or regulatory audit in order for such Lender to evidence
(whether for the purposes of pledge, enforcement or otherwise) the Borrowings
owing to, or to be made by, such Lender:
(i) The Borrowers shall promptly execute and deliver to each
Lender a promissory note payable to the order of each such Lender (each
individually a "Replacement Note" and collectively the "Replacement
Notes") in the form of the Revolving Credit Note in the amount of each
Lender's respective Syndication Interest in the Credit Facility subject
to Scheduled Reductions to be allocated amongst Lenders in accordance
with their respective Syndication Interests;
(ii) The Replacement Notes shall, in the aggregate, fully
replace the Revolving Credit Note and each reference to the Revolving
Credit Note in this Credit Agreement and each of the Loan Documents
shall be deemed to be a collective reference to the Replacement Notes;
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(iii) Borrowings, Interest Rate Options,
Continuation/Conversion Notices and all other provisions for the
disbursement of funds, setting of interest rates and collection of
repayments of interest and principal shall continue to be made by Agent
Bank as the administrative and collateral agent for the Lenders in the
same manner and to the same extent as provided in the Revolving Credit
Note and this Credit Agreement as fully applicable to each of the
Replacement Notes;
(iv) the Agent Bank, upon the consent of Requisite Lenders,
shall cause the Title Insurance Company to issue, at the expense of
Borrowers, such endorsements to the Title Insurance Policy as may be
reasonably necessary to assure the aggregate obligation evidenced by
the Replacement Notes is secured by the Deeds of Trust with the same
coverage and priority as the obligation evidenced by the Revolving
Credit Note; and
(v) Concurrently with the delivery of the Replacement Notes,
Agent Bank shall return the original Revolving Credit Note to Borrowers
marked as superseded and replaced by the Replacement Notes.
Section 2.06. Security for the Credit Facility. As security for the due
and punctual payment and performance of the terms and provisions of this Credit
Agreement, the Notes and all of the other Loan Documents, the Security
Documentation shall be executed and delivered to Agent Bank, as of the Closing
Date, by the respective parties to each of the Security Documentation and
recorded and/or filed as required by the Closing Instructions.
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Section 2.07. Place and Manner of Payment.
a. All amounts payable by Borrowers to the Lenders shall be
made to Agent Bank on behalf of Lenders pursuant to the terms of this Credit
Agreement and the Notes and shall be made on a Banking Business Day in lawful
money of the United States of America and in immediately available funds. Other
than in connection with: (i) the Scheduled Reductions of principal, or (ii)
principal payments which may be required to decrease the Aggregate Outstandings
to an amount equal to or less than the Maximum Permitted Balance, Borrowers
shall not make repayments ("Principal Prepayments") of the outstanding balance
of principal owing under the Revolving Credit Note more frequently than five (5)
such Principal Prepayments during each calendar month. Each such Principal
Prepayment of the Base Rate Loan shall be in a minimum amount of Five Hundred
Thousand Dollars ($500,000.00) (or, if less, the outstanding principal amount of
the Base Rate Loan) and in increments of One Hundred Thousand Dollars
($100,000.00) in excess thereof. Each such Principal Prepayment of a LIBOR Loan
shall be in a minimum amount of One Million Dollars ($1,000,000.00) and in
increments of One Million Dollars ($1,000,000.00) in excess thereof; provided,
that in no event shall any outstanding LIBOR Loan have a principal balance of
less than Five Million Dollars ($5,000,000.00).
b. All such amounts payable by Borrowers shall be made to Agent
Bank at its office located at Wells Fargo Bank, Syndications Division, 201 Third
Street, Eighth Floor, San Francisco, California 94103, or at such other address
as may be directed in writing by Agent Bank from time to time. If such payment
is received by Agent Bank prior to 11:00 a.m., Agent Bank shall credit Borrowers
with such payment on the day so received and shall disburse to the appropriate
Lenders on the same day the Pro Rata Share of payments relating to the Credit
Facility in immediately available funds. If such payment is received by Agent
Bank after 11:00 a.m., Agent Bank shall credit Borrowers with such payment as of
the next Banking Business Day and disburse to the appropriate Lenders on the
next Banking Business Day such Pro Rata Share of such payment relating to the
Credit Facility, in immediately available funds. Any payment on the Credit
Facility made by Borrowers to Agent Bank pursuant to the terms of this Credit
Agreement or the Revolving Credit Note for the account of Lenders shall
constitute payment to the appropriate Lenders. If the Revolving Credit Note or
any
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payment required to be made thereon or hereunder, is or becomes due and payable
on a day other than a Banking Business Day, the due date thereof shall be
extended to the next succeeding Banking Business Day and interest thereon shall
be payable at the then applicable rate during such extension.
c. The outstanding principal owing under the Credit Facility
and the Revolving Credit Note may, subject to Section 2.07(a), be prepaid at any
time in whole or in part without penalty, provided, however, that any portion or
portions of the unpaid principal balance which is accruing interest at a LIBO
Rate may only be prepaid or repaid on the last day of the applicable Interest
Period unless Borrowers give three (3) days prior written notice to Agent Bank
and additionally pay concurrently with such prepayment or repayment such
additional amount or amounts as will compensate Lenders for any losses, costs or
expenses which they may incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain such LIBOR Loan ("Breakage Charges"). A
certificate of a Lender as to amounts payable hereunder shall be conclusive and
binding on Borrowers for all purposes, absent manifest or demonstrable error.
Any calculation hereunder shall be made on the assumption that each Lender has
funded or will fund each LIBOR Loan in the London interbank market; provided
that no Lender shall have any obligation to actually fund any LIBOR Loan in such
manner.
d. Unless the Agent Bank receives notice from an Authorized
Representative prior to the date on which any payment is due to the Lenders that
the Borrowers will not make such payment in full as and when required, the Agent
Bank may assume that the Borrowers have made such payment in full to the Agent
Bank on such date in immediately available funds and the Agent Bank 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 the Borrowers have not made such payment in full to the Agent
Bank, each Lender shall repay to the Agent Bank on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Lender until
the date repaid.
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e. If, other than as expressly provided elsewhere herein, any
Lender shall obtain any payment with respect to the Bank Facilities (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its Syndication Interest, such Lender shall immediately
(i) notify the Agent Bank of such fact, and (ii) purchase from the other Lenders
such participations in the Credit Facility as shall be necessary to cause such
purchasing Lender to share the excess payment with each of them in proportion to
their respective Syndication Interests; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender's ratable share (according to the
proportion of (x) the amount of such paying Lender's required repayment to (y)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrowers agree that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment with respect to such participation as fully
as if such Lender were the direct creditor of the Borrowers in the amount of
such participation. The Agent Bank will keep records (which shall be conclusive
and binding in the absence of manifest error) of each participation purchased
under this section and will in each case notify the Lenders following any such
purchases or repayments.
Section 2.08. The Swingline Facility.
a. Subject to the conditions and upon the terms hereinafter set
forth and in accordance with the terms and provisions of the Swingline Note,
Exhibit B affixed hereto, Swingline Lender agrees to lend and advance Swingline
Advances to Borrowers in the amounts and at the times provided below.
Notwithstanding anything herein contained to the contrary, however, Borrowers
shall not be entitled to any Swingline Advances on and after ten (10) calendar
days prior to the Maturity Date.
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b. With respect to each proposed Swingline Advance, an
Authorized Representative shall give Swingline Lender written notice in the form
of the Notice of Swingline Advance ("Notice of Swingline Advance"), a copy of
which is marked "Exhibit E", affixed hereto and by this reference incorporated
herein and made a part hereof, to be received by Swingline Lender no later than
12:00 noon on the date for each proposed Swingline Advance specifying the
requested amount to be funded. Swingline Lender shall deposit into the
Designated Deposit Account in lawful money of the United States of America in
immediately available funds such amounts as Borrowers may request, provided,
that: (i) after giving effect to such Swingline Advance, the Swingline
Outstandings do not exceed Five Million Dollars ($5,000,000.00), (ii) the amount
requested does not exceed the Available Borrowings, and (iii) no Default or
Event of Default has occurred and is continuing, and (iv) the conditions
precedent set forth in Sections 3.25 and 3.26 shall have been satisfied. Within
the foregoing limitations, Borrowers may borrow, repay and reborrow under the
Swingline Facility. Each Swingline Advance shall be in an integral multiple of
One Hundred Thousand Dollars ($100,000.00). Promptly after receipt of each
request for a Swingline Advance, Swingline Lender shall obtain telephonic
verification from Agent Bank that, giving effect to such request, the amount of
such request does not exceed the then Available Borrowings (such verification to
be promptly confirmed in writing). Unless notified to the contrary by the
Swingline Lender, each repayment of a Swingline Advance shall be in an amount
which is an integral multiple of One Hundred Thousand Dollars ($100,000.00),
together with the accrued interest thereon. The Swingline Lender shall promptly
notify the Agent Bank of the Swingline Outstandings each time there is a change
therein.
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c. Each Swingline Advance shall bear interest at the Base Rate
plus the Applicable Margin and shall be payable at the times and in the manner
set forth below and, in any event, on or before ten (10) days prior to the
Maturity Date. Unless otherwise paid, interest accrued on the unpaid balance of
Swingline Outstandings shall be paid monthly on or before the fifth (5th) day
following receipt by Borrowers of an invoice from Swingline Lender setting forth
the amount of such accrued interest. In the event any Swingline Advance is
outstanding for thirty (30) consecutive Banking Business Days, then on the next
Banking Business Day (unless Borrowers have made other arrangements acceptable
to the Swingline Lender to pay the Swingline Outstanding in full or to continue
such Swingline Outstanding), Borrowers shall request a Borrowing under the
Credit Facility in an amount sufficient to pay the applicable Swingline Advance
in full, together with all interest accrued thereon. Upon receipt of the amount
of the Borrowing from the Lenders, the Agent Bank shall provide such amount to
the Swingline Lender for repayment of the applicable Swingline Advance and the
balance of the Borrowing, if any, shall be deposited in immediately available
funds to the Designated Deposit Account. In the event Borrowers fail to request
a Borrowing within the period specified above, Agent Bank shall, without notice
to the Borrowers and without regard to any other conditions precedent for the
making of Borrowings under the Credit Facility, including, without limitation
the remedies set forth in Section 7.02, promptly (but subject to the notice
periods for Borrowings set forth in Section 2.03) cause a Borrowing to be made
and funded by the Lenders under the Credit Facility in the amount necessary to
pay the applicable Swingline Advance in full, together with all interest accrued
thereon, to the extent of Available Borrowings, and the Borrowers shall be
deemed to have requested such Borrowing and consented to its being made as
provided for herein.
d. Each Lender's obligation to advance Borrowings in the
proportionate amount of its Syndication Interest in the Credit Facility of any
unreimbursed Swingline Outstandings pursuant hereto is several, and not joint or
joint and several. The failure of any Lender to perform its obligation to
advance a Borrowing in a proportionate amount of such Lender's Syndication
Interest of any unreimbursed Swingline Outstandings shall neither relieve any
other Lender of its obligation hereunder to advance such Borrowing in the amount
of such other Lender's proportionate Syndication Interest of such amount, nor
relieve the Lender which has
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failed to fund its obligations to Borrowers hereunder. The Borrowers agree to
accept the Borrowings for payment of Swingline Outstandings as provided
hereinabove, whether or not such Borrowings could have been made pursuant to the
terms of Article III B or any other section of this Credit Agreement.
Section 2.09. Issuance of Letters of Credit.
a. Any Authorized Representative of Borrowers may from time to
time request that a Standby Letter of Credit or Commercial Letter of Credit be
issued by delivering to L/C Issuer (with a telecopy to the Agent Bank) on a
Banking Business Day, at least five (5) Banking Business Days prior to the date
of such proposed issuance, an L/C Agreement in L/C Issuer's then standard form,
completed to the satisfaction of L/C Issuer and such other certificates as the
L/C Issuer may reasonably request; provided, however, that no Letter of Credit
shall be issued (a) if any Default or Event of Default has occurred and remains
continuing, or (b) if after giving effect to the issuance thereof, the aggregate
Stated Amount of outstanding Letters of Credit would exceed Ten Million Dollars
($10,000,000.00), or (c) the Stated Amount of the requested Letter of Credit
exceeds the Maximum Availability. Each Letter of Credit shall be issued by the
L/C Issuer on the Banking Business Day specified in the Borrowers' application
therefor. Each request for a Letter of Credit and each Letter of Credit shall be
subject to the Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce Publication New 1994 Revision No. 500, or any
successor publication then in effect. Each Letter of Credit will be issued for a
term not greater than one (1) year (and may include any provision for automatic
renewal, subject to the payment of any applicable L/C Fee for such renewal
period); provided, however, in no event shall any Letter of Credit have a Stated
Expiry Date later than thirty (30) days prior to the Maturity Date. Promptly
after receipt of each request for the issuance of a Letter of Credit and
immediately prior to the issuance thereof, L/C Issuer shall obtain telephonic
verification from Agent Bank that the amount of such request does not exceed the
then Available Borrowings. The L/C Issuer shall promptly notify the Agent Bank
of the aggregate L/C Exposure of outstanding Letters of Credit each time there
is a change therein.
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b. Upon presentation of a draft drawn under any Letter of
Credit, L/C Issuer shall promptly notify the Agent Bank and Borrowers of the
amount under such draft and the date upon which such draft is to be funded. On
or before two (2) Banking Business Days following such notice (unless Borrowers
have made other arrangements acceptable to the L/C Issuer to pay the amount of
such draft in full), Borrowers shall request a Borrowing under the Credit
Facility in an amount sufficient to pay the amount of such draft in full. The
Agent Bank, upon receipt of such funds from the Lenders, shall automatically
provide such amount to the L/C Issuer for payment of the amount of such draft
and the balance of the Borrowing shall be deposited in immediately available
funds to the Designated Deposit Account. In the event Borrowers fail to request
a Borrowing within two (2) Banking Business Days from receipt of the notice as
specified above, on the third (3rd) Banking Business Day following Agent Bank's
receipt of such notice, Agent Bank shall, without notice to or consent of the
Borrowers and without regard to any other conditions precedent for the making of
Borrowings under the Credit Facility, including, without limitation, the
remedies set forth in Section 7.02, cause a Borrowing to be made and funded by
the Lenders under the Credit Facility in the amount necessary to pay the amount
of such draft in full. Upon the occurrence of any Event of Default, L/C Issuer
shall, without notice or further authorization or consent of Borrowers
whatsoever, be authorized to immediately cause the Cash Collateral Account to be
established and funded by Lenders with a Borrowing advanced to Agent Bank equal
to the aggregate amount of the L/C Exposure then outstanding. All amounts held
by L/C Issuer in the Cash Collateral Account shall be held as security for the
repayment of any L/C Reimbursement Obligation thereafter arising pursuant to the
terms of the L/C Agreement(s) and the Cash Collateral Pledge Agreement.
Borrowings advanced by Lenders to pay drafts drawn upon or to secure repayment
of the L/C Exposure under Letters of Credit pursuant to this subsection shall:
(i) constitute Borrowings under the Credit Facility, (ii) initially be Base Rate
Loans and (iii) be subject to all of the provisions of this Credit Agreement
concerning Borrowings under the Credit Facility, except that such Borrowings
shall be made upon demand of the Agent Bank as set forth above rather than upon
Notice of Borrowing by Borrowers and shall be made, notwithstanding anything in
this Credit Agreement to the contrary, without regard to any other conditions
precedent to the making of Borrowings under the Credit Facility and
notwithstanding any Default or Event of Default thereunder. All amounts paid by
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L/C Issuer on a draft drawn under any Letter of Credit which has not been funded
or concurrently reimbursed by Borrowers or through a Borrowing as provided
hereinabove, shall bear interest at the Base Rate plus the Applicable Margin per
annum until repaid or reimbursed to L/C Issuer.
c. Each Lender's obligation to advance Borrowings in the
proportionate amount of its Syndication Interest in the Credit Facility of any
unreimbursed amounts outstanding under any Letter of Credit pursuant hereto is
several, and not joint or joint and several. The failure of any Lender to
perform its obligation to advance a Borrowing in a proportionate amount of such
Lender's Syndication Interest of any unreimbursed amounts outstanding under a
Letter of Credit will not relieve any other Lender of its obligation hereunder
to advance such Borrowing in the amount of such other Lender's proportionate
Syndication Interest of such amount, nor relieve the Lender which has failed to
fund of its obligation to fund hereunder. The Borrowers agree to accept the
Borrowings for payment of Letters of Credit as provided hereinabove, whether or
not such Borrowings could have been made pursuant to the terms of Article III B
or any other section of this Credit Agreement.
d. Letters of Credit shall be used and issued for the benefit
of Borrowers for the general corporate purposes of Borrowers, or any of them,
relating to the Hotel/Casino Facilities or any Restricted Subsidiary Venture.
Section 2.10. Fees.
a. On the Closing Date and on each other applicable date,
Borrowers shall pay the fees as required in the Fee Side Letter, each of such
fees to be retained by Agent Bank or distributed to Lenders as agreed between
Agent Bank and each Lender.
b. Borrowers shall pay a quarterly nonusage fee (the
"Commitment Fee") to the Agent Bank for the account of Lenders based on the
Leverage Ratio, calculated as of each Fiscal Quarter end with reference to the
Borrower Consolidation, to determine applicable Commitment Percentage determined
as set forth in Table Three of the definition of Applicable Margin.
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The Commitment Fee shall be calculated as the product of (i) the applicable
Commitment Percentage multiplied by (ii) the daily average of the Maximum
Permitted Balance less the daily average of the Funded Outstandings and less the
daily average of the amount of L/C Exposure attributable to all outstanding
Letters of Credit, computed on the basis of a three hundred sixty (360) day year
based on the number of actual days elapsed. Each Commitment Fee shall be payable
in arrears on a quarterly basis on or before the first (1st) day of the third
(3rd) month following each applicable Fiscal Quarter end and upon Bank Facility
Termination, whether at maturity, by acceleration or otherwise. Each Commitment
Fee shall be promptly distributed by Agent Bank to Lenders in proportion to
their respective Syndication Interests in the Credit Facility.
c. Concurrently with the issuance of each Standby Letter of
Credit, Borrowers shall pay a standby letter of credit issuance fee to the L/C
Issuer ("Standby L/C Fee") in an amount equal to the Stated Amount of each such
Standby Letter of Credit multiplied by a percentage equal to the then applicable
LIBO Rate Margin (as set forth in the definition of Applicable Margin) plus
one-quarter of one percent (0.25%), calculated on a per annum basis for the
number of days elapsing from the issuance date to the Stated Expiry Date of each
such Standby Letter of Credit. From each Standby L/C Fee, one-quarter of one
percent (0.25%) of the Stated Amount of each such Standby Letter of Credit,
calculated on a per annum basis as provided hereinabove, shall be retained by
Standby L/C Issuer for its own account and the balance of each L/C Fee shall be
promptly distributed by Agent Bank to Lenders in proportion to their respective
Syndication Interests in the Credit Facility. All Standby L/C Fees paid by
Borrowers are nonrefundable and shall be deemed fully earned upon issuance of
the applicable Standby Letter of Credit.
d. Concurrently with the issuance of each Commercial Letter of
Credit, Borrowers shall pay a commercial letter of credit issuance fee to the
L/C Issuer ("Commercial L/C Fee") in an amount equal to the Stated Amount of
each such Commercial Letter of Credit multiplied by one-quarter of one percent
(0.25%). Each Commercial L/C Fee shall be retained by L/C Issuer for its own
account. All Commercial L/C Fees paid by Borrowers are nonrefundable and shall
be deemed fully earned upon issuance of the applicable Commercial Letter of
Credit.
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Section 2.11. Interest on Overdue Amounts and Default Rate.
a. If any payment due under the Revolving Credit Note is not
paid within one (1) Banking Business Day after receipt by Borrowers of written
notice of such nonpayment from Agent Bank, Borrowers promise to pay a late
charge in the amount of three percent (3%) of the amount of such delinquent
payment and Agent Bank need not accept any late payment made unless it is
accompanied by such three percent (3%) late payment charge. Any late charge
shall be paid to Lenders in proportion to their respective Syndication
Interests.
b. In the event of the existence of an Event of Default,
commencing on the first (1st) Banking Business Day following the receipt by
Borrowers of written notice of the occurrence of such Event of Default from
Agent Bank, the total of the unpaid balance of the principal and the then
accrued and unpaid interest owing under the Credit Facility shall collectively
commence accruing interest at a rate equal to five percent (5%) over the Prime
Rate (the "Default Rate") until such time as all payments and additional
interest are paid, together with the curing of any Events of Default which may
exist, at which time the interest rate shall revert to that rate of interest
otherwise accruing pursuant to the terms of the Revolving Credit Note.
c. In the event of the occurrence of an Event of Default,
Borrowers agree to pay all reasonable costs of collection, including a
reasonable attorneys' fees and costs, in addition to and at the time of the
payment of such sum of money and/or the performance of such acts as may be
required to cure such default. In the event legal action is commenced for the
collection of any sums owing hereunder or under the terms of the Notes the
Borrowers agree that any judgment issued as a consequence of such action against
Borrowers and/or any Subsidiary Guarantor shall bear interest at a rate equal to
the Default Rate until fully paid.
Section 2.12. Net Payments. All payments under this Credit Agreement,
the Revolving Credit Note, the Swingline Note and/or a L/C Reimbursement
Obligation shall be made without set-off, counterclaim, recoupment or defense of
any kind and in such amounts as may be necessary in order
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that all such payments, after deduction or withholding for or on account of any
future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by the United States or any Governmental Authority, other than franchise
taxes or tax on or measured by the gross receipts or overall net income of any
Lender pursuant to the income tax laws of the United States or any State, or the
jurisdiction where each Lender's principal office is located (collectively
"Taxes"), shall not be less than the amounts otherwise specified to be paid
under this Credit Agreement and the Revolving Credit Note. A certificate as to
any additional amounts payable to the Lenders under this Section 2.12 submitted
to the Borrowers by the Lenders shall certify that such payments were actually
incurred by the applicable Lenders and shall show in reasonable detail an
accounting of the amount payable and the calculations used to determine in good
faith such amount and shall be conclusive absent manifest or demonstrable error.
Any amounts payable by the Borrowers under this Section 2.12 with respect to
past payments shall be due within ten (10) days following receipt by the
Borrowers of such certificate from the Lenders; any such amounts payable with
respect to future payments shall be due within ten (10) days after demand for
such future payments. With respect to each deduction or withholding for or on
account of any Taxes, the Borrowers shall promptly furnish to the Lenders such
certificates, receipts and other documents as may be required (in the reasonable
judgment of the Lenders) to establish any tax credit to which the Lenders may be
entitled.
Section 2.13. Increased Costs. If after the date hereof the adoption
of, or any change in, any applicable law, rule or regulation relating to LIBOR
Loans (including without limitation Regulation D of the Board of Governors of
the Federal Reserve System and any successor thereto), or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any future request or future directive
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency:
a. Shall subject any Lender to any tax, duty or other charge
with respect to the Credit Facility, the Revolving Credit Note, the Swingline
Note and/or a L/C Reimbursement Obligation or such Lender's obligation to make
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any funding of the Credit Facility, or shall change the basis of taxation of
payments to such Lender of the principal of, or interest on, the Credit Facility
or any other amounts due under the Revolving Credit Note, the Swingline Note
and/or a L/C Reimbursement Obligation in respect of the Credit Facility or such
Lender's obligation to fund the Credit Facility (except for changes in the rate
of tax on the overall net income of such Lender imposed by the United States or
any Governmental Authority pursuant to the income tax laws of the United States
or any State, or the jurisdiction where each Lender's principal office is
located); or
b. With respect to the Bank Facilities or the obligation of the
Lenders to advance Borrowings under the Credit Facility or to issue or
participate in Letters of Credit under the L/C Facility, shall impose, modify or
deem applicable any reserve imposed by the Board of Governors of the Federal
Reserve System, special deposit, capitalization, capital adequacy or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender; or
c. Shall impose on any Lender any other condition affecting the
Credit Facility, the Revolving Credit Note or such Lender's obligation to
advance Borrowings under the Credit Facility;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D or reserve requirements referred to above or a successor
thereto, to impose a cost on) such Lender of making or maintaining the Credit
Facility, or to reduce the amount of any sum received or receivable by such
Lender under the Revolving Credit Note, in each case in a manner not otherwise
given effect on the calculation of amounts payable by Borrowers hereunder, then
within ten (10) days after demand by such Lender (which demand shall be
accompanied by a certificate setting forth the basis of such demand), the
Borrowers shall pay directly to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost (or in the case of
Regulation D or reserve requirements referred to above or a successor thereto,
such costs which may be imposed upon such Lender) or such reduction of any sum
received or receivable under the Revolving Credit Note. A certificate as to any
additional amounts payable to any Lender under this Section 2.13 submitted to
the Borrowers by such Lender shall
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certify that such amounts were actually incurred by such Lender and shall show
in reasonable detail an accounting of the amount payable and the calculations
used to determine in good faith such amount and shall be conclusive absent
manifest or demonstrable error. Each Lender agrees to use its reasonable efforts
not materially disadvantageous to it (in its reasonable determination) to
minimize such increased or imposed costs or such reduction.
