Exhibit 10.9
EALING CORP.
C/O ICAHN ASSOCIATES CORP.
767 5TH AVENUE, 47TH FLOOR
NEW YORK, NY 10153
January 30, 2004
GB Holdings, Inc.
c/o Sands Hotel & Casino
Indiana Avenue & Brighton Park
Atlantic City, New Jersey 08401
Gentlemen:
In response to your request for a financial commitment from us, we are pleased
to inform you that Ealing Corp., a Nevada corporation (the "Lender")hereby
provides this commitment to provide to GB Holdings, Inc., a Delaware corporation
and its subsidiaries (collectively the "Borrowers") a loan facility (the
"Facility"), on the terms and subject to the conditions set forth on the Term
Sheet attached hereto as Annex A (the "Loan Terms").
This Commitment Letter and the obligation of the Lender to make any loans
pursuant to the Facility is subject to and conditioned on the negotiation and
execution of definitive loan documents and the execution of security documents
(collectively, the "Definitive Agreements") evidencing the first lien on the
assets of the Borrowers.
The Lender acknowledges that the Borrowers have the right and ability to seek
alternative sources of financing on terms other than the Loan Terms and the
Borrowers are not obligated to borrow under the Facility. As a result, the
Lender will not begin preparation of the Definitive Agreements or take other
action until the Borrowers provide a written indication that they want to
proceed with the preparation of such Agreements and that they undertake to
reimburse the Lender for all costs and expenses incurred.
In the event that the Definitive Agreements are not executed on or before April
1, 2004, this Commitment Letter and the Lender's commitment hereunder shall
automatically terminate on April 1, 2004 unless the Lender shall, in its sole
discretion, agree in writing to an extension.
[Signature Page to Follow]
Lender is pleased to have been given the opportunity to assist you in
connection with this financing.
VERY TRULY YOURS,
EALING CORP.
/s/ Edward E. Mattner
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Name: Edward E. Mattner
Title: Authorized Signatory
Receipt Acknowledged:
GB HOLDINGS INC.
/s/ Douglas S. Niethold
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Name: Douglas S. Niethold
Title: Vice President, Interim Chief
Financial Officer
REVOLVING CREDIT FACILITY
Summary of Terms and Conditions
I. PARTIES
Borrowers:
GB Holdings, Inc.
Greate Bay Hotel and Casino, Inc.
GB Funding Corp.
(the "Borrowers").
Lender: Ealing Corp. (the "Lender").
II. REVOLVING CREDIT FACILITY
Type and Amount of Revolving credit facility (the "Revolving
Facility: Credit Facility") in the amount of $10 million
(the loans thereunder, the "Loans").
Availability: The Revolving Credit Facility shall be
available on a revolving basis during the
period commencing on the Availability Date
through June 30, 2004. No additional
borrowings will be made or available after
June 30, 2004.
Maturity: June 30, 2005
Purpose: The proceeds of the Loans shall be used for
general working capital purposes.
III. CERTAIN PAYMENT
PROVISIONS
Fees and Interest Rates: As set forth on Annex I.
Optional Prepayments and Loans may be prepaid and commitments may be
Commitment Reductions: reduced by the Borrower in minimum amounts to
be agreed upon.
Mandatory Repayments: 100% of the net proceeds of any sale or other
disposition (including as a result of casualty
or condemnation) by the Borrower or any of its
subsidiaries of any assets (except for the
sale of inventory in the ordinary course of
business and certain other dispositions to be
agreed on) shall be applied to repay the
Revolving Credit Facility.
IV. COLLATERAL The obligations of each Borrower in respect of
the Revolving Credit Facility shall be secured
by a perfected first priority security
interest in favor of the Lender in each
Borrower's present and future tangible and
intangible assets (including, without
limitation, goods, payment receivables,
deposit accounts, general intangibles,
intellectual property, real property and all
of the capital stock of and other investment
property with all indebtedness under
indentures being subordinated to the Loans.
This Loan will be a first priority loan and
will be assumed by the new entities following
the Lender's review and approval of the
underlying documents, in connection with the
currently anticipated transaction involving
Atlantic Coast Entertainment Holdings, Inc.
and ACE Gaming, LLC (the "Transaction")
The Lender will enter into an intercreditor
agreement with, among other parties, the
trustee under the existing indenture and in
connection with the Transaction, with the
trustee under the new indenture contemplated
therein.
