Exhibit 99.2
EXECUTION
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of May 12, 2003
among
PINNACLE ENTERTAINMENT, INC.
The Lenders referred to herein
and
BANK OF AMERICA, N.A., as Administrative Agent
BEAR STEARNS CORPORATE LENDING INC., as Syndication Agent
CIBC INC. and SOCIETE GENERALE, as Documentation Agents
Banc of America Securities LLC and Bear, Stearns & Co. Inc. have acted as the
Joint Lead Arrangers and Joint Book Managers of the credit facilities described
herein, and Societe Generale has acted as a Co-Arranger.
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS.............................................................6
1.1 Defined Terms...............................................................................6
1.2 Use of Defined Terms.......................................................................39
1.3 Accounting Terms...........................................................................39
1.4 Rounding...................................................................................39
1.5 Exhibits and Schedules.....................................................................39
1.6 References to "Borrower and its Subsidiaries"..............................................39
1.7 Miscellaneous Terms........................................................................39
ARTICLE 2 LOANS AND LETTERS OF CREDIT.................................................................41
2.1 Loans -- General...........................................................................41
2.2 Base Loans.................................................................................42
2.3 LIBOR Loans................................................................................42
2.4 Letters of Credit..........................................................................43
2.5 Voluntary Reduction of Commitments.........................................................49
2.6 Scheduled Reduction of Commitments.........................................................49
2.7 Optional Termination of Commitments........................................................49
2.8 Optional Increase to the Commitments.......................................................50
2.9 Administrative Agent's Right to Assume Funds Available for Advances........................51
2.10 Swing Line.................................................................................52
2.11 Collateral and Guarantees..................................................................53
2.12 Activation of Reserved Portion of the Revolving Commitment.................................53
ARTICLE 3 PAYMENTS AND FEES...........................................................................54
3.1 Principal and Interest.....................................................................54
3.2 The Incremental Margin.....................................................................55
3.3 Upfront Fees and Arrangement Fees..........................................................56
3.4 Original Issue Discount....................................................................56
3.5 Early Termination Fee......................................................................56
3.6 Commitment Fees............................................................................56
3.7 Letter of Credit Fees......................................................................56
3.8 Agency Fees................................................................................57
3.9 Increased Commitment Costs.................................................................57
3.10 LIBOR Costs and Related Matters............................................................57
3.11 Late Payments..............................................................................60
3.12 Computation of Interest and Fees...........................................................60
3.13 Non-Business Days..........................................................................60
3.14 Manner and Treatment of Payments...........................................................60
3.15 Funding Sources............................................................................63
3.16 Failure to Charge Not Subsequent Waiver....................................................63
3.17 Administrative Agent's Right to Assume Payments Will be Made by Borrower...................63
3.18 Fee Determination Detail...................................................................63
3.19 Survivability..............................................................................63
ARTICLE 4 REPRESENTATIONS AND WARRANTIES..............................................................64
4.1 Existence and Qualification; Power; Compliance With Laws...................................64
-i-
4.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations.....64
4.3 No Governmental Approvals Required.........................................................65
4.4 Subsidiaries...............................................................................65
4.5 Financial Statements.......................................................................66
4.6 No Other Liabilities; No Material Adverse Changes..........................................66
4.7 Title to Property..........................................................................66
4.8 Intangible Assets..........................................................................66
4.9 Public Utility Holding Company Act.........................................................66
4.10 Litigation.................................................................................66
4.11 Binding Obligations........................................................................67
4.12 No Default.................................................................................67
4.13 ERISA......................................................................................67
4.14 Regulations T, U and X; Investment Company Act.............................................67
4.15 Disclosure.................................................................................67
4.16 Tax Liability..............................................................................68
4.17 Projections................................................................................68
4.18 Hazardous Materials........................................................................68
4.19 Gaming Laws................................................................................68
4.20 Land Sales.................................................................................68
4.21 Security Interests.........................................................................68
4.22 Lake Charles Project Entitlements..........................................................70
ARTICLE 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)...................71
5.1 Payment of Taxes and Other Potential Liens.................................................71
5.2 Preservation of Existence..................................................................71
5.3 Maintenance of Properties..................................................................71
5.4 Maintenance of Insurance...................................................................71
5.5 Compliance With Laws.......................................................................73
5.6 Inspection Rights..........................................................................73
5.7 Keeping of Records and Books of Account....................................................73
5.8 Compliance With Agreements.................................................................73
5.9 Use of Proceeds............................................................................73
5.10 Future Collateral..........................................................................73
5.11 New Significant Subsidiaries...............................................................74
5.12 Hazardous Materials Laws...................................................................74
5.13 Post-Closing Filings with Gaming Authorities...............................................74
5.14 The Lake Charles Vessel....................................................................74
ARTICLE 6 NEGATIVE COVENANTS..........................................................................76
6.1 Payment of Subordinated Obligations........................................................76
6.2 Disposition of Property....................................................................76
6.3 Mergers....................................................................................77
6.4 Hostile Acquisitions.......................................................................77
6.5 Distributions..............................................................................77
6.6 ERISA......................................................................................78
6.7 Change in Nature of Business...............................................................78
6.8 Liens and Negative Pledges.................................................................78
6.9 Indebtedness and Guaranty Obligations......................................................79
6.10 Transactions with Affiliates...............................................................80
-ii-
6.11 Fixed Charge Coverage Ratio................................................................80
6.12 Net Senior Debt Ratio......................................................................80
6.13 Net Total Debt Ratio.......................................................................80
6.14 Capital Expenditures.......................................................................81
6.15 Investments................................................................................82
6.16 Subsidiary Indebtedness....................................................................83
6.17 Amendments to Subordinated Obligations.....................................................83
6.18 In-Balance Requirement.....................................................................83
6.19 Lake Charles Project.......................................................................83
6.20 Permitted Asset Sales......................................................................85
6.21 Commencement of Lake Charles Project.......................................................86
6.22 Impediments to Distributions...............................................................86
ARTICLE 7 INFORMATION AND REPORTING REQUIREMENTS......................................................87
7.1 Financial and Business Information.........................................................87
7.2 Compliance Certificates....................................................................89
ARTICLE 8 CONDITIONS..................................................................................90
8.1 Conditions to the Closing Date.............................................................90
8.2 Each Revolving Obligation and each Withdrawal from the Completion Reserve Account..........93
8.3 Conditions to Revolving Obligations Which Exceed $25,000,000 and to Withdrawals
From The Completion Reserve Account.....................................................96
8.4 Conditions to Lake Charles Project Financings..............................................97
ARTICLE 9 THE COMPLETION RESERVE ACCOUNT..............................................................99
9.1 General....................................................................................99
9.2 Investments and Withdrawals................................................................99
9.3 Priority of Distributions..................................................................99
9.4 Required Deposits..........................................................................99
9.5 Post Construction Termination of the Completion Reserve Account...........................100
9.6 Early Termination of the Completion Reserve Account.......................................100
ARTICLE 10 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT......................................101
10.1 Events of Default.........................................................................101
10.2 Remedies Upon Event of Default............................................................103
10.3 Gaming Laws and Liquor Laws...............................................................104
ARTICLE 11 THE ADMINISTRATIVE AGENT..................................................................106
11.1 Appointment and Authorization.............................................................106
11.2 Delegation of Duties......................................................................106
11.3 Liability of Administrative Agent.........................................................106
11.4 Reliance by Administrative Agent..........................................................107
11.5 Notice of Default.........................................................................107
11.6 Credit Decision; Disclosure of Information by Administrative Agent........................107
11.7 Indemnification of Administrative Agent...................................................108
11.8 Administrative Agent in its Individual Capacity...........................................108
11.9 Successor Administrative Agent............................................................109
11.10 Administrative Agent May File Proofs of Claim.............................................109
11.11 Collateral and Guaranty Matters...........................................................110
11.12 Other Agents; Arrangers and Managers......................................................110
-iii-
ARTICLE 12 MISCELLANEOUS.............................................................................111
12.1 Cumulative Remedies; No Waiver............................................................111
12.2 Amendments; Consents......................................................................111
12.3 Costs, Expenses and Taxes.................................................................112
12.4 Nature of Lenders' Obligations............................................................113
12.5 Survival of Representations and Warranties................................................113
12.6 Notices and Other Communications; Facsimile Copies........................................113
12.7 Execution of Loan Documents...............................................................115
12.8 Successors and Assigns....................................................................115
12.9 Right of Setoff...........................................................................118
12.10 Sharing of Setoffs........................................................................118
12.11 Indemnity by Borrower.....................................................................119
12.12 Nonliability of the Lenders...............................................................120
12.13 No Third Parties Benefited................................................................120
12.14 Confidentiality...........................................................................120
12.15 Further Assurances........................................................................121
12.16 Integration...............................................................................121
12.17 Governing Law.............................................................................121
12.18 Severability of Provisions................................................................121
12.19 Headings..................................................................................122
12.20 Time of the Essence.......................................................................122
12.21 Foreign Lenders and Participants..........................................................122
12.22 Hazardous Material Indemnity..............................................................123
12.23 Gaming Boards.............................................................................124
12.24 Waiver of Right to Trial by Jury..........................................................124
12.25 Purported Oral Amendments.................................................................125
Exhibits
- --------
A - Assignment and Acceptance
B - Belterra Mortgage
C - Collateral Assignment of Architect's Contract
D - 1 Collateral Assignment of Construction Contract
D - 2 Collateral Assignment of Vessel Construction Contract
D - 3 Collateral Assignment of Cooperative Agreement
E - Compliance Certificate
F - In-Balance Certificate
G - Lake Charles Mortgage
H - 1 Model Landlord Consent and Agreement
H - 2 Lake Charles Landlord Consent
I - Mortgages
J - Preferred Ship Mortgages
K - Pricing Certificate
L - Request for Letter of Credit
M- Request for Loan\\Withdrawal Certificate
N - Revolving Note
O - Security Agreement
P - Term Note
Q - Trademark Assignment
-iv-
Schedules
- ---------
1.1A Permitted Sale Assets
1.1B Excluded Taxes
1.1C Existing Mortgages
1.1D Principal Amenities of the Lake Charles Project
1.1E Preferred Ship Mortgages
1.1F Existing Gaming Properties
4.3 Governmental Approvals
4.4 Subsidiaries
4.7 Existing Liens, Negative Pledges and Rights of Others
4.8 Trademarks and Trade Names
4.10 Material Litigation
4.18 Environmental Matters
4.22 Lake Charles Entitlements
6.8 Existing Indebtedness
6.15 Existing Investments
-v-
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of May 12, 2003
This AMENDED AND RESTATED LOAN AGREEMENT ("Agreement") is entered into
by and among Pinnacle Entertainment, Inc., a Delaware corporation ("Borrower"),
each Lender whose name is set forth on the signature pages of this Agreement and
each Lender which may hereafter become a party to this Agreement pursuant to
Section 12.8, Bear Stearns Corporate Lending Inc., as Syndication Agent, CIBC
Inc. and Societe Generale, as Documentation Agents, and Bank of America, N.A.,
as Administrative Agent. While not parties hereto in such capacities, Banc of
America Securities LLC and Bear, Stearns & Co. Inc. have acted as the Joint Lead
Arrangers and Joint Book Managers of the credit facilities described herein and
Societe Generale has acted as a Co-Arranger.
RECITALS
A. Borrower has heretofore entered that certain Reducing Revolving
Loan Agreement dated as of March 27, 1997 (as amended, including by way of an
Amended and Restated Reducing Revolving Loan Agreement dated as of October 14,
1998, the "Existing Loan Agreement"), with the Administrative Agent and the
other lenders party thereto.
B. Borrower has requested that the Existing Loan Agreement be amended
and restated as hereinafter set forth.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Administrative Agent" means Bank of America, when acting in its
capacity as the Administrative Agent under any of the Loan Documents, or
any successor Administrative Agent.
"Administrative Agent's Office" means the Administrative Agent's
address as set forth on the signature pages of this Agreement, or such
other address as the Administrative Agent hereafter may designate by
written notice to Borrower and the Lenders.
"Administrative Questionnaire" means, as to each Lender, the
Administrative Questionnaire submitted by that Lender to the Administrative
Agent through the Joint Lead Arrangers in connection with the syndication
of the credit facilities described herein, as supplemented from time to
time by notice from that Lender to the Administrative Agent, and any
records submitted to the Administrative Agent in connection with any
proposed assignment pursuant to Section 12.8.
"Advance" means any advance made or to be made by any Lender to
Borrower as provided in Article 2, and includes each Base Advance and LIBOR
Advance.
-6-
"Affiliate" means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled
by, such Person. As used in this definition, "control" (and the correlative
terms, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns, directly or
indirectly, 10% or more of the securities having ordinary voting power for
the election of directors or other governing body of a corporation that has
more than 100 record holders of such securities, or 10% or more of the
partnership or other ownership interests of any other Person that has more
than 100 record holders of such interests, will be deemed to control such
corporation, partnership or other Person.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America in its capacity
as the Administrative Agent, the BAS), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Effective Amount" means as of any date of determination the
sum of (i) the aggregate effective face amounts of all outstanding Letters
of Credit not then paid by the Issuing Lender plus (ii) the aggregate
amounts paid by the Issuing Lender under such Letters of Credit not then
reimbursed to the Issuing Lender by Borrower pursuant to Section 2.4(h) and
not the subject of Advances made pursuant to Sections 2.4(i) and 2.4(j).
"Agreement" means this Amended and Restated Loan Agreement, either as
originally executed or as it may from time to time be supplemented,
modified, amended, restated or extended.
"Annualized Adjusted EBITDA" means, as of each date of determination,
EBITDA for the four Fiscal Quarter period then ended plus (a) Indiana
Settlement Expenses deducted in determining Net Income for that period,
plus (b) to the extent reflected in EBITDA for that period, non-cash asset
write-downs made (x) prior to December 31, 2002, in an aggregate amount not
to exceed $2,800,000, (y) during the Fiscal Years ending December 31, 2003
and December 31, 2004 (but not later), in an aggregate amount not to exceed
$3,000,000 during such two year period, plus (c) any pre-opening and
related promotional expenses recorded during that fiscal period for a new
Gaming Property (including expenses associated with the rebranding of
Boomtown Bossier City to the extent incurred during the relevant period and
to the extent that the aggregate amount of all such expenses do not exceed
$2,129,000), plus (d) to the extent deducted in arriving at EBITDA for that
period, expenses incurred prior to the Closing Date in an aggregate amount
not to exceed $541,000 associated with Borrower's proposed acquisition of
the Aladdin Hotel and Casino, plus (e) to the extent deducted in arriving
at EBITDA for that period, expenses incurred prior to the Closing Date in
an aggregate amount not to exceed $2,000,000 associated with the relocation
of Borrower's corporate offices, plus (f) to the extent deducted in
arriving at EBITDA for that period, non-cash write downs to goodwill
required by Financial Accounting Standards Board Statement No. 142, and any
non-cash reductions to the value of the assets of Borrower and its
Restricted Subsidiaries required by Financial Accounting Standards Board
Statement No. 121, minus (g) that portion of EBITDA, if any, which is
attributable to Unrestricted Subsidiaries except to the extent of
Distributed Unrestricted Subsidiary Income received by Borrower and its
Restricted Subsidiaries during that period, provided that for each of the
first three full Post Completion Fiscal Quarters, that portion of EBITDA
which is attributable to the Lake Charles Project shall
-7-
be included only for the period consisting of the then completed Post
Completion Fiscal Quarters (ignoring any stub periods), annualized on a
straight-line basis.
"Approved Fund" means any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit A.
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all expenses
and disbursements of internal counsel.
"Auto-Renewal Letter of Credit" has the meaning set forth in Section
2.4(f).
"Available FF&E Amount" means, as of each date of determination, the
principal amount of committed financing available to Borrower pursuant to a
credit facility for Indebtedness of the type described in Section 6.9(f),
for which Borrower has entered into definitive documentation, and which is
subject only to conditions precedent which are reasonably consistent with
other similar facilities from a market perspective.
"Average Revolving Balance" means, in respect of the Revolving
Commitment and for any period, the arithmetic average Outstanding Amount of
the Revolving Commitment as of the last day of each calendar month which
ends during the period.
"Bank of America" means Bank of America, N.A. and its successors.
"BAS" means Banc of America Securities LLC and its successors.
"Base Advance" means an Advance made hereunder and specified to be a
Base Advance in accordance with Article 2.
"Base Loan" means a Loan made hereunder and specified to be a Base
Loan in accordance with Article 2.
"Base Margin" means (a) as to each Term Loan which is designated as a
Base Loan, 362.5 basis points per annum, and (b) as to each Revolving Loan
with is designated as a Base Loan and as to each Swing Line Loan, the
interest rate margin set forth below (expressed in basis points per annum)
opposite the Pricing Level for that Pricing Period, provided that during
the period between the Closing Date and six months following the Closing
Date the Base Margin for Revolving Loans and Swing Line Loans shall be
337.5 basis points:
Pricing Level Base Margin
------------- -----------
I 362.5 bps.
II 337.5 bps.
III 312.5 bps.
IV 287.5 bps.
V 262.5 bps.
-8-
"Base Rate" means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by
Bank of America as its "prime rate." The "prime rate" is a rate set by Bank
of America based upon various factors including Bank of America's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in such rate announced by Bank of
America shall take effect at the opening of business on the day specified
in the public announcement of such change.
"Belterra" means riverboat and dockside facilities of that name
(including the associated hotel and entertainment complex) operated by
Belterra Resort Indiana, LLC in Switzerland County, Indiana.
"Belterra Mortgage" means the Mortgage with Assignment of Rents,
Security Agreement and Fixture Filing executed by Belterra Resort Indiana,
LLC on the Closing Date to secure the Subsidiary Guaranty, substantially in
the form of Exhibit B, either as originally executed or as it may from time
be supplemented, modified, amended, extended or supplanted.
"Belterra Tower Project" means the proposed hotel tower consisting of
approximately 300 additional guest rooms to be constructed at Belterra.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday, other than a day on which banks are authorized or required to be
closed in California or New York.
"Capital Expenditure" means any expenditure by Borrower or the
Restricted Subsidiaries for or related to fixed assets or purchased
intangibles that is treated as a capital expenditure under GAAP, including
any amount which is required to be treated as an asset subject to a Capital
Lease Obligation, provided that casualty insurance proceeds and amounts
received by Borrower and its Restricted Subsidiaries in connection with
eminent domain proceedings or other similar "takings" of their Property,
and used to repair the related Property or to replace it, shall not be
considered Capital Expenditures.
"Capital Lease Obligations" means all monetary obligations of a Person
under any leasing or similar arrangement which, in accordance with GAAP, is
classified as a capital lease.
"Capital Stock" means any and all shares, interests, participations or
other equivalents of capital stock of a corporation, any and all classes of
membership interest in a limited liability company, any and all classes of
partnership interests in a partnership, any and all equivalent ownership
interests in a Person and any and all warrants, rights or options to
purchase any of the foregoing.
"Cash" means, when used in connection with any Person, all monetary
and non-monetary items owned by that Person that are treated as cash in
accordance with GAAP, consistently applied.
"Cash Collateral" and "Cash Collateralize" have the meaning set forth
in Section 2.4(r).