Section 2.14. Mitigation; Exculpation; Replacement Lender. Each Lender
agrees that it will promptly notify the Borrowers in writing upon its becoming
aware that any payments are to become due to it under this Credit Agreement
pursuant to Section 2.12 or 2.13. Each Lender further agrees that it will use
reasonable efforts not materially disadvantageous to it (in its reasonable
determination) in order to avoid or minimize, as the case may be, the payment by
the Borrowers of any additional amounts pursuant to Section 2.12 or 2.13. Each
Lender represents, to the best of its knowledge, that as of the Closing Date no
such amounts are payable to it.
ARTICLE III
CONDITIONS PRECEDENT TO THE CLOSING DATE
A. Closing Conditions. The obligation of each of the Banks hereunder is
subject to the following conditions precedent, each of which shall be satisfied
prior to July 31, 1999 (unless all of the Banks, in their sole and absolute
discretion, shall agree otherwise). The occurrence of the Closing Date is
subject to and contingent upon Agent Bank having received, in each case in form
and substance reasonably satisfactory to Agent Bank, or in the case of an
occurrence, action or event, the occurrence of, each of the following:
Section 3.01. Credit Agreement. Executed counterparts of this Credit
Agreement in sufficient duplicate originals for each of the Banks.
Section 3.02. The Notes.
a. The Revolving Credit Note duly executed by the Borrowers in
favor of Agent Bank.
b. The Swingline Note duly executed by the Borrowers in favor
of Swingline Lender.
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Section 3.03. Security Documentation. On or before the Closing Date,
the Security Documentation described below, duly executed by each applicable
Borrower or other party thereto, shall be delivered to Agent Bank:
a. Lodge Deed of Trust;
b. Lodge Financing Statements;
c. Lodge Assignment of Spaceleases, Contracts, Rents and
Revenues;
d. Lodge Assignment of Permits, Licenses and Contracts;
e. Cash Collateral Pledge Agreement;
f. Subsidiary Guaranty, if applicable;
g. Trademark Security Agreement;
h. Gilpin Deed of Trust;
i. Gilpin Financing Statements;
j. Gilpin Assignment of Permits, Licenses and Contracts;
k. Gilpin Assignment of Spaceleases, Contracts, Rents and
Revenues; and
l. Assignment of Parking Garage Lease.
Section 3.04. Other Loan Documents. The following Loan Documents duly
executed by each applicable Borrower and any other applicable party thereto,
consisting of the following shall be delivered or caused to be delivered to
Agent Bank on or before the Closing Date:
a. Environmental Certificate; and
b. Parking Garage Lease Subordination Agreement;
c. Gilpin Lease Subordination;
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d. Management Subordination Agreement.
Section 3.05. Organizational Documentation, Authorized Representatives
and Closing Certificate.
a. Agent Bank shall have received from the BHJE: (i) a
Certificate of Good Standing issued by the Secretary of State of the State of
Colorado and dated within thirty (30) calendar days of the Closing Date and
telephonically confirmed as of the Closing Date, (ii) a copy of the Articles of
Organization and Operating Agreement certified as of the Closing Date to be
true, correct and complete by the Managers of BHJE, and (iii) an original
Consent of Managers executed by each of the managers of BHJE authorizing BHJE to
enter into all documents and agreements to be executed by it pursuant to this
Credit Agreement and further authorizing and empowering the officer or manager
who will execute such documents and agreements with the authority and power to
execute such documents and agreements on behalf of BHJE.
b. Agent Bank shall have received from each of BHGD and GVI:
(i) a Certificate of Good Standing issued by the Secretary of State of the State
of Colorado and each dated within thirty (30) calendar days of the Closing Date
and telephonically confirmed as of the Closing Date, (ii) a copy of the
respective articles of incorporation and by-laws of each of BHGD and GVI and a
copy of the joint venture agreement of GHVP, together with all amendments and
addendum thereto, including, without limitation, written addendum or other
documentation specifying that GHVP is intended to be governed by the Colorado
Uniform Partnership Act, in each case certified as of the Closing Date to be
true, correct and complete by the respective Secretaries of each of BHGD and
GVI, (iii) an original Certificate of Corporate Resolution and Certificate of
Incumbency executed by the Secretary of each of BHGD and GVI and attested to by
its respective President, Vice President, or Treasurer authorizing each on
behalf of itself and on behalf of GHVP to enter into all documents and
agreements to be executed by it pursuant to this Credit Agreement and further
authorizing and empowering the officer or officers who will execute such
documents and agreements with the authority and power to execute such documents
and agreements on behalf of each respective corporation and on behalf of GHVP.
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c. Designation by member certificate of BHJE, by corporate
resolution of each of BHGD and GVI and by partnership resolution of GHVP, an
original certificate ("Authorized Representative Certificate"), substantially in
the form of the Authorized Representative Certificate marked "Exhibit H",
affixed hereto and by this reference incorporated herein and made a part hereof,
of the officers of BHGD and GVI who are authorized to give Notices of Borrowing,
Compliance Certificates, Pricing Certificate, Continuation/Conversion Notices,
and all other notices, requests, reports, consents, certifications and
authorizations on behalf of the Borrowers and the Borrower Consolidation (each
individually an "Authorized Representative" and collectively the "Authorized
Representatives").
d. An original closing certificate ("Closing Certificate"),
substantially in the form of the Closing Certificate marked "Exhibit I", affixed
hereto and by this reference incorporated herein and made a part hereof, duly
executed by each of the Borrowers.
Section 3.06. Opinion of Counsel. The opinion of counsel to the
Borrowers, dated as of the Closing Date and addressed to the Agent Bank and each
of the Banks, together with their respective successors and assigns,
substantially in the form of the legal opinion marked "Exhibit J", affixed
hereto and by this reference incorporated herein and made a part hereof.
Section 3.07. Title Insurance Policy. The Title Insurance Policy (or
proforma commitment for the issuance thereof) together with such endorsements
and re-insurance requirements as are set forth in the Closing Instructions.
Section 3.08. Survey. If required by the Title Company as a condition
for the issuance of the Title Policy, current ALTA survey for the Collateral
Properties subject to exceptions approved by Agent Bank prior to the Closing
Date, which must (i) be certified to Agent Bank and the Title Company, (ii) show
the Collateral Properties to be free of encroachments, overlaps, and other
survey defects, (iii) show the courses and distances of the boundary lines for
the Collateral Properties, (iv) show that all existing or to be constructed
improvements are located within said boundary lines, and (v) show the location
of all above and below ground easements, improvements, appurtenances, utilities,
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rights-of-way, water rights, if any, and ingress and egress, by reference to
book and page numbers and/or filed map reference. On or before the Closing Date,
Borrowers shall comply with all other survey requirements of Title Company for
the issuance of the Title Insurance Policy.
Section 3.09. Payment of Taxes. Evidence satisfactory to Agent Bank
that all past and current real and personal property taxes and assessments which
are presently due and payable applicable to the Collateral Properties and
Hotel/Casino Facilities have been paid in full.
Section 3.10. Insurance. Copies of the declaration pages of each of
the insurance policies certified to be true and correct by an Authorized
Representative of the Borrowers, together with original binders evidencing
Borrowers as named insured, and original certificates of insurance, loss payable
and mortgagee endorsements naming Agent Bank as mortgagee, loss payee and
additional insured, as required by the applicable insurance provisions set forth
in Section 5.09 of this Credit Agreement.
Section 3.11. Payment of Fee. Payment by Borrowers to Agent Bank of
the fees as provided in Section 2.10(a) hereinabove.
Section 3.12. Reimbursement for Expenses and Fees. Reimbursement by
Borrowers for all reasonable fees and out-of- pocket expenses incurred by Agent
Bank in connection with the Credit Facility, including, but not limited to,
escrow charges, title insurance premiums, environmental examinations, recording
fees, reasonable attorney's fees of Henderson & Morgan, LLC and co-counsel and
insurance consultants retained by Henderson & Morgan, LLC and all other like
fees and expenses remaining unpaid as of the Closing Date to the extent then due
and payable on the Closing Date, provided that the amount then invoiced shall
not thereafter preclude Borrowers' obligation to pay such costs and expenses
relating to the closing of the Credit Facility following the Closing Date or to
reimburse Agent Bank for the payment thereof.
Section 3.13. Schedules of Spaceleases and Equipment Leases and
Contracts. The Schedules of Spaceleases (Schedules 4.15(A) and B) and Equipment
Leases and Contracts (Schedule 4.16(A) and B) in each instance setting forth the
name of the other party thereto, a brief description of each
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spacelease, equipment lease and contract and the commencement and ending date
thereof.
Section 3.14. Environmental Reports.
a. A copy of all environmental reports, investigations,
violations and remedial action regarding the Hotel/Casino Facilities.
b. Borrowers hereby confirm the representations contained in
Sections 2.1 and 2.2 of the Environmental Certificate are true and correct in
all respects with respect to the Hotel/Casino Facilities.
Section 3.15 Gilpin Land Lease, Parking Garage Lease and Prime
Financing Documents. A true and correct copy of the Gilpin Land Lease, Parking
Garage Lease and Prime Financing Documents and of all amendments and
modifications thereto.
Section 3.16. Management Agreement. A true and correct copy of the
Management Agreement and of all amendments and modifications thereto.
Section 3.17. Payment in Full of Existing BHGD Loan and Existing BHJE
Loan.
a. Payment in full of all Existing BHGD Loan and the full and
complete release and reconveyance of all Existing BHGD Loan Security Documents.
b. Payment in full of all Existing BHJE Loan and the full and
complete release and termination of all Existing BHJE Loan Security Documents.
Section 3.18. Bond Documents. On or before the Closing Date, a true
and correct copy of the Official Bond Statement and the Special Assessment
Bonds, together with all amendments and modifications thereto and all other
documents and instruments relating to or evidencing the Deferred Assessment
Obligations.
Section 3.19. Subsidiary Stock. Original stock certificates of each
Restricted Subsidiary and Unrestricted Subsidiary shall be delivered to Agent
Bank on behalf of Lenders.
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Section 3.20. Schedule of all Significant Litigation. A Schedule of
Significant Litigation (Schedule 3.20) involving any member of the Borrower
Consolidation, in each instance setting forth the names of the other parties
thereto, a brief description of such litigation, whether or not such litigation
is covered by insurance and, if so, whether the defense thereof and liability
therefor has been accepted by the applicable insurance company indicating
whether such acceptance of such defenses with or without a reservation of
rights, the commencement date of such litigation and the amount sought to be
recovered by the adverse parties thereto or the amount which is otherwise in
controversy.
Section 3.21. Financial Statements. Audited financial statements of
the Borrower Consolidation on a consolidated and consolidating basis, for the
last Fiscal Year for which such financial statements are available, together
with a statement from the Controller or Treasurer, as applicable, of BHJE and
BHGD to the effect that no Material Adverse Change has occurred with respect to
the Borrowers since the date of the financial statements most recently given to
Agent Bank.
Section 3.22. No Injunction or Other Litigation. No law or regulation
shall prohibit, and no order, judgment or decree of any Governmental Authority
shall, and no litigation shall be pending or threatened which in the reasonable
judgment of the Agent Bank would or would reasonably be expected to, enjoin,
prohibit, limit or restrain the execution and delivery of this Credit Agreement
or the making of the Base Rate Loans or the LIBOR Loans or the performance by
the Borrowers of any other material obligations in respect thereof or the
ability of the Borrowers to conduct their business substantially as presently
conducted.
Section 3.23. Additional Documents and Statements. Such additional
documents, affidavits, certificates and opinions as Lenders may reasonably
require to insure compliance with this Credit Agreement. The statements set
forth in Section 3.25 shall be true and correct.
B. Conditions Precedent to all Borrowings. The obligation of each
Lender and Agent Bank to make any Borrowing requested to be made on any Funding
Date, except
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Borrowings made upon the demand of Agent Bank for the purpose of funding
repayment of Swingline Outstandings and/or L/C Reimbursement Obligations, is
subject to the occurrence of each of the following conditions precedent as of
such Funding Date:
Section 3.24. Notice of Borrowing. With respect to any Borrowing, the
Agent Bank shall have received in accordance with Section 2.03 on or before such
Funding Date an original and duly executed Notice of Borrowing or facsimile copy
thereof, to be promptly followed by an original.
Section 3.25. Certain Statements. On each such Funding Date and as of
the Closing Date the following statements shall be true and correct:
a. The representations and warranties made by the Borrowers
contained in Article IV hereof or in any of the Loan Documents (other than
representations and warranties which expressly speak only as of a different date
which shall be true and correct as of such date) are true and correct on and as
of the Funding Date and as of the Closing Date in all material respects as
though made on and as of that date, except to the extent that such
representations and warranties are not true and correct as a result of a change
which is permitted by this Credit Agreement or by any other Loan Document, or
which is otherwise consented to by Agent Bank upon the approval of Requisite
Lenders;
b. Since the date of the most recent financial statements
referred to in Sections 3.21 and 5.08, no Material Adverse Change shall have
occurred; and
c. No event or condition has occurred or as a result of any
Borrowings contemplated hereby would occur and is continuing, or would result
from the making thereof, which constitutes a Default or Event of Default
hereunder.
Section 3.26. Gaming Permits. The Borrower Consolidation shall have
all Gaming Permits material to or required for the conduct of its gaming
businesses and the conduct of games of chance at the Hotel/Casino Facilities and
such Gaming Permits shall not then be suspended, enjoined or prohibited (for any
length of time) by any Gaming Authority or any other Governmental Authority.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Banks to enter into this Credit Agreement, Borrowers make
the following representations and warranties:
Section 4.01. Organization; Power and Author- ization.
a. BHJE is a limited liability company duly formed, validly
existing and in good standing under the Laws of the State of Colorado. BHJE is
duly qualified to transact business, and is in good standing, in the State of
Colorado and each other jurisdiction in which the conduct of its business or the
ownership or leasing of its properties and assets makes such qualification or
registration necessary, except where the failure so to qualify or register and
to be in good standing would not constitute a Material Adverse Change. BHJE has
all requisite power and authority to conduct its business, to own and lease its
properties and assets and to execute and deliver each Loan Document to which it
is a Party and to perform the obligations to be performed by it as set forth in
the Credit Agreement and each of such Loan Documents. The chief executive
offices of BHJE are located at the address set forth for notices in the
signature pages to this Agreement. All outstanding membership shares of BHJE are
duly authorized, validly issued, fully paid and issued in compliance with all
necessary Gaming Laws and other applicable Laws. Schedule 4.01(a) accurately
describes the Persons owning membership interests in BHJE, and the nature and
extent of the interests held by each such Person, and there are not other
holders of equity interests in BHJE. Except as set forth on Schedule 4.01(a), no
Person holds any option, warrant or other right to acquire any equity interests
in BHJE.
b. BHGD and GVI are each a corporation duly organized and
validly existing under the laws of the State of Colorado. As of the Closing
Date, GVI is a wholly owned Subsidiary of BHGD and GHVP is a joint venture
partnership organized and validly existing under the laws of the State of
Colorado and is governed by the Colorado Uniform Partnership Act, whose joint
venture partners are BHGD and GVI. Each of BHGD, GVI and GHVP (i) has all
requisite
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corporate or partnership, as applicable, power, authority and legal right to
execute and deliver each document, agreement or certificate to which it is a
party or by which it is bound in connection with the Credit Facility, to
consummate the transactions and perform its obligations hereunder and
thereunder, and to own its properties and assets and to carry on and conduct its
business as presently conducted or proposed to be conducted, and (ii) has taken
all necessary corporate or partnership, as applicable, action to authorize the
execution, delivery and performance of this Credit Agreement and the other Loan
Documents to which it is a party or by which it is bound and to consummate the
transactions contemplated hereunder and thereunder.
c. Each Restricted Subsidiary: (i) is a corporation duly
formed, validly existing and in good standing under the laws of its jurisdiction
of organization, is duly qualified to do business as a foreign organization and
is in good standing as such in each jurisdiction in which the conduct of its
business or the ownership or leasing of its properties and assets makes such
qualification necessary where the failure to so qualify would have a Material
Adverse Change and has all requisite power and authority to conduct its business
and to own and lease its properties and assets, and (ii) has taken all necessary
action to authorize the execution, delivery and performance of the Subsidiary
Guaranty executed and delivered by it to Agent Bank as of the date of such
execution and delivery.
Section 4.02. Authority; Compliance with other Agreements and
Instruments and Government Regulations. The execution, delivery and performance
by the Borrower Consolidation of the Loan Documents and the execution of the
Loan Documents have been duly authorized by all necessary limited liability
company, corporate or partnership, as applicable, action and do not:
a. require any consent or approval not heretofore obtained of
any member, partner, co-venturer, director, stockholder, security holder or
creditor of such Party;
b. violate or conflict with any provision of such Party's
articles of organization or incorporation or bylaws, or joint venture agreement,
as applicable;
c. violate any requirement of Law, including any Gaming Law,
applicable to such Party;
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d. constitute a "transfer of an interest" or an "obligation
incurred" that is avoidable by a trustee under Section 548 of the Bankruptcy
Code of 1978, as amended, or constitute a "fraudulent conveyance," "fraudulent
obligation" or "fraudulent transfer" within the meanings of the Uniform
Fraudulent Conveyances Act or Uniform Fraudulent Transfer Act, as enacted in any
applicable jurisdiction; or
e. result in a breach of, or would, with the giving of notice
or the lapse of time or both, constitute a breach of or default under, or cause
or permit the acceleration of any obligation owed under, any indenture or loan
or credit agreement or any other Contractual Obligation to which such Party is a
party or by which such Party or any of its assets are bound or affected.
Section 4.03. Litigation. Except as disclosed on the Schedule of
Significant Litigation delivered in connection with Section 3.20, to the best
knowledge of Borrowers, after due inquiry and investigation, there is no action,
suit, proceeding, inquiry, hearing or investigation pending or threatened, in
any court of law or in equity, or before any Governmental Authority, which could
reasonably be expected to result in any Material Adverse Change. To the best
knowledge of Borrowers, after due inquiry and investigation, Borrowers are not
in violation of or default with respect to any material order, writ, injunction,
decree or demand of any such court or Governmental Authority.
Section 4.04. Agreements Legal, Binding, Valid and Enforceable. This
Credit Agreement, the Revolving Credit Note, the Swingline Note, the Security
Documentation and all other Loan Documents, when executed and delivered by
Borrowers in connection with the Bank Facilities will constitute legal, valid
and binding obligations of Borrowers, enforceable against Borrowers in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
relating to or affecting the enforcement of creditors' rights and the exercise
of judicial discretion in accordance with general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
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Section 4.05. Information and Financial Data Accurate; Financial
Statements; No Adverse Event. All information and financial and other data
previously furnished in writing by Borrowers in connection with the Bank
Facilities was true, correct and complete in all material respects as of the
date furnished (unless subsequently corrected prior to the date hereof), and
there has been no Material Adverse Change with respect thereto to the date of
this Credit Agreement since the dates thereof. No information has been omitted
which would make the information previously furnished in such financial
statements to Banks misleading or incorrect in any material respect to the date
of this Credit Agreement. Any and all financial statements heretofore furnished
to Banks by Borrowers: (a) present fairly the financial position of Borrowers as
of their respective dates and the results of operations and changes in financial
position for the periods to which they apply, and (b) have been prepared in
conformity with GAAP applied on a consistent basis throughout the periods
involved. Since the date of the financial statements referred to in this Section
4.05, there has been no Material Adverse Change in the financial condition,
assets, liabilities, business or operations of Borrowers.
Section 4.06. Governmental Approvals. All consents, approvals, orders
or authorizations of, or registrations, declarations, notices or filings with
any Governmental Authority which may be required in connection with the valid
execution and delivery of this Credit Agreement and the other Loan Documents by
Borrowers and the carrying-out or performance of any of the transactions
required or contemplated hereunder, or thereunder, by Borrowers, have been
obtained or accomplished and are in full force and effect, or can be obtained by
Borrowers. All consents, approvals, orders or authorizations of, or
registrations, declarations, notices or filings with any Governmental Authority
which are required by Borrowers in connection with the use and operation of the
Hotel/Casino Facilities have been obtained or accomplished and are in full force
and effect.
Section 4.07. Payment of Taxes. Borrowers, and each of them, have duly
filed or caused to be filed all federal, state and local tax reports and returns
which are required to be filed by them and have paid or made provisions for the
payment of, all material taxes, assessments, fees and other governmental charges
which have or may have become due pursuant to said returns or otherwise pursuant
to any
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assessment received by Borrowers except such taxes, assessments, fees or other
governmental charges, if any, as are being contested in good faith by Borrowers
by appropriate proceedings and for which Borrowers have maintained adequate
reserves for the payment thereof in accordance with GAAP.
Section 4.08. Title to Properties. As of the Closing Date and at all
times during the term of the Credit Facility: (i) BHJE shall have good and
marketable title to the BHJE Real Property, (ii) BHGD shall have good and
marketable title to the BHGD Real Property, (iii) BHGD shall be the owner and
holder of all outstanding shares of the common voting stock of GVI, except as
permitted in Section 6.11, (iv) GHVP shall have a leasehold interest in and to
the BHGD Real Property, pursuant to the Gilpin Land Lease, and (v) GHVP shall
have a lease of airspace and other necessary rights under the Parking Garage
Documents to own and operate the Parking Garage Leasehold. Borrowers have good
and marketable title to: (a) all of their respective properties and assets
reflected in the most recent financial statements referred to in Section 4.05
hereof as owned by them (except those properties and assets disposed of since
the date of said financial statements in the ordinary course of business or
those properties and assets which are no longer used or useful in the conduct of
its businesses), including, but not limited to, Borrowers' interest in patents,
trademarks, tradenames, servicemarks, and licenses relating to or pertaining to
the Hotel/Casino Facilities, and (b) all properties and assets acquired by them
subsequent to the date of the most recent financial statements referred to in
Section 4.05 hereof. All such properties and assets are not subject to any
liens, encumbrances or restrictions except Permitted Encumbrances. All roads,
easements and rights of way necessary for the full utilization of the Collateral
Properties have been completed and/or obtained.
Section 4.09. No Untrue Statements. All statements, representations
and warranties made by Borrowers in this Credit Agreement, any other Loan
Document and any other agreement, document, certificate or instrument previously
furnished or to be furnished by Borrowers to Banks pursuant to the provisions of
this Credit Agreement, at the time they were made and on and as of the Closing
Date: (a) are and shall be true, correct and complete in all material respects,
(b) do not and shall not contain any untrue statement of a material fact, and
(c) do not and shall not omit to state a material fact, the absence of which
makes the
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information contained herein or therein materially misleading or incomplete.
Borrowers understand that all such statements, representations and warranties
shall be deemed to have been relied upon by Banks as a material inducement to
establish the Bank Facilities.