V. CERTAIN CONDITIONS
Closing Date Conditions: The effectiveness of the Revolving Credit
Facility shall be conditioned upon the
continuing satisfaction of conditions
precedent usual for facilities and
transactions of this type, including, without
limitation, customary corporate and document
delivery requirements, delivery of
documentation, including the collateral
documents, title policies, lien searches,
receipt of certain approvals, perfection of
certain security interests, payment of fees,
delivery of legal opinions, accuracy of
representations and warranties under the
documentation or any other material agreements
as a result of the transactions contemplated
hereby, evidence of authority, and absence of
litigation (the date upon which all such
conditions precedent shall be satisfied to the
satisfaction of the Lender, the "Closing
Date").
Availability Date The availability of the Revolving Credit
Conditions Facility shall be conditioned upon the
continuing satisfaction of conditions
precedent usual for facilities and
transactions of this type, including, without
limitation, customary corporate and document
delivery requirements, receipt of all
necessary approvals, perfection of all
security interests, payment of fees, delivery
of legal opinions, accuracy of representations
and
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warranties under the documentation or any
other material agreements as a result of the
transactions contemplated hereby, evidence of
authority, and absence of litigation affecting
the Transaction (the date upon which all such
conditions precedent shall be satisfied to the
satisfaction of the Lender, the "Availability
Date").
Covenants and Usual and customary for comparable credit
Representations: facilities.
Negative Covenants: Usual and customary for comparable credit
facilities, including without limitation,
limitations on indebtedness; liens; guarantee
obligations; mergers, acquisitions,
consolidations, liquidations and dissolutions;
sales of assets; leases; dividends and other
payments in respect of capital stock; capital
expenditures; investments, loans and advances;
optional payments and modifications of other
debt instruments; modifications of material
agreements, transactions with affiliates; sale
and leasebacks; negative pledge clauses;
restrictions on subsidiary dividends; changes
in lines of business; and amendments to
acquisition documents.
Events of Default: Usual and customary for comparable credit
facilities, including without limitation,
nonpayment of principal when due; nonpayment
of interest, fees or other amounts after a
grace period to be agreed upon; material
inaccuracy of representations and warranties;
violation of covenants (subject, in the case
of certain affirmative covenants, to a grace
period to be agreed upon); cross-default;
bankruptcy and other insolvency events;
certain ERISA events; material judgments;
actual or asserted invalidity of any guarantee
or security document, subordination provisions
or security interest; lack of perfection or
priority of security interests; a change of
control; and revocation of key gaming
licenses.
Expenses and The Borrower shall pay (a) all reasonable
Indemnification: out-of-pocket expenses of the Lender
associated with the Revolving Credit Facility
and the preparation, execution, delivery and
administration of the documentation and any
amendment or waiver with respect thereto
(including the reasonable fees, disbursements
and other charges of counsel) and (b) all
out-of-pocket expenses of the Lender
(including the fees, disbursements and other
charges of counsel) in connection with the
enforcement of the documentation.
The Lender (and its affiliates and its
respective officers, directors, employees,
attorneys, advisors and agents) will have
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no liability for, and will be indemnified and
held harmless against, any loss, liability,
cost or expense incurred in respect of the
financing contemplated hereby or the use or
the proposed use of proceeds thereof (except
to the extent resulting from the gross
negligence or willful misconduct of the
indemnified party).
Governing Law and Forum: State of New York.
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Annex I
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Interest and Certain Fees
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Base Interest Rate: 10% per annum.
Interest Payment Dates: Interest shall be paid monthly in arrears.
Default Rate: At any time when the Borrower is in default in the
payment of any amount of principal due under the
Revolving Credit Facility, the Loans shall bear
interest at 2.00% per annum above the base rate
otherwise applicable thereto. Overdue interest, fees
and other amounts shall also bear interest at 2.00%
per annum above the base rate.
Rate and Fee Basis: All per annum rates shall be calculated on the basis
of a year of 360 days (or 365/366 days, in the case
of Base Rate Loans the interest rate payable on
which is then based on the Prime Rate) for actual
days elapsed.
Unused Line Fee: 50 basis points (0.50%) from the Availability Date.