"Cash Equivalents" means, when used in connection with any Person,
that Person's Investments in:
-9-
(a) Government Securities due within one year after the date of
the making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America or any political subdivision of any such State or
any public agency or instrumentality thereof given on the date of such
Investment a credit rating of at least Aa by Moody's or AA by Standard &
Poor's, in each case due within one 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 any
bank incorporated under the Laws of the United States of America, any State
thereof or the District of Columbia and having on the date of such
Investment combined capital, surplus and undivided profits of at least
$250,000,000, or total assets of at least $5,000,000,000, in each case due
within one 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 Lender or 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 capital, surplus
and undivided profits of at least $500,000,000, or total assets of at least
$15,000,000,000, in each case due 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, as amended, having on the date of the Investment
capital of at least $50,000,000, due within 90 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 or on the books of such registered broker or dealer,
as soon as practicable after the making of the Investment;
(f) readily marketable commercial paper or other debt securities
issued by 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 clause (c) or (d) above
given on the date of such Investment a credit rating of at least P-1 by
Moody's or A-1 by Standard & Poor's, in each case due within one year 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 (i) given on the date of such Investment a credit rating of at
least Aa by Moody's and AA by Standard & Poor's, in each case having an
investment period not exceeding 50 days or (ii) to the extent that
investors therein have the benefit of a standby letter of credit issued by
a Lender or a bank described in clauses (c) or (d) above; provided that (y)
the amount of all such Investments issued by the same issuer does not
exceed $5,000,000 and (z) the aggregate amount of all such Investments does
not exceed $15,000,000;
-10-
(h) a readily redeemable "money market mutual fund" sponsored by
a bank described in clause (c) or (d) hereof, or a registered broker or
dealer described in clause (e) hereof, that has and maintains an investment
policy limiting its investments primarily to instruments of the types
described in clauses (a) through (g) hereof and given on the date of such
Investment a credit rating of at least Aa by Moody's and AA by Standard &
Poor's; and
(i) corporate notes or bonds having an original term to maturity
of not more than one year issued by a corporation incorporated under the
Laws of the United States of America, or a participation interest therein;
provided that commercial paper issued by such corporation is given on the
date of such Investment a credit rating of at least Aa by Moody's and AA by
Standard & Poor's.
"Cash Income Taxes" means, with respect to any fiscal period, taxes on
or measured by income that are paid or currently payable by Borrower and
its Restricted Subsidiaries in Cash in respect of that fiscal period,
without giving effect to any income tax refunds received during that period
in respect of income taxes paid during any prior period.
"Cash Interest Expense" means, for any period, Interest Expense that
is paid or currently payable during that period in Cash.
"Certificate" means a certificate signed by a Responsible Official of
the Person providing the certificate.
"Change in Control" means (a) any transaction or series of related
transactions in which any Unrelated Person or two or more Unrelated Persons
acting in concert acquire beneficial ownership (within the meaning of Rule
13d-3(a)(1) under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of 25% or more of the outstanding Common Stock, or
(b) Borrower consolidates with or merges into another Person or transfers
or leases its Properties and assets substantially as an entirety to any
Person or any Person consolidates with or merges into Borrower, in either
event pursuant to a transaction in which the outstanding Common Stock is
converted into or exchanged for Cash, securities or other Property, with
the effect that any Unrelated Person becomes the beneficial owner, directly
or indirectly, of 25% or more of the outstanding Common Stock, (c) during
any period of 24 consecutive months, individuals who at the beginning of
such period constituted the board of directors of Borrower (together with
any new or replacement directors whose election by the board of directors,
or whose nomination for election, was approved by a vote of at least a
majority of the directors at the beginning of such period or whose election
or nomination for reelection was previously so approved) cease for any
reason to constitute a majority of the directors then in office or (d) any
event or circumstance constituting a "change in control" or other similar
occurrence under documentation evidencing or governing any Indebtedness of
Borrower of $25,000,000 or more which results in an obligation of Borrower
to prepay, purchase, offer to purchase, redeem or defease all or a portion
of such Indebtedness. For purposes of the foregoing, the term "Unrelated
Person" means any Person other than (i) a Subsidiary of Borrower or (ii) an
employee stock ownership plan or other employee benefit plan covering the
employees of Borrower and its Subsidiaries.
"Closing Date" means the time and Business Day on which the conditions
set forth in Section 8.1 are satisfied or waived. The Administrative Agent
shall notify Borrower and the Lenders of the date that is the Closing Date.
-11-
"Co-Arranger" means Societe Generale in its capacity as a Co-Arranger
of the credit facilities described herein. The Co-Arranger shall have no
duties or liabilities under this Agreement or the other Loan Documents
beyond its duties as a Lender, and is entitled to the benefits of the
indemnity contained in Section 12.11
"Code" means the Internal Revenue Code of 1986, as amended or replaced
and as in effect from time to time.
"Collateral" means all of the collateral covered by the Collateral
Documents (which shall not include the assets of the Unrestricted
Subsidiaries).
"Collateral Assignment of Architect's Contract" means a Collateral
Assignment of the prime architectural contract for the Lake Charles Project
executed by Lake Charles and the Lake Charles Architect in favor of the
Administrative Agent on or prior to the Initial Funding Date, substantially
in the form of Exhibit C, either as originally executed or as it may from
time to time be supplemented, modified, amended, restated or extended.
"Collateral Assignment of Construction Contract" means a Collateral
Assignment of the prime construction contract for the Lake Charles Project
executed by Lake Charles and the Lake Charles Contractor in favor of the
Administrative Agent on or prior to the Initial Funding Date, substantially
in the form of Exhibit D-1, either as originally executed or as it may from
time to time be supplemented, modified, amended, restated or extended.
"Collateral Assignment of Cooperative Agreement" means a Collateral
Assignment of the Cooperative Agreement executed in favor of the
Administrative Agent on or prior to the Initial Funding Date, substantially
in the form of Exhibit D-3, either as originally executed or as it may from
time to time be supplemented, modified, amended, restated or extended.
"Collateral Assignment of Vessel Construction Agreement" means a
Collateral Assignment of the Vessel Construction Agreement executed by Lake
Charles and LEEVAC in favor of the Administrative Agent on or prior to the
Initial Funding Date, substantially in the form of Exhibit D-2, either as
originally executed or as it may from time to time be supplemented,
modified, amended, restated or extended.
"Collateral Documents" means, collectively, the Security Agreement,
the Trademark Collateral Assignment, the Pledge Agreements (Gaming
Regulated), the Pledge Agreement (General), the Mortgages, the Preferred
Ship Mortgages, the Collateral Assignment of Construction Contract, the
Collateral Assignment of Vessel Construction Contract, the Collateral
Assignment of Cooperative Agreement, the Collateral Assignment of
Architect's Contract and any other security agreement, pledge agreement,
deed of trust, mortgage, notice to or acknowledgment of a registrar or
depositary institution, control agreement or other collateral security
agreement executed and delivered by Borrower or any Significant Subsidiary
(and executed by any third party whose signature is necessary) to secure
the Obligations.
"Commitment Fee Rate" means, as of each date of determination, the
percentage per annum set forth in the appropriate column below opposite the
percentage of the Revolving Commitment which is then outstanding in the
forms of Loans, Letters of Credit or Swing Line Loans:
-12-
----------------------------------------------------------------
Percentage of Revolving Commitment Fee Rate for
Commitment Outstanding Revolving Commitment
----------------------------------------------------------------
Less than 33% 1.250%
----------------------------------------------------------------
Equal to or greater than 33%, but less 1.000%
than 66%
----------------------------------------------------------------
66% or more 0.750%
----------------------------------------------------------------
"Commitments" means, collectively, the Revolving Commitment and the
Term Commitment.
"Committed Capital Expenditure Amount" means, as of each date of
determination, the sum of (a) the then remaining unexpended Construction
Budget for the Lake Charles Project, plus (b) the then remaining unexpended
$37,000,000 construction budget for the Belterra Tower Project, plus (c)
the then remaining unexpended construction budget for each other Committed
Project (in each case excluding capitalized interest).
"Committed Project" means, collectively, the Belterra Tower Project,
the Lake Charles Project, and each other capital project hereafter
commenced by Borrower or any of its Restricted Subsidiaries involving
Capital Expenditure of the types contemplated by Section 6.14(c) for which
Borrower has become contractually committed (in each case excluding
capitalized interest).
"Common Stock" means the common stock of Borrower or its successor by
merger.
"Compensation Period" shall have the meaning set forth in Section
3.14(c)(ii).
"Completion Reserve Account" means an account established by the
Administrative Agent and entitled "Bank of America, N.A. Collateral Account
for Pinnacle Entertainment, Inc. (Lake Charles Project Completion Reserve
Account) under Loan Agreement dated May 12, 2003".
"Compliance Certificate" means a Compliance Certificate, substantially
in the form of Exhibit E, properly completed and signed by a Senior Officer
of Borrower.
"Construction Budget" means the $325,000,000 construction budget for
the Lake Charles Project heretofore delivered, as at any time supplemented
or amended in accordance with the terms of this Agreement (but in any event
without increasing the aggregate amount thereof except as expressly
provided in Section 6.14(a)).
"Construction Consultant" means Professional Associates Construction
Services or any successor construction consultant acceptable to the
Administrative Agent.
"Construction Plans" means the construction plans for the Lake Charles
Project heretofore delivered to the Lenders, as at any time supplemented or
amended in accordance with the terms of this Agreement.
-13-
"Construction Progress Report" means a report prepared by the
Construction Consultant in a form which is reasonably acceptable to the
Administrative Agent describing the progress of construction of the Lake
Charles Project, which report shall include an analysis and comparison of
the progress of construction to the Construction Plans and Construction
Budget, as at any time amended in accordance with the terms of this
Agreement.
"Construction Timetable" means the construction timetable for the Lake
Charles Project heretofore delivered to the Construction Consultant, as at
any time amended in accordance with the terms of this Agreement.
"Contractual Obligation" means, as to any Person, any provision of any
outstanding security 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 Property is bound.
"Cooperative Agreement" means the Cooperative Endeavor Development
Agreement between Borrower (under its former name), the Lake Charles Harbor
& Terminal District, the Calcasieu Parish Police Jury, and the City of Lake
Charles, Louisiana, as amended at any time in accordance with this
Agreement.
"Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"Crystal Park" means Crystal Park Hotel and Casino Development
Company, LLC, a California limited liability company, its successors and
permitted assigns.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"Default" means any event that, with the giving of any applicable
notice or passage of time specified in Section 10.1, or both, would be an
Event of Default.
"Default Rate" means the interest rate described in Section 3.11.
"Designated Deposit Account" means a deposit account to be maintained
by Borrower with Bank of America, as from time to time designated by
Borrower by written notification to the Administrative Agent.
"Designated Eurodollar Market" means, with respect to any LIBOR Loan,
(a) the London Eurodollar Market, (b) if prime banks in the London
Eurodollar Market are at the relevant time not accepting deposits of
Dollars or if the Administrative Agent determines in good faith that the
London Eurodollar Market does not represent at the relevant time the
effective pricing to the Lenders for deposits of Dollars in the London
Eurodollar Market, the Cayman Islands Eurodollar Market or (c) if prime
banks in the Cayman Islands Eurodollar Market are at the relevant time not
accepting deposits of Dollars or if the Administrative Agent determines in
good faith that the Cayman Islands Eurodollar Market does not represent at
the relevant time the effective pricing to the Lenders for deposits of
Dollars in the Cayman Islands Eurodollar Market, such other Eurodollar
Market as may from time to time be selected by the Administrative Agent
with the approval of Borrower and the Majority Lenders.
-14-
"Disposition" means the voluntary sale, transfer or other disposition
of any asset of Borrower or any of the Restricted Subsidiaries (a) which
constitutes (i) any Real Property or (ii) an improvement to Real Property
which is a Gaming Property or (b) which is for a consideration to Borrower
and its Restricted Subsidiaries in excess of $1,000,000, but not including
any sale, transfer or other disposition of (y) Cash, Cash Equivalents,
Investments (other than Investments in any Subsidiary of Borrower),
inventory or other assets sold, leased or otherwise disposed of in the
ordinary course of business of Borrower or a Restricted Subsidiary or (z)
equipment sold or otherwise disposed of, where (i) substantially similar
equipment in replacement thereof has theretofore been acquired, or as soon
as is practicable under the circumstances thereafter is acquired, by
Borrower or a Restricted Subsidiary, or (ii) Borrower or the Restricted
Subsidiary determines in good faith that the failure to replace such
equipment will not be detrimental to the business of Borrower or the
Restricted Subsidiary.
"Disqualified Stock" means any Capital Stock (but excluding any debt
security which is convertible into, or exchangeable for, Capital Stock) of
Borrower or its Restricted Subsidiaries, which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part,
on or prior to the Term Maturity Date; provided that the aforementioned
interests shall not be Disqualified Stock if they are redeemable prior to
the Term Maturity Date only if the board of directors of Borrower
determines in its judgment that as a result of a holder or beneficial owner
owning such interests (i) Borrower or its Restricted Subsidiary has lost or
may lose any license or franchise from any Gaming Board held by Borrower or
any Restricted Subsidiary of Borrower necessary to conduct any portion of
the business of Borrower or such Restricted Subsidiary of Borrower or (ii)
any Gaming Board has taken or may take action to materially restrict or
impair the operations of Borrower or its Restricted Subsidiaries, which
license, franchise or action is conditioned upon some or all of the holders
or beneficial owners of such interests being licensed or found qualified or
suitable to own such interests.
"Distributed Unrestricted Subsidiary Income" means, for any fiscal
period, the amount of Cash received as Distributions by Borrower and its
Restricted Subsidiaries during that period in Dollars from the Unrestricted
Subsidiaries, after deduction of all applicable withholding and other
foreign taxes and other amounts applicable to any such Distribution.
"Distribution" means, with respect to any Capital Stock issued by a
Person, (a) the retirement, redemption, purchase or other acquisition for
Cash or for Property by such Person of any such Capital Stock, (b) the
declaration or (without duplication) payment by such Person of any dividend
in Cash or in other Property on or with respect to any such Capital Stock,
(c) any Investment by such Person in the holder of 5% or more of any such
Capital Stock if a purpose of such Investment is to avoid characterization
of the transaction as a Distribution, and (d) any other payment in Cash or
other Property by such Person constituting a distribution under applicable
Laws with respect to such Capital Stock.
"Documentation Agents" means Societe Generale and CIBC Inc. The
capacity of the Documentation Agents is titular in nature, and the
Documentation Agents shall have no rights or duties hereunder over those
arising hereunder by reason of their status as Lenders.
"Dollars" or "$" means United States dollars.
-15-
"Draw Package" means a monthly submission made by the Borrower to the
Administrative Agent and the Construction Consultant in accordance with
Section 8.4, which shall include without limitation:
(a) an Application and Certification for Payment in the form
commonly referred to as American Institute of Architects Document G702 and
a detailed continuation sheet in the form commonly referred to as American
Institute of Architects Document G703, in each case in form and substance
satisfactory to the Administrative Agent and the Construction Consultant,
setting forth the amount anticipated to be paid to contractors and vendors
in connection with the Lake Charles Project as of the last Business Day of
that calendar month from the Loans and from withdrawals from the Completion
Reserve Account;
(b) a certification from the Lake Charles Contractor (or other
relevant contracting party) stating in substance that, to the best of the
Lake Charles Contractor's (or such other contracting party's) knowledge,
information and belief, the work covered by the application has been
completed in accordance with the contract documents for the Lake Charles
Project, that all amounts have been paid by the Lake Charles Contractor (or
such other contracting party) for the work for which any previous
applications were issued (except in respect of any amounts described
therein), and certifying the amounts then due to the Lake Charles
Contractor (or other contracting party) under their contracts with the
Borrower;
(c) a certification from the Lake Charles Architect (or other
relevant contracting party) stating in substance that, in accordance with
the contract documents for the Lake Charles Project, based upon on-site
observations and the data comprising the application, the Lake Charles
Architect (or other relevant contracting party) certifies to the Borrower
that to the best of its knowledge, information and belief, the work
associated with the Lake Charles Project has progressed as indicated
therein, that the quality of such work is in accordance with such contract
documents, and that the Lake Charles Contractor (or other indicated
contracting party) is entitled to the payment of the amount certified to be
due to them; and
(d) such other supporting materials as the Administrative Agent
or the Construction Consultant may reasonably require.
"Early Maturity Date" means the earliest to occur of the following
dates, unless the contingencies set forth after each such date have
occurred by the required dates:
(a) September 30, 2004, unless on or prior to June 30, 2004, not
less than $40,000,000 of Net After Tax Proceeds have been deposited
into the Completion Reserve Account in accordance with Section 9.4(b);
(b) August 15, 2006, unless by such date Borrower's 9.25% Senior
Subordinated Notes have either been repaid in full or refinanced in
their entirety with New Subordinated Obligations; or
(c) February 1, 2007, unless by such date Borrower's 9.5% Senior
Subordinated Notes have either been repaid in full or refinanced in
their entirety with New Subordinated Obligations.
"EBITDA" means, with respect to any fiscal period, the sum of (a) Net
Income for that fiscal period, plus (b) Net Cash Interest Expense for that
fiscal period (excluding capitalized interest), plus (c) non-cash
amortization during that period of debt issuance costs,
-16-
plus (d) the aggregate amount of federal and state taxes on or measured by
income for that fiscal period (whether or not payable during that fiscal
period), plus (e) depreciation and amortization, and plus (f) any
extraordinary non-cash loss (or minus any extraordinary non-cash gain) for
that fiscal period, minus (g) the amount of any extraordinary non-cash loss
reflected in EBITDA for any prior period which has resulted in a Cash loss
during the current fiscal period (or plus the amount of any extraordinary
non-cash gain reflected in EBITDA for any prior period which has resulted
in a Cash gain in the current fiscal period), in each case as determined in
accordance with GAAP and only to the extent reflected in the determination
of Net Income for that fiscal period.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by (i) the Administrative Agent, the Issuing Lender and
the Swing Line Lender, and (ii) unless an Event of Default has occurred and
is continuing, Borrower (each such approval not to be unreasonably withheld
or delayed); provided that notwithstanding the foregoing, (x) "Eligible
Assignee" shall not include Borrower or any of Borrower's Affiliates or
Subsidiaries, (y) no proposed Eligible Assignee shall be a Person which has
been found to be unsuitable as a lender to Borrower by any Gaming Board,
(z) no Person which is known by the Administrative Agent or the relevant
assigning Lender to be an owner or operator of a gaming company shall be an
"Eligible Assignee."
"ERISA" means the Employee Retirement Income Security Act of 1974, and
any regulations issued pursuant thereto, as amended or replaced and as in
effect from time to time.
"ERISA Affiliate" means each Person (whether or not incorporated)
which is required to be aggregated with Borrower pursuant to Section 414 of
the Code.
"Eurodollar Lending Office" means, as to each Lender, its office or
branch so designated by written notice to Borrower and the Administrative
Agent as its Eurodollar Lending Office. If no Eurodollar Lending Office is
designated by a Lender, its Eurodollar Lending Office shall be its office
at its address for purposes of notices hereunder.
"Eurodollar Market" means a regular established market located outside
the United States of America by and among banks for the solicitation, offer
and acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
Regulation D or any comparable regulation of any Government Agency having
jurisdiction over any Lender.
"Event of Default" is defined in Section 10.1.
"Excess Cash" means, as of each date of determination, the sum of the
Cash and Cash Equivalents owned by Borrower and its Restricted Subsidiaries
as of that date, net of any restricted Cash or Cash Equivalents as of that
date (except to the extent that the restriction relates to their dedication
to Committed Capital Expenditures, and in any event excluding any Cash or
Cash Equivalents owned by any Unrestricted Subsidiaries, including the
Foreign Subsidiaries) and net of the amount, not less than $45,000,000 as
of any date, which is then being utilized by Borrower and its Restricted
Subsidiaries for cage cash.
-17-
"Excluded Taxes" means, collectively, (a) the potential tax
liabilities of Borrower and its Subsidiaries described on Schedule 1.1B,
and (b) capital gains taxes associated with the Disposition of the
Permitted Sale Assets.
"Existing Letter of Credit" means the letter of credit issued by Bank
of America for the account of Borrower as its letter of credit no. 3034403
in the face amount of $2,600,000.