Section 4.10. Brokerage Commissions. No person is entitled to receive
any brokerage commission, finder's fee or similar fee or payment in connection
with the extensions of credit contemplated by this Credit Agreement as a result
of any agreement entered into by Borrowers. No brokerage or other fee,
commission or compensation is to be paid by Banks with respect to the extensions
of credit contemplated hereby as a result of any agreement entered into by
Borrowers, and Borrowers agree to indemnify Banks against any such claims for
brokerage fees or commissions and to pay all expenses including, without
limitation, reasonable attorney's fees incurred by Banks in connection with the
defense of any action or proceeding brought to collect any such brokerage fees
or commissions.
Section 4.11. No Defaults. Except as set forth on Schedule 4.15, none
of the Borrowers is in violation of or in default with respect to any applicable
laws and/or regulations which materially and adversely affect the Hotel/Casino
Facilities or the business, financial condition, property of Borrowers or
operations of the Borrowers, or any of them, or of the Hotel/Casino Facilities.
Without limiting the generality of the foregoing, BHJE is not in violation or
default (nor is there any waiver in effect which, if not in effect, would result
in a violation or default) under the Bond Documents, and Borrowers are not in
violation or default (nor is there any waiver in effect which, if not in effect,
would result in a violation or default) in any material and adverse respect
under any indenture, evidence of indebtedness, loan or financing agreement or
other agreement or instrument of whatever nature to which they, or any of them,
is a party or by which they, or any of them, is bound (except for any defaults
previously brought to Banks' attention in writing, for which Borrowers have
received a waiver from Requisite Lenders).
Section 4.12. Employee Retirement Income Security Act of 1974. No
Reportable Event has occurred and is continuing with respect to any Pension Plan
under ERISA, that gives rise to liabilities that materially adversely affect the
financial condition or operations of Borrowers, or any of them.
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Section 4.13. Bond Documents. The copy of the Bond Documents and
modifications and amendments thereto (if any) which have been delivered to Agent
Bank in accordance with Section 3.18: (a) is a true, correct and complete copy
of the respective original thereof, as in effect on the Closing Date, and no
amendments or modifications have been made to such Bond Documents, except as set
forth by documents delivered to Agent Bank in accordance with said Section 3.18
or otherwise reasonably approved in writing by Requisite Lenders, and (b) have
not been terminated and are in full force and effect. BHJE is not in default in
the observance or performance of any of its material obligations under the Bond
Documents and has done all things required to be done as of the Closing Date to
keep unimpaired its rights thereunder.
Section 4.14. Availability of Utility Services and Facilities. All
utility services and facilities necessary for the Hotel/Casino Facilities
including, without limitation, electrical, water, gas and sewage services and
facilities are available and in use at the Hotel/Casino Facilities.
Section 4.15. Spaceleases. A schedule of all executed Spaceleases
pertaining to the Hotel/Casino Facilities or any portion thereof, in existence
as of the Closing Date hereof, are set forth on Schedules 4.15(A) and 4.15(B)
attached hereto.
Section 4.16. Equipment Leases and Contracts. A schedule of all
executed Equipment Leases and Contracts pertaining to the Hotel/Casino
Facilities or any portion thereof, in existence on the date hereof, is set forth
on Schedules 4.16(A) and 4.16(B) attached hereto.
Section 4.17. Policies of Insurance. As of the Closing Date, each of
the copies of the declaration pages, original binders and certificates of
insurance evidencing the Policies of Insurance relating to the Hotel/Casino
Facilities delivered to Agent Bank by Borrowers (i) is a true, correct and
complete copy of the respective original thereof as in effect on the date
hereof, and no amendments or modifications of any of said documents or
instruments not included in such copies have been made, and (ii) has not been
terminated and is in full force and effect. Borrowers, and each of them, are not
in default in the observance or performance of their
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respective obligations under said documents and instruments, and Borrowers, and
each of them, have done all things required to be done as of the date of this
Credit Agreement to keep unimpaired their rights thereunder.
Section 4.18. Gilpin Land Lease and Parking Garage Lease. The copies
of the Gilpin Land Lease, Parking Garage Lease and all modifications and
amendments thereto (if any) which have been delivered to Agent Bank in
accordance with Section 3.15: (a) is a true, correct and complete copy of the
respective original thereof, as in effect on the Closing Date, and no amendments
or modifications have been made to such Gilpin Land Lease or Parking Garage
Lease, except as set forth by documents delivered to Agent Bank in accordance
with said Section 3.15 or otherwise reasonably approved in writing by Requisite
Lenders, and (b) has not been terminated and is in full force and effect.
Neither BHGD nor GHVP is in default in the observance or performance of any of
their respective obligations under the Gilpin Land Lease and each has done all
things required to be done as of the Closing Date to keep unimpaired their
respective rights thereunder. Neither BHJE nor GHVP is in default in the
observance or performance of any of their respective obligations under the
Parking Garage Lease and each has done all things required to be done as of the
Closing Date to keep unimpaired their respective rights thereunder.
Section 4.19. Management Agreement. The copy of the Management
Agreement and all modifications and amendments thereto (if any) which have been
delivered to Agent Bank in accordance with Section 3.16 and as affixed hereto as
Exhibit R: (a) is a true, correct and complete copy of the respective original
thereof, as in effect on the Closing Date, and no amendments or modifications
have been made to the Management Agreement, except as set forth by the documents
delivered to Agent Bank in accordance with said Section 3.16 or otherwise
reasonably approved in writing by Requisite Lenders, and (b) has not been
terminated and is in full force and effect. BHJE is not in default in the
observance or performance of any of its obligations under the Management
Agreement and has done all things required to be done as of the Closing Date to
keep unimpaired its rights thereunder.
Section 4.20. Gaming Permits. All Gaming Permits required to be held
by Borrowers are current and in good standing and Borrowers presently hold all
Gaming Permits
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necessary for the continued operation of the Hotel/Casino Facilities.
Section 4.21. Environmental Certificate. As of the Closing Date, the
representations and certifications contained in the Environmental Certificate
are true and correct in all material respects.
Section 4.22. Subsidiaries. As of the Closing Date, no Borrower has
any Subsidiary which is not also a Borrower, other than the Restricted and
Unrestricted Subsidiaries of BHGD more particularly described on the Schedule of
Restricted and Unrestricted Subsidiaries, Schedule 4.22 attached hereto.
Section 4.23. Compliance with Statutes, etc. Except for matters
related to the compliance by the Borrowers with Hazardous Materials Laws, which
matters are governed by the Environmental Certificate and the Deeds of Trust,
each of the Borrowers is in compliance with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all Governmental
Authorities, domestic or foreign, in respect of the conduct of its business and
the ownership of its property, except such noncompliance as would not, in the
aggregate, have a Material Adverse Change.
Section 4.24. Investment Company Act. No Borrower is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
Section 4.25. Public Utility Holding Company Act. No Borrower is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 4.26. Labor Relations. There is no strike or work stoppage in
existence, or to the best knowledge of Borrowers threatened, involving any
member of the Borrower Consolidation or any of the Hotel/Casino Facilities.
Section 4.27. Patents, Licenses, Franchises and Formulas. Except as
disclosed in Schedule 4.27, Borrowers own all the patents, trademarks, permits,
service marks,
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trade names, copyrights, licenses, franchises and formulas, or has a valid
license or sublicense of rights with respect to the foregoing, and has obtained
assignments of all leases and other rights of whatever nature, necessary for the
present conduct of its business, without any known conflict with the rights of
others which, or the failure to obtain which, as the case may be, could
reasonably be expected to result in a Material Adverse Change on the business,
operations, property, assets or condition (financial or otherwise) of Borrowers
taken as a whole. Each of the patents, trademarks, servicemarks, tradenames and
copyrights owned by Borrowers which is registered with any Governmental
Authority is set forth on Schedule 4.27, attached hereto.
Section 4.28. Contingent Liabilities. As of the Closing Date, the
Borrower Consolidation has incurred no material Contingent Liabilities (any
Contingent Liability in excess of One Million Dollars ($1,000,000.00) being
deemed material) other than those described on Schedule 4.28.
Section 4.29. Prime Financing Obligations. The copies of the Prime
Financing Documents and all modifications and amendments thereto (if any) which
have been delivered to Agent Bank in accordance with Section 3.15: (a) is a
true, correct and complete copy of the respective original thereof, as in effect
on the Closing Date, and no amendments or modifications have been made to such
Prime Financing Documents, except as set forth by documents delivered to Agent
Bank in accordance with said Section 3.15 or otherwise reasonably approved in
writing by Requisite Lenders. GHVP is not in default in the observance or
performance of any of its obligations under the Prime Financing Documents.
ARTICLE V
GENERAL COVENANTS OF BORROWERS
To induce the Banks to enter into this Credit Agreement and establish
the Bank Facilities, Borrowers covenant to Lenders as follows:
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Section 5.01. FF&E. The Borrower Consolidation shall furnish, fixture
and equip the Hotel/Casino Facilities with FF&E it reasonably deems appropriate
for the operation of the Hotel/Casino Facilities. All FF&E that is purchased and
installed in the Hotel/Casino Facilities shall be purchased free and clear of
any liens, encumbrances or claims, other than Permitted Encumbrances. If
Borrowers should sell, transfer, convey or otherwise dispose of any FF&E and not
replace such FF&E with purchased items of equivalent value and utility or
replace said FF&E with leased FF&E of equivalent value and utility, within the
permissible leasing and purchase agreement limitation set forth herein, to the
extent such non- replaced FF&E exceeds a cumulative aggregate value of One
Million Dollars ($1,000,000.00) during any Fiscal Year, Borrowers shall be
required to immediately make a Voluntary Permanent Reduction in the amount of
the Capital Proceeds of the FF&E so disposed of in excess of such One Million
Dollars ($1,000,000.00), subject, however, to the right of Agent Bank to verify
to its reasonable satisfaction the amount of said Capital Proceeds; in the event
Agent Bank and Borrowers do not agree as to the value of the FF&E disposed of
and the amount of the Capital Proceeds, then Borrowers, at their sole cost and
expense, shall obtain a written appraisal of the FF&E disposed of, in excess of
such One Million Dollars ($1,000,000.00) from an appraiser reasonably
satisfactory to Agent Bank, setting forth said values and amounts, and Lenders
agree to accept the results of said appraisal. The Borrowers shall immediately
make a Voluntary Permanent Reduction in the amount of such appraisal.
Section 5.02. Permits; Licenses and Legal Requirements. Borrowers
shall comply in all material respects with and keep in full force and effect, as
and when required, all Gaming Permits and all material permits, licenses and
approvals obtained from any Governmental Authorities which are required for the
operation and use of the Hotel/Casino Facilities. Borrowers, and each of them,
shall comply in all material respects with all applicable material existing and
future laws, rules, regulations, orders, ordinances and requirements of all
Governmental Authorities, and with all recorded restrictions affecting the
Premises where the failure of such compliance could reasonably be expected to
result in a Material Adverse Change.
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Section 5.03. Bond Documents. Until Bank Facility Termination, BHJE
shall fully perform and comply with all agreements, covenants, terms and
conditions imposed upon, or assumed by, BHJE under the Bond Documents. BHJE
shall not amend or modify, or enter into any agreement to amend or modify the
Bond Documents without the prior written consent of Agent Bank, which consent
shall not be unreasonably withheld or delayed, or if in the opinion of Agent
Bank such amendment or modification is materially adverse to BHJE, without the
prior written consent of Requisite Lenders.
Section 5.04. Protection Against Lien Claims. Borrowers shall give
written notice to Agent Bank on or before ten (10) days of any Borrower's actual
knowledge thereof, of any lien claim filed against any Borrower or any portion
of the Collateral Properties. Borrowers shall promptly pay and discharge or
cause to be paid and discharged all claims and liens for labor done and
materials and services supplied and furnished in connection with the
Hotel/Casino Facilities in accordance with this Section 5.04, except such claims
and liens, if any, as: (a) are being contested in good faith by Borrowers by
appropriate proceedings and for which Borrowers have maintained adequate
reserves for the payment thereof in accordance with GAAP, and (b) are junior in
priority to the applicable Deed of Trust or the Title Company has insured the
applicable Deed of Trust with priority over such claims and liens. If any
mechanic's lien or materialman's lien shall be recorded, filed or suffered to
exist against the Collateral Properties or any interest therein by reason of
work, labor, services or materials supplied, furnished or claimed to have been
supplied and furnished in connection with the Hotel/Casino Facilities, upon
Borrowers receipt of written notice from Agent Bank demanding the release and
discharge of such lien, said lien or claim shall be paid, released and
discharged of record within sixty (60) days following its receipt of such notice
with respect to the Hotel/Casino Facilities.
Section 5.05. No Change in Character of Primary Business. Until Bank
Facility Termination, (i) the Hotel/Casino Facilities shall be operated by
members of the Borrower Consolidation, and (ii) the Borrower Consolidation shall
not effect a material change in the nature and character of its existing primary
business at the Hotel/Casino Facilities as presently conducted and as presently
contemplated and disclosed to Banks.
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Section 5.06. Preservation and Maintenance of Properties and Assets;
Acquisition of Additional Property. Until Bank Facility Termination, (a)
Borrowers shall operate, maintain and preserve all rights, privileges,
franchises, licenses, Gaming Permits and other properties and assets necessary
to conduct their businesses and the Hotel/Casino Facilities, the absence of
which would cause a Material Adverse Change, in accordance in all material
respects with all applicable governmental laws, ordinances, approvals, rules and
regulations and requirements, including, but not limited to, zoning, sanitary,
pollution, building, environmental and safety laws and ordinances, rules and
regulations promulgated thereunder, and (b) Borrowers shall not consolidate
with, remove, demolish, materially alter, discontinue the use of, sell,
transfer, assign, hypothecate or otherwise dispose of to any Person (other than
to another member of the Borrower Consolidation), any part of their properties
and assets necessary for the continuance of their business, as presently
conducted and as presently contemplated, other than in the normal course of
business or as otherwise permitted pursuant to this Credit Agreement.
Furthermore, in the event any member of the Borrower Consolidation, or any
Affiliate and/or Subsidiary thereof, shall acquire any other real property or
rights to the use of real property which is used in a material manner in
connection with the Hotel/Casino Facilities or any other portion of the
Collateral Properties, Borrowers shall concurrently with the acquisition of such
real property or the rights to the use of such real property, execute or cause
the execution of such documents as may be necessary to add such real property or
rights to the use of real property as Collateral under the Credit Facility.
Borrowers shall not remove, demolish, materially alter, discontinue the use of,
sell, transfer, assign, hypothecate or otherwise dispose of to any Person, any
part of their properties and assets necessary for the continuance of their
businesses, as presently conducted, other than in the normal course of
Borrowers' business and as provided in Sections 5.01 and 5.07.
Section 5.07. Repair of Properties and Assets. Until Bank Facility
Termination, Borrowers shall, at their own cost and expense, (i) maintain,
preserve and keep in a manner consistent with gaming casino operating practices
generally applicable to casino operations operating in the Gilpin County,
Colorado area, their respective assets and properties, including, but not
limited to, the Collateral and
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all FF&E owned or leased by Borrowers in good and substantial repair, working
order and condition, ordinary wear and tear excepted, (ii) from time to time,
make or cause to be made, all necessary and proper repairs, replacements,
renewals, improvements and betterments to the Hotel/Casino Facilities, and (iii)
from time to time, make such substitutions, additions, modifications and
improvements as may be necessary and as shall not materially impair the
structural integrity, operating efficiency and economic value of said assets
included within the Hotel/Casino Facilities. All alterations, replacements,
renewals, or additions made pursuant to this Section 5.07 shall become and
constitute a part of said assets and property and subject, inter alia, to the
provisions of Section 5.01 and subject to the lien of the Security
Documentation.
Section 5.08. Financial Statements; Reports; Certificates and Books
and Records.
a. Until Bank Facility Termination, Borrowers shall, unless the
Agent Bank (with the written approval of the Requisite Lenders) otherwise
consents, at Borrowers' sole expense, deliver to the Agent Bank and each of the
Lenders a full and complete copy of each of the following and shall comply with
each of the following financial requirements:
(i) As soon as practicable, and in any event within
thirty-five (35) days after the end of each calendar month, a monthly
income statement for each of the Hotel/Casino Facilities, together
with the consolidated balance sheet of the Borrower Consolidation as
at the end of such calendar month and a consolidated income statement,
statement of operations and a statement of cash flows for the calendar
month under review and reflecting year-to-date performance of the
Borrower Consolidation and a comparison of the financial performance
of the Borrower Consolidation to the prior year's operations. Such
consolidated financial statements shall be certified by an Authorized
Representative of Borrowers as fairly presenting the financial
condition, results of operations and cash flows of Borrowers in
accordance with GAAP, consistently applied, except as noted therein,
as at such date and for such periods, subject only to normal year-end
accruals and audit adjustments;
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(ii) As soon as practicable, and in any event within
forty-five (45) days after the end of each Fiscal Quarter (including
the fourth (4th) Fiscal Quarter in any Fiscal Year), the consolidated
and consolidating balance sheet and consolidated and consolidating
income statement, operating statement and statement of retained
earnings and cash flows (in each case reconciled with year end audited
statements and compared to budget and prior year period) of the
Borrower Consolidation as at the end of such Fiscal Quarter and for
the portion of the Fiscal Year ended with such Fiscal Quarter, all in
reasonable detail. Such financial statements shall be certified by an
Authorized Representative of the Borrower Consolidation as fairly
presenting the financial condition, results of operations and cash
flows of the Borrower Consolidation in accordance with GAAP (other
than footnote disclosures) as at such date and for such periods,
subject only to normal year-end accruals and audit adjustments;
(iii) As soon as practicable, and in any event within
forty-five (45) days after the end of each Fiscal Quarter (including
the fourth (4th) Fiscal Quarter in any Fiscal Year), a pricing
certificate in the form marked "Exhibit G", affixed hereto and by this
reference incorporated herein and made a part hereof (the "Pricing
Certificate") setting forth a preliminary calculation of the Leverage
Ratio as of the last day of such Fiscal Quarter, and providing
reasonable detail as to the calculation thereof, which calculations
shall be based on the preliminary unaudited financial statements of
the Borrower Consolidation for such Fiscal Quarter, and as soon as
practicable thereafter, in the event of any material variance in the
actual calculation of the Leverage Ratio from such preliminary
calculation, a revised Pricing Certificate setting forth the actual
calculation thereof; provided, however, that in the event that
Borrowers do not deliver a Pricing Certificate when due, then until
(but only until) such Pricing Certificate is delivered as provided
herein, the
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Leverage Ratio shall be deemed, for the purpose of determining the
Applicable Margin, to be equal to 3.00 to 1.0 and the Applicable
Margin determined with respect thereto.
(iv) As soon as practicable, and in any event within one
hundred twenty (120) days after the end of each Fiscal Year, (i) the
consolidated and consolidating balance sheet, income statement,
statement of retained earnings and cash flows (reconciled with year
end audited statements) of the Borrower Consolidation as at the end of
such Fiscal year, all in reasonable detail. Such financial statements
shall be prepared in accordance with GAAP and shall be accompanied by
a report of independent public accountants of recognized standing
selected by Borrowers and reasonably satisfactory to the Agent Bank
(it being understood that any "Big 6" accounting firm shall be
automatically deemed satisfactory to the Agent Bank), which report
shall be prepared in accordance with generally accepted auditing
standards as at such date, and shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any
other qualification or exception determined by the Requisite Lenders
in their good faith business judgment to be materially adverse to the
interests of the Banks. Such accountants' report shall be accompanied
by a certificate stating that, in making the examination pursuant to
generally accepted auditing standards necessary for the certification
of such financial statements and such report, such accountants have
obtained no knowledge of any Default or, if, in the opinion of such
accountants, any such Default shall exist, stating the nature and
status of such Default, and stating that such accountants have
reviewed the Financial Covenants as at the end of such Fiscal Year
(which shall accompany such certificate) under Sections 6.01 through
6.09, have read such Sections (including the definitions of all
defined terms used therein) and that nothing has come to the attention
of such accountants in the course of such examination that would cause
them to believe that the same were not calculated by the Borrower
Consolidation in the manner prescribed by this
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Credit Agreement. Such financial statements shall be certified by an
Authorized Representative of the Borrower Consolidation in the same
manner as required with respect to financial statements delivered
pursuant to Section 5.08(a)(ii);
(v) As soon as practicable, and in any event no later than
fifteen (15) days prior to the commencement of each Fiscal Year, a
budget (including a Capital Expenditure budget) and projection by
Fiscal Quarter for that Fiscal Year and by Fiscal Year for the next
occurring two (2) consecutive Fiscal Years, including for the first
such Fiscal Year, projected consolidated and consolidating balance
sheets, statements of operations and statements of cash flow of the
Borrower Consolidation, all in reasonable detail and in the same
format as filed with the Securities and Exchange Commission;
(vi) Concurrently with the financial statements and reports
required pursuant to Sections 5.08(a)(ii) and 5.08(a)(iv), Compliance
Certificate signed by an Authorized Representative;
(vii) As soon as practicable, and in any event within
forty-five (45) days (or, in the case of the fourth (4th) Fiscal
Quarter in each Fiscal Year, ninety (90) days) after the end of each
Fiscal Quarter, a written report, in form and detail reasonably
acceptable to the Agent Bank, with respect to the status of each New
Venture, including the amounts of New Venture Capital Expenditures and
New Venture Investments made, and reasonably anticipated to be made,
with respect thereto; and
(viii) Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication that shall have been sent to the stockholders of BHGD,
and copies of all annual, regular, periodic and special reports
(including, without limitation, each 10Q and 10K report) and
registration statements which BHGD shall have filed or be required to
file with the Securities
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and Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, and not otherwise required to be
delivered to the Banks pursuant to other provisions of this Section
5.08.
b. Until Bank Facility Termination, Borrowers, and each of
them, shall keep and maintain complete and accurate books and records in
accordance with GAAP, consistently applied. Borrowers, and each of them, shall
permit Banks and any authorized representatives of Banks to have reasonable
access to and to inspect, examine and make copies of the books and records, any
and all accounts, data and other documents of Borrowers at all reasonable times
upon the giving of reasonable notice of such intent. In addition: (i) in the
event of the occurrence of any Default or Event of Default, or (ii) in the event
any Material Adverse Change occurs, Borrowers shall promptly, and in any event
within five (5) Banking Business Days after actual knowledge thereof, notify
Agent Bank in writing of such occurrence.
c. Until Bank Facility Termination, Borrowers, and each of
them, shall furnish to Agent Bank, with sufficient copies for distribution to
each of the Banks, any financial information or other information bearing on the
financial status of the Borrowers, or any of them, which is reasonably requested
by Agent Bank or Requisite Lenders.
Section 5.09. Insurance. Until Bank Facility Termination, Borrowers
shall obtain, or cause to be obtained, and shall maintain or cause to be
maintained with respect to the Hotel/Casino Facilities and the Collateral
Properties at their own cost and expense, and shall deposit with Agent Bank on
or before the Closing Date:
a. Property Insurance. Borrowers shall maintain a special
causes of loss (ISO form or equivalent), perils policy covering the buildings
and improvements, and any other permanent structures for one hundred percent
(100%) of the replacement cost. Borrowers shall maintain no less than a Ten
Million Dollar ($10,000,000.00) limit of coverage for the perils of flood and
earthquake covering the Lodge Collateral and no less than a Two Million Five
Hundred Thousand Dollar ($2,500,000.00) limit of coverage for the perils of
flood and earthquake covering the Gilpin Collateral. Upon the request of Agent
Bank, replacement cost for insurance purposes will be established by an
independent
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appraiser mutually selected by Borrowers and Agent Bank. The policy will include
Agreed Amount (waiving co-insurance), replacement cost valuation and building
ordinance endorsements. The policy will include a standard mortgagee clause (ISO
form or equivalent, i.e. Borrowers' Acts will not impair Mortgagee's right to
recover, exclusive payment of loss to Mortgagee and automatic notice of
cancellation/non-renewal to Mortgagee) and provide that all losses in excess of
Five Hundred Thousand Dollars ($500,000.00) be adjusted with the Agent Bank. The
Borrowers waive any and all rights of subrogation against Banks resulting from
losses to property.
b. Personal Property (including machinery, equipment,
furniture, fixtures, stock). Borrowers shall maintain a special causes of loss
perils "All Risk" property coverage for all (one hundred percent (100%) of
values at replacement cost) personal property owned, leased or for which
Borrowers are legally liable. The coverage will include a lenders' loss payable
endorsement in favor of Agent Bank.
The policy providing real property and personal property
coverages, as specified in 5.09(a) and (b) hereinabove, may include a deductible
of no more than Fifty Thousand Dollars ($50,000.00) for any single occurrence.
Flood and earthquake deductibles can be no more than One Hundred Thousand
Dollars ($100,000.00), if a separate deductible applies.
c. Business Interruption/Extra Expense. Borrowers shall
maintain combined Business Interruption/Extra Expense coverage with a limit
representing no less than Seventy-Five percent (75.0%) of the projected annual
net profit plus continuing expenses (including debt service) for the
Hotel/Casino Facilities. Such coverage shall include an extensions for off
premises power losses at One Million Dollars ($1,000,000.00) and extended period
of indemnity of one hundred twenty (120) days endorsement. These coverages may
have deductible of no greater than twenty-four (24) hours, or Fifty Thousand
($50,000.00), if a separate deductible applies. This coverage will be
specifically endorsed to include Agent Bank as Loss Payee.
d. Boiler and Machinery. Borrowers shall maintain a Boiler and
Machinery policy for the Hotel/Casino Facilities written on a Comprehensive Form
with a combined direct and indirect limit of no less than Twenty Million Dollars
($20,000,000.00). The policy shall include
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extensions for Agreed Amount (waiving co-insurance) and Replacement Cost
Valuation. The policy may contain deductibles of no greater than Fifty Thousand
Dollars ($50,000.00) direct and forty-eight (48) hours indirect.
e. Crime Insurance. Borrowers shall obtain a comprehensive
crime policy, including the following coverages:
(i) employee dishonesty - One Million Dollars
($1,000,000.00);
(ii) money and securities (inside) - Five Hundred Thousand
Dollars ($500,000.00);
(iii) money and securities (outside) - Five Hundred Thousand
Dollars ($500,000.00);
(iv) depositor's forgery - Five Hundred Thousand Dollars
($500,000.00);
(v) computer fraud - Five Hundred Thousand Dollars
($500,000.00).
The policy must be amended so that money is defined to include
"tokens and chips". The policy may contain deductibles of no greater than One
Hundred Thousand Dollars ($100,000.00) for employee dishonesty and Twenty-Five
Thousand Dollars ($25,000.00) for all coverages listed above.
f. Commercial General Liability (1996 Form or Equivalent).
Borrowers shall maintain a Commercial General Liability policy with a One
Million Dollar ($1,000,000.00) combined single limit for bodily injury and
property damage, including Products Liability, Contractual Liability, and all
standard policy form extensions. The policy must provide a Two Million Dollar
($2,000,000.00) general aggregate (per location, if multi-location risk) and be
written on an "occurrence form". The policy will include extensions for Liquor
Legal Liability and Employee Benefits Legal Liability, Innkeepers Legal and Safe
Deposit Box Legal coverages. If the general liability policy contains a
self-insured retention, it shall be no greater than Ten Thousand Dollars
($10,000.00) per occurrence, with an aggregate retention of no more than Two
Hundred Fifty Thousand Dollars ($250,000.00) including expenses.
The policy shall be endorsed to include Agent Bank as an
additional insured on behalf of the Banks.
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Definition of additional insured shall include all officers, directors,
employees, agents and representatives of the additional insured. The coverage
for additional insured shall apply on a primary basis irrespective of any other
insurance whether collectible or not (ISO Endorsement Form CG 20261185
Additional Insured - Designated Person or Organization or Equivalent).
g. Automobile. Borrowers shall maintain a comprehensive
Automobile Liability Insurance Policy written under coverage "symbol 1",
providing a One Million Dollar ($1,000,000.00) combined single limit for bodily
injury and property damage covering all owned, non-owned and hired vehicles of
the Borrowers. If the policy contains a self insured retention it shall be no
greater than Ten Thousand Dollars ($10,000.00) per occurrence, with an aggregate
retention of no more than Two Hundred Fifty Thousand Dollars ($250,000.00)
including expenses. The following additional coverages must be purchased by
Borrowers:
(i) Garage Liability. A One Million Dollar ($1,000,000.00)
combined single limit for bodily and property damage for the garage
operation.
(ii) Garagekeepers Legal Liability. Five Hundred Thousand
Dollar ($500,000.00) limit for comprehensive and collision coverages
for physical damage to vehicles in the Borrowers' care, custody and
control. The policy can be subject to a deductible of no greater than
Two Thousand Five Hundred Dollars ($2,500.00) for each auto and Ten
Thousand Dollars ($10,000.00) for each loss.
h. Workers Compensation and Employers Liability Insurance.
Borrowers shall maintain a standard workers compensation policy covering the
State of Colorado, and any other state where the company is operating, including
employers liability coverage subject to a limit of no less than One Million
Dollars ($1,000,000.00) each employee, One Million Dollars ($1,000,000.00) each
accident, One Million Dollars ($1,000,000.00) policy limit. The policy shall
include endorsements for Voluntary Compensation Employers Liability Coverage and
Stop Gap Liability. If the Borrowers have elected to self-insure Workers
Compensation coverage in the State of Colorado (or any other state), the Agent
Bank must be furnished with a copy of the certificate from the state(s)
permitting self-insurance and evidence of a Stop Loss Excess Workers
Compensation policy with a specific retention of no greater than One Hundred
Fifty Thousand Dollars ($150,000.00) per occurrence.
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i. If Borrowers' general liability and automobile policies
include a self-insured retention, it is agreed and fully understood that
Borrowers are solely responsible for payment of all amounts due within said
self-insured retentions. Any Indemnification/Hold Harmless provision is extended
to cover all liabilities associated with said self-insured retentions.
j. Umbrella Liability. An Umbrella Liability policy shall be
purchased with a limit of not less than Fifty Million Dollars ($50,000,000.00)
providing excess coverage over all limits and coverages indicated in paragraphs
(f), (g), and (h) above. The limits can be secured by a combination of Primary
and Excess Umbrella policies, provided that all layers follow form with the
underlying policies indicated in (f), (g) and (h) and are written on an
"occurrence" form. This policy shall be endorsed to include the Agent Bank as an
additional insured on behalf of the Banks, in the same manner set forth in
Section 5.09(f) hereinabove.
k. All policies indicated above shall be written with insurance
companies licensed and admitted to do business in all states where the Borrower
Consolidation, or any of them, is operating and shall be rated no lower than "A
XII" in the most recent addition of A.M. Best's and "AA" in the most recent
edition of Standard & Poor's, or such other carrier reasonably acceptable to
Agent Bank. All policies discussed above shall be endorsed to provide that in
the event of a cancellation, non-renewal or material modification, Agent Bank
shall receive thirty (30) days prior written notice thereof. The Borrowers shall
furnish Agent Bank with Certificates of Insurance executed by an authorized
agent evidencing compliance with all insurance provisions discussed above on an
annual basis. Borrowers shall also furnish policy endorsements evidencing the
Agent Bank's appropriate status (Mortgagee, Loss Payee, Additional Insured,
etc.) under each policy. Certificates of Insurance executed by an authorized
agent of each carrier providing insurance evidencing continuation of all
coverages will be provided on the Closing Date and annually on or before ten
(10) days prior to the expiration of each policy. All certificates and other
notices related to the insurance program shall be delivered to Agent Bank
concurrently with the delivery of such certificates or notices to such carrier
or to Borrowers, or any of them, as applicable.
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l. Any other insurance reasonably requested by Agent Bank or
Requisite Lenders in such amount and covering such risks as may be reasonably
requested.
Section 5.10. Taxes. Throughout the term of the Credit Facility,
Borrowers shall prepare and timely file or cause to be prepared and timely filed
all material federal, state and local tax returns required to be filed by them,
and Borrowers shall pay and discharge prior to delinquency all material taxes,
assessments and other governmental charges or levies imposed upon them, or in
respect of any of their respective properties and assets except such taxes,
assessments and other governmental charges or levies, if any, as are being
contested in good faith by Borrowers in the manner which is set forth for such
contests by Section 4.07 herein.
Section 5.11. Permitted Encumbrances Only. Until Bank Facility
Termination, none of the Borrowers shall create, incur, assume or suffer to
exist any Lien, attachment, levy, distraint, or other judicial process and
burdens of every kind and nature except the Permitted Encumbrances on or with
respect to the Collateral, except (a) with respect to matters described in
Section 5.04 and 5.10, such items as are being discharged, released and/or
contested, as the case may be, in the manner described therein, written notice
of all tax lien contests and all other items involving amounts in excess of Two
Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate having been given
to Agent Bank, and (b) with respect to any other items involving amounts in
excess of Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate, if
any, as are being contested in good faith by appropriate proceedings and for
which Borrowers have given written notice thereof to Agent Bank and have
maintained adequate reserves in accordance with GAAP for the payment thereof.
Section 5.12. Advances. Until Bank Facility Termination, if any
Borrower should fail (i) to perform or observe, or (ii) to cause to be performed
or observed, any covenant or obligation of such Borrower under this Credit
Agreement or any of the other Loan Documents, the failure of which could
reasonably be expected to have a Material Adverse Effect, then Agent Bank, upon
the giving of reasonable notice and the approval of Requisite Lenders, may (but
shall be under no obligation to) take such steps as are necessary to remedy any
such non-performance or non-observance and provide
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for payment thereof. All amounts advanced by Agent Bank or Lenders pursuant to
this Section 5.12 shall become an additional obligation of Borrowers to Lenders
secured by the Security Documentation and other Loan Documents, shall reduce the
amount of Available Borrowings and shall become due and payable by Borrowers on
the next interest payment date, together with interest thereon at a rate per
annum equal to the Default Rate (such interest to be calculated from the date of
such advancement to the date of payment thereof by Borrowers).
Section 5.13. Further Assurances. Borrowers, Agent Bank and each of
the Banks will, at the expense of the Borrowers, do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, such
amendments or supplements hereto or to any of the Loan Documents and such
further documents, instruments and transfers as any such party may reasonably
require for the curing of any defect in the execution or acknowledgement hereof
or in any of the Loan Documents, or in the description of the Collateral
Properties or other Collateral or for the proper evidencing of giving notice of
each lien or security interest securing repayment of the Bank Facilities.
Further, upon the execution and delivery of the Security Documentation and each
of the Loan Documents and thereafter, from time to time, Borrowers shall cause
the Security Documentation and each of the Loan Documents and each amendment and
supplement thereto to be filed, registered and recorded and to be refiled,
re-registered and re-recorded in such manner and in such places as may be
reasonably required by the Agent Bank, in order to publish notice of and fully
protect the liens of the Security Documentation and the Loan Documents and to
protect or continue to perfect the security interests created by the Security
Documentation and Loan Documents in the Collateral Properties and Collateral and
to perform or cause to be performed from time to time any other actions required
by law and execute or cause to be executed any and all instruments of further
assurance that may be necessary for such publication, perfection, continuation
and protection.
Section 5.14. Indemnification. Borrowers agree to and do hereby
jointly and severally indemnify, protect, defend and save harmless Agent Bank
and each of the Banks and their respective directors, trustees, officers,
employees, agents, attorneys and shareholders (individually an "Indemnified
Party" and collectively the "Indemnified Parties") from and against any and all
losses, damages,
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expenses or liabilities of any kind or nature from any investigations, suits,
claims, demands or other proceedings, including reasonable counsel fees incurred
in investigating or defending such claim, suffered by any of them and caused by,
relating to, arising out of, resulting from, or in any way connected with this
Credit Agreement, with any other Loan Document or with the transactions
contemplated herein and thereby; provided, however, Borrowers shall not be
obligated to indemnify, protect, defend or save harmless an Indemnified Party
if, and to the extent, the loss, damage, expense or liability was caused by (a)
the gross negligence or wilful misconduct of such Indemnified Party, or (b) the
breach of this Credit Agreement or any other Loan Document by such Indemnified
Party or the breach of any laws, rules or regulations by such Indemnified Party
(other than those breaches of laws arising from any Borrower's default). In case
any action shall be brought against any Indemnified Party based upon any of the
above and in respect to which indemnity may be sought against Borrowers, Agent
Bank shall promptly notify Borrowers in writing, and Borrowers shall assume the
defense thereof, including the employment of counsel selected by Borrowers and
reasonably satisfactory to Agent Bank, the payment of all costs and expenses and
the right to negotiate and consent to settlement. Upon reasonable determination
made by an Indemnified Party that such counsel would have a conflict
representing such Indemnified Party and Borrowers, the applicable Indemnified
Party shall have the right to employ, at the expense of Borrowers, separate
counsel in any such action and to participate in the defense thereof. Borrowers
shall not be liable for any settlement of any such action effected without their
consent, but if settled with Borrowers' consent, or if there be a final judgment
for the claimant in any such action, Borrowers agree to indemnify, defend and
save harmless such Indemnified Parties from and against any loss or liability by
reason of such settlement or judgment. In the event that any Person is adjudged
by a court of competent jurisdiction not to have been entitled to
indemnification under this Section 5.14, it shall repay all amounts with respect
to which it has been so adjudged. If and to the extent that the indemnification
provisions contained in this Section 5.14 are unenforceable for any reason, the
Borrowers hereby agree to make the maximum contribution to the payment and
satisfaction of such obligations that is permissible under applicable law. The
provisions of this Section 5.14 shall survive the termination of this Credit
Agreement and the repayment of the Bank Facilities and the assignment or
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subparticipation of all or any portion of the Syndication Interest held by any
Lender pursuant to Section 10.10.
Section 5.15. Inspection of the Collateral and Appraisal. Until Bank
Facility Termination Borrowers shall provide or cause to be provided to Banks
and any authorized representatives of Banks, accompanied by representatives of
Borrowers and coordinated with Agent Bank, the reasonable right of entry and
free access to the Collateral Properties to inspect same on reasonable prior
notice to Borrowers. If at any time any Qualified Appraisal of the Collateral
Properties, or any of them, is required to be made by any banking regulatory
authority or determined to be necessary by Agent Bank or Requisite Lenders after
the occurrence of an Event of Default, Borrowers agree to pay all fees, costs
and expenses incurred by Agent Bank in connection with the preparation of such
Qualified Appraisal.
Section 5.16. Compliance With Other Loan Documents, Execution of
Subsidiary Guaranties and Pledge of Restricted Subsidiary and Unrestricted
Subsidiary Stock. Borrowers shall comply with each and every term, condition and
agreement contained in the Loan Documents to which they, or any of them, are a
party. Borrowers shall notify Agent Bank in writing on or before ten (10) days
following the creation thereof, of each Restricted Subsidiary and Unrestricted
Subsidiary, together with a description of each New Venture owned or to be
acquired by such Restricted Subsidiary or Unrestricted Subsidiary. Borrowers
shall further cause each Restricted Subsidiary and Unrestricted Subsidiary
created or otherwise occurring from time to time following the Closing Date to
join in the execution of the Subsidiary Guaranty in favor of Agent Bank and to
deliver the original thereof, or a duly executed Certificate of Joinder in the
form attached to the Subsidiary Guaranty as Exhibit A, to Agent Bank promptly,
but in no event later than thirty (30) days following the creation or other
occurrence of such Restricted Subsidiary and/or Unrestricted Subsidiary, as
applicable. BHGD shall execute or cause to be executed a Stock Pledge (Gaming)
or Stock Pledge (General), as applicable, no later than thirty (30) days
following the creation or other occurrence of each Restricted Subsidiary and/or
Unrestricted Subsidiary, as applicable. In the case of a Stock Pledge (Gaming),
BHGD shall use its best efforts to cause all necessary Governmental Authorities
to consent to the delivery of the applicable stock certificates, together with a
stock power executed in blank, to Agent Bank as soon
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as reasonably practical. In the case of a Stock Pledge (General), the applicable
stock certificates, together with a stock power executed in blank, shall be
delivered to Agent Bank concurrently with the execution of the Stock Pledge
(General).
Section 5.17. Suits or Actions Affecting Borrowers. Until Bank
Facility Termination, Borrowers shall promptly advise Agent Bank in writing
within ten (10) days of Borrowers' knowledge of (a) any claims, litigation,
proceedings or disputes (whether or not purportedly on behalf of Borrowers, or
any of them) against, or to the actual knowledge of Borrowers, threatened or
affecting Borrowers, or any of them, which could reasonably be expected to
result in an award of monetary damages in excess of One Million Dollars
($1,000,000.00), (b) any material labor controversy resulting in or threatening
to result in a strike against the Hotel/Casino Facilities, or (c) any proposal
by any Governmental Authority to acquire any of the material assets or business
of Borrowers.
Section 5.18. Consents of and Notice to Gaming Authorities. Borrowers
shall comply in all material respects with all applicable statutes, rules and
regulations requiring reports and disclosures to all applicable Gaming
Authorities on a timely basis.
Section 5.19. Tradenames, Trademarks and Servicemarks. Borrowers shall
not assign or in any other manner alienate their interest in any material
tradenames, trademarks or servicemarks relating or pertaining to the
Hotel/Casino Facilities during the term of the Credit Facility, except pursuant
to the Security Documentation or in the ordinary course of business. Borrowers
shall not change their names without first giving written notice to Agent Bank,
together with evidence reasonably satisfactory to the Agent Bank that all
notices and other documents required to be delivered, recorded or filed in order
to perfect and protect the security interest granted by the Borrowers to the
Banks in such trademarks, tradenames and servicemarks and the other Collateral
have been so delivered, recorded and/or filed.
Section 5.20. Notice of Hazardous Materials. Within ten (10) days
after an executive officer of the Borrowers obtaining actual knowledge thereof,
Borrowers shall immediately advise Agent Bank in writing and deliver a copy
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of (a) any and all enforcement, clean-up, removal or other governmental or
regulatory actions expected to cost in excess of Two Hundred Fifty Thousand
Dollars ($250,000.00) instituted, completed or threatened pursuant to any
applicable federal, state or local laws, ordinances or regulations relating to
any Hazardous Materials (as defined in the Environmental Certificate) affecting
the Collateral ("Hazardous Materials Laws"); (b) all claims made or threatened
by any third party against Borrowers or the Hotel/Casino Facilities in excess of
Two Hundred Fifty Thousand Dollars ($250,000.00) relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any
Hazardous Materials (the matters set forth in clauses (a) and (b) above are
hereinafter referred to as "Hazardous Materials Claims"); and (c) the discovery
of any occurrence or condition on any real property adjoining or in the vicinity
of the Hotel/Casino Facilities that could cause the Borrowers, or any of them,
or any part thereof to be classified as a "border-zone property" under the
provisions of, or to be otherwise subject to any restrictions on the ownership,
occupancy, transferability or use of the Hotel/Casino Facilities under, any
Hazardous Materials Laws.
Section 5.21. Compliance with Access Laws.
a. Borrowers agree that Borrowers, the Hotel/Casino Facilities
and the Collateral Properties shall at all times strictly comply with the
requirements of the Americans with Disabilities Act of 1990; the Fair Housing
Amendments Act of 1988; and other federal, state or local laws or ordinances
related to disabled access; or any statute, rule, regulation, ordinance, order
of Governmental Authorities, or order or decree of any court adopted or enacted
with respect thereto, as now existing or hereafter amended or adopted
(collectively, the "Access Laws"). At any time, Agent Bank may require a
certificate of compliance with the Access Laws and indemnification agreement in
a form reasonably acceptable to Agent Bank. Agent Bank may also require a
certificate of compliance with the Access Laws from an architect, engineer, or
other third party acceptable to Agent Bank.
b. Notwithstanding any provisions set forth herein or in any
other document, Borrowers shall not alter or permit any tenant or other person
to alter the Hotel/Casino Facilities or the Collateral Properties in any manner
which would increase Borrowers' responsibilities for
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compliance with the Access Laws in any materially adverse respect, without the
prior written approval of Agent Bank. In connection with such approval, Agent
Bank may require a certificate of compliance with the Access Laws from an
architect, engineer or other person acceptable to Agent Bank.
c. Borrowers agree to give prompt written notice to Agent Bank
of the receipt by Borrowers of any material claims of violation of any of the
Access Laws and of the commencement of any proceedings or investigations which
relate to compliance with any of the Access Laws (except proceedings or
investigations which do not involve material claims of violation or
non-compliance).
d. Borrowers shall indemnify, defend and hold harmless
Indemnified Parties from and against any and all claims, demands, damages,
costs, expenses, losses, liabilities, penalties, fines and other proceedings
including, without limitation, reasonable attorneys' fees and expenses arising
directly or indirectly from or out of or in any way connected with any failure
of the Hotel/Casino Facilities or the Collateral Properties to comply with any
of the Access Laws. The obligations and liabilities of Borrowers under this
section shall survive Bank Facility Termination, any satisfaction, assignment,
judicial or nonjudicial foreclosure proceeding, or delivery of a deed in lieu of
foreclosure.
Section 5.22. Gilpin Land Lease and Parking Garage Documents.
a. Until Bank Facility Termination: (i) BHGD, as lessor, and
GHVP, as lessee, shall fully perform and comply with or cause to be performed
and complied with all of the covenants, terms and conditions imposed or assumed
by them under the Gilpin Land Lease, and (ii) BHJE, as lessor, and GHVP, as
lessee, shall fully perform and comply with or cause to be performed and
complied with all covenants, terms and conditions applicable to them under the
Parking Garage Documents. None of the Borrowers shall amend, modify or
terminate, or enter into any agreement to amend, modify or terminate the Gilpin
Land Lease or the Parking Garage Documents without the prior written consent
Requisite Lenders.
b. BHJE consents to any transfer of GHVP's interest under the
Parking Garage Lease pursuant to:
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(i) exercise of any remedies which any of the Banks may have under any of the
Gilpin Security Documents; or (ii) any conveyance in lieu of any such remedies
under any of the Gilpin Security Documents.
Section 5.23. Compliance with Management Subordination Agreement.
Until Bank Facility Termination: BHJE shall comply with or cause to be complied
with all of the covenants, terms and conditions set forth in the Management
Subordination Agreement with respect to the payment of the Management Fees and
other provisions therein contained. BHJE shall not amend, modify or terminate,
or enter into any agreement to amend, modify or terminate the Management
Agreement or the Management Subordination Agreement without the prior written
consent of Requisite Lenders.
Section 5.24. Updated Appraisal. In the event of the occurrence of a
Default or Event of Default or if at any time an appraisal of the Hotel/Casino
Facilities and the Collateral Properties prepared in compliance with FIRREA is
determined to be necessary by Agent Bank or Requisite Lenders, Borrowers agree
to cooperate and provide all information reasonably necessary for the
preparation of such appraisal and to pay all reasonable fees, costs and expenses
incurred by Agent Bank in connection with the engagement and preparation of such
appraisal. Borrowers shall not be obligated to pay for more than one of such
appraisals.
Section 5.25. Year 2000 Compliance. Borrowers shall perform all acts
reasonably necessary to ensure that (i) Borrowers and the hotel casino and
related businesses conducted by Borrowers at the Hotel/Casino Facilities become
Year 2000 Compliant on or before September 30, 1999. Such acts shall include,
without limitation, performing a comprehensive review and assessment of all of
Borrowers' material systems and adopting a detailed plan, with itemized budget,
for the remediation, monitoring and testing of such systems. As used in this
paragraph, "Year 2000 Compliant" shall mean, in regard to any entity, that all
material software, hardware, firmware, equipment, goods or systems of the
Borrower Consolidation material to the business operations or financial
condition of the Borrower Consolidation, will properly perform date sensitive
functions before, during and after the year 2000. Borrowers shall, promptly upon
request, provide to Agent Bank such certifications or other evidence of
Borrowers' compliance
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with the terms of this paragraph as Agent Bank or Requisite Lenders may from
time to time reasonably require.
Section 5.26. Prime Financing Obligations. Until Bank Facility
Termination, GHVP shall fully perform and comply with all agreements, covenants,
terms and conditions imposed upon, or assumed by, GHVP under the Prime Financing
Documents. GHVP shall not amend or modify, or enter into any agreement to amend
or modify the Prime Financing Documents without the prior written consent of
Agent Bank, which consent shall not be unreasonably withheld or delayed, or if
in the opinion of Agent Bank such amendment or modification is materially
adverse to GHVP, without the prior written consent of Requisite Lenders.