"Existing Loan Agreement" has the meaning set forth in the recitals to
this Agreement.
"Existing Mortgages" means the deeds of trust and mortgages described
on Schedule 1.1C.
"Existing Subordinated Obligations" means, collectively, (a) the
$125,000,000 9.5% Senior Subordinated Notes due 2007 of Borrower (under its
former name, Hollywood Park, Inc.) and Hollywood Park Operating Company
issued pursuant to the Indenture dated as of August 1, 1997 among Borrower,
Hollywood Park Operating Company, the initial guarantors referred to
therein, and The Bank of New York, as Trustee, as amended from time to
time, and (b) the $350,000,000 9.25% Senior Subordinated Notes due 2007 of
Borrower issued pursuant to the Indenture dated as of February 18, 1998
among Borrower (under its former name), the initial guarantors referred to
therein, and The Bank of New York, as Trustee, as amended from time to
time.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank on the
Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.
"FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as it may be amended from time to time.
"Fiscal Quarter" means the fiscal quarter of Borrower ending on each
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the fiscal year of Borrower ending on each
December 31.
"Fixed Charge Coverage Ratio" means, as of the last day of each Fiscal
Quarter, the ratio of (a) Annualized Adjusted EBITDA determined as of that
date minus the aggregate Maintenance and Miscellaneous Capital Expenditures
made during the four Fiscal Quarter period ending on that date and minus
Cash Income Taxes paid during that period (other than Excluded Taxes paid
during that period) to (b) Fixed Charges for the four Fiscal Quarter period
then ended.
"Fixed Charges" means, for any period, the sum of (a) Net Cash
Interest Expense during that period, (b) principal payments required to be
made by Borrower and its Restricted
-18-
Subsidiaries during that period in respect of Indebtedness (including
Capital Lease Obligations) (in the case of the Revolving Commitment, being
equal to the excess, if any, of the Average Revolving Balance of the
Revolving Commitment over the amount of the Revolving Commitment as of the
last day of the period) except in the case of any Subordinated Obligations
which are refinanced using New Subordinated Obligations, and (c)
Distributions made by Borrower in Cash during that fiscal period.
"Foreign Lender" means each Lender that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code.
"Foreign Subsidiaries" means (a) Casino Magic Neuquen, S.A., an
Argentina corporation, (b) Casino Magic Support Services, S.A., an
Argentina corporation, (c) Casino Magic Buenos Aires, SA, (d) Casino Magic
Hellas, SA (Greece), and (e) Casino Magic Europe BV (Netherlands) and any
other Subsidiary of Borrower that is organized under the Laws of a
jurisdiction outside the United States of America and substantially all of
the assets of which are located outside the United States of America.
"Free Cash Flow" means, for the period ending on any date, that
portion of Annualized Adjusted EBITDA (as determined on that date)
occurring during the relevant period minus Fixed Charges, minus Maintenance
and Miscellaneous Capital Expenditures made in cash and minus Cash Income
Taxes paid (other than any Excluded Taxes), in each case for the same
period.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"Funded Debt" means, as of any date of determination (without
duplication and on a consolidated basis), the sum of (a) the outstanding
principal Indebtedness of Borrower and the Restricted Subsidiaries for
borrowed money on that date plus (b) the aggregate amount of the principal
portion of all Capital Lease Obligations of Borrower and the Restricted
Subsidiaries on that date.
"GAAP" means, as of any date of determination, accounting principles
(a) set forth as generally accepted in then currently effective Opinions of
the Accounting Principles Board of the American Institute of Certified
Public Accountants, (b) set forth as generally accepted in then currently
effective Statements of the Financial Accounting Standards Board or (c)
that are then approved by such other entity as may be approved by a
significant segment of the accounting profession in the United States of
America. The term "consistently applied," as used in connection therewith,
means that the accounting principles applied are consistent in all material
respects with those applied at prior dates or for prior periods.
"Gaming Board" means, collectively, (a) the California Attorney
General (acting pursuant to the California Gambling Control Act), (b) the
Nevada Gaming Commission, (c) the Nevada State Gaming Control Board, (d)
the Indiana Gaming Commission, (e) the Mississippi Gaming Commission, (f)
the Louisiana Gaming Control Board, and (g) any other Government Agency
that holds regulatory, licensing or permit authority over gambling, gaming
or casino activities conducted by Borrower and the Restricted Subsidiaries
within its jurisdiction.
-19-
"Gaming Laws" means all Laws pursuant to which any Gaming Board
possesses regulatory, licensing or permit authority over gambling, gaming
or casino activities conducted by Borrower and the Restricted Subsidiaries
within its jurisdiction.
"Gaming Properties" means, collectively, the properties commonly known
as (a) Hollywood Park-Casino, (b) the Boomtown Reno Hotel & Casino, (c)
Belterra, (d) the Lake Charles Project, (e) Boomtown New Orleans Casino,
(f) Casino Magic Biloxi, (g) Boomtown Bossier City, each of which is
further described on Schedule 1.1F and (h) any other gaming or
entertainment facility hereafter owned by Borrower or any Restricted
Subsidiary.
"Government Agency" means (a) any international, foreign, federal,
state, county or municipal government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality or public body, or (c) any
court or administrative tribunal of competent jurisdiction.
"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.
"Granting Lender" shall have the meaning set forth in Section 12.8(g).
"Guaranty Obligation" means, as to any Person, any (a) guarantee by
that Person of Indebtedness of, or other obligation performable by, any
other Person or (b) assurance given by that Person to an obligee of any
other Person with respect to the performance of an obligation by, or the
financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide
funds (by means of loans, capital contributions or otherwise) to such other
Person, any agreement to support the solvency or level of any balance sheet
item of such other Person or any "keep-well" or other arrangement of
whatever nature given for the purpose of assuring or holding harmless such
obligee against loss with respect to any obligation of such other Person;
provided, however, that the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guaranty Obligation in respect of
Indebtedness shall be deemed to be an amount equal to the stated or
determinable amount of the related Indebtedness (unless the Guaranty
Obligation 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 the
Person in good faith. The amount of any other Guaranty Obligation shall be
deemed to be zero unless and until the amount thereof has been (or in
accordance with Financial Accounting Standards Board Statement No. 5 should
be) quantified and reflected or disclosed in the consolidated financial
statements (or notes thereto) of Borrower and the Restricted Subsidiaries.
"Hazardous Materials" means substances defined as "hazardous
substances" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., or as
"hazardous", "toxic" or "pollutant" substances or as "solid waste" pursuant
to the Hazardous Materials Transportation Act, 49 U.S.C. (S) 1801, et seq.,
the
-20-
Resource Conservation and Recovery Act, 42 U.S.C. (S) 6901, et seq., or as
"friable asbestos" pursuant to the Toxic Substances Control Act, 15 U.S.C.
(S) 2601 et seq. or any other applicable Hazardous Materials Law, in each
case as such Laws are amended from time to time.
"Hazardous Materials Laws" means all Laws governing the treatment,
transportation or disposal of Hazardous Materials applicable to any of the
Real Property.
"Honor Date" shall have the meaning set forth in Section 2.4(h).
"In-Balance Certificate" means an In-Balance Certificate substantially
in the form of Exhibit F, properly completed and signed by a Senior Officer
of Borrower, demonstrating that the In-Balance Requirement has been
satisfied as of the last day of the relevant calendar month.
"In-Balance Requirement" means, as of each date of determination,
that:
(a) the sum of (i) the then undrawn portion of the Revolving
Commitment, plus (ii) the balance of the Completion Reserve Account, plus
(iii) the Excess Cash, plus (iv) Projected Free Cash Flow, plus (v) the
Projected Land Sale Amount, plus (vi) the Available FF&E Amount;
exceeds,
(b) the Committed Capital Expenditure Amount as of that date.
"Incremental Margin" means an incremental margin to be added to the
interest rate payable in respect of the outstanding Loans and Swing Line
Loans hereunder (except that the Incremental Margin shall not apply to or
be paid in respect of any portion of the Term Loans outstanding from time
to time which do not exceed the balance of the Completion Reserve Account
from time to time), and an incremental increase of the fees payable under
Section 3.7 in respect of all issued and outstanding Letters of Credit,
equal to 0.50% per annum.
"Indebtedness" means, as to any Person (without duplication), (a)
indebtedness of such Person for borrowed money or for the deferred purchase
price of Property (excluding trade and other accounts payable in the
ordinary course of business in accordance with ordinary trade terms),
including any Guaranty Obligation for any such indebtedness, (b)
indebtedness of such Person of the nature described in clause (a) that is
non-recourse to the credit of such Person but is secured by assets of such
Person, to the extent of the value of such assets, (c) Capital Lease
Obligations of such Person, (d) indebtedness of such Person arising under
bankers' acceptance facilities or under facilities for the discount of
accounts receivable of such Person, (e) any direct or contingent
obligations of such Person under letters of credit issued for the account
of such Person and (f) any net obligations of such Person under Swap
Agreements.
"Indemnified Liabilities" shall have the meaning set forth in Section
12.11.
"Indiana Settlement Expenses" means, the amount of fines, settlement
payments, legal and related expenses, lost income, expenses associated with
required share repurchases and all other amounts expensed in relation to or
arising out of the Settlement Agreement dated as of August 5, 2002 to which
Borrower and the Indiana State Gaming Commission are parties, provided that
the aggregate amount of Indiana Settlement Expenses deducted in determining
-21-
EBITDA shall not exceed (a) $5,000,000, to the extent expensed following
the Closing Date, or (b) $12,000,000, in the aggregate.
"Initial Funding Date" means the date upon which the conditions
precedent set forth in Section 8.2 are satisfied.
"Intangible Assets" means assets that are considered intangible assets
under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks and patents.
"Interest Differential" means, with respect to any prepayment of a
LIBOR Loan on a day other than the last day of the applicable Interest
Period and with respect to any failure to borrow a LIBOR Loan on the date
or in the amount specified in any Request for Loan\\Withdrawal Certificate,
(a) the LIBOR Rate payable (or, with respect to a failure to borrow, the
LIBOR Rate which would have been payable) with respect to the LIBOR Loan
minus (b) the LIBOR Rate on, or as near as practicable to the date of the
prepayment or failure to borrow for a LIBOR Loan with an Interest Period
commencing on such date and ending on the last day of the Interest Period
of the LIBOR Loan so prepaid or which would have been borrowed on such
date.
"Interest Expense" means, as of the last day of any fiscal period, the
sum of (a) all interest, fees and finance charges paid or payable (without
duplication, on a consolidated basis) for that fiscal period by Borrower
and the Restricted Subsidiaries to a lender for money borrowed (including
any obligations for fees and finance charges payable to the issuer of any
letter of credit) or the deferred purchase price of assets that are
considered "interest expense" under GAAP, plus (b) the portion of rent paid
or payable (without duplication, on a consolidated basis) for that fiscal
period by Borrower and the Restricted Subsidiaries under Capital Lease
Obligations that should be treated as interest in accordance with Financial
Accounting Standards Board Statement No. 13.
"Interest Period" means, as to each LIBOR Loan, the period commencing
on the date specified by Borrower pursuant to Section 2.1(c) and ending 1,
2, 3 or 6 months (or, with the written consent of all of the Lenders, any
other period) thereafter, as specified by Borrower in the applicable
Request for Loan\\Withdrawal Certificate; provided that:
(a) The first day of any Interest Period shall be a LIBOR
Business Day;
(b) Any Interest Period that would otherwise end on a day that is
not a LIBOR Business Day shall be extended to the next succeeding LIBOR
Business Day unless such LIBOR Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
LIBOR Business Day;
(c) Borrower may not specify an Interest Period in respect of any
Revolving Loan that extends beyond the next Quarterly Payment Date unless
the sum of (i) the aggregate principal amount of the Revolving Loans which
are LIBOR Loans having an Interest Period ending after that Quarterly
Payment Date plus (ii) the Aggregate Effective Amount under Letters of
Credit for which the expiry date is after that Quarterly Payment Date, does
not exceed the Revolving Commitment (after giving effect to any reduction
thereto scheduled to be made on such Quarterly Payment Date pursuant to
Section 2.6);
-22-
(d) Borrower may not specify an Interest Period in respect of any
Term Loan that extends beyond the next Quarterly Payment Date unless the
aggregate principal amount of the Term Loans which are LIBOR Loans having
an Interest Period ending after that Quarterly Payment Date does not exceed
the Term Commitment (after giving effect to any reduction thereto scheduled
to be made on that Quarterly Payment Date pursuant to Section 2.6); and
(e) No Interest Period in respect of the Loans under the
Revolving Commitment shall extend beyond the Revolving Maturity Date.
(f) No Interest Period in respect of the Loans under the Term
Commitment shall extend beyond the Term Maturity Date.
"Investment" means, 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, 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 (minus any return of
capital with respect to such Investment which has actually been received in
Cash or Cash Equivalents or has been converted into Cash or Cash
Equivalents), without adjustment for subsequent increases or decreases in
the value of such Investment.
"Issuing Lender" means Bank of America in its capacity as issuer of
Letters of Credit hereunder, or any successor issuer of Letters of Credit
hereunder.
"Joint Lead Arrangers" means Banc of America Securities LLC and Bear,
Stearns & Co. Inc. in their capacities as the Joint Lead Arrangers and
Joint Book Managers of the credit facilities described herein. The Joint
Book Managers and Joint Lead Arrangers shall have no duties or liabilities
under this Agreement or the other Loan Documents, and are entitled to the
benefits of the indemnity contained in Section 12.11.
"Lake Charles" means PNK (Lake Charles), L.L.C., a Louisiana limited
liability company which is a wholly owned Subsidiary of the Borrower, its
successors and permitted assigns.
"Lake Charles Architect" means Bergman, Walls and Associates, Ltd.
"Lake Charles Completion Date" means the date upon which each of the
following has occurred:
(a) the Construction Consultant shall have delivered a certificate to
the Administrative Agent to the effect that the Lake Charles Project shall
have been substantially completed in accordance with the Construction
Plans, and, without limitation on the foregoing, (i) at least 95% of the
hotel rooms provided for in the Construction Plans shall be ready for
occupancy, (ii) at least 95% of contemplated gaming units (including table
games and slot machines) shall be ready for gaming operations;
(b) the Construction Consultant shall have delivered a certificate to
the Administrative Agent to the effect that the Lake Charles Project, and
all of the amenities
-23-
described on Schedule 1.1D, shall be legally open for business to gaming
patrons, with all required consents and approvals of Government Agencies
obtained; and
(c) the Administrative Agent shall have received appropriate
endorsements to its ALTA policy of title insurance at the sole expense of
Borrower insuring against any mechanics liens, materialmen's liens and
other similar claims (in each case, other than Permitted Encumbrances) in
respect of the construction of the Lake Charles Project, and insuring that
the completed Lake Charles Project does not encroach upon any adjacent
property.
"Lake Charles Contractor" means Manhattan Construction Company or
another prime contractor for the Lake Charles Project designated by the
Borrower in a writing delivered to the Lenders, and which is reasonably
acceptable to the Majority Lenders.
"Lake Charles Lease" means the lease by Lake Charles of the Lake
Charles Project site from the Lake Charles Harbor and Terminal District,
substantially in the form of the draft delivered to the Administrative
Agent prior to the Closing Date.
"Lake Charles Mortgage" means the Mortgage with Assignment of Rents,
Security Agreement and Fixture Filing executed by Lake Charles on or before
the Initial Funding Date to secure the Subsidiary Guaranty, substantially
in the form of Exhibit G, either as originally executed or as it may from
time be supplemented, modified, amended, extended or supplanted.
"Lake Charles Opening Date" means the date upon which all of the
following have occurred (a) the Lake Charles Project is substantially
complete, with all of the amenities described on Schedule 1.1D as being
scheduled for completion by the Lake Charles Opening Date actually
completed, (b) a certificate of occupancy (which may be a temporary
certificate of occupancy) has been issued in respect of the Lake Charles
Project, and (c) the Lake Charles Project is legally open for business to
hotel, resort and gaming patrons.
"Lake Charles Project" means the resort casino and hotel project
contemplated to be constructed by Borrower and its Restricted Subsidiaries
in Lake Charles, Louisiana, and anticipated to include the amenities
described on Schedule 1.1D, to be constructed in accordance with the
Construction Plans and the Construction Budget.
"Lake Charles Vessel" means the vessel to be constructed pursuant to
the Vessel Construction Contract, upon which the gaming facilities
associated with the Lake Charles Project are to be located.
"Land Sale Contracts" means, collectively, (a) The Agreement of
Purchase and Sale dated as of September 10, 2002 between Borrower and Watt
Developers LLC, as amended by amendments dated as of December 9, 2002,
January 17, 2003, February 14, 2003, February 27, 2003, March 14, 2003 and
March 31, 2003, and (b) the Purchase Agreement dated as of June 14, 2002
between Borrower and Rothbart Development Corporation, and countersigned as
to certain provisions by Wal-Mart Real Estate Business Trust, as amended by
an Amendment dated November 14, 2002 and by letter agreement dated January
16, 2003, true copies of which have been delivered to the Administrative
Agent.
"Laws" means, collectively, all international, foreign, federal, state
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents, including, without limitation,
Gaming Laws.
-24-
"LEEVAC" means LEEVAC Industries, LLC and its successors.
"Lender" means each bank whose name is set forth in the signature
pages of this Agreement and each lender which may hereafter become a party
to this Agreement pursuant to Section 12.8.
"Letter of Credit Advance" means, with respect to each Lender, such
Lender's funding of its participation in any Letter of Credit Loan in
accordance with its Pro Rata Share.
"Letter of Credit Application" means, in respect of each Letter of
Credit, a Letter of Credit Application and Agreement on the Issuing
Lender's then standard form.
"Letter of Credit Fee" means, for each Pricing Period, the per annum
rate set forth as the interest rate margin in the definition of "LIBOR
Margin" opposite the Pricing Level for that Pricing Period plus any then
applicable Incremental Margin.
"Letter of Credit Loan" means an extension of credit by the Issuing
Lender resulting from a drawing under any Letter of Credit which has not
been reimbursed on the date when made or refinanced as a Loan consisting of
Advances by each of the Lenders.
"Letters of Credit" means any of the letters of credit issued by the
Issuing Lender under the Revolving Commitment pursuant to Section 2.4,
either as originally issued or as the same may be supplemented, modified,
amended, renewed, extended or supplanted.
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Revolving Maturity Date then in effect (or, if such day is not
a Business Day, the next preceding Business Day).
"LIBOR Advance" means an Advance made hereunder and specified to be a
LIBOR Advance in accordance with Article 2.
"LIBOR Business Day" means any Business Day on which dealings in
Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"LIBOR Loan" means a Loan made hereunder and specified to be a LIBOR
Loan in accordance with Article 2.
"LIBOR Margin" means (a) as to each Term Loan which is designated as a
LIBOR Loan, 462.5 basis points per annum, and (b) as to each Revolving Loan
with is designated as a LIBOR Loan, the interest rate margin set forth
below (expressed in basis points per annum) opposite the Pricing Level for
that Pricing Period, provided that during the period between the Closing
Date and six months following the Closing Date the LIBOR Margin for
Revolving Loans shall be 437.5 basis points:
Pricing Level Base Margin
------------- -----------
I 462.5 bps.
II 437.5 bps.
III 412.5 bps.
IV 387.5 bps.
V 362.5 bps.
-25-
"LIBOR Rate" means for any Interest Period with respect to any LIBOR
Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not
appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b)
are not available, the rate per annum determined by the Administrative
Agent as the rate of interest at which deposits in Dollars for delivery on
the first day of such Interest Period in same day funds in the approximate
amount of the LIBOR Loan being made, continued or converted by Bank of
America and with a term equivalent to such Interest Period would be offered
by Bank of America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London time)
two Business Days prior to the first day of such Interest Period.