ARTICLE VI
FINANCIAL COVENANTS
Until payment in full of all sums owing hereunder and under the Notes
and the occurrence of Bank Facilities Termination, the Borrower Consolidation
agrees, as set forth below, to comply or cause compliance with the following
Financial Covenants.
Section 6.01. Leverage Ratio. Commencing as of the first Fiscal
Quarter ending subsequent to the Closing Date and continuing as of each Fiscal
Quarter end until Bank Facilities Termination, the Borrower Consolidation shall
maintain a Leverage Ratio no greater than the ratios described hereinbelow to be
calculated as of the end of each Fiscal Quarter in accordance with the following
schedule:
Maximum
Fiscal Quarter End Leverage Ratio
------------------ --------------
As of the Closing Date and as of
each Fiscal Quarter end through
the Fiscal Quarter ending
December 31, 2000 3.00 to 1.00
As of the Fiscal Quarter ending
March 31, 2001, and as of each
Fiscal Quarter end through Bank
Facilities Termination 2.75 to 1.00
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Section 6.02. Fixed Charge Coverage Ratio. Commencing as of the first
Fiscal Quarter ending subsequent to the Closing Date and continuing as of each
Fiscal Quarter end until Bank Facilities Termination, the Borrower Consolidation
shall maintain a Fixed Charge Coverage Ratio no less than 1.25 to 1.00.
Section 6.03. Minimum Tangible Net Worth. The Borrower Consolidation
shall maintain as of the end of each Fiscal Quarter following the Closing Date,
a Tangible Net Worth equal to or greater than the sum of (a) ninety percent
(90%) of the Tangible Net Worth of the Borrower Consolidation as of the Closing
Date, plus (b) seventy-five percent (75%) of Net Income of the Borrower
Consolidation after taxes realized as of each Fiscal Quarter end occurring on
and after the Closing Date (without reduction for any net losses), plus (c) the
lesser of (i) seventy-five percent (75%) of Net Equity Proceeds, or (ii) the
aggregate amount of Net Equity Proceeds less the portion of such Net Equity
Proceeds Invested by BHGD in Unrestricted Subsidiaries to the extent permitted
in Section 6.06(f).
Section 6.04. Limitation on Capital Expenditures. During each Fiscal
Year, commencing with the Fiscal Year commencing January 1, 1999, Borrowers
shall not make or cause to be made, Capital Expenditures to the Hotel/Casino
Facilities greater than: (i) an aggregate amount equal to six percent (6%) of
gross revenues derived from the Hotel/Casino Facilities by the Borrower
Consolidation during the immediately preceding Fiscal Year, plus (ii) the amount
then available for expenditure under the Net Equity Proceeds Expenditure Basket.
Section 6.05. Contingent Liability(ies). The Borrower Consolidation
shall not directly or indirectly incur any Contingent Liability(ies) in excess
of the cumulative aggregate amount of Five Million Dollars ($5,000,000.00) at
any time outstanding without the prior written consent of Requisite Lenders. In
no event shall any Contingent Liabilities be secured by a Lien on any property
or assets of any member of the Borrower Consolidation.
Section 6.06. Investment Restrictions. Other than Investments permitted
herein or approved in writing by Requisite Lenders, the Borrower Consolidation
shall not make any Investments (whether by way of loan, stock purchase, capital
contribution, or otherwise) other than the following:
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(a) Cash, Cash Equivalents and direct obligations of the United
States Government;
(b) Prime commercial paper (AA rated or better);
(c) Certificates of Deposit or Repurchase Agreement issued by a
commercial bank having capital surplus in excess of One Hundred Million Dollars
($100,000,000.00);
(d) Money market or other funds of nationally recognized
institutions investing solely in obligations described in (a), (b) and (c)
above;
(e) Loans and advances to employees in the ordinary course of
business not exceeding Two Hundred Thousand Dollars ($200,000.00) in the
aggregate at any one time;
(f) Investments in Unrestricted Subsidiaries so long as (i)
each such Investment does not exceed the aggregate amount then available for
expenditure under the Net Equity Proceeds Expenditure Basket, and (ii) in no
event shall the amount Invested in Unrestricted Subsidiaries during any
consecutive twelve (12) month period exceed the maximum aggregate amount of
Fifteen Million Dollars ($15,000,000.00);
(g) Investments in Restricted Subsidiaries, so long as with
respect to each such Investment: (i) three (3) full Fiscal Quarters have elapsed
following the Closing Date, (ii) the Borrower Consolidation has achieved a
Leverage Ratio of 2.75 to 1.00 or less as of the most recently ended Fiscal
Quarter, and (iii) the aggregate amount Invested in Restricted Subsidiaries
shall not exceed (x) the maximum aggregate amount of Ten Million Dollars
($10,000,000.00) during any consecutive twelve (12) month period, plus (y) the
amount then available for expenditure under the Net Equity Proceeds Expenditure
Basket;
(h) So long as no Default or Event of Default has occurred and
remains continuing or would result from the acquisition thereof, the Borrower
Consolidation may make an Investment for the acquisition by BHGD of no less than
the entire JE Membership Interests of Entertainment and Diversified in BHJE, so
long as such Investment (i) does not exceed the aggregate amount of Ten Million
Dollars
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($10,000,000.00) to the extent paid or payable in Cash, or (ii) is paid or
payable in common voting stock of BHGD; and
(i) Capital Expenditures for the Hotel/Casino Facilities during
each Fiscal Year, up to the maximum amounts permitted under Section 6.05.
Section 6.07. Total Liens. The Borrower Consolidation shall not
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any of their respective assets or any of the Collateral, whether
now owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any of the Collateral under the
Uniform Commercial Code of any State or under any similar recording or notice
statute, except:
(a) Permitted Encumbrances;
(b) Liens granted or permitted pursuant to the Security
Documentation;
(c) Liens securing the Special Assessment Bonds; and
(d) Liens on the FF&E and other goods securing Indebtedness to
finance the purchase price thereof; provided that (i) such Liens shall extend
only to the equipment and other goods so financed and the proceeds thereof, and
(ii) such Liens shall not secure Indebtedness in excess of Five Million Dollars
($5,000,000.00) in the aggregate at any time.
Section 6.08. Limitation on Indebtedness. The Borrower Consolidation
will not incur any Indebtedness, except as specifically permitted hereinbelow:
a. Secured Interest Rate Hedges up to the maximum aggregate
notional principal amount of Thirty Million Dollars ($30,000,000.00) at any time
outstanding;
b. Secured Indebtedness permitted under Section 6.07(d) and
Capital Lease Liabilities up to the maximum aggregate amount of Five Million
Dollars ($5,000,000.00) at any time outstanding;
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c. Deferred Assessment Obligations under the Special Assessment
Bonds; and
d. Unsecured Indebtedness so long as: (i) all material
covenants, terms and conditions of such unsecured Indebtedness shall be equally
or less restrictive on the Borrower Consolidation than those applicable under
the Credit Agreement, and (ii) the aggregate of the secured Indebtedness and
Capitalized Lease Liabilities permitted under Section 6.08(b) and the unsecured
Indebtedness permitted under this Section 6.08(d) shall at no time exceed the
maximum sum of Five Million Dollars ($5,000,000.00) in the aggregate.
Section 6.09. Restriction on Distributions. The Borrower Consolidation
shall not pay or declare any dividends or Distributions, except as specifically
permitted below:
a. So long as no Default or Event of Default has occurred and
remains continuing, BHJE may make JE Tax Distributions.
b. So long as no Default or Event of Default has occurred and
remains continuing or would result from the making thereof, BHJE may pay
Management Fees to the holders of the JE Membership Interests in accordance with
the Management Agreement, subject to the terms and provisions set forth in the
Management Subordination Agreement.
c. So long as no Default or Event of Default has occurred and
remains continuing, on and after March 31, 2000, BHJE may make Distributions
during each Fiscal Year with respect to the JE Membership Interest in addition
to the JE Tax Distributions and the Management Fees, up to a maximum amount (the
"JE Permitted Distributions") determined by the following calculation:
(i) The Net Income of BHJE for the applicable Fiscal Year
shall be determined and multiplied by twenty-five percent (25.0%);
(ii) The amount of JE Tax Distributions made during such
Fiscal Year shall then be deducted from (i) above; and
(iii) The result of the calculations in (i) and (ii) above
shall be multiplied by fifty
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percent (50.0%) to determine the maximum aggregate amount of JE
Permitted Distributions which may be made during such Fiscal Year.
Section 6.10. No Change of Control. Until the occurrence of Bank
Facility Termination, no Change of Control shall occur.
Section 6.11. Consolidation, Merger, Sale of Assets. No member of the
Borrower Consolidation shall wind up, liquidate or dissolve its affairs or enter
into any transaction of merger or consolidation (except a merger or
consolidation with another entity within the Borrower Consolidation), or convey,
sell, lease or otherwise dispose of (or agree to do any of the foregoing at any
future time prior to Bank Facility Termination) all or any material part of its
respective property or assets (except to another entity within the Borrower
Consolidation), except that (i) the Borrowers may make sales of inventory in the
ordinary course of business, (ii) the Borrowers may, in the ordinary course of
business, sell equipment which is uneconomic or obsolete as provided in Section
5.01.
Section 6.12. Transactions with Affiliates. Other than: (i) between
and amongst the Borrower Consolidation, or (ii) in connection with Investments
in a New Venture and/or New Venture Subsidiaries to the extent permitted herein,
no transactions shall be made with Affiliates or Subsidiaries other than arms
length transactions for fair market value.
Section 6.13. No Transfer of Ownership. BHGD shall not transfer or
hypothecate its ownership interests in GVI, GHVP or any Restricted Subsidiary
except in connection with the Security Documentation or as permitted in Section
6.11. Provided, however, BHGD shall have the right to sell any Unrestricted
Subsidiary in exchange for its fair market value.
Section 6.14. ERISA. No Borrower shall:
a. At any time, permit any Pension Plan which is maintained by
such Borrower or to which such Borrower is obligated to contribute on behalf of
its respective employees, to:
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(i) engage in any non-exempt "prohibited transaction", as
such term is defined in Section 4975 of the Code;
(ii) incur any material "accumulated funding deficiency",
as that term is defined in Section 302 of ERISA; or
(iii) suffer a termination event to occur which may
reasonably be expected to result in liability of such Borrower to the
Pension Plan or to the Pension Benefit Guaranty Corporation or the
imposition of a lien on the Collateral pursuant to Section 4068 of
ERISA.
b. Fail, upon such Borrower becoming aware thereof, promptly to
notify the Agent Bank of the occurrence of any "reportable event" (as defined in
Section 4043 of ERISA) or of any non-exempt "prohibited transaction" (as defined
in Section 4975 of the Code) with respect to any Pension Plan which is
maintained by such Borrower or to which such Borrower is obligated to contribute
on behalf of its employees or any trust created thereunder.
c. At any time, permit any Pension Plan which is maintained by
such Borrower or to which such Borrower is obligated to contribute on behalf of
its employees to fail to comply with ERISA or other applicable laws in any
respect that would result in a Material Adverse Effect.
Section 6.15. Margin Regulations. No part of the proceeds of the
Credit Facility, Swingline Facility or L/C Facility will be used by Borrowers,
or any of them, to purchase or carry any Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock. Neither the
making of such loans, nor the use of the proceeds of such loans will violate or
be inconsistent with the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
Section 6.16. Restriction on Subsidiaries. No Borrower, other than
BHGD, shall create any additional Subsidiaries without the prior written consent
of Requisite Lenders.
Section 6.17. Limitation on Consolidated Tax Liability. No Borrower
shall be liable for federal income
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taxes relating to the taxable income of any Subsidiary or Affiliate of the
Borrowers, or any of them, in excess of the amount of federal income taxes it
would pay if reporting as a separate entity, unless such Borrower is fully
reimbursed by such Subsidiary or Affiliate on or before the payment of such
taxes.
Section 6.18. Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent Bank
pursuant to the terms hereof are hereinafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the Borrowers
with the agreement of their independent certified public accountants and such
changes result in a change in the method of calculation of any of the financial
covenants, standards or terms found herein, the parties hereto agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of Borrowers shall be the same after such changes as if such
changes had not been made; provided, however, that no change in GAAP that would
affect the method of calculation of any of the financial covenants, standards or
terms shall be given effect in such calculations until such provisions are
amended, in a manner satisfactory to Agent Bank and Requisite Lenders, to so
reflect such change in accounting principles.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. Any of the following events and the
passage of any applicable notice and cure periods shall constitute an Event of
Default hereunder:
(a) Any representation or warranty made by Borrowers pursuant
to or in connection with this Credit Agreement, the Notes, the Environmental
Certificate, or any other Loan Document or in any report, certificate, financial
statement or other writing furnished by Borrowers in connection herewith, shall
prove to be false, incorrect or misleading in any materially adverse aspect as
of the date when made.
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(b) Borrowers shall have defaulted in the payment of any
interest on the Revolving Credit Note or Swingline Note for a period of five (5)
days from the date such payment is due or shall have defaulted in the payment of
any principal on the Revolving Credit Note when due;
(c) Any of the Security Documentation or any provision thereof
shall cease to be in full force and effect in any material respect or shall
cease to give the Agent Bank in any material respect the liens, rights, powers
and privileges purported to be created thereby or the Borrowers shall default in
the due performance or observance of any term, covenant or agreement on their
part to be performed or observed pursuant to the Security Documentation for a
period of thirty (30) days after written notice thereof is delivered to
Borrowers by Agent Bank (or such shorter period following such notice as may be
specified in any Loan Document);
(d) Borrowers shall have defaulted in the payment of any fees
required to be paid under the Fee Side Letter, late charge, Commitment Fees,
expenses, indemnities or any other amount owing under any Loan Document for a
period of five (5) days after notice thereof to Borrowers from Agent Bank;
(e) Borrowers or any Restricted Subsidiary shall fail duly and
punctually to perform or comply with: (i) any term, covenant, condition or
promise contained in Sections 5.11, 6.01, 6.02, 6.03, 6.04, 6.05, 6.06, 6.07,
6.08, 6.09, 6.10, 6.11, 6.12, 6.13 or 6.16, or (ii) any other term, covenant,
condition or promise contained in this Credit Agreement, the Notes, the Security
Documentation or any other Loan Document and, in the case of any term, covenant,
condition or promise covered by this clause (ii), such failure shall continue
thirty (30) days after written notice thereof is delivered to Borrowers by Agent
Bank (or such shorter period following such notice as may be specified in any
Loan Document);
(f) Any Borrower or any Restricted Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to it or its debts under the Bankruptcy Code or any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a
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trustee, receiver, liquidator, custodian or other similar official, for all or
substantially all of its property, or shall consent to any such relief or to the
appointment or taking possession by any such official in any involuntary case or
other proceeding against it;
(g) An involuntary case or other proceeding shall be commenced
against any Borrower or any Restricted Subsidiary seeking liquidation,
reorganization or other relief with respect to itself or its debts under the
Bankruptcy Code or any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official, for all or substantially all of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of ninety (90) days;
(h) Any Borrower or any Restricted Subsidiary makes an
assignment of all or substantially all of their assets for the benefit of its
creditors;
(i) Borrowers shall fail to make any payment when due (whether
by scheduled maturity, required prepayment, offer to purchase, redemption,
acceleration, demand or otherwise, in each case beyond the grace period provided
with respect to such Indebtedness) on any Indebtedness (other than any
Indebtedness under this Credit Agreement), if the aggregate amount of such
Indebtedness is Five Million Dollars ($5,000,000.00), or more, or any breach,
default or event of default shall occur, or any other event shall occur or
condition shall exist, under any instrument, agreement or indenture pertaining
thereto if the effect thereof is to accelerate, the maturity of any such
Indebtedness; or any such Indebtedness shall be declared to be due and payable
or shall be required to be prepaid, purchased or redeemed (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof,
or the holder of any lien in any amount, shall commence foreclosure of such lien
upon property of Borrowers having a value in excess of Five Million Dollars
($5,000,000.00) and such foreclosure shall continue against such property to a
date less than thirty (30) days prior to the date of the proposed foreclosure
sale;
(j) The occurrence of any event of default, beyond any
applicable grace period, under the terms of any agreement with any Lender in
connection with a Secured Interest Rate Hedge relating to the Credit Facility;
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(k) The occurrence of any Reportable Event as defined under the
ERISA, which Agent Bank determines in good faith constitutes proper grounds for
the termination of any employee pension benefit plan or pension plan of
Borrowers covered by ERISA by the Pension Benefit Guaranty Corporation or for
the appointment by an appropriate United States District Court of a trustee to
administer any such plan, should occur which has a Material Adverse Effect and
should continue for thirty (30) days after written notice of such determination
shall have been given to Borrowers by Agent Bank;
(l) Any money judgment, writ or warrant of attachment or
similar process involving (i) in any individual case an amount in excess of Five
Million Dollars ($5,000,000.00) or (ii) in the aggregate at any time an amount
in excess of Ten Million Dollars ($10,000,000.00) (in either case not adequately
covered by insurance as to which a solvent and unaffiliated insurance company
has acknowledged coverage) shall be entered or filed against any Borrower or any
of their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of sixty (60) days (or in any event later than five (5)
days prior to the date of any proposed sale thereunder);
(m) The loss, revocation or suspension (for a period in excess
of ten (10) calendar days) of the Gaming Permits issued by the applicable Gaming
Authorities for the Hotel/Casino Facilities, or either of them, or the failure
of Borrowers to maintain gaming activities at the Hotel/Casino Facilities, other
than on account of force majeure, at least to the same general extent as is
presently conducted thereon for a period in excess of thirty (30) consecutive
days;
(n) Any order, judgment or decree shall be entered against any
Borrower or any Restricted Subsidiary decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of thirty (30) days, or any Borrower shall otherwise dissolve or cease to
exist, other than as permitted under Section 6.13;
(o) BHGD sells, transfers, assigns, hypothecates or otherwise
alienates its interest in all or any portion of the common voting stock of GVI
or its
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ownership of GHVP (other than in connection with the merger of GVI and
GHVP into BHGD) or its membership interest in BHJE, other than in connection
with the Security Documentation;
(p) The occurrence of any Change in Control;
(q) The failure of BHJE to timely perform any obligation which
it may have under any of the Bond Documents;
(r) Any Borrower shall be voluntarily or involuntarily divested
of title or possession of any of the Hotel/Casino Facilities or shall lease or
in any other manner, voluntarily or involuntarily alienate any of its interest
in any Hotel/Casino Facility, other than the Permitted Encumbrances and as
permitted in Section 5.01;
(s) Any Subsidiary Guaranty shall cease to be in full force or
effect in any material respect, or any Subsidiary Guarantor shall deny or
disaffirm such Subsidiary Guarantor's obligations under the Subsidiary Guaranty,
or such Subsidiary Guarantor shall default for a period of thirty (30) days
after notice thereof from Agent Bank in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
the Subsidiary Guaranty;
(t) The occurrence of a Material Adverse Change with respect to
the Borrower Consolidation taken as a whole; or
(u) The failure of GHVP to timely perform any obligation which
it may have under any of the Prime Financing Documents.
Section 7.02. Default Remedies. Upon the occurrence of any Event of
Default, Agent Bank may and, upon the consent of Requisite Lenders shall declare
the unpaid balance of the Notes, together with the interest thereon, to be fully
due and payable, and, in addition, the applicable Banks, as set forth below,
may, at their option, or shall, as indicated below, exercise any or all of the
following remedies:
(a) Agent Bank may, upon the consent of Requisite Lenders, or
at the direction of the Requisite
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Lenders shall terminate the obligation of Lenders to make any advances for
Borrowings and/or declare all outstanding unpaid Indebtedness hereunder and
under the Revolving Credit Note and other Loan Documents together with all
accrued interest thereon immediately due and payable without presentation,
demand, protest or notice of any kind. This remedy will be deemed to have been
automatically exercised on the occurrence of any event set out in Sections
7.01(f), (g) or (h).
(b) The Swingline Lender shall, upon receipt of written notice
of the occurrence of an Event of Default, terminate its obligation to make any
advances under the Swingline Facility and may declare all outstanding unpaid
Indebtedness hereunder and under the Swingline Note, together with all accrued
interest thereon immediately due and payable without presentation, demand,
protest or notice of any kind. This remedy will be deemed to have been
automatically exercised on the occurrence of any event set out in Sections
7.01(f), (g) or (h).
(c) The L/C Issuer shall, upon receipt of written notice of the
occurrence of an Event of Default, terminate its obligation to issue Letters of
Credit and/or any Letter of Credit which may be terminated in accordance with
its terms. This remedy will be deemed to have been automatically exercised on
the occurrence of any event set out in Sections 7.01(f), (g) or (h).
(d) Agent Bank and/or L/C Issuer may, or at the direction of
the Requisite Lenders will, direct the Borrowers to pay (and each of the
Borrowers hereby jointly and severally agree upon receipt of such notice to pay)
to the L/C Issuer an amount in Cash equal to the then outstanding L/C Exposure,
such Cash to be held by L/C Issuer in the Cash Collateral Account as security
for the repayment of all L/C Reimbursement Obligations thereafter occurring.
(e) The Banks and/or Agent Bank may exercise any and all
remedies available to Banks or Agent Bank under the Loan Documents.
(f) In the event Borrowers have failed to provide any insurance
required under Section 5.09, Agent Bank may elect at its discretion to, or shall
at the direction of Requisite Lenders, purchase such insurance. All payments
made by Agent Bank for the purpose of providing the insurance coverages required
under Section 5.09 shall be deemed amounts advanced under Section 5.12 of this
Credit Agreement.
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(g) The Banks and/or Agent Bank may exercise any other remedies
available to Banks or Agent Bank at law or in equity, including requesting the
appointment of a receiver to perform any acts required of Borrowers, or any of
them, under this Credit Agreement, and Borrowers hereby specifically consent to
any such request by Banks.
For the purpose of carrying out this section and exercising these
rights, powers and privileges, Borrowers hereby irrevocably constitute and
appoint Agent Bank as their true and lawful attorney-in-fact to execute,
acknowledge and deliver any instruments and do and perform any acts such as are
referred to in this paragraph in the name and on behalf of Borrowers. Agent Bank
on behalf of Lenders may exercise one or more of Lenders' remedies
simultaneously and all its remedies are nonexclusive and cumulative. Lenders
shall not be required to pursue or exhaust any Collateral or remedy before
pursuing any other Collateral or remedy. Lenders' failure to exercise any remedy
for a particular default shall not be deemed a waiver of (i) such remedy, nor
their rights to exercise any other remedy for that default, nor (ii) their right
to exercise that remedy for any subsequent default.
Section 7.03. Application of Proceeds. All payments and proceeds
received and all amounts held or realized from the sale or other disposition of
the Collateral, which are to be applied hereunder towards satisfaction of
Borrowers' obligations under this Credit Agreement, shall be applied in the
following order of priority:
(a) First, to the payment of all reasonable fees, costs and
expenses (including reasonable attorney's fees and expenses) incurred by Agent
Bank and Banks, their agents or representatives in connection with the
realization upon any of the Collateral;
(b) Next, to the payment in full of any other amounts due under
this Credit Agreement, the Security Documentation, or any other Loan Documents
(other than the Notes and any liability under the Secured Interest Rate Hedges);
(c) Next, to the balance of interest remaining unpaid on the
Notes;
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(d) Next, to the balance of principal remaining unpaid on the
Notes and any liability under the Secured Interest Rate Hedges on a pari passu
basis;
(e) Next, the balance, if any, of such payments or proceeds to
whomever may be legally entitled thereto.
Section 7.04. Notices. In order to entitle Agent Bank and/or Banks to
exercise any remedy available hereunder, it shall not be necessary for Agent
Bank and/or Banks to give any notice, other than such notice as may be required
expressly herein or by applicable law.
Section 7.05. Agreement to Pay Attorney's Fees and Expenses. Subject
to the provisions of Section 10.14, upon the occurrence of an Event of Default,
as a result of which Agent Bank and/or Banks shall require and employ attorneys
or incur other expenses for the collection of payments due or to become due or
the enforcement or performance or observance of any obligation or agreement on
the part of Borrowers contained herein, Borrowers shall, on demand, pay to Agent
Bank and Banks the actual and reasonable fees of such attorneys (including
actual and reasonable allocated costs of in-house legal counsel) and such other
reasonable expenses so incurred by Agent Bank and Banks.
Section 7.06. No Additional Waiver Implied by One Waiver. In the event
any agreement contained in this Credit Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder.
Section 7.07. Licensing of Agent Bank and Lenders. In the event of the
occurrence of an Event of Default hereunder or under any of the Loan Documents
and it shall become necessary, or in the opinion of Requisite Lenders advisable,
for an agent, supervisor, receiver or other representative of Agent Bank and
Banks to become licensed under the provisions of the laws of the State of
Colorado or rules and regulations adopted pursuant thereto, as a condition to
receiving the benefit of any Collateral encumbered by the Security Documentation
or other Loan Documents for the benefit of Lenders or otherwise to enforce their
rights hereunder, Borrowers do hereby give their
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consent to the granting of such license or licenses and agree to execute such
further documents as may be required in connection with the evidencing of such
consent.
Section 7.08. Exercise of Rights Subject to Applicable Law. All
rights, remedies and powers provided by this Article VII may be exercised only
to the extent that the exercise thereof does not violate any applicable
provision of the laws of any Governmental Authority and all of the provisions of
this Article VII are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to the extent
necessary so that they will not render this Credit Agreement invalid,
unenforceable or not entitled to be recorded or filed under the provisions of
any applicable law.
Section 7.09. Discontinuance of Proceedings. In case Agent Bank and/or
Banks shall have proceeded to enforce any right, power or remedy under this
Credit Agreement, the Notes, the Security Documentation or any other Loan
Document by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to Banks, then and in every such case Borrowers, Agent Bank and/or
Banks shall be restored to their former positions and rights hereunder with
respect to the Collateral, and all rights, remedies and powers of Agent Bank and
Banks shall continue as if such proceedings had not been taken, subject to any
binding rule by the applicable court or other tribunal in any such proceeding.
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 8.01. No Abatement of Payments. If all or any part of the
Collateral shall be materially damaged or destroyed, or if title to or the
temporary use of the whole or any part of any of the Collateral shall be taken
or condemned by a competent authority for any public use or purpose or by
exercise of the power of eminent domain, there shall be no abatement or
reduction in the amounts payable by Borrowers hereunder or under the Notes, and
Borrowers shall continue to be obligated to make such payments.
Section 8.02. Distribution of Capital Proceeds Upon Occurrence of
Fire, Casualty, Other Perils or
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Condemnation. All monies received from "All Risk" including flood and earthquake
insurance policies covering any of the Collateral or from condemnation or
similar actions in regard to said Collateral, shall be paid directly to Agent
Bank. In the event the amount paid to Agent Bank is equal to or less than Five
Hundred Thousand Dollars ($500,000.00), such amount shall be paid to Borrowers,
unless a Default in the payment of any principal or interest owing under the
terms of the Bank Facilities or an Event of Default shall have occurred
hereunder and is continuing. In the event the amount paid to Agent Bank is
greater than Five Hundred Thousand Dollars ($500,000.00), then, unless a Default
or Event of Default has occurred hereunder and is then continuing, the entire
amount so collected or so much thereof as may be required to repair or replace
the destroyed or condemned property, shall, subject to the conditions set forth
below, be released to Borrowers for repair or replacement of the property
destroyed or condemned or to reimburse Borrowers for the costs of such repair or
replacement incurred prior to the date of such release. If a Default or Event of
Default has occurred hereunder and is then continuing such amount may, at the
option of Requisite Lenders, be applied to pay the outstanding balance of the
Credit Facility. In the event the amount so collected is applied to pay or
reduce the outstanding balance of the Credit Facility, the amount received by
Agent Bank shall be applied in the priority set forth in Section 7.03 and, if
such application is made when a Default or Event of Default has occurred and
remains continuing, then Borrowers shall not be entitled to any further
Borrowings. In the event Banks are required to release all or a portion of the
collected funds to Borrowers for such repair or replacement of the property
destroyed or condemned, such release of funds shall be made in accordance with
the following terms and conditions:
a. The repairs, replacements and rebuilding shall be made in
accordance with plans and specifications to be reasonably approved by Requisite
Lenders and in accordance with all applicable laws, ordinances, rules,
regulations and requirements of Governmental Authorities;
b. Borrowers shall provide Agent Bank with a reasonable
detailed estimate of the costs of such repairs or restorations;
c. Borrowers shall satisfy the Requisite Lenders that after the
reconstruction is completed, the value
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of the Collateral, as determined by the Requisite Lenders in their reasonable
discretion, will not be less than the value of the Collateral immediately prior
to the damage, destruction, condemnation or taking, as reasonably determined by
the Requisite Lenders pursuant to this Credit Agreement;
d. In the Agent Bank's reasonable opinion, any undisbursed
portion of the Available Borrowings, after deposit of such proceeds, is
insufficient to pay all costs of reconstruction of the Hotel/Casino Facilities
or other Collateral, Borrowers shall deposit additional funds with the Agent
Bank or raise additional equity capital, sufficient to pay such additional costs
of reconstructing the Collateral;
e. Borrowers have delivered to the Agent Bank a construction
contract for the work of reconstruction in form and content, including insurance
requirements, acceptable to the Requisite Lenders with a contractor reasonably
acceptable to the Requisite Lenders;
f. The Requisite Lenders in their reasonable discretion have
determined that after the work of reconstruction is completed, the Hotel/Casino
Facilities will produce income sufficient to pay all costs of operations and
maintenance of the Hotel/Casino Facilities with a reasonable reserve for
repairs, and service all Indebtedness secured by the Collateral;
g. No Default or Event of Default has occurred and is
continuing;
h. Borrowers have deposited with the Agent Bank that amount
reasonably determined by the Requisite Lenders (taking into consideration the
amount of Credit Facility funds available for such purpose, and the amount of
proceeds, if any, of insurance policies covering property damage and business
interruption in connection with the Hotel/Casino Facilities accruing and
immediately forthcoming to the Agent Bank) to be sufficient to service the
Indebtedness secured hereby during the period of reconstruction, as reasonably
estimated by the Requisite Lenders;
i. Before commencing any such work, Borrowers shall, at their
own cost and expense, furnish Agent Bank with appropriate endorsements, if
needed, to the "All Risk" insurance policy which Borrowers are then presently
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maintaining to cover all of the risks during the course of such work;
j. Such work shall be commenced by Borrowers within one hundred
twenty (120) days after (i) settlement shall have been made with the insurance
companies, and (ii) all the necessary governmental approvals shall have been
obtained, and such work shall be completed within a reasonable time, free and
clear of all liens and encumbrances other than Permitted Encumbrances; and
k. Disbursements of such insurance or condemnation proceeds
shall be made in the customary manner used by Agent Bank for the disbursement of
construction loans.
ARTICLE IX
AGENCY PROVISIONS
Section 9.01. Appointment.
a. Each Lender hereby (i) designates and appoints WFB as the
Agent Bank of such Lender under this Credit Agreement and the Loan Documents,
(ii) authorizes and directs Agent Bank to enter into the Loan Documents other
than this Credit Agreement for the benefit of Lenders, and (iii) authorizes
Agent Bank to take such action on its behalf under the provisions of this Credit
Agreement and the Loan Documents and to exercise such powers as are set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, subject to the limitations referred to in Sections 9.10(a) and 9.10(b).
Agent Bank agrees to act as such on the express conditions contained in this
Article IX.
b. The provisions of this Article IX are solely for the benefit
of Agent Bank and Lenders, and Borrowers shall not have any rights to rely on or
enforce any of the provisions hereof (other than as set forth in the provisions
of Sections 9.03, 9.09 and 9.10), provided, however, that the foregoing shall in
no way limit Borrowers' obligations under this Article IX. In performing its
functions and duties under this Credit Agreement, Agent Bank shall act solely as
Agent Bank of Lenders and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for
Borrowers or any other Person.
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Section 9.02. Nature of Duties. Agent Bank shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement or in
the Loan Documents. The duties of Agent Bank shall be administrative in nature.
Subject to the provisions of Sections 9.05 and 9.07, Agent Bank shall administer
the Bank Facilities in the same manner as it administers its own loans. Promptly
following the effectiveness of this Credit Agreement, Agent Bank shall send to
each Lender a duplicate executed original, to the extent the same are available
in sufficient numbers, of the Credit Agreement and a copy of each other Loan
Document in favor of Lenders and a copy of the filed or recorded Security
Documentation, with the originals of the latter to be held and retained by Agent
Bank for the benefit of all Lenders. Agent Bank shall not have by reason of this
Credit Agreement a fiduciary relationship in respect of any Lender. Nothing in
this Credit Agreement or any of the Loan Documents, expressed or implied, is
intended or shall be construed to impose upon Agent Bank any obligation in
respect of this Credit Agreement or any of the Loan Documents except as
expressly set forth herein or therein. Each Lender shall make its own
independent investigation of the financial condition and affairs of the
Borrowers and the Collateral in connection with the making and the continuance
of the Bank Facilities hereunder and shall make its own appraisal of the
creditworthiness of the Borrowers and the Collateral, and, except as
specifically provided herein, Agent Bank shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the Closing Date or at any time or times thereafter.
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Section 9.03. Disbursement of Borrowings.
a. Not later than the next Banking Business Day following
receipt of a Notice of Borrowing, Agent Bank shall send a copy thereof by
facsimile to each Lender and shall otherwise notify each Lender of the proposed
Borrowing and the Funding Date. Each Lender shall make available to Agent Bank
(or the funding bank or entity designated by Agent Bank), the amount of such
Lender's Pro Rata Share of such Borrowing in immediately available funds not
later than the times designated in Section 9.03(b). Unless Agent Bank shall have
been notified by any Lender not later than the close of business (San Francisco
time) on the Banking Business Day immediately preceding the Funding Date in
respect of any Borrowing that such Lender does not intend to make available to
Agent Bank such Lender's Pro Rata Share of such Borrowing, Agent Bank may assume
that such Lender shall make such amount available to Agent Bank. If any Lender
does not notify Agent Bank of its intention not to make available its Pro Rata
Share of such Borrowing as described above, but does not for any reason make
available to Agent Bank such Lender's Pro Rata Share of such Borrowing, such
Lender shall pay to Agent Bank forthwith on demand such amount, together with
interest thereon at the Federal Funds Rate. In any case where a Lender does not
for any reason make available to Agent Bank such Lender's Pro Rata Share of such
Borrowing, Agent Bank, in its sole discretion, may, but shall not be obligated
to, fund to Borrowers such Lender's Pro Rata Share of such Borrowing. If Agent
Bank funds to Borrowers such Lender's Pro Rata Share of such Borrowing and if
such Lender subsequently pays to Agent Bank such corresponding amount, such
amount so paid shall constitute such Lender's Pro Rata Share of such Borrowing.
Nothing in this Section 9.03(a) shall alter the respective rights and
obligations of the parties hereunder in respect of a Defaulting Lender or a
Non-Pro Rata Borrowing.
b. Requests by Agent Bank for funding by Lenders of Borrowings
will be made by telecopy. Each Lender shall make the amount of its Pro Rata
Share of such Borrowing available to Agent Bank in Dollars and in immediately
available funds, to such bank and account, in San Francisco, California as Agent
Bank may designate, not later than 9:00 a.m. (San Francisco time) on the Funding
Date designated in the Notice of Borrowing with respect to such Borrowing, but
in no event later than one (1) Banking Business Day notice with respect to Bank
Rate Loans and two (2) Banking
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Business Days notice with respect to LIBOR Loans, in each case following
Lender's receipt of the applicable Notice of Borrowing.
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c. Nothing in this Section 9.03 shall be deemed to relieve any
Lender of its obligation hereunder to make its Pro Rata Share of Borrowings on
any Funding Date, nor shall any Lender be responsible for the failure of any
other Lender to perform its obligations to advance its Pro Rata Share of any
Borrowing hereunder, and the Pro Rata Share of the Aggregate Commitment of any
Lender shall not be increased or decreased as a result of the failure by any
other Lender to perform its obligation to advance its Pro Rata Share of any
Borrowing.
Section 9.04. Distribution and Apportionment of Payments.
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a. Subject to Section 9.04(b), payments actually received by
Agent Bank for the account of Lenders shall be paid to them promptly after
receipt thereof by Agent Bank, but in any event within one (1) Banking Business
Day, provided that Agent Bank shall pay to Lenders interest thereon, at the
Federal Funds Rate from the Banking Business Day following receipt of such funds
by Agent Bank until such funds are paid in immediately available funds to
Lenders. Subject to Section 9.04(b), all payments of principal and interest in
respect of Aggregate Outstandings, all payments of the Commitment Fees and L/C
Fees described in this Credit Agreement, and all payments in respect of any
other Obligations shall be allocated among such Lenders as are entitled thereto,
in proportion to their respective Pro Rata Shares or otherwise as provided
herein. Agent Bank shall promptly distribute, but in any event within one (1)
Banking Business Day, to each Lender at its primary address set forth on the
appropriate signature page hereof or on the applicable Assignment and Assumption
Agreement, or at such other address as a Lender may request in writing, such
funds as it may be entitled to receive, provided that Agent Bank shall in any
event not be bound to inquire into or determine the validity, scope or priority
of any interest or entitlement of any Lender and may suspend all payments and
seek appropriate relief (including, without limitation, instructions from
Requisite Lenders or all Lenders, as applicable, or an action in the nature of
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby. The order of priority herein is set forth
solely to determine the rights and priorities of Lenders as among themselves and
may at any time or from time to time be changed by Lenders as they may elect, in
writing in accordance with Section 10.01, without necessity of notice to or
consent of or approval by Borrowers or any other Person. All payments or other
sums received by Agent Bank for the account of Lenders (including, without
limitation, principal and interest payments, the proceeds of any and all
insurance maintained with respect to any of the Collateral, and any and all
condemnation proceeds with respect to any of the Collateral) shall not
constitute property or assets of the Agent Bank and shall be held by Agent Bank,
solely in its capacity as administrative and collateral agent for itself and the
other Lenders, subject to the Loan Documents.
b. Notwithstanding any provision hereof to the contrary, until
such time as a Defaulting Lender has funded its Pro Rata Share of Borrowing
which was previously a
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Non Pro Rata Borrowing, or all other Lenders have received payment in full
(whether by repayment or prepayment) of the principal due in respect of such Non
Pro Rata Borrowing, all principal sums owing to such Defaulting Lender hereunder
shall be subordinated in right of payment to the prior payment in full of all
principal, in respect of all Non Pro Rata Borrowing in which the Defaulting
Lender has not funded its Pro Rata Share. This provision governs only the
relationship among Agent Bank, each Defaulting Lender, and the other Lenders;
nothing hereunder shall limit the obligation of Borrowers to repay all
Borrowings in accordance with the terms of this Credit Agreement. The provisions
of this section shall apply and be effective regardless of whether an Event of
Default occurs and is then continuing, and notwithstanding (i) any other
provision of this Credit Agreement to the contrary, (ii) any instruction of
Borrowers as to their desired application of payments or (iii) the suspension of
such Defaulting Lender's right to vote on matters which are subject to the
consent or approval of Requisite Lenders or all Lenders. No Commitment Fees or
L/C Fees shall accrue in favor of, or be payable to, such Defaulting Lender from
the date of any failure to fund Borrowings or reimburse Agent Bank for any
Liabilities and Costs as herein provided until such failure has been cured, and
Agent Bank shall be entitled to (A) withhold or setoff, and to apply to the
payment of the defaulted amount and any related interest, any amounts to be paid
to such Defaulting Lender under this Credit Agreement, and (B) bring an action
or suit against such Defaulting Lender in a court of competent jurisdiction to
recover the defaulted amount and any related interest. In addition, the
Defaulting Lender shall indemnify, defend and hold Agent Bank and each of the
other Lenders harmless from and against any and all Liabilities and Costs, plus
interest thereon at the Default Rate, which they may sustain or incur by reason
of or as a direct consequence of the Defaulting Lender's failure or refusal to
abide by its obligations under this Credit Agreement.
c. Each Lender that is a foreign Person (i.e., a Person other
than a United States Person for Federal income tax purposes) shall deliver to
Agent Bank, no later than the Closing Date (or if such Lender becomes a party to
this Credit Agreement after the Closing Date, the date upon which such Lender
becomes a party hereto), a complete and correct signed original Internal Revenue
Service ("IRS") Form 4224 (or any successor thereto) or IRS Form 1001 (or any
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successor thereto) indicating that such Lender is on the date of delivery
thereof entitled to receive all payments under this Credit Agreement free from
withholding of United States Federal income tax and shall deliver updated or
corrected Forms 4224 or 1001 to Agent Bank to the extent and in the manner
required under the United States tax law.
Section 9.05. Rights, Exculpation, Etc. Neither Agent Bank, any
Affiliate of Agent Bank, nor any of their respective officers, directors,
employees, agents, attorneys or consultants, shall be liable to any Lender for
any action taken or omitted by them hereunder or under any of the Loan
Documents, or in connection herewith or therewith, except that Agent Bank shall
be liable for its gross negligence or willful misconduct. In the absence of
gross negligence or willful misconduct, Agent Bank shall not be liable for any
apportionment or distribution of payments made by it in good faith pursuant to
Section 9.04, and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Person to whom
payment was due, but not made, shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled. Agent Bank shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, any of the Security Documentation or any
of the other Loan Documents, or any of the transactions contemplated hereby and
thereby; or for the financial condition of the Borrowers or any of their
Affiliates. Agent Bank shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Credit Agreement or any of the Loan Documents or the
financial condition of the Borrowers or any of their Affiliates, or the
existence or possible existence of any Default or Event of Default.
Section 9.06. Reliance. Agent Bank shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents, telecopies
or any telephone message believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person, and with respect to
all matters pertaining to this Credit Agreement or any of the Loan Documents and
its duties hereunder or thereunder, upon advice of legal counsel (including
counsel for Borrowers), independent public accountant and other experts selected
by it.
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Section 9.07. Indemnification. To the extent that Agent Bank is not
reimbursed and indemnified by Borrowers, Lenders will reimburse, within ten (10)
Banking Business Days after notice from Agent Bank, and indemnify and defend
Agent Bank for and against any and all Liabilities and Costs which may be
imposed on, incurred by, or asserted against it in any way relating to or
arising out of this Credit Agreement, the Security Documentation or any of the
other Loan Documents or any action taken or omitted by Agent Bank or under this
Credit Agreement, the Security Documentation or any of the other Loan Documents,
in proportion to each Lender's Pro Rata Share; provided that no Lender shall be
liable for any portion of such Liabilities and Costs resulting from Agent Bank's
gross negligence or willful misconduct. The obligations of Lenders under this
Section 9.07 shall survive the payment in full of all Obligations and the
termination of this Credit Agreement. In the event that after payment and
distribution of any amount by Agent Bank to Lenders, any Lender or third party,
including Borrowers, any creditor of Borrowers or a trustee in bankruptcy,
recovers from Agent Bank any amount found to have been wrongfully paid to Agent
Bank or disbursed by Agent Bank to any Lender, then such Lender shall reimburse
Agent Bank for all such amounts. Notwithstanding the foregoing, Agent Bank shall
not be obligated to advance Liabilities and Costs and may require the deposit by
each Lender of its Pro Rata Share of any material Liabilities and Costs
anticipated by Agent Bank before they are incurred or made payable.
Section 9.08. Agent Individually. With respect to its Pro Rata Share
of the Credit Facility, Agent Bank shall have and may exercise the same rights
and powers hereunder and is subject to the same obligations and liabilities as
and to the extent set forth herein for any other Lender. The terms "Lenders",
"Requisite Lenders" or any similar terms may include Agent Bank in its
individual capacity as a Lender or one of the Requisite Lenders, but Requisite
Lenders shall not include Agent Bank solely in its capacity as Agent Bank and
need not necessarily include Agent Bank in its capacity as a Lender. Agent Bank
and any Lender and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with Borrowers
or any of their Affiliates as if it were not acting as Agent Bank or Lender
pursuant hereto.
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Section 9.09. Successor Agent Bank; Resignation of Agent Bank; Removal
of Agent Bank.
a. Agent Bank may resign from the performance of all its
functions and duties hereunder at any time by giving at least thirty (30)
Banking Business Days' prior written notice to Lenders and Borrowers, and shall
automatically cease to be Agent Bank hereunder in the event a petition in
bankruptcy shall be filed by or against Agent Bank or the Federal Deposit
Insurance Corporation or any other Governmental Authority shall assume control
of Agent Bank or Agent Bank's interests under the Bank Facilities. Further,
Lenders (other than Agent Bank) may unanimously remove Agent Bank at any time
upon the occurrence of gross negligence or wilful misconduct by Agent Bank by
giving at least thirty (30) Banking Business Days' prior written notice to Agent
Bank, Borrowers and all other Lenders. Such resignation or removal shall take
effect upon the acceptance by a successor Agent Bank of appointment pursuant to
clause (b) or (c).
b. Upon any such notice of resignation by or removal of Agent
Bank, Requisite Lenders shall appoint a successor Agent Bank which appointment
shall be subject to Borrowers' consent (other than upon the occurrence and
during the continuance of any Event of Default), which shall not be unreasonably
withheld or delayed. Any successor Agent Bank must be a Bank (i) the senior debt
obligations of which (or such bank's parent's senior unsecured debt obligations)
are rated not less than Baa-2 by Moody's Investors Services, Inc. or a
comparable rating by a rating agency acceptable to Requisite Lenders and (ii)
which has total assets in excess of Ten Billion Dollars ($10,000,000,000.00).
c. If a successor Agent Bank shall not have been so appointed
within said thirty (30) Banking Business Day period, the retiring or removed
Agent Bank, with the consent of Borrowers (other than upon the occurrence and
during the continuance of any Event of Default) (which may not be unreasonably
withheld or delayed), shall then appoint a successor Agent Bank who shall meet
the requirements described in subsection (b) above and who shall serve as Agent
Bank until such time, if any, as Requisite Lenders, with the consent of
Borrowers (other than upon the occurrence and during the continuance of any
Event of Default), appoint a successor Agent Bank as provided above.
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Section 9.10. Consent and Approvals.
a. Each consent, approval, amendment, modification or waiver
specifically enumerated in this Section 9.10(a) shall require the consent of
Requisite Lenders:
(i) Approval of Borrowings with less than full compliance
with requirements of Article IIIB (Section 2.04);
(ii) Consent to modification of the Bond Documents
(Sections 5.03);
(iii) Consent to modification to or waiver of financial
reporting requirements or production of additional financial or other
information (Section 5.08);
(iv) Approval of amendments to Gilpin Land Lease and/or
Parking Garage Lease (Section 5.22);
(v) Approval of amendments to Management Agreement
(Section 5.23);
(vi) Consent to Contingent Liabilities (Section 6.05);
(vii) Approval of Investments (Section 6.06);
(viii) Consent to creation of Subsidiaries (Section 6.16);
(ix) Approval of a change in the method of calculation of
any financial covenants, standards or terms as a result of a change in
accounting principle (Section 6.18);
(x) Direct Agent Bank to declare the unpaid balance of
the Credit Facility fully due and payable (Section 7.02);
(xi) Direct the disposition of insurance proceeds or
condemnation awards under certain circumstances (Section 8.02);
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(xii) Approval of appointment of successor Agent Bank
(Section 9.09);
(xiii) Approval of certain Protective Advances (Section
9.11(a));
(xiv) Approval of a Post-Foreclosure Plan and related
matters (Section 9.11(e));
(xv) Consent to action or proceeding against Borrowers or
the Collateral by any Lender (Section 9.12); or
(xvi) Except as referred to in subsection (b) below,
approval of any amendment, modification or termination of this Credit
Agreement, or waiver of any provision herein (Section 10.01).
b. Each consent, approval, amendment, modification or waiver
specifically enumerated in Section 10.01 shall require the consent of all
Lenders.
c. In addition to the required consents or approvals referred
to in subsection (a) above, Agent Bank may at any time request instructions from
Requisite Lenders with respect to any actions or approvals which, by the terms
of this Credit Agreement or of any of the Loan Documents, Agent Bank is
permitted or required to take or to grant without instructions from any Lenders,
and if such instructions are promptly requested, Agent Bank shall be absolutely
entitled to refrain from taking any action or to withhold any approval and shall
not be under any liability whatsoever to any Person for refraining from taking
any action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from Requisite Lenders. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against Agent
Bank as a result of Agent Bank acting or refraining from acting under this
Credit Agreement, the Security Documentation or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders or, where applicable,
all Lenders. Agent Bank shall promptly notify each Lender at any time that the
Requisite Lenders have instructed Agent Bank to act or refrain from acting
pursuant hereto.