"License Revocation" means the revocation, failure to renew or
suspension of, or the appointment of a receiver, supervisor or similar
official with respect to, any casino, gambling or gaming license issued by
any Gaming Board covering any casino or gaming facility of Borrower or any
Restricted Subsidiary.
"Liquor Authorities" shall mean, in any jurisdiction in which Borrower
or any of its Restricted Subsidiaries sells and/or distributes liquor, the
Government Agency responsible for interpreting, administering and enforcing
the Liquor Laws.
"Liquor Laws" shall mean the laws, regulations and orders applicable
to or involving the sale and distribution of liquor by Borrower or any of
its Restricted Subsidiaries in any jurisdiction as in effect from time to
time, including the policies, interpretations and administration thereof by
the applicable Liquor Authorities.
"Liquor License" shall mean, in any jurisdiction in which Borrower or
any of its Restricted Subsidiaries sells and distributes liquor, any
license, permit or other authorization to sell and/or distribute liquor
that is granted or issued by the Government Agency responsible for
interpreting, administering and enforcing the Liquor Laws.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge of
any kind, whether voluntarily incurred or arising by operation of Law or
otherwise, affecting any Property, including any agreement to grant any of
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature of a security interest, and/or the filing of or
agreement to give any financing statement (other than a precautionary
financing statement with respect to a
-26-
lease that is not in the nature of a security interest) under the Uniform
Commercial Code or comparable Law of any jurisdiction with respect to any
Property.
"Loan" means the aggregate of the Advances made at any one time by the
Lenders pursuant to Article 2.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Subsidiary Guaranty, the Swing Line Note, the Collateral Documents, any
Secured Swap Agreement, and any other agreements of any type or nature
hereafter executed and delivered by Borrower or any of the Significant
Subsidiaries to the Administrative Agent or to any Lender in any way
relating to or in furtherance of this Agreement, in each case either as
originally executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.
"Maintenance and Miscellaneous Capital Expenditures" means Capital
Expenditures of the type described in Section 6.14(d).
"Majority Lenders" means, as of any date of determination (a) if the
Commitments are then in effect, Lenders having in the aggregate a majority
in interest of the Commitments, and (b) if the Commitments have then been
terminated and there are then any outstanding Obligations, Lenders holding
a majority in interest of the aggregate outstanding Obligations.
"Managing Agents" means, as of each date of determination, the
Administrative Agent, the Syndication Agent and the Documentation Agents,
in each case to the extent that they remain parties to this Agreement as
Lenders as of that date. Whenever this Agreement or the other Loan
Documents grant discretion to the Majority Lenders to take any action or to
approve or disapprove any item, the Administrative Agent and the Managing
Agents shall be entitled to exercise their discretion freely, and without
liability to Borrower, its Subsidiaries or the other Lenders (each of the
Majority Lenders being entitled to the protections afforded to the
Administrative Agent in exercising such functions, mutatis mutandis).
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
business or condition (financial or otherwise) of Borrower and the
Restricted Subsidiaries, taken as a whole or (c) materially impairs or
could reasonably be expected to materially impair the ability of Borrower
and the Significant Subsidiaries, taken as a whole, to perform the
Obligations.
"Model Landlord Consent and Agreement" means the landlord consent and
agreement in the form of Exhibit H -1.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Mortgages" means, collectively, (a) the Existing Mortgages, in each
case as amended and restated on the Closing Date substantially in the forms
attached as Exhibits I-1 to I-8, (b) the Belterra Mortgage and the Lake
Charles Mortgage, and (c) each deed of trust or mortgage hereafter executed
and delivered in accordance with Section 5.10, in each case either
-27-
as originally executed or as they may from time to time be supplemented,
modified, amended, extended or supplanted.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA to which Borrower or any of its
ERISA Affiliates contribute or are obligated to contribute.
"Negative Pledge" means a Contractual Obligation which contains a
covenant binding on Borrower or any of the Restricted Subsidiaries that
prohibits Liens on any of its or their Property, other than (a) any such
covenant contained in a Contractual Obligation granting a Lien permitted
under Section 6.8 which affects only the Property that is the subject of
such permitted Lien and (b) any such covenant that by its terms does not
apply to Liens securing the Obligations.
"Net After Tax Proceeds" means, in respect of any sale, transfer or
other disposition of Permitted Sale Assets by Borrower or any of its
Restricted Subsidiaries, or in respect of the issuance by Borrower of any
of its equity securities, the Cash proceeds received by Borrower and its
Subsidiaries in connection therewith, net of (i) the reasonable and direct
expenses payable following the consummation of the related transaction by
Borrower and its Restricted Subsidiaries in connection therewith, (ii) in
the case of any sale, transfer or other disposition of any Permitted Sale
Assets, the amount of any Indebtedness secured by a Lien on any such
Permitted Sale Assets which Borrower and its Restricted Subsidiaries are
required to discharge in connection with the sale, transfer or other
disposition, and (iii) the reasonably estimated income, capital gains and
other taxes payable by Borrower in connection therewith and (iv) as and
when received, all Cash received by Borrower with respect to any promissory
note or non-Cash Property received by Borrower upon such sale, transfer or
other disposition.
"Net Cash Interest Expense" means, for any period, Cash Interest
Expense for that period minus the consolidated interest income of Borrower
and its Restricted Subsidiaries received in Cash during that period.
"Net Income" means, with respect to any fiscal period, the
consolidated net income of Borrower and the Restricted Subsidiaries for
that period, determined in accordance with GAAP, consistently applied.
"Net Senior Debt Ratio" means, as of the last day of each Fiscal
Quarter, the ratio of (a) Senior Debt as of that date, minus the balance of
the Completion Reserve Account as of that date to (b) Annualized Adjusted
EBITDA determined as of that date.
"Net Total Debt Ratio" means, as of the last day of each Fiscal
Quarter, the ratio of (a) Funded Debt as of that date, minus the balance of
the Completion Reserve Account as of that date to (b) Annualized Adjusted
EBITDA determined as of that date.
"New Lender" has the meaning set forth in Section 2.8(d).
"New Subordinated Obligations" means unsecured Indebtedness of
Borrower that (a) does not have any scheduled principal payment, mandatory
principal prepayment or sinking fund payment due prior to the date which is
six months following the Term Maturity Date, (b) is not secured by any Lien
on any Property of Borrower or any of the Restricted Subsidiaries, and (c)
is otherwise on terms (except for pricing) which are (i) not more favorable
to the holders of such Indebtedness than those contained in the Existing
-28-
Subordinated Obligations as in effect on the date hereof in any manner
which is detrimental to the Administrative Agent or the Lenders (as
determined by the Administrative Agent in its discretion), or (ii)
substantially identical to those governing the Existing Subordinated
Obligations as in effect on the date hereof (as determined by the
Administrative Agent in its discretion), or (iii) otherwise approved by the
Majority Lenders.
"Non-Renewal Notice Date" shall have the meaning set forth in Section
2.4(f).
"Notes" means, collectively, the Revolving Notes and the Term Notes.
"Obligations" means all present and future obligations of every kind
or nature of Borrower or any Significant Subsidiary at any time and from
time to time owed to the Administrative Agent, the Issuing Lender, the
Swing Line Lender or the Lenders or any one or more of them, under any one
or more of the Loan Documents, whether due or to become due, matured or
unmatured, liquidated or unliquidated, or contingent or noncontingent,
including obligations of performance as well as obligations of payment, and
including interest that accrues after the commencement of any proceeding
under any Debtor Relief Law by or against Borrower or any Subsidiary or
Affiliate of Borrower.
"Ogle Haus Note" means the $1,402,474.06 Mortgage Note dated as of
October 26, 1999 made by Ogle Haus, LLC in favor of Peoples Trust Company,
which note is secured by a mortgage on the Ogle Haus property, and any
amendments or extensions thereof which do not increase the principal
balance thereof.
"Opinions of Counsel" means the favorable written legal opinions of
(a) Irell & Manella LLP, special counsel to Borrower and the Restricted
Subsidiaries, (b) Schreck Brignone , special Nevada counsel to Borrower and
certain of the Restricted Subsidiaries, (c) Watkins Ludlam Winter &
Stennis, P.A., special Mississippi counsel to Borrower and certain of the
Restricted Subsidiaries, (d) Adams and Reese, LLP, special Louisiana
counsel to Borrower and certain of the Restricted Subsidiaries, (e) Baker &
Daniels, special Indiana counsel to Borrower and certain of the Restricted
Subsidiaries, (f) Briol & Associates, PLLC, special Minnesota counsel to
Borrower and certain of the Restricted Subsidiaries, and (g) Bryan Cave,
LLP, special Missouri counsel to Borrower and certain of the Restricted
Subsidiaries, and in each case together with copies of all factual
certificates and legal opinions upon which such counsel has relied.
"Outstanding Amount" means (i) with respect to Advances and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Advances
and Swing Line Loans, as the case may be, occurring on such date; and (ii)
with respect to any Letter of Credit Obligations on any date, the amount of
such Letter of Credit Obligations on such date after giving effect to any
Credit Extension occurring on such date and any other changes in the
aggregate amount of the Letter of Credit Obligations as of such date,
including as a result of any reimbursements of outstanding unpaid drawings
under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.
"Participant" shall have the meaning set forth in Section 12.8(d).
"Party" means any Person other than the Administrative Agent, the
Issuing Lender, the Swing Line Lender and the Lenders, which now or
hereafter is a party to any of the Loan Documents.
-29-
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan,
which is subject to Title IV of ERISA and is maintained by Borrower or any
of its Subsidiaries or to which Borrower or any of its Subsidiaries
contributes or has an obligation to contribute.
"Permitted Encumbrances" means:
(a) Inchoate Liens incident to construction on or maintenance of
Property; or Liens incident to construction on or maintenance of Property
now or hereafter filed of record for which adequate reserves have been set
aside (or deposits made pursuant to applicable Law) and which are being
contested in good faith by appropriate proceedings and have not proceeded
to judgment, provided that, by reason of nonpayment of the obligations
secured by such Liens, no such Property is subject to a material risk of
loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not yet
past due; or Liens for taxes and assessments on Property for which adequate
reserves have been set aside and are being contested in good faith by
appropriate proceedings and have not proceeded to judgment, provided that,
by reason of nonpayment of the obligations secured by such Liens, no such
Property is subject to a material risk of loss or forfeiture;
(c) minor defects and irregularities in title to any Property
which in the aggregate do not materially impair the fair market value or
use of the Property subject thereto for the purposes for which it is or may
reasonably be expected to be held;
(d) easements, exceptions, reservations, or other agreements for
the purpose of pipelines, conduits, cables, wire communication lines, power
lines and substations, streets, trails, walkways, drainage, irrigation,
water, and sewerage purposes, dikes, canals, ditches, the removal of oil,
gas, coal, or other minerals, and other like purposes affecting Property,
facilities, or equipment which in the aggregate do not materially burden or
impair the fair market value or use of such Property for the purposes for
which it is or may reasonably be expected to be held;
(e) easements, exceptions, reservations, or other agreements for
the purpose of facilitating the joint or common use of Property in or
adjacent to a shopping center or similar project affecting Property which
in the aggregate do not materially burden or impair the fair market value
or use of such Property for the purposes for which it is or may reasonably
be expected to be held;
(f) rights reserved to or vested in any Government Agency to
control or regulate, or obligations or duties to any Government Agency with
respect to, the use of any Property;
(g) rights reserved to or vested in any Government Agency to
control or regulate, or obligations or duties to any Government Agency with
respect to, any right, power, franchise, grant, license, or permit;
(h) present or future zoning laws and ordinances or other laws
and ordinances restricting the occupancy, use, or enjoyment of Property;
-30-
(i) statutory Liens (including, without limitation, carriers and
warehouseman's liens), other than those described in clauses (a) or (b)
above, arising in the ordinary course of business with respect to
obligations which are not delinquent or are being contested in good faith,
provided that, if delinquent, adequate reserves have been set aside with
respect thereto and, by reason of nonpayment, no Property is subject to a
material risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of
Property which in the aggregate do not materially impair the fair market
value or use of the Property for the purposes for which it is or may
reasonably be expected to be held;
(k) rights of tenants under leases and rental agreements covering
Property entered into in the ordinary course of business of the Person
owning such Property;
(l) Liens consisting of pledges or deposits to secure obligations
under workers' compensation laws, employment insurance or similar
legislation, including Liens of judgments thereunder which are not
currently dischargeable;
(m) Liens consisting of pledges or deposits of Property to secure
performance in connection with operating leases made in the ordinary course
of business to which Borrower or a Subsidiary of Borrower is a party as
lessee, provided the aggregate value of all such pledges and deposits in
connection with any such lease does not at any time exceed 20% of the
annual fixed rentals payable under such lease;
(n) Liens consisting of deposits of Property to secure bids made
with respect to, or performance of, contracts (other than contracts
creating or evidencing an extension of credit to the depositor) in the
ordinary course of business;
(o) Liens consisting of any right of offset, or statutory
bankers' lien, on bank deposit accounts maintained in the ordinary course
of business so long as such bank deposit accounts are not established or
maintained for the purpose of providing such right of offset or bankers'
lien;
(p) Liens consisting of deposits of Property to secure statutory
obligations of Borrower or a Subsidiary of Borrower in the ordinary course
of business;
(q) Liens consisting of deposits of Property to secure (or in
lieu of) surety, appeal or customs bonds in proceedings to which Borrower
or a Subsidiary of Borrower is a party in the ordinary course of business;
(r) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or a Subsidiary of Borrower in the ordinary
course of its business which is currently being contested in good faith by
appropriate proceedings, provided that such Lien is junior to the Lien of
the Collateral Documents, adequate reserves have been set aside and no
material Property is subject to a material risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the ordinary course of
business but not in connection with an extension of credit, which do not in
the aggregate, when taken together with all other Liens, materially impair
the value or use of the Property of Borrower and the Subsidiaries of
Borrower, taken as a whole.
-31-
"Permitted Right of Others" means a Right of Others consisting of (a)
an interest (other than a legal or equitable co-ownership interest, an
option, warrant or other right to acquire a legal or equitable co-ownership
interest and any interest of a ground lessor under a ground lease) that
does not materially impair the value or use of Property for the purposes
for which it is or may reasonably be expected to be held, (b) an option or
right to acquire a Lien that would be a Permitted Encumbrance, (c) the
subordination of a lease or sublease in favor of a financing entity holding
an obligation not otherwise prohibited hereunder, and (d) a license, or
similar right, of or to Intangible Assets granted in the ordinary course of
business.
"Permitted Sale Assets" means the assets described on Schedule 1.1A.
"Person" means any individual or entity, including a trustee,
corporation, limited liability company, general partnership, limited
partnership, joint stock company, trust, estate, unincorporated
organization, business association, firm, joint venture, Government Agency,
or other entity.
"Pledge Agreements" means, collectively, the Pledge Agreements (Gaming
Regulated) and the Pledge Agreement (General).
"Pledge Agreement (Gaming Regulated)" means (a) the Pledge Agreements
heretofore executed by Borrower and Restricted Subsidiaries in respect of
each Restricted Subsidiary which is a Nevada or Mississippi gaming licensee
or registered holding company for a gaming licensee, as amended by the
Amendments thereto to be delivered to the Administrative Agent on or prior
to the Closing Date pursuant to Section 8.1, and (b) each of the pledge
agreements executed and delivered by Borrower and the Significant
Subsidiaries on the Closing Date covering the Pledged Collateral (Gaming
Regulated), in each case either as originally executed or as it may from
time to time be supplemented, modified, amended, extended or supplanted.
"Pledge Agreement (General)" means the pledge agreement executed and
delivered by Borrower and the Significant Subsidiaries covering the Pledged
Collateral (General), either as originally executed or as it may from time
to time be supplemented, modified, amended, extended or supplanted.
"Pledged Collateral (Gaming Regulated)" means all of the Capital Stock
owned by Borrower or any Subsidiary thereof in (i) Lake Charles, (ii),
Belterra Resort Indiana, LLC, (iii) Biloxi Casino Corp., (iv) Boomtown
Hotel and Casino, Inc., (v) Casino Magic Corp., and (vi) PNK (Bossier
City), Inc., (vii) Louisiana - I Gaming, a Louisiana partnership in
Commendam and (viii) Boomtown, Inc.
"Pledged Collateral (General)" means all of the Capital Stock held by
Borrower or any of the Significant Subsidiaries in all Subsidiaries of
Borrower, other than the Pledged Collateral (Gaming Regulated) and the
shares of the Unrestricted Subsidiaries, including the Capital Stock of the
Foreign Subsidiaries.
"Post Completion Fiscal Quarter" means each Fiscal Quarter which
begins on or following the Lake Charles Opening Date.
"Preferred Ship Mortgages" means the Preferred Ship Mortgages referred
to on Schedule 1.1E, as amended and restated on the Closing Date to be
substantially in the form of
-32-
Exhibit J, and each additional preferred ship mortgage hereafter delivered
to the Administrative Agent pursuant to Section 5.10.
"Pricing Certificate" means a certificate in the form of Exhibit K,
properly completed and signed by a Senior Officer of Borrower.
"Pricing Level" means, for each Pricing Period, the pricing level set
forth below opposite the Net Total Debt Ratio as of the last day of the
Fiscal Quarter most recently ended prior to the commencement of that
Pricing Period:
Pricing Level Net Total Debt Ratio
------------- --------------------
I Greater than or equal to 6.25:1.00
II Less than 6.25:1.00, but greater than or equal to 5.50:1.00
III Less than 5.50:1.00, but greater than or equal to 4.75:1.00
IV Less than 4.75:1.00, but greater than or equal to 4.00:1.00
V Less than 4.00:1.00
provided that (i) in the event that Borrower does not deliver a Pricing
Certificate with respect to any Pricing Period prior to the commencement of
such Pricing Period, then until (but only until) such Pricing Certificate
is delivered the Pricing Level for that Pricing Period shall be Pricing
Level I and (ii) in the event of any error in a Pricing Certificate, any
resulting change to the Pricing Level shall be made retroactively
(provided, that any resulting decrease in the Base Margin and LIBOR Margin
shall be recouped only as a credit against interest or commitment fees
payable thereafter).
"Pricing Period" means (a) the period commencing on the Closing Date
and ending on November 14, 2003, (b) the period beginning on November 15,
2003, and ending on November 30, 2003, and (c) each subsequent period of
three calendar months beginning on each December 1, March 1, June 1 and
September 1.
"Primary Earned Basket Amount" means, as of each date of
determination, 100% of the first $5,000,000 by which the aggregate Net
After Tax Proceeds received by Borrower and its Restricted Subsidiaries
exceed $40,000,000.
"Pro Rata Share" means, with respect to each Lender, the percentage of
the relevant Commitment held by that Lender, as such percentage may be
increased or decreased pursuant to an Assignment and Acceptance executed in
accordance with Section 12.8. As of the Closing Date, each Lender has been
advised in writing by the Joint Lead Arrangers of its Pro Rata Shares of
the Commitments, and shall receive Notes in the amount of its Pro Rata
Shares.
"Projected Free Cash Flow" means, as of the last day of each calendar
month, the product of (a) Free Cash Flow for the one year period ending
with the then most recently ended calendar month, times (b) a fraction, the
numerator of which is the integral number of months which are then
remaining during the period ending on December 31, 2004 and the denominator
of which is twelve, adjusted to reflect an annualized growth rate of 10%
per annum.
-33-
"Projected Land Sale Amount" means the amount which cannot be below
zero and is equal to $40,000,000 minus the amount of Net After Tax Proceeds
received by Borrower as a result of sales of Permitted Sale Assets
following the Closing Date, provided that the Projected Land Sale Amount
shall be reduced to zero as of June 30, 2004.
"Projections" means the financial projections provided by the Borrower
to the Administrative Agent and distributed to the Lenders with the
Confidential Information Memorandum for the facilities contemplated herein
by the Lead Arrangers.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Qualifying Indebtedness" means any Indebtedness hereafter issued by
Borrower and its Restricted Subsidiaries, other than (a) any Subordinated
Obligations the proceeds of which refinance existing Subordinated
Obligations of a like amount, and (b) Indebtedness of the types described
in Sections 6.9(c), (d), (f), (g) and (h).
"Quarterly Payment Date" means each March 31, June 30, September 30,
and December 31.
"Real Property" means, as of any date of determination, all real
Property then or theretofore owned, leased or occupied by Borrower or any
of the Restricted Subsidiaries.
"Real Property Collateral" means each parcel of real property owned or
leased by Borrower and its Significant Subsidiaries, including without
limitation the Real Property located in Inglewood, California, Compton,
California, Reno, Nevada, Harvey Canal, Louisiana, Bossier City, Louisiana,
Belterra, Indiana, Biloxi, Mississippi, St. Louis, Missouri and the other
land listed as Permitted Sale Assets other than the real property
underlying the Ogle Haus and the Borrower's headquarters leasehold in Las
Vegas, Nevada.
"Regulations D, T, U and X" means Regulations D, T, U and X,
respectively, as at any time amended, of the Board of Governors of the
Federal Reserve System, or any other regulations in substance substituted
therefor.
"Request for Letter of Credit" means a written request for a Letter of
Credit substantially in the form of Exhibit L, signed by a Responsible
Official of Borrower and properly completed to provide all information
required to be included therein.
"Request for Loan\\Withdrawal Certificate" means a written request for
a Loan or for a withdrawal from the Completion Reserve Account
substantially in the form of Exhibit M, signed by a Responsible Official of
Borrower and properly completed to provide all information required to be
included therein.
"Required Lenders" means, as of any date of determination (a) if the
Commitments are then in effect, either (y) the Majority Lenders, but
including the Administrative Agent and the Syndication Agent (if then a
party hereto), or (z) Lenders having in the aggregate 66 2/3% of the
Commitments, and (b) if the Commitments have then been terminated and there
are then any outstanding Obligations, the Majority Lenders.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and
-34-
any Law, or judgment, award, decree, writ or determination of a Government
Agency, in each case applicable to or binding upon such Person or any of
its Property or to which such Person or any of its Property is subject.
"Responsible Official" means (a) when used with reference to a Person
other than an individual, the (i) chief executive officer, (ii) president,
(iii) chief operating officer, (iv) general counsel, (v) chief financial
officer or (vi) controller of such Person, (b) when used with reference to
a Person that is a member-managed limited liability company, the natural
persons holding such offices in the manager, and (c) when used with
reference to a Person who is an individual, such Person. The Lenders shall
be entitled to conclusively rely upon any document or certificate that is
signed or executed by a Responsible Official of Borrower or any of its
Subsidiaries as having been authorized by all necessary corporate, limited
liability company, partnership and/or other action on the part of Borrower
or such Subsidiary.
"Restricted Subsidiary" means, as of any date of determination, all
Subsidiaries of Borrower other than the Foreign Subsidiaries and any
Subsidiaries of Borrower which have been designated as Unrestricted
Subsidiaries in accordance with the definition thereof.
"Revolving Commitment" means, subject to Sections 2.5, 2.6, 2.7 and
2.8, $115,000,000, provided that a $5,000,000 portion of the Revolving
Commitment shall not be available unless and until a Lender is designated
to assume such portion pursuant to Section 2.12.
"Revolving Lenders" means, as of each date of determination, those
Lenders having a Pro Rata Share of the Revolving Commitment as of that
date.
"Revolving Loans" means the Loans made under the Revolving Commitment.
"Revolving Maturity Date" means the earlier to occur of (a) any Early
Maturity Date (should the same occur), and (b) May 15, 2007.
"Revolving Notes" means the promissory notes made by Borrower to a
Lender evidencing the Advances under that Lender's Pro Rata Share of the
Revolving Commitment, substantially in the form of Exhibit N, either as
originally executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or supplanted.
"Revolving Obligations" means, as of each date of determination, the
sum of (i) the aggregate principal amount of the outstanding Revolving
Loans, plus (ii) the Aggregate Effective Amount, plus (iii) the Swing Line
Outstandings.
"Revolving Reduction Amount" means, as to each applicable Quarterly
Payment Date, an amount equal to 5.70% of the Revolving Commitment on
September 30, 2005 (prior to giving effect to the reductions thereto
scheduled to occur on that date), provided that, if the Revolving
Commitment is thereafter increased in accordance with Section 2.8, the
Revolving Reduction Amount for each Quarterly Payment Date occurring
following such increase shall also be increased in the same proportion
which (a) the amount of the Revolving Commitment (as so increased), bears
to (b) the Revolving Commitment (as in effect immediately prior to the
increase).
"Right of Others" means, as to any Property in which a Person has an
interest, any legal or equitable right, title or other interest (other than
a Lien) held by any other Person in
-35-
that Property, and any option, warrant or other right held by any other
Person to acquire any such right, title or other interest in that Property,
including any option or right to acquire a Lien; provided, however, that
(a) any covenant restricting the use or disposition of Property of such
Person contained in any Contractual Obligation of such Person and (b) any
provision contained in a contract creating a right of payment or
performance in favor of a Person that conditions, limits, restricts,
diminishes, transfers or terminates such right, shall not be deemed to
constitute a Right of Others.
"Schedule Date" means, with respect to any Schedule to this Agreement,
the date as of which the representations made in such Schedule are
initially made. However, a Schedule Date shall not qualify any subsequent
representation or warranty by Borrower that the statements made in such
Schedule continue to be accurate as of any later date.
"Secondary Earned Basket Amount" means, as of each date of
determination, 50% of the amount by which the aggregate Net After Tax
Proceeds received by Borrower and its Restricted Subsidiaries after the
Closing Date exceed $45,000,000.
"Secured Swap Agreement" means a Swap Agreement between Borrower and a
Lender (or an Affiliate of a Lender).
"Security Agreement" means the Amended and Restated Security Agreement
executed and delivered by Borrower and the Significant Subsidiaries on the
Closing Date, substantially in the form of Exhibit O, either as originally
executed or as it may from time to time be supplemented, modified, amended,
extended or supplanted.
"Securityholder Notes" means unsecured subordinated promissory notes
issued to former securityholders in Borrower in consideration of the
repurchase or redemption of their shares pursuant to Article 13 of the
Certificate of Incorporation of Borrower (as in effect on the Closing Date)
which are in form and substance acceptable to the Administrative Agent and
which, in any event, (a) are subordinated in right of payment to the
Obligations in a manner which is at least as favorable as the Subordinated
Obligations, (b) have the benefit of no operational covenants, (c) do not
have the benefit of any guaranty or other suretyship arrangement provided
by the Restricted Subsidiaries, and (d) provide for no cash payments prior
to the date which is one year following the Term Maturity Date.
"Senior Debt" means, as of each date of determination, all Funded Debt
that is not a Subordinated Obligation.
"Senior Officer" means the (a) chief executive officer, (b) president,
(c) chief operating officer, (d) general counsel, (e) chief financial
officer or (f) treasurer of Borrower.
"Significant Subsidiary" means (a) each Restricted Subsidiary that
holds title to any portion of the Real Property Collateral, (b) each
Restricted Subsidiary that holds title to any Property acquired after the
Closing Date which is required to be pledged as future Collateral pursuant
to Section 5.10 and (c) as of any date of determination, each other
Restricted Subsidiary that had, on the last day of the Fiscal Quarter then
most recently ended, total assets with a book value or fair market value of
$500,000 or more.
"SPC" shall have the meaning set forth in Section 12.8(g).
-36-
"Special Eurodollar Circumstance" means the application or adoption
after the Closing Date of any Law or interpretation, or any change therein
or thereof, or any change in the interpretation or administration thereof
by any Government Agency, central bank or comparable authority charged with
the interpretation or administration thereof, or compliance by any Lender
or its Eurodollar Lending Office with any request or directive (whether or
not having the force of Law) of any such Government Agency, central bank or
comparable authority, or the existence or occurrence of circumstances
affecting the Designated Eurodollar Market generally that are beyond the
reasonable control of the Lenders.
"Standard & Poor's" means Standard & Poor's Rating Group (a division
of McGraw-Hill, Inc.), and its successors.
"Subordinated Obligations" means (a) the Existing Subordinated
Obligations, and (b) any New Subordinated Obligations.
"Subsidiary" means, as of any date of determination and with respect
to any Person, any corporation, limited liability company or partnership
(whether or not, in any case, characterized as such or as a "joint
venture"), whether now existing or hereafter organized or acquired: (a) in
the case of a corporation or limited liability company, of which a majority
of the interests having ordinary voting power for the election of directors
or other governing body or management control (other than interests having
such power only by reason of the happening of a contingency) are at the
time beneficially owned by such Person and/or one or more Subsidiaries of
such Person, or (b) in the case of a partnership, of which a majority of
the partnership or other ownership interests are at the time beneficially
owned by such Person and/or one or more of its Subsidiaries.
"Subsidiary Guaranty" means the continuing guaranty of the Obligations
executed and delivered by the Significant Subsidiaries on the Closing Date,
either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Swap Agreement" means a written agreement between Borrower and one or
more financial institutions providing for "swap", "cap", "collar" or other
interest rate protection with respect to any Indebtedness.
"Swing Line" means the revolving line of credit established by the
Swing Line Lender in favor of Borrower pursuant to Section 2.10.
"Swing Line Note" means the promissory note and any other documents
executed by Borrower in favor of the Swing Line Lender in connection with
the Swing Line.
"Swing Line Lender" means Bank of America.
"Swing Line Loans" means loans made by the Swing Line Lender to
Borrower pursuant to Section 2.10.
"Swing Line Outstandings" means, as of any date of determination, the
aggregate principal Indebtedness of Borrower on all Swing Line Loans then
outstanding.
"Syndication Agent" means Bear Stearns Corporate Lending Inc. The
capacity of the Syndication Agent is titular in nature, and the Syndication
Agent shall have no rights or duties hereunder over those arising hereunder
by reason of their status as Lenders.
-37-
"Taxes" has the meaning set forth in Section 3.14(f).
"Term Amortization Amount" means, as to each Quarterly Payment Date,
$312,500, provided that, if the Term Commitment is hereafter increased in
accordance with Section 2.8, the Term Amortization Amount for each
Quarterly Payment Date occurring following such increase shall also be
increased in the same proportion which (a) the amount of the Term
Commitment (as so increased), bears to (b) the Term Commitment (as in
effect immediately prior to the increase).
"Term Commitment" means, subject to Sections 2.5, 2.6, 2.7 and 2.8,
$125,000,000.
"Term Lenders" means, as of each date of determination, those Lenders
having a Pro Rata Share of the Term Commitment as of that date.
"Term Loans" means Loans made under the Term Commitment.
"Term Maturity Date" means the earlier of (a) any Early Maturity Date
(should the same occur), or (b) May 15, 2008.
"Term Notes" means the promissory notes made by Borrower to a Lender
evidencing the Advances under that Lender's Pro Rata Share of the Term
Commitment, substantially in the form of Exhibit P, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"Title Company" means Chicago Title Company or such other title
insurance company as is reasonably acceptable to the Administrative Agent.
"to the knowledge of" means, when modifying a representation, warranty
or other statement of any Person, that the fact or situation described
therein is known by the Person (or, in the case of a Person other than a
natural Person, known by a Responsible Official of that Person) making the
representation, warranty or other statement, or with the exercise of
reasonable due diligence under the circumstances (in accordance with the
standard of what a reasonable Person in similar circumstances would have
done) would have been known by the Person (or, in the case of a Person
other than a natural Person, would have been known by a Responsible
Official of that Person).
"Trademark Collateral Assignment" means the Amended and Restated
Trademark Collateral Assignment executed and delivered by Borrower and the
Significant Subsidiaries on the Closing Date, substantially in the form of
Exhibit Q, either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"type", when used with respect to any Loan or Advance, means the
designation of whether such Loan or Advance is a Base Loan or Advance, or a
LIBOR Loan or Advance.
"Unreimbursed Amount" has the meaning set forth in Section 2.4(h).
"Unrelated Person" has the meaning set forth in the definition of
"Change in Control."
"Unrestricted Subsidiary" means the Foreign Subsidiaries and any
future Subsidiary of Borrower hereafter so designated by Borrower to the
Administrative Agent in writing, provided that (a) no Subsidiary may be
designated as an Unrestricted Subsidiary at any time
-38-
when a Default or Event of Default has occurred and remains continuing, or
would result from such designation, (b) Borrower shall make any such
designation prior to or substantially concurrently with the acquisition or
formation of the relevant Subsidiary, and (c) no Unrestricted Subsidiary
shall own, directly or indirectly, any portion of or rights in (i) any of
the hotel, casino and resort properties described in the definition of
"Gaming Properties" or (ii) any equity or debt securities of any Restricted
Subsidiary.
"Vessel Construction Contract" means a Vessel Construction Agreement,
substantially in the form delivered pursuant to Section 8.1 between LEEVAC
(or another contractor acceptable to the Managing Agents or the Majority
Lenders) and Lake Charles.
1.2 Use of Defined Terms. Any defined term used in the plural shall
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any one or more of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not specifically defined in
this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
GAAP applied on a consistent basis, except as otherwise specifically prescribed
herein. In the event that GAAP changes during the term of this Agreement or, to
the extent that Borrower is in compliance with GAAP but is directed by the SEC
to change its manner of accounting in any respect, in each case in a such way
that covenants contained in Sections 6.11 through 6.14 and Section 6.18 would
then be calculated in a different manner or with different components, (a)
Borrower and the Lenders agree to amend this Agreement in such respects as are
necessary to conform those covenants as criteria for evaluating Borrower's
financial condition to substantially the same criteria as were effective prior
to such change in GAAP or SEC direction and (b) Borrower shall be deemed to be
in compliance with the covenants contained in the aforesaid Sections if and to
the extent that Borrower would have been in compliance therewith under GAAP as
in effect immediately prior to such change, but shall have the obligation to
deliver each of the materials described in Article 7 to the Administrative Agent
and the Lenders, on the dates therein specified, with financial data presented
in a manner which conforms with GAAP as in effect immediately prior to such
change.
1.4 Rounding. Any financial ratios required to be maintained by
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
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. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 References to "Borrower and its Subsidiaries". Any reference
herein to "Borrower and its Subsidiaries" or the like shall refer solely to
Borrower during such times, if any, as Borrower shall have no Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is disjunctive; the term "and"
is conjunctive. The term "shall" is mandatory; the term "may" is permissive.
Masculine terms also apply to females; feminine terms also apply to males. The
term "including" is by way of example and
-39-
not limitation.
-40-
ARTICLE 2
LOANS AND LETTERS OF CREDIT
2.1 Loans -- General.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Initial Funding Date
through the Revolving Maturity Date, the Revolving Lenders shall, pro rata
according to their respective Pro Rata Shares of the then applicable
Revolving Commitment, make Advances to Borrower under the Revolving
Commitment in such amounts as Borrower may request that do not result in
the Revolving Obligations being in excess of the then applicable Revolving
Commitment. Each Revolving Loan which results in the outstanding Revolving
Obligations being in excess of $25,000,000 shall also be subject to the
fulfillment of the conditions precedent set forth in Section 8.3. Subject
to the limitations set forth herein, Borrower may borrow, repay and
reborrow under the Revolving Commitment without premium or penalty.
(b) Subject to the terms and conditions set forth in this
Agreement, on the Closing Date the Term Lenders shall, pro rata according
to their respective Pro Rata Shares of the Term Commitment, make a Term
Loan to Borrower in the amount of the Term Commitment (net of the amount of
any original issue discount), the net proceeds of which shall be deposited
into the Completion Reserve Account. In the event that the amount of the
Term Commitment is increased following the Closing Date in accordance with
Section 2.8, then the Term Lenders assuming the increased Term Commitment
shall fund the proceeds of their Advances in respect of such increase to
the Administrative Agent (net of the amount of any original issue discount)
who shall deposit the same into the Completion Reserve Account to the
extent required by Article 9. From time to time following the Closing Date,
subject to the terms and conditions set forth in this Agreement, the Term
Lenders shall refinance the initial Term Loan with new LIBOR Loans made
from time to time at the request of Borrower, provided that no Term Loan
which results in an increase in the aggregate principal amount of the
outstanding Term Loan shall be made following the Closing Date (except in
connection with any increase of the Term Commitment of the type
contemplated by Section 2.8). Once repaid or prepaid, no Term Loan may be
reborrowed, but may be directly refinanced using the proceeds of new Term
Loans. No Term Loan may be designated as a Base Loan, except to the extent
that LIBOR Loans are not being made available to Borrower under the
Revolving Commitment in accordance with the terms of this Agreement.
(c) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan\\Withdrawal Certificate which shall specify
the requested (i) date of such Loan, (ii) type of Loan, (iii) amount of
such Loan, (iv) in the case of a LIBOR Loan, the Interest Period for such
Loan, and (v) the Commitment under which the Loan is requested. Unless the
Administrative Agent has notified, in its sole and absolute discretion, has
notified Borrower to the contrary, a Loan may be requested by telephone by
a Responsible Official of Borrower, in which case Borrower shall confirm
such request by promptly delivering to the Administrative Agent a Request
for Loan\\Withdrawal Certificate in person or by telecopier conforming to
the preceding sentence. Administrative Agent shall incur no liability
whatsoever hereunder in acting upon any telephonic Request for
Loan\\Withdrawal Certificate purportedly made by a Responsible Official of
Borrower, and Borrower hereby agrees to
-41-
indemnify the Administrative Agent from any loss, cost, expense or
liability as a result of so acting.
(d) Promptly following receipt of a Request for Loan\\Withdrawal
Certificate, the Administrative Agent shall notify each Lender by telephone
or telecopier (and if by telephone, promptly confirmed by telecopier) of
the date and type of the Loan, the applicable Interest Period, and that
Lender's Pro Rata Share (if any) of the Loan. Not later than 11:00 a.m.
(California time) on the date specified for any Loan (which must be a
Business Day), each Lender having a Pro Rata Share of the related
Commitment shall make its Pro Rata Share of the Loan in immediately
available funds available to the Administrative Agent at the Administrative
Agent's Office. Upon satisfaction or waiver of the applicable conditions
set forth in Article 8, all Advances shall be credited on that date in
immediately available funds to the Designated Deposit Account.
(e) Unless the Majority Lenders otherwise consent, each Loan
shall be in an integral multiple of $1,000,000 which is not less than
$5,000,000 (except to the extent that such Loan is in the remaining
available principal amount of the applicable Commitment).
(f) The Advances made by each Lender under the Revolving
Commitment shall be evidenced by that Lender's Revolving Note and the
Advances made by each Lender under the Term Commitment shall be evidenced
by that Lender's Term Note.
(g) A Request for Loan\\Withdrawal Certificate shall be
irrevocable upon the Administrative Agent's first notification thereof.
(h) If no Request for Loan\\Withdrawal Certificate (or telephonic
request for Loan referred to in Section 2.1(c), if applicable) has been
made within the requisite notice periods set forth in Section 2.2 or 2.3
prior to the end of the Interest Period for any LIBOR Loan, then on the
last day of such Interest Period, such LIBOR Loan shall be automatically
converted into a Base Loan in the same amount.