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d. Each Lender agrees that any action taken by Agent Bank at
the direction or with the consent of Requisite Lenders in accordance with the
provisions of this Credit Agreement or any Loan Document, and the exercise by
Agent Bank at the direction or with the consent of Requisite Lenders of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all Lenders,
except for actions specifically requiring the approval of all Lenders. All
communications from Agent Bank to Lenders requesting Lenders' determination,
consent, approval or disapproval (i) shall be given in the form of a written
notice to each Lender, (ii) shall be accompanied by a description of the matter
or thing as to which such determination, approval, consent or disapproval is
requested, or shall advise each Lender where such matter or thing may be
inspected, or shall otherwise describe the matter or issue to be resolved, (iii)
shall include, if reasonably requested by a Lender and to the extent not
previously provided to such Lender, written materials and a summary of all oral
information provided to Agent Bank by Borrowers in respect of the matter or
issue to be resolved, and (iv) shall include Agent Bank's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event within ten (10) Banking Business Days (the "Lender Reply
Period"). Unless a Lender shall give written notice to Agent Bank that it
objects to the recommendation or determination of Agent Bank (together with a
written explanation of the reasons behind such objection) within the Lender
Reply Period, such Lender shall be deemed to have approved of or consented to
such recommendation or determination. With respect to decisions requiring the
approval of Requisite Lenders or all Lenders, Agent Bank shall submit its
recommendation or determination for approval of or consent to such
recommendation or determination to all Lenders and upon receiving the required
approval or consent shall follow the course of action or determination
recommended to Lenders by Agent Bank or such other course of action recommended
by Requisite Lenders, and each non-responding Lender shall be deemed to have
concurred with such recommended course of action.
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Section 9.11. Agency Provisions Relating to Collateral.
a. Agent Bank is hereby authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from any Lender, from
time to time prior to an Event of Default, to take any action with respect to
any Collateral or Loan Document which may be necessary to perfect and maintain
Liens of the Security Documentation upon the Collateral granted pursuant to the
Loan Documents. Agent Bank may make, and shall be reimbursed by Lenders (in
accordance with their Pro Rata Shares), to the extent not reimbursed by
Borrowers, for, Protective Advance(s) during any one (1) calendar year with
respect to the Collateral up to the sum of (i) amounts expended to pay real
estate taxes, assessments and governmental charges or levies imposed upon such
Collateral, (ii) amounts expended to pay insurance premiums for policies of
insurance related to such Collateral, and (iii) One Hundred Thousand Dollars
($100,000.00). Protective Advances in excess of said sum during any calendar
year for any Collateral shall require the consent of Requisite Lenders.
b. Lenders hereby irrevocably authorize Agent Bank, at its
option and in its discretion, to release any Security Documentation granted to
or held by Agent Bank upon any Collateral (i) upon Bank Facility Termination and
repayment and satisfaction of all Borrowings, and all other Obligations and the
termination of this Credit Agreement, or (ii) if approved, authorized or
ratified in writing by Agent Bank at the direction of all Lenders. Agent Bank
shall not be required to execute any document to evidence the release of the
Security Documentation granted to Agent Bank for the benefit of Lenders herein
or pursuant hereto upon any Collateral if, in Agent Bank's opinion, such
document would expose Agent Bank to liability or create any obligation or entail
any consequence other than the release of such Security Documentation without
recourse or warranty, and such release shall not in any manner discharge, affect
or impair the Obligations or any Security Documentation upon (or obligations of
Borrowers in respect of) any property which shall continue to constitute part of
the Collateral.
c. Except as provided in this Credit Agreement, Agent Bank
shall have no obligation whatsoever to any Lender or to any other Person to
assure that the Collateral exists or is owned by Borrowers or is cared for,
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protected or insured or has been encumbered or that the Security Documentation
granted to Agent Bank herein or in any of the other Loan Documents or pursuant
hereto or thereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority.
d. Should Agent Bank (i) employ counsel for advice or other
representation (whether or not any suit has been or shall be filed) with respect
to any Collateral or any part thereof, or any of the Loan Documents, or the
attempt to enforce any security interest or Security Documentation on any of the
Collateral, or (ii) commence any proceeding or in any way seek to enforce its
rights or remedies under the Loan Documents, irrespective of whether as a result
thereof Agent Bank shall acquire title to any Collateral, either through
foreclosure, deed in lieu of foreclosure or otherwise, each Lender, upon demand
therefor from time to time, shall contribute its share (based on its Pro Rata
Share) of the reasonable costs and/or expenses of any such advice or other
representation, enforcement or acquisition, including, but not limited to, fees
of receivers or trustees, court costs, title company charges, filing and
recording fees, appraisers' fees and fees and expenses of attorneys to the
extent not otherwise reimbursed by Borrowers; provided that Agent Bank shall not
be entitled to reimbursement of its attorneys' fees and expenses incurred in
connection with the resolution of disputes between Agent Bank and other Lenders
unless Agent Bank shall be the prevailing party in any such dispute. Any loss of
principal and interest resulting from any Event of Default shall be shared by
Lenders in accordance with their respective Pro Rata Shares. It is understood
and agreed that in the event Agent Bank determines it is necessary to engage
counsel for Lenders from and after the occurrence of an Event of Default, said
counsel shall be selected by Agent Bank.
e. In the event that all or any portion of the Collateral is
acquired by Agent Bank as the result of a foreclosure or the acceptance of a
deed or assignment in lieu of foreclosure, or is retained in satisfaction of all
or any part of Borrowers' obligations, title to any such Collateral or any
portion thereof shall be held in the name of Agent Bank or a nominee or
subsidiary of Agent Bank, as agent, for the ratable benefit of Agent Bank and
Lenders. Agent Bank shall prepare a recommended course of action for such
Collateral (the "Post-Foreclosure Plan"), which shall be subject to the approval
of the Requisite Lenders. In the
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event that Requisite Lenders do not approve such Post-Foreclosure Plan, any
Lender shall be permitted to submit an alternative Post- Foreclosure Plan to
Agent Bank, and Agent Bank shall submit any and all such additional
Post-Foreclosure Plans to the Lenders for evaluation and the approval of
Requisite Lenders. In accordance with the approved Post-Foreclosure Plan, Agent
Bank shall manage, operate, repair, administer, complete, construct, restore or
otherwise deal with the Collateral acquired and administer all transactions
relating thereto, including, without limitation, employing a management agent,
leasing agent and other agents, contractors and employees, including agents of
the sale of such Collateral, and the collecting of rents and other sums from
such Collateral and paying the expenses of such Collateral; actions taken by
Agent Bank with respect to the Collateral, which are not provided for in the
approved Post-Foreclosure Plan or reasonably incidental thereto, shall require
the consent of Requisite Lenders by way of supplement to such Post-Foreclosure
Plan. Upon demand therefor from time to time, each Lender will contribute its
share (based on its Pro Rata Share) of all reasonable costs and expenses
incurred by Agent Bank pursuant to the Post-Foreclosure Plan in connection with
the construction, operation, management, maintenance, leasing and sale of such
Collateral. In addition, Agent Bank shall render or cause to be rendered by the
managing agent, to each of the Lenders, monthly, an income and expense statement
for such Collateral, and each of the Lenders shall promptly contribute its Pro
Rata Share of any operating loss for such Collateral, and such other expenses
and operating reserves as Agent Bank shall deem reasonably necessary pursuant to
and in accordance with the Post-Foreclosure Plan. To the extent there is net
operating income from such Collateral, Agent Bank shall, in accordance with all
applicable Gaming Laws and the Post- Foreclosure Plan, determine the amount and
timing of distributions to Lenders. All such distributions shall be made to
Lenders in accordance with their respective Pro Rata Shares. Lenders acknowledge
that if title to any Collateral is obtained by Agent Bank or its nominee, such
Collateral will not be held as a permanent investment but will be liquidated as
soon as practicable. Agent Bank shall undertake to sell such Collateral, at such
price and upon such terms and conditions as the Requisite Lenders shall
reasonably determine to be most advantageous. Any purchase money mortgage or
deed of trust taken in connection with the disposition of such Collateral in
accordance with the immediately preceding sentence shall name Agent Bank, as
agent for Lenders, as the
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beneficiary or mortgagee. In such case, Agent Bank and Lenders shall enter into
an agreement with respect to such purchase money mortgage defining the rights of
Lenders in the same Pro Rata Shares as provided hereunder, which agreement shall
be in all material respects similar to this Article IX insofar as the same is
appropriate or applicable.
Section 9.12. Lender Actions Against Collateral and Restriction on
Exercise of Set-Off. Each Lender agrees that it will not take any action, nor
institute any actions or proceedings, against Borrowers or any other obligor
hereunder, under the Security Documentation or under any other Loan Documents
with respect to exercising claims against or rights in any Collateral or
exercise any set-off under Section 10.22 or under common law without the prior
consent of Requisite Lenders.
Section 9.13. Ratable Sharing. Subject to Section 9.03 and 9.04, upon
the occurrence of an Event of Default, Lenders agree among themselves that (i)
with respect to all amounts received by them which are applicable to the payment
of the Obligations, equitable adjustment will be made so that, in effect, all
such amounts will be shared among them ratably in accordance with their Pro Rata
Shares, whether received by voluntary payment, by counterclaim or cross action
or by the enforcement of any or all of the Obligations, or the Collateral, (ii)
if any of them shall by voluntary payment or by the exercise of any right of
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of the Obligations held by it which is greater than its Pro Rata Share of
the payments on account of the Obligations, the one receiving such excess
payment shall purchase, without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in such Obligations owed to the others so that all such
recoveries with respect to such Obligations shall be applied ratably in
accordance with their Pro Rata Shares; provided, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent necessary to adjust
for such recovery, but without interest except to the extent the purchasing
party is required to pay interest in connection with such recovery. Borrowers
agree that any Lender so purchasing a participation from another Lender pursuant
to this Section 9.13 may, to the fullest
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extent permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender were the direct creditor of Borrowers
in the amount of such participation. No Lender shall exercise any setoff,
banker's lien or other similar right in respect to any Obligations without the
prior written approval by Agent Bank.
Section 9.14. Delivery of Documents. Agent Bank shall as soon as
reasonably practicable distribute to each Lender at its primary address set
forth on the appropriate counterpart signature page hereof, or at such other
address as a Lender may request in writing, (i)copies of all documents to which
such Lender is a party or of which is executed or held by Agent Bank on behalf
of such Lender, (ii) all documents of which Agent Bank receives copies from
Borrowers pursuant to Article VI and Section 10.03, (iii) all other documents or
information which Agent Bank is required to send to Lenders pursuant to the
terms of this Credit Agreement, (iv) other information or documents received by
Agent Bank at the request of any Lender, and (v) all notices received by Agent
Bank pursuant to Section 5.20. In addition, within fifteen (15) Banking Business
Days after receipt of a request in writing from a Lender for written information
or documents provided by or prepared by Borrowers, Agent Bank shall deliver such
written information or documents to such requesting Lender if Agent Bank has
possession of such written information or documents in its capacity as Agent
Bank or as a Lender.
Section 9.15. Notice of Events of Default. Agent Bank shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default (other than nonpayment of principal of or interest on the Bank
Facilities) unless Agent Bank has received notice in writing from a Lender or
Borrowers referring to this Credit Agreement or the other Loan Documents,
describing such event or condition and expressly stating that such notice is a
notice of a Default or Event of Default. Should Agent Bank receive such notice
of the occurrence of a Default or Event of Default, or should Agent Bank send
Borrowers a notice of Default or Event of Default, Agent Bank shall promptly
give notice thereof to each Lender.
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ARTICLE X
GENERAL TERMS AND CONDITIONS
The following terms and conditions shall be applicable until Bank
Facility Termination:
Section 10.01. Amendments and Waivers. (a) No amendment or modification
of any provision of this Credit Agreement shall be effective without the written
agreement of Requisite Lenders (after notice to all Lenders) and Borrowers
(except for rights and priorities of Lenders as amongst themselves as provided
in Section 9.04(a) which do not require the consent of Borrowers), and (b) no
termination or waiver of any provision of this Credit Agreement, or consent to
any departure by Borrowers therefrom shall in any event be effective without the
written concurrence of Requisite Lenders (after notice to all Lenders), which
Requisite Lenders shall have the right to grant or withhold at their sole
discretion, except that the following amendments, modifications or waivers shall
require the consent of all Lenders:
(i) modify any requirement hereunder that any particular action
be taken by all the Lenders or by the Requisite Lenders, modify this Section
10.01 or change the definition of "Requisite Lenders", or remove Agent Bank
under Section 9.09(a), shall be effective unless consented to by all of the
Lenders, without regard to the vote of Agent Bank as a Lender with regard to the
removal of Agent Bank under Section 9.09(a);
(ii) increase the Aggregate Commitment or increase the
respective Syndication Interests of any Lender, release any material portion of
the Collateral except as specifically provided in the Credit Agreement, release
any Borrower or Subsidiary Guarantor except as specifically provided in the
Credit Agreement, extend the Maturity Date or change any provision expressly
requiring the consent of all Lenders shall be made without the consent of each
Lender; or
(iii) reduce any fees described in Section 2.10(b) or (c) or
extend the due date for, or reduce or postpone the amount of, any payments or
Scheduled Reductions on the Credit Facility, or reduce the rate of interest or
postpone the payment of interest on the Credit Facility, shall be made without
the consent of all of the Lenders.
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No amendment, modification, termination or waiver of any provision of Article IX
or any other provision referring to Agent Bank shall be effective without the
written concurrence of Agent Bank, but only if such amendment, modification,
termination or waiver alters the obligations or rights of Agent Bank. Any waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Borrowers in any case
shall entitle Borrowers to any other further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.01 shall be binding on each
assignee, transferee or recipient of Agent Bank's or any Lender's respective
Syndication Interest in the Credit Facility at the time outstanding. No
modification of Section 2.08 or the Swingline Note shall be made without the
consent of the Swingline Lender. No modification of Section 2.09 shall be made
without the consent of the L/C Issuer.
Section 10.02. Failure to Exercise Rights. Nothing herein contained
shall impose upon Banks or Borrowers any obligation to enforce any terms,
covenants or conditions contained herein. Failure of Banks or Borrowers, in any
one or more instances, to insist upon strict performance by Borrowers or Banks
of any terms, covenants or conditions of this Credit Agreement or the other Loan
Documents, shall not be considered or taken as a waiver or relinquishment by
Banks or Borrowers of their right to insist upon and to enforce in the future,
by injunction or other appropriate legal or equitable remedy, strict compliance
by Borrowers or Banks with all the terms, covenants and conditions of this
Credit Agreement and the other Loan Documents. The consent of Banks or Borrowers
to any act or omission by Borrowers or Banks shall not be construed to be a
consent to any other or subsequent act or omission or to waive the requirement
for Banks' or Borrowers' consent to be obtained in any future or other instance.
Section 10.03. Notices and Delivery. Unless otherwise specifically
provided herein, any consent, notice or other communication herein required or
permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or United States mail and shall be deemed
to have been given when delivered in
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person or by courier service, upon receipt of a telecopy (or on the next Banking
Business Day if such telecopy is received on a non- Banking Business Day or
after 5:00 p.m. on a Banking Business Day) or four (4) Banking Business Days
after deposit in the United States mail (registered or certified, with postage
prepaid and properly addressed). Notices to Agent Bank pursuant to Articles II
shall not be effective until received by Agent Bank. For the purposes hereof,
the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 10.03) shall be as set forth below each
party's name on the signature pages hereof, or, as to each party, at such other
address as may be designated by such party in an Assignment and Assumption
Agreement or in a written notice to all of the other parties. All deliveries to
be made to Agent Bank for distribution to the Lenders shall be made to Agent
Bank at the addresses specified for notice on the signature page hereto and in
addition, a sufficient number of copies of each such delivery shall be delivered
to Agent Bank for delivery to each Lender at the address specified for
deliveries on the signature page hereto or such other address as may be
designated by Agent Bank in a written notice.
Section 10.04. Modification in Writing. This Credit Agreement and the
other Loan Documents constitute the entire agreement between the parties and
supersede all prior agreements whether written or oral with respect to the
subject matter hereof, including, but not limited to, the Commitment Letter and
any term sheets furnished by any of the Banks to Borrowers. Neither this Credit
Agreement, nor any other Loan Documents, nor any provision herein, or therein,
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
Section 10.05. Other Agreements. If the terms of any documents,
certificates or agreements delivered in connection with this Credit Agreement
are inconsistent with the terms of the Loan Documents, Borrowers shall use their
best efforts to amend such document, certificate or agreement to the
satisfaction of Agent Bank to remove such inconsistency.
Section 10.06. Counterparts. This Credit Agreement may be executed by
the parties hereto in any number of separate counterparts with the same effect
as if the
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signatures hereto and hereby were upon the same instrument. All such
counterparts shall together constitute but one and the same document.
Section 10.07. Rights, Powers and Remedies are Cumulative. None of the
rights, powers and remedies conferred upon or reserved to Agent Bank, Banks or
Borrowers in this Credit Agreement are intended to be exclusive of any other
available right, power or remedy, but each and every such right, power and
remedy shall be cumulative and not alternative, and shall be in addition to
every right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute. Any forbearance, delay or omission by
Agent Bank, Banks or Borrowers in the exercise of any right, power or remedy
shall not impair any such right, power or remedy or be considered or taken as a
waiver or relinquishment of the right to insist upon and to enforce in the
future, by injunction or other appropriate legal or equitable remedy, any of
said rights, powers and remedies given to Agent Bank, Banks or Borrowers herein.
The exercise of any right or partial exercise thereof by Agent Bank, Banks or
Borrowers shall not preclude the further exercise thereof and the same shall
continue in full force and effect until specifically waived by an instrument in
writing executed by Agent Bank or Banks, as the case may be.
Section 10.08. Continuing Representations. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Credit Agreement, the making of the Bank Facilities hereunder
and the execution and delivery of each other Loan Document until final payment
of all sums owing under the Bank Facilities and Bank Facility Termination has
occurred.
Section 10.09. Successors and Assigns. All of the terms, covenants,
warranties and conditions contained in this Credit Agreement shall be binding
upon and inure to the sole and exclusive benefit of the parties hereto and their
respective successors and assigns.
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Section 10.10. Assignment of Loan Documents by Borrowers or
Syndication Interests by Lenders.
a. This Credit Agreement and the other Loan Documents to which
Borrowers are a party will be binding upon and inure to the benefit of
Borrowers, the Agent Bank, each of the Banks, and their respective successors
and assigns, except that, Borrowers may not assign their rights hereunder or
thereunder or any interest herein or therein without the prior written consent
of all the Lenders. Any attempted assignment or delegation in contravention of
the foregoing shall be null and void. Any Lender may at any time pledge its
Syndication Interest in the Credit Facility, the Credit Agreement and the Loan
Documents to a Federal Reserve Bank, but no such pledge shall release that
Lender from its obligations hereunder or grant to such Federal Reserve Bank the
rights of a Lender hereunder absent foreclosure of such pledge.
b. Each Lender may assign all or any part of its Syndication
Interest in the Credit Facility to any Affiliate of such Lender or to any other
Lender without consent and to one or more financial institutions that are
Eligible Assignees with the prior consent of the Agent Bank and Borrowers (which
consents shall not be unreasonably withheld or delayed); provided, however, that
the minimum amount of each such assignment shall be Five Million Dollars
($5,000,000.00), or such lesser amount as may be agreed between Borrowers and
Agent Bank or as constitutes the remaining amount of a Lender's Syndication
Interest in the Credit Facility (except that there shall be no minimum
assignment among the Lenders or to their Affiliates), and each assignee Lender
(or assignor if so agreed between the assignee Lender and such assignor) shall
pay to the Agent Bank an assignment fee of Three Thousand Five Hundred Dollars
($3,500.00) with respect to each such assignment. Each such assignment shall be
evidenced by an assignment substantially in the form of an Assignment and
Assumption Agreement or other form reasonably acceptable to Agent Bank and
Borrowers. Upon any such assignment, the assignee financial institution shall
become a Lender for all purposes under the Credit Agreement and each of the Loan
Documents and the assigning Lender shall be released from its further
obligations hereunder to the extent of such assignment. Notwithstanding the
foregoing, the rights of the Lenders to make assignments shall be subject to the
approval by the Gaming Authorities of the assignee or participant, to the extent
required by applicable Gaming Laws, and to applicable securities laws.
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151
c. Each Lender may sell participations without notice to or
consent of the Borrowers, or any of them, or Agent Bank to any bank or financial
institution which is not a competitor or an Affiliate of any competitor of the
Hotel/Casino Facilities in the gaming industry (it being acknowledged that a
bank or financial institution shall not be deemed a competitor or Affiliate of a
competitor merely because it lends money or otherwise extends credit to any such
competitor or Affiliate of a competitor), for all or any part of its Syndication
Interest in the Credit Facility; provided, however, that (i) such Lender shall
remain responsible for its total obligations under the Credit Agreement and each
of the Loan Documents, (ii) the Borrowers and the Agent Bank shall continue to
deal solely with such Lender in connection with such Lender's rights and
obligations under the Credit Agreement and each of the Loan Documents, and (iii)
such Lender shall not sell any participation under which the participant would
have rights to approve any amendment or waiver relating to the Credit Agreement
or any Loan Document except to the extent any such amendment or waiver would (w)
extend the final maturity date or the date for the payment of any installments
of fees, principal or interest due in respect of the Credit Facility, (x) reduce
the interest rates applicable to the Credit Facility or (y) release any material
portion of the Collateral. Notwithstanding the foregoing, the rights of the
Lenders to grant participations shall be subject to the approval by the Gaming
Authorities of the assignee or participant, to the extent required by applicable
Gaming Laws, and to applicable securities laws.
d. In the event any Lender is found unsuitable as a Lender
under the Credit Facility by the Gaming Authorities or the Governmental
Authorities of any State of the United States ("Unsuitable Lender"): (a) Agent
Bank shall use its best efforts to find a replacement Lender, (b) Borrowers
shall have the right to make a Voluntary Reduction in the amount necessary to
reduce the Aggregate Commitment by the amount of the Syndication Interest held
by the Unsuitable Lender (without any penalties, including any Breakage Charges)
until a replacement Lender, if any, commits to acquire the Syndication Interest
of the Unsuitable Lender, at which time the Aggregate Commitment shall be
increased by the amount of the Voluntary Reduction, and (c) upon full payment of
all outstanding amounts of principal and interest
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152
owing it, such Unsuitable Lender shall execute such documents as may be required
by Agent Bank, Borrowers or any applicable gaming authorities to evidence the
termination of its Syndication Interest in the Credit Facility.
Section 10.11. Action by Lenders. Whenever Banks shall have the right
to make an election, or to exercise any right, or their consent shall be
required for any action under this Credit Agreement or the Loan Documents, then
such election, exercise or consent shall be given or made for all Banks by Agent
Bank in accordance with the provisions of Sections 10.01. Notices, reports and
other documents required to be given by Borrowers to Banks hereunder may be
given by Borrowers to Agent Bank on behalf of Banks, with sufficient copies for
distribution to each of the Banks, and the delivery to Agent Bank shall
constitute delivery to Banks. In the event any payment or payments are received
by a Lender other than Agent Bank, Borrowers consent to such payments being
shared and distributed as provided herein.
Section 10.12. Time of Essence. Time shall be of the essence of this
Credit Agreement.
Section 10.13. Choice of Law and Forum. This Credit Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Nevada without regard to principles of conflicts of law. Borrowers further agree
that a non-exclusive forum for the determination of any action relating to this
Credit Agreement, the Loan Documents, or any other document or instrument
delivered in favor of Banks pursuant to the terms hereof may include an
appropriate Court of the State of Nevada or the United States District Court or
United States Bankruptcy Court for the District of Nevada and the Borrowers
hereby irrevocably submit to the jurisdiction thereof.
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153
Section 10.14. Arbitration.
a. Upon the request of any party, whether made before or after
the institution of any legal proceeding, any action, dispute, claim or
controversy of any kind (e.g., whether in contract or in tort, statutory or
common law, legal or equitable) ("Dispute") now existing or hereafter arising
between the parties in any way arising out of, pertaining to or in connection
with the Credit Agreement, Loan Documents or any related agreements, documents,
or instruments (collectively the "Documents"), may, by summary proceedings
(e.g., a plea in abatement or motion to stay further proceedings), bring an
action in court to compel arbitration of any Dispute.
b. All Disputes between the parties shall be resolved by
binding arbitration governed by the Commercial Arbitration Rules of the American
Arbitration Association, which shall use the Federal Rules of Civil Procedure
with respect to all discovery matters. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction.
c. No provision of, nor the exercise of any rights under this
arbitration clause shall limit the rights of any party, and the parties shall
have the right during any Dispute, to seek, use and employ ancillary or
preliminary remedies, judicial or otherwise, for the purposes of realizing upon,
preserving, protecting or foreclosing upon any property, real or personal, which
is involved in a Dispute, or which is subject to, or described in, the
Documents, including, without limitation, rights and remedies relating to: (i)
foreclosing against any real or personal property collateral or other security
by the exercise of a power of sale under the Security Documentation or other
security agreement or instrument, or applicable law, (ii) exercising self-help
remedies (including setoff rights) or (iii) obtaining provisional or ancillary
remedies such as injunctive relief, sequestration, attachment, garnishment or
the appointment of a receiver from a court having jurisdiction before, during or
after the pendency of any arbitration. The institution and maintenance of an
action for judicial relief or pursuit of provisional or ancillary remedies or
exercise of self-help remedies shall not constitute a waiver of the right of any
party, including the plaintiff, to submit the Dispute to arbitration nor render
inapplicable the compulsory arbitration provision hereof.
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154
Section 10.15. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED
BY LAW, BORROWERS AND EACH OF THE BANKS EACH MUTUALLY HEREBY EXPRESSLY WAIVE ANY
RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS CREDIT AGREEMENT, THE NOTES OR
ANY OF THE LOAN DOCUMENTS, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE DEALINGS OF BORROWERS AND BANKS WITH RESPECT TO THIS CREDIT
AGREEMENT, THE NOTES OR ANY OF THE LOAN DOCUMENTS, OR THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE
OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, BORROWERS AND EACH OF THE BANKS EACH MUTUALLY AGREE THAT ANY
SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDINGS SHALL BE DECIDED BY
A COURT TRIAL WITHOUT A JURY AND THAT THE DEFENDING PARTY MAY FILE AN ORIGINAL
COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE
OF THE CONSENT OF THE COMPLAINING PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY.
Section 10.16. Scope of Approval and Review. Any inspection of the
Hotel/Casino Facilities shall be deemed to be made solely for Banks' internal
purposes and shall not be relied upon by the Borrowers or any third party. In no
event shall Lenders be deemed or construed to be joint venturers or partners of
Borrowers.
Section 10.17. Severability of Provisions. In the event any one or
more of the provisions contained in this Credit Agreement shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
Section 10.18. Cumulative Nature of Covenants. All covenants contained
herein are cumulative and not exclusive of each other covenant. Any action
allowed by any covenant shall be allowed only if such action is not prohibited
by any other covenant.
Section 10.19. Costs to Prevailing Party. If any action or arbitration
proceeding is brought by any party against any other party under this Credit
Agreement or any of the Loan Documents, the prevailing party shall be entitled
to recover such costs and attorney's fees as the court in such action or
proceeding may adjudge reasonable.
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155
Section 10.20. Expenses.
a. Generally. Borrowers agree upon demand to promptly pay, or
reimburse Agent Bank for, all of Agent Bank's documented reasonable
out-of-pocket costs and expenses of every type and nature incurred by Agent Bank
at any time (whether prior to, on or after the date of this Credit Agreement) in
connection with (i) any requests for consent, waiver or other modification of
any Loan Document made by Borrowers, other than to correct errors attributable
to the Banks; (ii) the negotiation, preparation and execution of this Credit
Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III), the Security
Documentation and the other Loan Documents and the advance of Borrowings; (iii)
the subordination of any Collateral, including title charges, recording fees and
reasonable attorneys' fees and costs incurred in connection therewith; (iv) any
appraisals performed after the occurrence of an Event of Default; (v) the
creation, perfection or protection of the Security Documentation on the
Collateral (including, without limitation, any fees and expenses for title and
lien searches, local counsel in various jurisdictions, filing and recording fees
and taxes, duplication costs and corporate search fees); and (vi) the
protection, collection or enforcement of any of the Obligations or the
Collateral, including Protective Advances.
b. After Event of Default. Borrowers further agree to pay, or
reimburse Agent Bank and Lenders, for all reasonable out-of-pocket costs and
expenses, including without limitation reasonable attorneys' fees and
disbursements incurred by Agent Bank or Lenders after the occurrence of an Event
of Default (i) in enforcing any Obligation or in foreclosing against the
Collateral or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Credit Agreement in
the nature of a "work-out" or in any insolvency or bankruptcy proceeding; (iii)
in commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to Borrowers and related to or arising out of the transactions
contemplated hereby (whether in bankruptcy or otherwise);
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156
(iv) in taking any other action in or with respect to any suit or proceeding
(whether in bankruptcy or otherwise); (v) in protecting, preserving, collecting,
leasing, selling, taking possession of, or liquidating any of the Collateral; or
(vi) in attempting to enforce or enforcing any lien in any of the Collateral or
any other rights under the Security Documentation.
Section 10.21. Security and Loan Documentation. The Security
Documentation and other Loan Documents (other than this Credit Agreement) may be
held in the name of WFB as the Agent Bank of all Banks hereunder pursuant to the
terms of this Credit Agreement.
Section 10.22. Setoff. In addition to any rights and remedies of the
Banks provided by law, if any Event of Default exists, Agent Bank is authorized
at any time and from time to time, without prior notice to the Borrowers, any
such notice being waived by the Borrowers to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by such Bank to or for the credit
or the account of Borrowers against any and all obligations of Borrowers under
the Bank Facilities, now or hereafter existing, irrespective of whether or not
the Agent Bank or any such Bank shall have made demand under this Credit
Agreement or any Loan Document and although such amounts owed may be contingent
or unmatured. Agent Bank agrees promptly to notify the Borrowers and the Agent
Bank (and Agent Bank shall promptly notify each other Bank) after any such
setoff and application made by Agent Bank; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Bank under this Section 10.22 are in addition to
the other rights and remedies (including other rights of setoff) which each such
Bank may have.
Section 10.23. Borrowers' Waivers and Consents.
a. Each Borrower shall be jointly and severally liable for the
repayment of all Aggregate Outstandings and Obligations hereunder.
b. Each Borrower agrees that neither the Agent Bank nor any
Bank shall have any responsibility to inquire into the apportionment, allocation
or disposition of any Borrowings, Swingline Advances and/or Letters of Credit as
among the Borrowers.
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157
c. For the purpose of implementing the joint borrower
provisions of this Credit Agreement and each of the Loan Documents, each
Borrower hereby irrevocably appoints each other Borrower as its agent and
attorney-in-fact for all purposes of this Credit Agreement and each of the Loan
Documents, including without limitation the giving and receiving of notices and
other communications, the making of requests for, or conversions or
continuations of, Borrowings, Swingline Advances and/or Letters of Credit, the
execution and delivery of certificates and the receipt and allocation of
disbursements from the Banks.
d. Each Borrower acknowledges that the handling of the Bank
Facilities on a joint borrowing basis as set forth in this Credit Agreement is
solely an accommodation to Borrowers and is done at their request. Each Borrower
agrees that neither the Agent Bank, nor any Bank, shall incur any liability to
any Borrower as a result thereof. To induce the Agent Bank and the Banks to
enter into this Credit Agreement, and in consideration thereof, in accordance
with the provisions set forth in Section 5.14 of this Credit Agreement, each
Borrower hereby agrees to indemnify the Agent Bank and each Bank and hold each
such entity harmless from and against any and all liabilities, expenses, losses,
damages and/or claims of damage or injury asserted against such entity by any
Borrower or by any other Person arising from or incurred by reason of the
structuring of the Bank Facilities as herein provided, reliance by the Agent
Bank or the Banks on any requests or instructions from any Borrower, or any
other action taken by the Agent Bank or a Bank hereunder. This Section shall
survive Bank Facility Termination.
e. Each Borrower represents and warrants to the Agent Bank and
the Banks that (i) it has established adequate means of obtaining from each
other Borrower on a continuing basis financial and other information pertaining
to the business, operations and condition (financial and otherwise) of each of
the other Borrowers and its respective property, and (ii) each Borrower now is
and hereafter will be completely familiar with the business, operations and
condition (financial and otherwise) of each other Borrower, and its property.
Each Borrower hereby waives and relinquishes any duty on the part of the Agent
Bank or any Bank to disclose to such Borrower any matter, fact or thing
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158
relating to the business, operations or condition (financial or otherwise) of
any other Borrower, or the property of any other Borrower, whether now or
hereafter known by the Agent Bank or any Bank at any time through Bank Facility
Termination.
f. Each Borrower acknowledges that the Aggregate Outstandings,
or portions thereof, may derive from value provided directly to another Person
and, in full recognition of that fact, each Borrower consents and agrees that
the Agent Bank and any Bank may, at any time and from time to time, without
notice or demand, and without affecting the enforceability or security of the
Loan Documents:
(i) accept partial payments on the Bank Facilities;
(ii) receive and hold additional security or guaranties for
the Bank Facilities or any part thereof;
(iii) release, reconvey, terminate, waive, abandon,
subordinate, exchange, substitute, transfer and enforce any security or
guaranties, and apply any security and direct the order or manner of
sale thereof, as the Agent Bank or such Bank in its sole and absolute
discretion may determine;
(iv) release any party or any guarantor from any personal
liability with respect to the Bank Facilities or any part thereof;
(v) settle, release on terms satisfactory to the Agent Bank
or such Bank or by operation of applicable laws or otherwise liquidate
or enforce any Bank Facilities and any security or guaranty in any
manner, consent to the transfer of any security and bid and purchase at
any sale; and/or
(vi) consent to the merger, change or any other restructuring
or termination of the corporate existence of any other Borrower or any
other Person, and correspondingly restructure the Bank Facilities,
continuing existence of any lien or encumbrance under any other Loan
Document to which any Borrower is a party or the
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159
enforceability hereof or thereof with respect to all or any part of the
Bank Facilities.
Each Borrower expressly waives any right to require the Agent
Bank or any Bank to marshal assets in favor of any Borrower, any other
party or any other Person or to proceed against any other Borrower or
any other party or any Collateral provided by any other Borrower or any
other party, and agrees that the Agent Bank and any Bank may proceed
against Borrowers and/or the Collateral in such order as they shall
determine in their sole and absolute discretion. The Agent Bank and any
Bank may file a separate action or actions against any Borrower,
whether action is brought or prosecuted with respect to any other
security or against any other Person, or whether any other Person is
joined in any such action or actions. Each Borrower agrees that the
Agent Bank or any Bank and any other Borrower may deal with each other
in connection with the Bank Facilities or otherwise, or alter any
contracts or agreements now or hereafter existing between any of them,
in any manner whatsoever, all without in any way altering or affecting
the obligations of such Borrower under the Loan Documents. Each
Borrower expressly waives any and all defenses now or hereafter arising
or asserted by reason of: (a) any disability or other defense of any
other Borrower or any other party with respect to any Bank Facilities,
(b) the unenforceability or invalidity as to any other Borrower or any
other party of the Bank Facilities, (c) the unenforceability or
invalidity of any security or guaranty for the Bank Facilities or the
lack of perfection or continuing perfection or failure of priority of
any security for the Bank Facilities, (d) the cessation for any cause
whatsoever of the liability of any Borrower or any other party (other
than by reason of the full payment and performance of all Bank
Facilities), (e) any failure of the Agent Bank or any Bank to give
notice of sale or other disposition to any Borrower or any defect in
any notice that may be given in connection with any sale or
disposition, (f) any act or omission of the Agent Bank or any Bank or
others that directly or indirectly results
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160
in or aids the discharge or release of any Borrower or any other Person
or the Bank Facilities or any other security or guaranty therefor by
operation of law or otherwise, (g) any law which provides that the
obligation of a surety or guarantor must neither be larger in amount
nor in other respects more burdensome than that of the principal or
which reduces a surety's or guarantor's obligation in proportion to the
principal obligation, (h) any failure of the Agent Bank or any Bank to
file or enforce a claim in any bankruptcy or other proceeding with
respect to any Person, (i) the election by the Agent Bank or any Bank,
in any bankruptcy proceeding of any Person, of the application or
non-application of Section 1111(b)(2) of the United States Bankruptcy
Code, (j) any extension of credit or the grant of any lien or
encumbrance under Section 364 of the United States Bankruptcy Code, (k)
any use of cash collateral under Section 363 of the United States
Bankruptcy Code, (l) any agreement or stipulation with respect to the
provision of adequate protection in any bankruptcy proceeding of any
Person, (m) the avoidance of any lien or encumbrance in favor of the
Agent Bank or any Bank for any reason, (n) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against any Person, including
any discharge of, or bar or stay against collecting, all or any of the
obligations (or any interest thereon) in or as a result of any such
proceeding, or (o) any election of remedies by the Agent Bank or any
Bank, even if the effect thereof is to destroy or impair any Borrower's
right to subrogation, reimbursement, exoneration, indemnification or
contribution.
g. In the event that all or any part of the Bank Facilities at
any time are secured by any one or more deeds of trust or mortgages creating or
granting liens on any interests in real property, each Borrower authorizes the
Agent Bank and any Bank, upon the occurrence of any Default Notice Recording and
the acceleration of the Indebtedness then owing under the Bank Facilities, at
their sole option, without any other notice or demand and without affecting any
of the Bank Facilities or the validity or enforceability of
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161
any liens or encumbrance in favor of the Agent Bank or any Bank on any
Collateral, to foreclose any or all of such deeds of trust or mortgages by
judicial or nonjudicial sale. To the extent permitted by applicable law, each
Borrower expressly waives any defenses to the enforcement of the Loan Documents
or any liens or encumbrances created or granted under the Loan Documents or to
the recovery by the Agent Bank or any Bank against any other Borrower or any
guarantor or any other Person liable therefor of any deficiency after a judicial
or nonjudicial foreclosure or sale, even though such a foreclosure or sale may
impair the subrogation rights of a Borrower and may preclude a Borrower from
obtaining reimbursement or contribution from any Borrower.
h. Notwithstanding anything to the contrary elsewhere contained
herein or in any other Loan Document to which any Borrower is a party, each
Borrower hereby expressly agrees with respect to the other Borrowers and their
successors and assigns (including any surety) and any other Person which is
directly or indirectly a creditor of the other Borrowers or any surety for any
other Borrower, not to exercise, until Bank Facility Termination has irrevocably
occurred, any rights at law or in equity to subrogation, to reimbursement, to
exoneration, to contribution, to setoff or to any other rights that could accrue
to a surety against a principal, to a guarantor against a maker or obligor, to
an accommodation party against the party accommodated, or to a holder or
transferee against a maker, and which such Borrower may have or hereafter
acquire against the other Borrowers or any other such Person in connection with
or as a result of such Borrower's execution, delivery and/or performance of this
Credit Agreement or any other Loan Document to which such Borrower is a party.
Section 10.24. Confidentiality. Each of the Banks agrees to hold any
non-public information that it may receive from Borrowers pursuant to this
Credit Agreement (or pursuant to any other Loan Document) in confidence and
consistent with their respective policies for handling material non-public
information, except for disclosure: (a) To the other Banks; (b) To legal counsel
and accountants for Borrowers or any of the Banks; (c) To the other professional
advisors to Borrowers or any of the Banks, provided that the recipient has
accepted such information subject to a confidentiality agreement substantially
similar to this Section 10.24; (d) To regulatory officials having jurisdiction
over that Bank; (e) To any Gaming Authority
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162
having regulatory jurisdiction over Borrowers or their respective Subsidiaries,
provided that each of the Banks agrees to endeavor to notify Borrowers of any
such disclosure; (f) As required by law or legal process or in connection with
any legal proceeding, provided that such disclosing Bank uses reasonable efforts
to notify Borrowers prior to any such disclosure; and (g) To another financial
institution in connection with a disposition or proposed disposition to that
financial institution of all or part of that Lender's Syndication Interest
hereunder or in the Revolving Credit Note, provided that the recipient has
accepted such information subject to a confidentiality agreement substantially
similar to this Section 10.24. For purposes of the foregoing, "non-public
information" shall mean any information respecting Borrowers or their respective
Subsidiaries reasonably considered by Borrowers to be material and not available
to the public, other than (i) information previously filed with any governmental
agency and available to the public, (ii) information which is available to the
general public at the time of use or disclosure, (iii) information which becomes
available to the general public, other than by manner of unauthorized disclosure
or use, or (iv) information previously published in any public medium from a
source other than, directly or indirectly, that Bank. Nothing in this Section
shall be construed to create or give rise to any fiduciary duty on the part of
the Agent Bank or the Banks to Borrowers.
Section 10.25. Schedules Attached. Schedules are attached hereto and
incorporated herein and made a part hereof as follows:
Schedule 2.01(a) - Schedule of Lenders' Proportions in Credit
Facility
Schedule 2.01(c) - Aggregate Commitment Reduction Schedule
Schedule 3.17(a) - Schedule of Existing BHGD Loan Security
Documents
Schedule 3.17(b) - Schedule of Existing BHJE Loan Security
Documents
Schedule 3.20 - Schedule of Significant Litigation
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163
Schedule 4.01(a) - Schedule of BHJE Members
Schedule 4.15 - Schedules of Spaceleases
(A) Lodge Schedule of Spaceleases
(B) Gilpin Schedule of Spaceleases
Schedule 4.16 - Schedules of Equipment Leases and Contracts
(A) Lodge Schedule of Equipment Leases and
Contracts
(B) Gilpin Schedule of Equipment Leases and
Contracts
Schedule 4.22 - Schedule of Restricted and Unrestricted
Subsidiaries
Schedule 4.27 - Schedule of Trademarks, Patents, Licenses,
Franchises, Formulas and Copyrights
Schedule 4.28 - Schedule of Contingent Liabilities
Section 10.26. Exhibits Attached. Exhibits are attached hereto and
incorporated herein and made a part hereof as follows:
Exhibit A - Revolving Credit Note - Form
Exhibit B - Swingline Note - Form
Exhibit C - Notice of Borrowing - Form
Exhibit D - Continuation/Conversion Notice - Form
Exhibit E - Notice of Swingline Advance - Form
Exhibit F - Compliance Certificate - Form
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164
Exhibit G - Pricing Certificate - Form
Exhibit H - Authorized Representative Certificate - Form
Exhibit I - Closing Certificate - Form
Exhibit J - Legal Opinion - Form
Exhibit K - Subsidiary Guaranty - Form
Exhibit L - Assignment and Assumption Agreement - Form
Exhibit M - Cash Collateral Pledge Agreement - Form
Exhibit N - Stock Pledge (Gaming) - Form
Exhibit O - Stock Pledge (General) - Form
Exhibit P - Lodge Property - Description
Exhibit Q - Gilpin Property - Description
Exhibit R - Management Agreement
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165
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed as of the day and year first above written.
BORROWERS:
BLACK HAWK/JACOBS
ENTERTAINMENT, LLC,
a Colorado limited liability
company
By: BH ENTERTAINMENT LTD.,
an Ohio limited
liability company,
its Co-Manager
By: JACOBS ENTERTAINMENT LTD.,
an Ohio limited liability
company, its Manager
By
---------------------------------
Jeffrey P. Jacobs,
President
By: BLACK HAWK GAMING &
DEVELOPMENT COMPANY, INC.,
a Colorado corporation,
its Co-Manager
By
-------------------------------------
Stephen R. Roark,
President
Address:
240 Main Street
P.O. Box 21
Black Hawk, CO 80422
Attn: Stephen R. Roark
Telephone: (303) 582-1117
Facsimile: (303) 582-0239
S-1
166
with a copy to:
Jeffrey P. Jacobs
c/o Jacobs Investments, Inc.
425 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: (216) 861-4080
Facsimile: (216) 861-6315
BLACK HAWK GAMING &
DEVELOPMENT COMPANY, INC.,
a Colorado corporation
By
----------------------------------------
Stephen R. Roark,
President
Address:
240 Main Street
P.O. Box 21
Black Hawk, CO 80422
Attn: Stephen R. Roark
Telephone: (303) 582-1117
Facsimile: (303) 582-0239
GILPIN VENTURES, INC.,
a Colorado corporation
By
----------------------------------------
Stephen R. Roark,
President
Address:
240 Main Street
P.O. Box 21
Black Hawk, CO 80422
Attn: Stephen R. Roark
Telephone: (303) 582-1117
Facsimile: (303) 582-0239
S-2
167
GILPIN HOTEL VENTURE,
a Colorado joint venture
partnership
By: BLACK HAWK GAMING &
DEVELOPMENT COMPANY,
INC., a Colorado
corporation,
joint venture partner
By
------------------------------------
Stephen R. Roark,
President
By: GILPIN VENTURES, INC.,
a Colorado corporation,
joint venture partner
By
------------------------------------
Stephen R. Roark,
President
Address:
240 Main Street
P.O. Box 21
Black Hawk, CO 80422
Attn: Stephen R. Roark
Telephone: (303) 582-1117
Facsimile: (303) 582-0239
S-3
168
BANKS:
WELLS FARGO BANK,
National Association,
Agent Bank, Lender,
Swingline Lender and
L/C Issuer
By
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Name
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Title
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Address:
Credit Matters
Wells Fargo Bank, N.A.
3800 Howard Hughes Parkway
Las Vegas, NV 89109
Attn: Dave Kramer, V.P.
Telephone: (702) 791-6273
Facsimile: (702) 791-6248
Borrowings, Payments, Conversions
Wells Fargo Bank, NA, as Agent Bank
Commercial Bank Loan Center
Agency Dept. 2840
201 3rd Street, 8th Floor
San Francisco, CA 94103
Attn: Manager
Telephone: (415) 477-5379
Facsimile: (415) 512-9408
Payment Instructions
Wells Fargo Bank, NA
San Francisco, CA
ABA # 1210-00248
For Acct.: 4081-656936
Ref: Black Hawk
THE FIRST NATIONAL BANK OF
CHICAGO, Lender
By
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Name
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Title
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S-4
169
Address:
777 South Figueroa Street
4th Floor
Los Angeles, CA 90017-5800
Telephone: (213) 683-4948
Facsimile: (213) 683-4999
KEYBANK NATIONAL ASSOCIATION,
Lender
By
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Name
--------------------------------------
Title
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Address:
700 Fifth Avenue, 46th Floor
Seattle, WA 98104
Attn: Tom Crandell, V.P.
Telephone: (206) 684-6037
Facsimile: (206) 684-6035
FIRST SECURITY BANK, N.A.,
Lender
By
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Name
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Title
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S-5
170
Address:
15 East 100 South - 2nd Floor
Salt Lake City, UT 84111
Attn: David P. Williams, V.P.
Telephone: (801) 246-5540
Facsimile: (801) 246-5532
WEST COAST BANK,
Lender
By
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Name
--------------------------------------
Title
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Address:
301 Church Street
P.O. Box 428
Salem, OR 97308-0428
Telephone: (800) 422-5724
Ext. 2915
Facsimile: (503) 399-3937
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