(i) If a Loan is to be made on the same date that another Loan is
due and payable, Borrower or the Lenders, as the case may be, shall make
available to the Administrative Agent the net amount of funds giving effect
to both such Loans and the effect for purposes of this Agreement shall be
the same as if separate transfers of funds had been made with respect to
each such Loan.
2.2 Base Loans. Each request by Borrower for a Base Loan shall be made
pursuant to a Request for Loan\\Withdrawal Certificate (or telephonic or other
request for loan referred to Section 2.1(c), if applicable) received by the
Administrative Agent, at the Administrative Agent's Office, not later than 9:00
a.m. (California time) on the Business Day prior to the date of the requested
Base Loan. All Loans, other than Term Loans, shall constitute Base Loans unless
properly designated as a LIBOR Loan pursuant to Section 2.3.
2.3 LIBOR Loans.
(a) Each request by Borrower for a LIBOR Loan shall be made
pursuant to a Request for Loan\\Withdrawal Certificate (or telephonic or
other request for Loan referred to in Section 2.1(c), if applicable)
received by the Administrative Agent, at the Administrative Agent's Office,
not later than 9:00 a.m. (California time) at least three LIBOR Business
Days before the first day of the applicable Interest Period.
-42-
(b) On the date which is two LIBOR Business Days before the first
day of the applicable Interest Period, the Administrative Agent shall
confirm its determination of the applicable LIBOR Rate (which determination
shall be conclusive in the absence of manifest error) and promptly shall
give notice of the same to Borrower and the Lenders by telephone or
telecopier (and if by telephone, promptly confirmed by telecopier).
(c) Unless the Administrative Agent and the Majority Lenders
otherwise consent, no more than fifteen Interest Periods shall be in effect
at any one time.
(d) No LIBOR Loan may be requested during the continuation of a
Default or Event of Default.
(e) Nothing contained herein shall require any Lender to fund any
LIBOR Advance in the Designated Eurodollar Market.
2.4 Letters of Credit.
(a) On the date upon which the initial Revolving Loans under this
Agreement are made, the Existing Letter of Credit shall be deemed to have
been issued pursuant hereto, and from and after such date, the Existing
Letter of Credit shall be subject to and governed by the terms and
conditions of this Agreement. On and following the Initial Funding Date,
subject to the terms and conditions set forth herein:
(i) the Issuing Lender agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.4, (1)
from time to time on any Business Day during the period from the
Initial Funding Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of Borrower, and to amend
Letters of Credit previously issued by it, in accordance with
subsections (d) and (e) below, and (2) to honor drafts under the
Letters of Credit; and
(ii) the Revolving Lenders severally agree to participate in
Letters of Credit in accordance with their respective Pro Rata Shares;
provided that the Issuing Lender shall not be obligated to make any
Credit Extension with respect to any Letter of Credit, and no Lender
shall be obligated to participate in any Letter of Credit if as of the
date of such Credit Extension, (y) the Revolving Obligations exceed
the then applicable Revolving Commitment or (z) the Aggregate
Effective Amount exceeds $15,000,000. Each Letter of Credit which
results in the outstanding Revolving Obligations being in excess of
$25,000,000 shall also be subject to the fulfillment of the conditions
precedent set forth in Section 8.3.
(b) The Issuing Lender shall be under no obligation to issue any
Letter of Credit if:
(i) any order, judgment or decree of any Government Agency
or arbitrator shall by its terms purport to enjoin or restrain the
Issuing Lender from issuing such Letter of Credit, or any Law
applicable to the Issuing Lender or any request or directive (whether
or not having the force of law) from any Government Agency prohibits,
or requests that the Issuing Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon the Issuing Lender with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the
Issuing Lender is not otherwise compensated
-43-
hereunder) not in effect on the Closing Date, or shall impose upon the
Issuing Lender any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the Issuing Lender in good
faith deems material;
(ii) subject to Section 2.4(f), unless all the Lenders
otherwise consent in writing delivered to the Administrative Agent,
the expiry date of such requested Letter of Credit would occur more
than twelve months after the date of issuance (except Letters of
Credit in support of Borrower's workers compensation self-insurance
program, which may have a term of up to 395 days);
(iii) the expiry date of such requested Letter of Credit
would occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date;
(iv) the issuance of such Letter of Credit would violate one
or more policies of the Issuing Lender; or
(v) such Letter of Credit is in an initial amount less than
$100,000 or is to be denominated in a currency other than Dollars.
(c) The Issuing Lender shall be under no obligation to amend any
Letter of Credit if (i) the Issuing Lender would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (ii) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.
(d) Each Letter of Credit shall be issued or amended, as the case
may be, upon the request of Borrower delivered to the Issuing Lender (with
a copy to the Administrative Agent) in the form of a Request for Letter of
Credit and a Letter of Credit Application, appropriately completed and
signed by a Responsible Official of Borrower. These documents must be
received by the Issuing Lender and the Administrative Agent not later than
11:00 a.m. (California time) at least two Business Days (or such later date
and time as the Issuing Lender may agree in a particular instance in its
sole discretion) prior to the proposed issuance date or date of amendment.
In the case of a request for an initial issuance of a Letter of Credit, the
Letter of Credit Application shall specify in form and detail satisfactory
to the Issuing Lender: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount thereof;
(C) the expiry date thereof; (D) the name and address of the beneficiary
thereof; (E) the documents to be presented by such beneficiary in case of
any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G)
such other matters as the Issuing Lender may require. In the case of a
request for an amendment of any outstanding Letter of Credit, such Letter
of Credit Application shall specify, in form and detail satisfactory to the
Issuing Lender, the Letter of Credit to be amended, the proposed date of
amendment thereof (which shall be a Business Day), the nature of the
proposed amendment; and such other matters as the Issuing Lender may
require.
(e) Promptly after receipt of any Letter of Credit Application,
the Issuing Lender will confirm with the Administrative Agent (by telephone
or in writing) that the Administrative Agent has received a copy of such
Letter of Credit Application. Upon receipt by the Issuing Lender of
confirmation from the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject
to the terms and conditions hereof, the Issuing Lender shall, on the
requested date, issue a Letter of
-44-
Credit for the account of Borrower or enter into the applicable amendment,
as the case may be, in each case in accordance with the Issuing Lender's
usual and customary business practices. Immediately upon the issuance of
each Letter of Credit, each Revolving Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Issuing Lender
a risk participation in such Letter of Credit in an amount equal to the
product of such Lender's Pro Rata Share of the Revolving Commitment times
the face amount of such Letter of Credit.
(f) If Borrower so requests in any applicable Letter of Credit
Application, the Issuing Lender may, in its sole and absolute discretion,
agree to issue a Letter of Credit that has automatic renewal provisions
(each, an "Auto-Renewal Letter of Credit"); provided that any such
Auto-Renewal Letter of Credit must permit the Issuing Lender to prevent any
such renewal at least once in each twelve-month period (commencing with the
date of issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the "Non-Renewal Notice Date") in
each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the Issuing Lender, Borrower
shall not be required to make a specific request to the Issuing Lender for
any such renewal. Once an Auto-Renewal Letter of Credit has been issued,
the Lenders shall be deemed to have authorized (but may not require) the
Issuing Lender to permit the renewal of such Letter of Credit at any time
prior to an expiry date not later than the Letter of Credit Expiration
Date; provided, however, that the Issuing Lender shall not permit any such
renewal if (i) the Issuing Lender has determined that it would have no
obligation at such time to issue such Letter of Credit in its renewed form
under the terms hereof (by reason of the provisions of Section 2.4(b) or
otherwise), or (ii) it has received notice on or before the day that is two
Business Days before the Non-Renewal Notice Date from the Administrative
Agent that the Majority Lenders have elected not to permit such renewal.
(g) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the Issuing Lender will also deliver to
Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
(h) Upon receipt from the beneficiary of any Letter of Credit of
any notice of a drawing under such Letter of Credit, the Issuing Lender
shall notify Borrower and the Administrative Agent thereof. Not later than
11:00 a.m. (California time) on the date of any payment by the Issuing
Lender under a Letter of Credit (each such date, an "Honor Date"), Borrower
shall reimburse the Issuing Lender through the Administrative Agent in an
amount equal to the amount of such drawing. If Borrower fails to so
reimburse the Issuing Lender by such time, the Administrative Agent shall
promptly notify each Revolving Lender of the Honor Date, the amount of the
unreimbursed drawing (the "Unreimbursed Amount"), and the amount of such
Revolving Lender's Pro Rata Share thereof. In such event, Borrower shall be
deemed to have requested a Base Loan to be disbursed on the Honor Date in
an amount equal to the Unreimbursed Amount, without regard to the minimum
and multiples specified in Section 2.1(f) for the principal amount of Base
Loans, but subject to the amount of the unutilized portion of the Revolving
Commitment and the conditions set forth in Sections 8.2 (other than the
delivery of a Request for Letter of Credit). Any notice given by the
Issuing Lender or the Administrative Agent pursuant to this Section 2.4(h)
may be given by telephone if immediately confirmed in writing; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
-45-
(i) Each Revolving Lender (including the Revolving Lender acting
as Issuing Lender) shall upon any notice pursuant to Section 2.4(h) make
funds available to the Administrative Agent for the account of the Issuing
Lender at the Administrative Agent's Office in an amount equal to its Pro
Rata Share of the Unreimbursed Amount not later than 1:00 p.m. (California
time) on the Business Day specified in such notice by the Administrative
Agent, whereupon, subject to the provisions of Section 2.4(j) each
Revolving Lender that so makes funds available shall be deemed to have made
a Base Advance to Borrower in such amount. The Administrative Agent shall
remit the funds so received to the Issuing Lender.
(j) With respect to any Unreimbursed Amount that is not fully
refinanced by Base Loans because the conditions set forth in Section 8.2
cannot be satisfied or for any other reason, Borrower shall be deemed to
have incurred from the Issuing Lender a Letter of Credit Loan in the amount
of the Unreimbursed Amount that is not so refinanced, which Letter of
Credit Loan shall be due and payable on demand (together with interest) and
shall bear interest at the Default Rate. In such event, each Revolving
Lender's payment to the Administrative Agent for the account of the Issuing
Lender pursuant to Section 2.4(i) shall be deemed payment in respect of its
participation in such Letter of Credit Loan and shall constitute a Letter
of Credit Advance from such Revolving Lender in satisfaction of its
participation obligation under this Section 2.4.
(k) Until each Revolving Lender funds its Advance or Letter of
Credit Advance pursuant to this Section 2.4 to reimburse the Issuing Lender
for any amount drawn under any Letter of Credit, interest in respect of
such Revolving Lender's Pro Rata Share of such amount shall be solely for
the account of the Issuing Lender.
(l) Each Revolving Lender's obligation to make Advances or Letter
of Credit Advances to reimburse the Issuing Lender for amounts drawn under
Letters of Credit, as contemplated by this Section 2.4, shall be absolute
and unconditional and shall not be affected by any circumstance, including
(A) any set-off, counterclaim, recoupment, defense or other right which
such Revolving Lender may have against the Issuing Lender, Borrower or any
other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however, that each Revolving
Lender's obligation to make Advances pursuant to this Section 2.4 is
subject to the conditions set forth in Section 8.2. No such making of an
Letter of Credit Advance shall relieve or otherwise impair the obligation
of Borrower to reimburse the Issuing Lender for the amount of any payment
made by the Issuing Lender under any Letter of Credit, together with
interest as provided herein.
(m) If any Revolving Lender fails to make available to the
Administrative Agent for the account of the Issuing Lender any amount
required to be paid by such Revolving Lender pursuant to the foregoing
provisions of this Section 2.4 by the time specified in Section 2.4(i), the
Issuing Lender shall be entitled to recover from such Revolving Lender
(acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to
the date on which such payment is immediately available to the Issuing
Lender at a rate per annum equal to the Federal Funds Rate from time to
time in effect. A certificate of the Issuing Lender submitted to any
Revolving Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest
error.
(n) At any time after the Issuing Lender has made a payment under
any Letter of Credit and has received from any Revolving Lender such
Revolving Lender's Letter
-46-
of Credit Advance in respect of such payment in accordance with Section
2.4(i), if the Administrative Agent receives for the account of the Issuing
Lender any payment in respect of the related Unreimbursed Amount or
interest thereon (whether directly from Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by the Administrative Agent),
the Administrative Agent will distribute to such Revolving Lender its Pro
Rata Share thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Revolving
Lender's Letter of Credit Advance was outstanding) in the same funds as
those received by the Administrative Agent.
(o) If any payment received by the Administrative Agent for the
account of the Issuing Lender pursuant to Section 2.4(i) is required to be
returned as a preference or otherwise in any bankruptcy or insolvency of
Borrower or any of its Subsidiaries (including pursuant to any settlement
entered into by the Issuing Lender in its discretion), each Revolving
Lender shall pay to the Administrative Agent for the account of the Issuing
Lender its Pro Rata Share thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount
is returned by such Revolving Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.
(p) The obligation of Borrower to reimburse the Issuing Lender
for each drawing under each Letter of Credit and to repay each Letter of
Credit Loan shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that Borrower may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person
for whom any such beneficiary or any such transferee may be acting),
the Issuing Lender or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss or
delay in the transmission or otherwise of any document required in
order to make a drawing under such Letter of Credit;
(iv) any payment by the Issuing Lender under such Letter of
Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any
payment made by the Issuing Lender under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
such Letter of Credit, including any arising in connection with any
proceeding under any Debtor Relief Law; or
-47-
(v) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to,
or a discharge of, Borrower.
Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with Borrower's instructions or other irregularity, Borrower
will immediately notify the Issuing Lender. Borrower shall be conclusively
deemed to have waived any such claim against the Issuing Lender and its
correspondents unless such notice is given as aforesaid.
(q) Each Revolving Lender and Borrower agree that, in paying any
drawing under a Letter of Credit, the Issuing Lender shall not have any
responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document
or the authority of the Person executing or delivering any such document.
None of the Issuing Lender, any Agent-Related Person nor any of the
respective correspondents, participants or assignees of the Issuing Lender
shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or
the Majority Lenders, as applicable; (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application.
Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.
None of the Issuing Lender, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the Issuing Lender,
shall be liable or responsible for any of the matters described in clauses
(i) through (v) of Section 2.4(p); provided, however, that anything in such
clauses to the contrary notwithstanding, Borrower may have a claim against
the Issuing Lender, and the Issuing Lender may be liable to Borrower, to
the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by Borrower which Borrower
proves were caused by the Issuing Lender's willful misconduct or gross
negligence or the Issuing Lender's willful failure to pay under any Letter
of Credit after the presentation to it by the beneficiary of a sight draft
and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing,
the Issuing Lender may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the Issuing Lender shall not be
responsible for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.
(r) Upon the request of the Administrative Agent, (i) if the
Issuing Lender has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an Letter of Credit Loan,
or (ii) if, as of the Letter of Credit Expiration Date, any Letter of
Credit may for any reason remain outstanding and partially or wholly
undrawn, Borrower shall immediately Cash Collateralize the then Outstanding
Amount of all Letter of Credit Obligations (in an amount equal to such
Outstanding Amount determined as of the date of such Letter of Credit Loan
or the Letter of Credit Expiration Date, as the case may be). For purposes
hereof, "Cash Collateralize" means to pledge and deposit with or deliver to
the Administrative Agent, for the benefit of the Issuing Lender and the
Lenders, as
-48-
collateral for the Letter of Credit Obligations, cash or deposit account
balances ("Cash Collateral") pursuant to documentation in form and
substance reasonably satisfactory to the Administrative Agent and the
Issuing Lender (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. Borrower hereby
grants to the Administrative Agent, for the benefit of the Issuing Lender
and the Lenders, a security interest in all such cash, deposit accounts and
all balances therein and all proceeds of the foregoing. Cash Collateral
shall be maintained in blocked, non-interest bearing deposit accounts at
Bank of America.
2.5 Voluntary Reduction of Commitments. Borrower shall have the right,
at any time and from time to time following the Lake Charles Completion Date,
without penalty or charge, upon at least three Business Days' prior written
notice to the Administrative Agent, to voluntarily, permanently and irrevocably
reduce, in aggregate principal amounts in an integral multiple of $1,000,000 but
not less than $5,000,000, or to terminate, all or a portion of the then
undisbursed portion of the Commitments, or at any time, to prepay any
outstanding Obligations with the consent of the remaining Majority Lenders,
provided that each such reduction of the Commitments shall be accompanied by the
payment by Borrower of any breakage costs resulting from the prepayment of the
Loans, computed in accordance with Section 3.10. The Administrative Agent shall
promptly notify the Lenders of any reduction or termination of any of the
Commitments under this Section. Any reduction of the Commitments under this
Section shall be applied (a) in the case of any reduction of the Revolving
Commitment, to the Revolving Reduction Amounts, (b) in the case of any reduction
of the Term Commitments, to the Term Amortization Amounts, in each case in the
inverse order of their occurrence.
2.6 Scheduled Reduction of Commitments.
(a) The Revolving Commitment shall automatically reduce on
September 30, 2005, and each subsequent Quarterly Payment Date by the
related Revolving Reduction Amount.
(b) The Term Commitment shall automatically reduce on the date of
each prepayment of the Term Loans, in the amount of such prepayment
(including without limitation upon any voluntary prepayment following the
termination of the Completion Reserve Account in accordance with Section
9.5(b)(2), and upon any prepayment in accordance with Sections 3.1(e)(v) or
3.1(e)(vi)).
(c) The Term Commitment shall also automatically reduce on
September 30, 2003 and each subsequent Quarterly Payment Date by the
related Term Amortization Amount.
2.7 Optional Termination of Commitments. Following the occurrence of a
Change in Control, the Majority Lenders may in their sole and absolute
discretion elect, during the thirty day period immediately subsequent to the
later of (a) such occurrence or (b) the earlier of (i) receipt of Borrower's
written notice to the Administrative Agent of such occurrence or (ii) if no such
notice has been received by the Administrative Agent, the date upon which the
Administrative Agent has actual knowledge thereof, to terminate the Commitments,
in which case the Commitments shall be terminated effective on the date which is
thirty days subsequent to written notice from the Administrative Agent to
Borrower thereof.
-49-
2.8 Optional Increase to the Commitments.
(a) Provided that no Default or Event of Default then exists,
Borrower may request in writing that the then effective Revolving
Commitment, Term Commitment, or either or both of them, be increased to an
aggregate amount which does not result in the principal amount of the
Commitments being greater than $250,000,000 minus the amount of any
permanent reductions to the Commitments which have then occurred pursuant
to Sections 2.5, 2.6 or 2.7, provided that any such increase shall be made
prior to the one year anniversary of the Closing Date. Any request under
this Section shall be submitted by Borrower to the Lenders through the
Administrative Agent not less than fifteen days prior to the proposed
increase, specify the proposed effective date and amount of such increase
to each of the Commitments, if any, and be accompanied by a Certificate
signed by a Senior Officer of Borrower, stating that no Default or Event of
Default exists as of the date of the request or will result from the
requested increase. The consent of the Lenders, as such, shall not be
required for an increase in the amount of either or both of the Commitments
pursuant to this Section.
(b) Each Lender may approve or reject a request for an increase
in the amount of the Commitments in its sole and absolute discretion and,
absent an affirmative written response within thirty days after receipt of
such request, shall be deemed to have rejected the request. The rejection
of such a request by any number of Lenders shall not affect Borrower's
right to increase the Commitments pursuant to this Section.
(c) In responding to a request under this Section, each Lender
which is willing to increase the amount of its Pro Rata Share of the
increased Commitments shall specify the amount of the proposed increase
which it is willing to assume. Each consenting Lender shall be entitled to
participate ratably (based on its Pro Rata Share of the Commitments before
such increase) in any resulting increase in the Commitments, subject to the
right of the Administrative Agent to adjust allocations of the increased
Commitments so as to result in the amounts of the Pro Rata Shares of the
Lenders being in integral multiples of $100,000.
(d) If the aggregate principal amount offered to be assumed by
the consenting Lenders is less than the amount requested, Borrower may (i)
reject the proposed increase in its entirety, (ii) accept the offered
amounts or (iii) designate new lenders who qualify as Eligible Assignees
and which are reasonably acceptable to the Administrative Agent as
additional Lenders hereunder in accordance with clause (f) of this Section
(each, a "New Lender"), which New Lenders may assume the amount of the
increase in the Commitments that has not been assumed by the consenting
Lenders.
(e) After completion of the foregoing, the Administrative Agent
shall give written notification to the Lenders and any New Lenders of the
increase to the Commitments which shall thereupon become effective.
(f) Each New Lender shall become an additional party hereto as a
New Lender concurrently with the effectiveness of the proposed increase in
the Commitments upon its execution of an instrument of joinder to this
Agreement which is in form and substance reasonably acceptable to the
Administrative Agent and which, in any event, contains the representations,
warranties, indemnities and other protections afforded to the
Administrative Agent and the other Lenders which would be granted or made
by an Eligible Assignee by means of the execution of an Assignment and
Acceptance.
-50-
(g) Subject to the foregoing, any increase to the Commitments
requested under this Section shall be effective as of the date proposed by
Borrower and shall be in the principal amount equal to (i) the amount which
consenting Lenders are willing to assume as increases to the amount of
their Pro Rata Share plus (ii) the amount offered by any New Lenders. Upon
the effectiveness of any such increase, each Loan outstanding under any
Commitment which is so increased shall be refinanced with new Advances
reflecting the adjusted Pro Rata Shares of the Lenders in that Commitment
and Borrower shall:
(x) issue replacement Notes to each affected Lender and new
Notes to each New Lender (in each case, as may be requested by such
Lender), and the percentage of Pro Rata Shares of each Lender will be
adjusted to give effect to the increase in the Commitments;
(y) execute and deliver to the Administrative Agent such
amendments to the Loan Documents as the Administrative Agent may reasonably
request relating to such increase (including without limitation, amendments
to the Mortgages reflecting the increase of the amounts secured thereby,
and, in any such case Borrower shall provide to the Administrative Agent an
endorsement to its ALTA lenders policy of title insurance, in form and
substance reasonably acceptable to the Administrative Agent, insuring the
continued priority and perfection of the Mortgages); and
(z) pay to the existing Lenders any breakage costs which are
payable in connection with the refinancing of any Loans in the manner
contemplated by Section 3.10 (it being understood that in the event of any
increase to the Term Commitment, each LIBOR Loan which is then outstanding
under the Term Commitment shall be refinanced in a manner which results in
each Lender having a Pro Rata Share of the Term Commitment having a ratable
share of each Term Loan which is outstanding thereunder).
2.9 Administrative Agent's Right to Assume Funds Available for
Advances. Unless the Administrative Agent shall have been notified by any Lender
no later than 10:00 a.m. (California time) on the Business Day of the proposed
funding by the Administrative Agent of any Loan that such Lender does not intend
to make available to the Administrative Agent such Lender's portion of the total
amount of such Loan, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on the date of the Loan
and the Administrative Agent may, in reliance upon such assumption, make
available to Borrower a corresponding amount. If the Administrative Agent has
made funds available to Borrower based on such assumption and such corresponding
amount is not in fact made available to the Administrative Agent by such Lender,
the Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Lender. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent promptly shall notify Borrower and Borrower shall pay such
corresponding amount to the Administrative Agent. The Administrative Agent also
shall be entitled to recover from such Lender interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to Borrower to the date such corresponding
amount is recovered by the Administrative Agent, at a rate per annum equal to
the daily Federal Funds Rate. Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its Pro Rata Shares of the Commitments or
to prejudice any rights which the Administrative Agent or Borrower may have
against any Lender as a result of any default by such Lender hereunder.
-51-
2.10 Swing Line.
(a) From time to time from the Initial Funding Date through the
day prior to the Revolving Maturity Date, the Swing Line Lender shall make
Swing Line Loans to Borrower in such amounts as Borrower may request,
provided that (a) after giving effect to each Swing Line Loan, the Swing
Line Outstandings shall not exceed $15,000,000 and the principal amount of
the Revolving Obligations shall not exceed the then effective Revolving
Commitment, (b) without the consent of all of the Lenders, no Swing Line
Loan may be made during the continuation of an Event of Default and (c) the
Swing Line Lender has not given at least twenty-four hours prior notice to
Borrower that availability under the Swing Line is suspended or terminated.
Each Swing Line Loan which results in the outstanding Revolving Obligations
being in excess of $25,000,000 shall also be subject to the fulfillment of
the conditions precedent set forth in Section 8.3. Borrower may borrow,
repay and reborrow under this Section. Unless notified to the contrary by
the Swing Line Lender, borrowings under the Swing Line may be made in
amounts which are integral multiples of $100,000 upon telephonic request by
a Responsible Official of Borrower made to the Administrative Agent not
later than 1:00 p.m. (California time) on the Business Day of the requested
borrowing (which telephonic request shall be promptly confirmed in writing
by telecopier). Promptly after receipt of such a request for borrowing, the
Administrative Agent shall provide telephonic verification to the Swing
Line Lender that, after giving effect to such request, availability for
Loans will exist under Section 2.1 (and such verification shall be promptly
confirmed in writing by telecopier). Unless notified to the contrary by the
Swing Line Lender, each repayment of a Swing Line Loan shall be in an
amount which is an integral multiple of $100,000. If Borrower instructs the
Swing Line Lender to debit its demand deposit account at the Swing Line
Lender in the amount of any payment with respect to a Swing Line Loan, or
the Swing Line Lender otherwise receives repayment, after 3:00 p.m.
(California time) on a Business Day, such payment shall be deemed received
on the next Business Day. The Swing Line Lender shall promptly notify the
Administrative Agent of the Swing Loan Outstandings each time there is a
change therein.
(b) Swing Line Loans shall bear interest at a fluctuating rate
per annum equal to the Base Rate plus the Base Margin plus any applicable
Incremental Margin. Interest shall be payable on such dates, not more
frequent than monthly, as may be specified by the Swing Line Lender and in
any event on the Revolving Maturity Date. The Swing Line Lender shall be
responsible for invoicing Borrower for such interest. The interest payable
on Swing Line Loans is solely for the account of the Swing Line Lender
(subject to clause (d) below).
(c) The Swing Line Loans shall be payable on demand made by the
Swing Line Lender and in any event on the Revolving Maturity Date.
(d) Upon the making of a Swing Line Loan, each Revolving Lender
shall be deemed to have purchased from the Swing Line Lender a
participation therein in an amount equal to that Lender's Pro Rata Share of
the Revolving Commitment times the amount of the Swing Line Loan. Upon
demand made by the Swing Line Lender, each Revolving Lender shall,
according to its Pro Rata Share of the Revolving Commitment, promptly
provide to the Swing Line Lender its purchase price therefor in an amount
equal to its participation therein. The obligation of each Revolving Lender
to so provide its purchase price to the Swing Line Lender shall be absolute
and unconditional (except only demand made by the Swing Line Lender) and
shall not be affected by the occurrence of a Default or Event of Default
after the making of such Swing Line Loan; provided that no Revolving Lender
shall be obligated to purchase its Pro Rata Share of (i) Swing Line Loans
to the extent that Swing Line
-52-
Outstandings are in excess of $5,000,000 and (ii) any Swing Line Loan made
(absent the consent of all of the Lenders) during the continuation of an
Event of Default. Each Revolving Lender that has provided to the Swing Line
Lender the purchase price due for its participation in Swing Line Loans
shall thereupon acquire a pro rata participation, to the extent of such
payment, in the claim of the Swing Line Lender against Borrower for
principal and interest and shall share, in accordance with that pro rata
participation, in any principal payment made by Borrower with respect to
such claim and in any interest payment made by Borrower (but only with
respect to periods subsequent to the date such Lender paid the Swing Line
Lender its purchase price) with respect to such claim.
(e) In the event that the Swing Line Outstandings are in excess
of $1,000,000 on three consecutive Business Days, then on the next Business
Day, Borrower shall request a Loan pursuant to Section 2.1 sufficient to
reduce the Swing Line Outstandings below $1,000,000. In addition, upon any
demand for payment of the Swing Line Outstandings by the Swing Line Lender,
Borrower shall request a Loan pursuant to Section 2.1 sufficient to repay
all Swing Line Outstandings (and, for this purpose, Section 2.1 shall not
apply). In each case, the Administrative Agent shall automatically provide
the responsive Advances made by each Lender to the Swing Line Lender (which
the Swing Line Lender shall then apply to the Swing Line Outstandings). In
the event that Borrower fails to request a Loan within the time specified
by Section 2.2 on any such date, the Administrative Agent may, but is not
required to, without notice to or the consent of Borrower, cause Advances
to be made by the Revolving Lenders under the Revolving Commitment in
amounts which are sufficient to reduce the Swing Line Outstandings as
required above. The conditions precedent set forth in Article 8 shall not
apply to Advances to be made by the Lenders pursuant to the three preceding
sentences. The proceeds of such Advances shall be paid directly to the
Swing Line Lender for application to the Swing Line Outstandings.
2.11 Collateral and Guarantees. The Obligations shall be secured by
the Collateral pursuant to the Collateral Documents and be guaranteed by the
Significant Subsidiaries pursuant to the Subsidiary Guaranty.
2.12 Activation of Reserved Portion of the Revolving Commitment. At
any time prior to the date which is ten Business Days following the Closing Date
(but prior to the Initial Funding Date) and provided that no Default or Event of
Default then exists, the Borrower may designate (a) any consenting existing
Lender or (b) a Person which qualifies as an Eligible Assignee who consents and
who is reasonably acceptable to the Administrative Agent to assume the
$5,000,000 portion of the Revolving Commitment which has not been allocated to
the Lenders on the Closing Date. If the Person so designated agrees, in its sole
discretion, to assume such an increase to the Revolving Commitment, such Person
shall be issued a Revolving Note reflecting their Pro Rata Share of the
Revolving Commitment. Upon the designation of such a Person, and such Person's
execution of an assumption agreement which is reasonably acceptable to the
Borrower and the Administrative Agent, (a) the available amount of the Revolving
Commitment shall be increased from $110,000,000 to $115,000,000, (b) the Person
executing the assumption agreement shall become a Lender for all purposes of
this Agreement, and (c) each Revolving Lender's Pro Rata Share of the Revolving
Commitment shall be adjusted to give effect to the new Lender's $5,000,000
interest in the Revolving Commitment.
-53-
ARTICLE 3
PAYMENTS AND FEES
3.1 Principal and Interest.
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Advance from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth or
provided for herein before and after Default, before and after maturity,
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law, with interest on overdue interest
at the Default Rate to the fullest extent permitted by applicable Laws.
(b) Interest accrued on each Base Loan on each Quarterly Payment
Date shall be due and payable on that day. Except as otherwise provided in
Section 3.11 and Section 3.1(d), the unpaid principal amount of each Base
Loan shall bear interest at a fluctuating rate per annum equal to the Base
Rate plus the applicable Base Margin plus any applicable Incremental
Margin. Each change in the interest rate under this Section 3.1(b) due to a
change in the Base Rate shall take effect simultaneously with the
corresponding change in the Base Rate.
(c) Interest accrued on each LIBOR Loan which is for a term of
three months or less shall be due and payable on the last day of the
related Interest Period. Interest accrued on each other LIBOR Loan shall be
due and payable on the date which is three months after the date such LIBOR
Loan was made (and, in the event that all of the Lenders have approved an
Interest Period of longer than six months, every three months thereafter
through the last day of the Interest Period) and on the last day of the
related Interest Period. Except as otherwise provided in Section 3.11 and
Section 3.1(d), the unpaid principal amount of any LIBOR Loan shall bear
interest at a rate per annum equal to the LIBOR Rate for that LIBOR Loan
plus the applicable LIBOR Margin plus any applicable Incremental Margin.
(d) Notwithstanding Section 3.2 or clause (b) or clause (c) of
this Section, the Incremental Margin shall not apply to or be paid in
respect of any portion of the Term Loans outstanding from time to time
which do not exceed the balance of the Completion Reserve Account from time
to time.
(e) If not sooner paid, the aggregate principal amount of the
Loans shall be payable as follows:
(i) the principal amount of each LIBOR Loan shall be payable
on the last day of the Interest Period for such Loan;
(ii) the amount, if any, by which the Revolving Obligations
at any time exceeds the then applicable Revolving Commitment, shall be
payable immediately;
(iii) the principal amount of the Term Loans shall be
payable on September 30, 2003 and on each subsequent Quarterly Payment
Date in the related Term Amortization Amount and, in any event, the
amount, if any, by which the
-54-
principal amount of the outstanding Term Loans at any time exceeds the
then applicable Term Commitment, shall be payable immediately;
(iv) the principal amount of the Obligations shall be
prepaid (subject to applications of the funds contained therein in the
manner contemplated by Section 9.3) upon the termination of the
Completion Reserve Account in accordance with Section 9.6;
(v) in the event that any Early Maturity Date occurs, the
principal amount of the Loans and the Swing Line Loans shall be
immediately payable, and Borrower shall immediately cause the return
of, or shall Cash Collateralize, each Letter of Credit;
(vi) in the event that Borrower or any of its Restricted
Subsidiaries receives any Net After Tax Proceeds which result in the
aggregate amount of the Net After Tax Proceeds received following the
Closing Date being in excess of $45,000,000, and Borrower elects not
to deposit the 50% of such Net After Tax Proceeds into the Completion
Reserve Account in accordance with Section 9.4(c), then Borrower shall
immediately (y) apply 25% of such excess Net After Tax Proceeds to
prepay the Term Loans (with application to the most remote
installments) in an amount which does not result in the aggregate
principal balance of the Term Loans being less than $90,000,000 (any
amount which is in excess of the amount required to so reduce the Term
Loans being retained by Borrower), and (z) apply 25% of such excess
Net After Tax Proceeds to prepay outstanding Revolving Loans (without
any reduction of the Revolving Commitment);
(vii) the Revolving Loans shall in any event be payable in
full on the Revolving Maturity Date; and
(viii) the Term Loans shall in any event be payable in full
on the Term Maturity Date.
(f) The Loans may, at any time and from time to time, voluntarily
be paid or prepaid in whole or in part without premium or penalty, except
that with respect to any voluntary prepayment under this Section (i) any
partial prepayment shall be not less than $5,000,000, (ii) the
Administrative Agent shall have received written notice of any prepayment
by 9:00 a.m. (California time) on the date of prepayment (which must be a
Business Day) in the case of a Base Loan, and, in the case of a LIBOR Loan,
three Business Days before the date of prepayment, which notice shall
identify the date and amount of the prepayment and the Loan being prepaid,
(iii) each prepayment of principal on any LIBOR Loan shall be accompanied
by payment of interest accrued to the date of payment on the amount of
principal paid and (iv) any payment or prepayment of all or any part of any
LIBOR Loan on a day other than the last day of the applicable Interest
Period shall be subject to Section 3.10(e).
3.2 The Incremental Margin. In the event that Borrower has not
deposited Net After Tax Proceeds in an aggregate amount which is not less than
$40,000,000 into the Completion Reserve Account on or prior to December 31, 2003
in accordance with Section 9.4(b), then the Incremental Margin shall apply
during the period beginning on January 1, 2004 until the date upon which such
Net After Tax Proceeds are so deposited.
-55-
3.3 Upfront Fees and Arrangement Fees. On the Closing Date, Borrower
shall pay to the Administrative Agent, for the respective accounts of the
Lenders (other than the Administrative Agent) pro rata according to their Pro
Rata Share of the Commitments, upfront fees in an amount set forth in a letter
from the Joint Lead Arranger to each Lender and acknowledged by that Lender and
by Borrower as the applicable upfront fee for such Lender. Such upfront fees are
for the credit facilities committed by each Lender under this Agreement and are
fully earned when paid. The upfront fees paid to each Lender are solely for its
own account and are nonrefundable. Borrower shall also pay certain arrangement
fees to the Joint Lead Arrangers as set forth in a letter agreement with the
Joint Lead Arrangers.
3.4 Original Issue Discount. The Term Loans shall be subject to an
original issue discount in an amount heretofore agreed upon between the Joint
Lead Arrangers and the Borrower and advised to each of the initial Term Lenders
in writing, the amount of which shall be retained and reserved from the funded
amount of such Term Loans.
3.5 Early Termination Fee. In the event that on or prior to June 30,
2004, Borrower fails to deposit not less than $40,000,000 of Net After Tax
Proceeds into the Completion Reserve Account in accordance with Section 9.4(b),
then Borrower shall immediately pay to the Lenders in accordance with their
respective Pro Rata Shares of the Commitments, an early termination fee of 0.50%
of the then outstanding principal amount of the Obligations (after giving effect
to the application of the Completion Reserve Account upon its termination under
Section 9.6 to the prepayment of the Obligations in accordance with Section
3.1(e)(iv)). This fee is fully earned when due and is non-refundable.
3.6 Commitment Fees. From date of the execution of this Agreement by
all parties, Borrower shall pay to the Administrative Agent, for the ratable
accounts of the Revolving Lenders pro rata according to their Pro Rata Share of
the Revolving Commitment, a commitment fee equal to the applicable Commitment
Fee Rate times the actual daily amount by which (i) the Revolving Commitment
exceeds (ii) the Revolving Obligations minus the Swing Line Outstandings. These
commitment fees shall be payable quarterly in arrears on each Quarterly Payment
Date, upon any termination of the Revolving Commitment and on the Revolving
Maturity Date.
3.7 Letter of Credit Fees. With respect to each Letter of Credit,
Borrower shall pay the following fees:
(a) concurrently with the issuance of each Letter of Credit, a
letter of credit issuance fee to the Issuing Lender for the sole account of
the Issuing Lender, in an amount set forth in a letter agreement between
Borrower and the Issuing Lender;
(b) quarterly in arrears on each Quarterly Payment Date, to the
Administrative Agent for the ratable account of the Lenders in accordance
with their Pro Rata Share of the Revolving Commitment, Letter of Credit
Fees equal to the actual daily amount of the outstanding Letters of Credit
during the three month period ending on that date times the face amount of
each Letter of Credit outstanding during that period; and
(c) concurrently with each issuance, negotiation, drawing or
amendment of each Letter of Credit, to the Issuing Lender for the sole
account of the Issuing Lender, issuance, negotiation, drawing and amendment
fees in the amounts set forth from time to time as the Issuing Lender's
scheduled fees for such services.
-56-
Each of the fees payable with respect to Letters of Credit under this Section is
earned when due and is nonrefundable.
3.8 Agency Fees. Borrower shall pay to the Administrative Agent an
agency fee in such amounts and at such times as heretofore agreed upon by letter
agreement between Borrower and the Administrative Agent. The agency fee is for
the services to be performed by the Administrative Agent in acting as
Administrative Agent and is fully earned on the date paid. The agency fee paid
to the Administrative Agent is solely for its own account and is nonrefundable.
3.9 Increased Commitment Costs. If any Lender shall determine in good
faith that the introduction after the Closing Date of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change therein or any
change in the interpretation or administration thereof by any central bank or
other Government Agency charged with the interpretation or administration
thereof, or compliance by such Lender (or its Eurodollar Lending Office) or any
corporation controlling the Lender, with any request, guideline or directive
regarding capital adequacy (whether or not having the force of Law) of any such
central bank or other authority, affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy and such Lender's
desired return on capital) determines in good faith that the amount of such
capital is increased, or the rate of return on capital is reduced, as a
consequence of its obligations under this Agreement, then, within five Business
Days after demand of such Lender, Borrower shall pay to such Lender, from time
to time as specified in good faith by such Lender, additional amounts sufficient
to compensate such Lender in light of such circumstances, to the extent
reasonably allocable to such obligations under this Agreement, provided that
Borrower shall not be obligated to pay any such amount which arose prior to the
date which is ninety days preceding the date of such demand or is attributable
to periods prior to the date which is ninety days preceding the date of such
demand. Each Lender's determination of such amounts shall be conclusive in the
absence of manifest error.
3.10 LIBOR Costs and Related Matters.
(a) In the event that any Government Agency imposes on any Lender
any reserve or comparable requirement (including any emergency,
supplemental or other reserve) with respect to the Eurodollar Obligations
of that Lender, Borrower shall pay that Lender within five Business Days
after demand all amounts necessary to compensate such Lender (determined as
though such Lender's Eurodollar Lending Office had funded 100% of its LIBOR
Advance in the Designated Eurodollar Market) in respect of the imposition
of such reserve requirements. The Lender's determination of such amount
shall be conclusive in the absence of manifest error.
(b) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance:
(i) shall subject any Lender or its Eurodollar Lending
Office to any tax, duty or other charge or cost with respect to any
LIBOR Advance, any of its LIBOR Loans or its obligation to make LIBOR
Advances, or shall change the basis of taxation of payments to any
Lender attributable to the principal of or interest on any LIBOR
Advance or any other amounts due under this Agreement in respect of
any LIBOR Advance, any of its LIBOR Loans or its obligation to make
LIBOR Advances, excluding (i) taxes imposed on or measured in whole or
in part by its overall net income, gross income or gross receipts and
franchise taxes imposed on it (including
-57-
United States backup withholding taxes), by (A) any jurisdiction (or
political subdivision thereof) in which it is organized or maintains
its principal office or Eurodollar Lending Office or (B) any
jurisdiction (or political subdivision thereof) in which it is "doing
business," (ii) any withholding taxes or other taxes based on gross
income imposed by the United States of America (other than withholding
taxes and taxes based on gross income resulting from or attributable
to any change after the Closing Date in any law, rule or regulation or
any change in the interpretation or administration of any law, rule or
regulation by any Government Agency) and (iii) any withholding taxes
or other taxes based on gross income imposed by the United States of
America for any period with respect to which it has failed to provide
Borrower with the appropriate form or forms required by Section 12.21,
to the extent such forms are then required by applicable Laws;
(ii) shall impose, modify or deem applicable any reserve not
applicable or deemed applicable on the date hereof (including any
reserve imposed by the Board of Governors of the Federal Reserve
System, special deposit, capital or similar requirements against
assets of, deposits with or for the account of, or credit extended by,
any Lender or its Eurodollar Lending Office); or
(iii) shall impose on any Lender or its Eurodollar Lending
Office or the Designated Eurodollar Market any other condition
affecting any LIBOR Advance, any of its LIBOR Loans, its obligation to
make LIBOR Advances or this Agreement, or shall otherwise affect any
of the same;
and the result of any of the foregoing, as determined in good faith by such
Lender, increases the cost to such Lender or its Eurodollar Lending Office
of making or maintaining any LIBOR Advance or in respect of any LIBOR
Advance, any of its LIBOR Loans or its obligation to make LIBOR Advances or
reduces the amount of any sum received or receivable by such Lender or its
Eurodollar Lending Office with respect to any LIBOR Advance, any of its
LIBOR Loans or its obligation to make LIBOR Advances (assuming such
Lender's Eurodollar Lending Office had funded 100% of its LIBOR Advance in
the Designated Eurodollar Market), then, within five Business Days after
demand by such Lender (with a copy to the Administrative Agent), Borrower
shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction (determined as
though such Lender's Eurodollar Lending Office had funded 100% of its LIBOR
Advance in the Designated Eurodollar Market). Each Lender's determination
of such amounts shall be conclusive in the absence of manifest error.
(c) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance shall, in the good faith opinion of any
Lender, make it unlawful or impossible for such Lender or its Eurodollar
Lending Office to make, maintain or fund its portion of any LIBOR Loan, or
materially restrict the authority of such Lender to purchase or sell, or to
take deposits of, Dollars in the Designated Eurodollar Market, or to
determine or charge interest rates based upon the Eurodollar Rate, and such
Lender shall so notify the Administrative Agent, then such Lender's
obligation to make LIBOR Advances shall be suspended for the duration of
such illegality or impossibility and the Administrative Agent forthwith
shall give notice thereof to the other Lenders and Borrower. Upon receipt
of such notice, the outstanding principal amount of such Lender's LIBOR
Advances, together with accrued interest thereon, automatically shall be
converted to Base Advances on either (1) the last day of the Interest
Period(s) applicable to such LIBOR Advances if such Lender may lawfully
continue to maintain and fund such LIBOR Advances to such day(s) or
-58-
(2) immediately if such Lender may not lawfully continue to fund and
maintain such LIBOR Advances to such day(s), provided that in such event
the conversion shall not be subject to payment of a prepayment fee under
Section 3.10(e). Each Lender agrees to endeavor promptly to notify Borrower
of any event of which it has actual knowledge, occurring after the Closing
Date, which will cause that Lender to notify the Administrative Agent under
this Section, and agrees to designate a different Eurodollar Lending Office
if such designation will avoid the need for such notice and will not, in
the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender. In the event that any Lender is unable, for
the reasons set forth above, to make, maintain or fund its portion of any
LIBOR Loan, such Lender shall fund such amount as a Base Advance for the
same period of time, and such amount shall be treated in all respects as a
Base Advance. Any Lender whose obligation to make LIBOR Advances has been
suspended under this Section shall promptly notify the Administrative Agent
and Borrower of the cessation of the Special Eurodollar Circumstance which
gave rise to such suspension.
(d) If, with respect to any proposed LIBOR Loan:
(i) the Administrative Agent reasonably determines that, by
reason of circumstances affecting the Designated Eurodollar Market
generally that are beyond the reasonable control of the Lenders,
deposits in Dollars (in the applicable amounts) are not being offered
to any Lender in the Designated Eurodollar Market for the applicable
Interest Period; or
(ii) the Majority Lenders advise the Administrative Agent
that the Eurodollar Rate as determined by the Administrative Agent (i)
does not represent the effective pricing to such Lenders for deposits
in Dollars in the Designated Eurodollar Market in the relevant amount
for the applicable Interest Period, or (ii) will not adequately and
fairly reflect the cost to such Lenders of making the applicable LIBOR
Advances;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Lenders, whereupon until the Administrative Agent notifies
Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Lenders to make any future LIBOR Advances
shall be suspended.
(e) Upon payment or prepayment of any LIBOR Advance (other than a
prepayment resulting from a conversion required under Section 3.10(c)), on
a day other than the last day in the applicable Interest Period (whether
voluntarily, involuntarily, by reason of acceleration, or otherwise), or
upon the failure of Borrower (for a reason other than the failure of a
Lender to make an Advance) to borrow on the date or in the amount specified
for a LIBOR Loan in any Request for Loan\\Withdrawal Certificate, Borrower
shall pay to the appropriate Lender within five Business Days after demand
a prepayment fee or failure to borrow fee, as the case may be (determined
as though 100% of the LIBOR Advance had been funded in the Designated
Eurodollar Market) equal to the sum of:
(i) the principal amount of the LIBOR Advance prepaid or not
borrowed, as the case may be, times [the number of days from and
including the date of prepayment or failure to borrow, as applicable,
to but excluding the last day in the applicable Interest Period],
divided by 360, times the applicable Interest Differential (provided
that the product of the foregoing formula must be a positive number);
plus
-59-
(ii) all out-of-pocket expenses incurred by the Lender
reasonably attributable to such payment, prepayment or failure to
borrow.
Each Lender's determination of the amount of any prepayment fee payable
under this Section shall be conclusive in the absence of manifest error.
(f) Each Lender agrees to endeavor promptly to notify Borrower of
any event of which it has actual knowledge, occurring after the Closing
Date, which will entitle such Lender to compensation pursuant to clause (a)
or clause (b) of this Section, and agrees to designate a different
Eurodollar Lending Office if such designation will avoid the need for or
reduce the amount of such compensation and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender. Any request for compensation by a Lender under this Section shall
set forth the basis upon which it has been determined that such an amount
is due from Borrower, a calculation of the amount due, and a certification
that the corresponding costs have been incurred by the Lender.
3.11 Late Payments. If any installment of principal or interest or any
fee or cost or other amount payable under any Loan Document to the
Administrative Agent or any Lender is not paid when due, commencing on the
fourth Business Day after the date when due until paid it shall bear interest at
a fluctuating interest rate per annum at all times equal to the sum of the Base
Rate plus the Base Margin plus any applicable Incremental Margin plus 2%, to the
fullest extent permitted by applicable Laws (the "Default Rate"). Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be compounded monthly, on the last day of each calendar month, to the
fullest extent permitted by applicable Laws.
3.12 Computation of Interest and Fees. Computation of interest on Base
Loans shall be calculated on the basis of a year of 365 or 366 days, as the case
may be, and the actual number of days elapsed; computation of interest on LIBOR
Loans and all fees under this Agreement shall be calculated on the basis of a
year of 360 days and the actual number of days elapsed. Borrower acknowledges
that such latter calculation method will result in a higher yield to the Lenders
than a method based on a year of 365 or 366 days. Interest shall accrue on each
Loan for the day on which the Loan is made; interest shall not accrue on a Loan,
or any portion thereof, for the day on which the Loan or such portion is paid.
Any Loan that is repaid on the same day on which it is made shall bear interest
for one day. Notwithstanding anything in this Agreement to the contrary,
interest in excess of the maximum amount permitted by applicable Laws shall not
accrue or be payable hereunder or under the Notes, and any amount paid as
interest hereunder or under the Notes which would otherwise be in excess of such
maximum permitted amount shall instead be treated as a payment of principal.
3.13 Non-Business Days. If any payment to be made by Borrower or any
other Party under any Loan Document shall come due on a day other than a
Business Day, payment shall instead be considered due on the next succeeding
Business Day and the extension of time shall be reflected in computing interest
and fees.
3.14 Manner and Treatment of Payments.
(a) All payments to be made by Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
(b) Each payment hereunder (except payments pursuant to Sections
3.9, 3.10, 12.3, 12.11 and 12.22) or on the Notes or under any other Loan
Document shall be made to the Administrative Agent, at the Administrative
Agent's Office, for the account of each of
-60-
the Lenders or the Administrative Agent, as the case may be, in immediately
available funds not later than 11:00 a.m. (other than payments with respect
to Swing Line Loans, which must be received by 3:00 p.m.) (California time)
on the day of payment (which must be a Business Day). All payments received
after such time, on any Business Day, shall be deemed received on the next
succeeding Business Day. The amount of all payments received by the
Administrative Agent for the account of each Lender shall be immediately
paid by the Administrative Agent to the applicable Lender in immediately
available funds and, if such payment was received by the Administrative
Agent by 11:00 a.m. (California time) on a Business Day and not so made
available to the account of a Lender on that Business Day, the
Administrative Agent shall reimburse that Lender for the cost to such
Lender of funding the amount of such payment at the Federal Funds Rate. All
payments shall be made in lawful money of the United States of America
without setoff, counterclaim, recoupment or deduction of any kind.
(c) Unless Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume
that Borrower or such Lender, as the case may be, has timely made such
payment and may (but shall not be so required to), in reliance thereon,
make available a corresponding amount to the Person entitled thereto. If
and to the extent that such payment was not in fact made to the
Administrative Agent in immediately available funds, then:
(i) if Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the
portion of such assumed payment that was made available to such Lender
in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made
available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent in immediately available
funds at the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon
for the period from the date such amount was made available by the
Administrative Agent to Borrower to the date such amount is recovered
by the Administrative Agent (the "Compensation Period") at a rate per
annum equal to the Federal Funds Rate from time to time in effect. If
such Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Lender's Advance included in the
applicable Advance. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon Borrower, and Borrower shall pay
such amount to the Administrative Agent, together with interest
thereon for the Compensation Period at a rate per annum equal to the
rate of interest applicable to the applicable Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to
fulfill its Pro Rata Shares of the Commitments or to prejudice any
rights which the Administrative Agent or Borrower may have against any
Lender as a result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or Borrower with respect
to any amount owing under this subsection (c) shall be conclusive, absent
manifest error.
-61-
(d) Each payment or prepayment on account of any Loan shall be
applied pro rata according to the outstanding Advances made by each Lender
comprising such Loan.
(e) The Advances made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts and
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error. Any failure to so record or any error in
so doing shall not, however, limit or otherwise affect the obligation of
the Borrower to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by
any Lender and the accounts and records maintained by the Administrative
Agent, the accounts and records maintained by the Administrative Agent
shall prevail. Upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) one or more Notes, which shall evidence
such Lender's Loans in addition to such accounts and records.
(f) Each payment of any amount payable by Borrower or any other
Party under this Agreement or any other Loan Document shall be made free
and clear of, and without reduction by reason of, any taxes, assessments or
other charges imposed by any Government Agency, central bank or comparable
authority, excluding (i) taxes imposed on or measured in whole or in part
by its overall income or gross receipts and franchise taxes imposed on it
(including United States backup withholding taxes), by (A) any jurisdiction
(or political subdivision thereof) in which it is organized or maintains
its principal office or Eurodollar Lending Office or (B) any jurisdiction
(or political subdivision thereof) in which it is "doing business," (ii)
any withholding taxes or other taxes based on income imposed by the United
States of America (other than withholding taxes and taxes based on income
resulting from or attributable to any change following the Closing Date in
any law, rule or regulation or any change in the interpretation or
administration of any law, rule or regulation by any Government Agency) and
(iii) any withholding taxes or other taxes based on income imposed by the
United States of America for any period with respect to which it has failed
to provide Borrower with the appropriate form or forms required by Section
12.21, to the extent such forms are then required by applicable Laws (all
such non-excluded taxes, assessments or other charges being hereinafter
referred to as "Taxes"). Subject to Section 12.21(c) hereof, to the extent
that Borrower is obligated by applicable Laws to make any deduction or
withholding on account of Taxes from any amount payable to any Lender under
this Agreement, Borrower shall (i) make such deduction or withholding and
pay the same to the relevant Government Agency and (ii) pay such additional
amount to that Lender as is necessary to result in that Lender's receiving
a net after-Tax amount equal to the amount to which that Lender would have
been entitled under this Agreement absent such deduction or withholding. If
and when receipt of such payment results in an excess payment or credit to
that Lender on account of such Taxes, that Lender shall promptly refund
such excess to Borrower. Upon reasonable request of Borrower, each Lender
shall use reasonable efforts to cooperate with Borrower with a view to
obtaining a refund of any Taxes with respect to which the Borrower has paid
any amounts pursuant to this Section 3.14(f) and which were not correctly
or legally asserted by the relevant Government Agency. If any Taxes that
are imposed on a Lender and excluded from indemnification provided by this
Section 3.14(f) are required by any Government Agency to be paid by
Borrower (other than through withholding from payments made to the affected
Lender), then Borrower shall provide notice to the affected Lender within a
reasonable time after paying such amounts, together with an explanation in
reasonable detail explaining the nature and circumstances of such payment.
Within a reasonable time after
-62-
receipt thereof, the affected Lender shall reimburse Borrower for any
payment of such excluded taxes.
(g) The obligations of the Lenders hereunder to make Advances and
to fund participations in Letters of Credit and Swing Line Loans are
several and not joint. The failure of any Lender to make any Advance or to
fund any such participation on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other
Lender to so make its Advance or purchase its participation.
3.15 Funding Sources. Nothing in this Agreement shall be deemed to
obligate any Lender to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner.
3.16 Failure to Charge Not Subsequent Waiver. Any decision by the
Administrative Agent or any Lender not to require payment of any interest
(including interest arising under Section 3.11), fee, cost or other amount
payable under any Loan Document, or to calculate any amount payable by a
particular method, on any occasion shall in no way limit or be deemed a waiver
of the Administrative Agent's or such Lender's right to require full payment of
any interest (including interest arising under Section 3.11), fee, cost or other
amount payable under any Loan Document, or to calculate an amount payable by
another method that is not inconsistent with this Agreement, on any other or
subsequent occasion.
3.17 Administrative Agent's Right to Assume Payments Will be Made by
Borrower. Unless the Administrative Agent shall have been notified by Borrower
prior to the date on which any payment to be made by Borrower hereunder is due
that Borrower does not intend to remit such payment, the Administrative Agent
may, in its discretion, assume that Borrower has remitted such payment when so
due and the Administrative Agent may, in its discretion and in reliance upon
such assumption, make available to each Lender on such payment date an amount
equal to such Lender's share of such assumed payment. If Borrower has not in
fact remitted such payment to the Administrative Agent, each Lender shall
forthwith on demand repay to the Administrative Agent the amount of such assumed
payment made available to such Lender, together with interest thereon in respect
of each day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent at the Federal Funds Rate.
3.18 Fee Determination Detail. The Administrative Agent, and any
Lender, shall provide reasonable detail to Borrower regarding the manner in
which the amount of any payment to the Administrative Agent and the Lenders, or
that Lender, under Article 3 has been determined, concurrently with demand for
such payment.
3.19 Survivability. All of Borrower's obligations under Sections 3.9
and 3.10 shall survive for ninety days following the date on which the
Commitments are terminated, all Loans hereunder are fully paid and all Letters
of Credit have expired; provided, however, that following such date such
obligations shall not be Obligations secured by the Collateral Documents.
-63-
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Lenders that:
4.1 Existence and Qualification; Power; Compliance With Laws. Borrower
is a corporation duly formed, validly existing and in good standing under the
Laws of Delaware. Borrower is duly qualified or registered to transact business
and is in good standing in each jurisdiction in which the conduct of its
business or the ownership or leasing of its Properties makes such qualification
or registration necessary, in each case except where the failure so to qualify
or register and to be in good standing would not constitute a Material Adverse
Effect. Borrower has all requisite corporate power and authority to conduct its
business, to own and lease its Properties and to execute and deliver each Loan
Document to which it is a Party and to perform its Obligations. All outstanding
shares of Capital Stock of Borrower are (or, when issued, will be) duly
authorized, validly issued, fully paid and non-assessable, and no holder thereof
has any enforceable right of rescission under any applicable state or federal
securities Laws. Borrower is in compliance with all Laws and other legal
requirements applicable to its business, has obtained all authorizations,
consents, approvals, orders, licenses and permits from, and has accomplished all
filings, registrations and qualifications with, or obtained exemptions from any
of the foregoing from, any Government Agency that are necessary for the
transaction of its business, except where the failure so to comply, file,
register, qualify or obtain exemptions does not constitute a Material Adverse
Effect.
4.2 Authority; Compliance With Other Agreements and Instruments and
Government Regulations. The execution, delivery and performance by Borrower and
each Significant Subsidiary of the Loan Documents to which it is a Party have
been duly authorized by all necessary corporate (or partnership or other
organic) action, and do not and will not:
(a) Require any consent or approval not heretofore obtained of
any partner, director, stockholder or other equity holder, security holder
or creditor of such Party;
(b) Violate or conflict with any provision of such Party's
charter, articles or certificate of incorporation, or bylaws, articles of
organization or operating agreement, as applicable;
(c) Result in or require the creation or imposition of any Lien
or Right of Others upon or with respect to any Property now owned or leased
or hereafter acquired by such Party other than a Lien or Right of Others
created in favor of the Lenders as contemplated under and pursuant to the
Loan Documents;
(d) Violate any Requirement of Law applicable to such Party,
subject to obtaining the authorizations from, or filings with, the
Government Agencies described in Schedule 4.3;
(e) Result in a breach of or constitute a 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 Property is bound or
affected;
-64-
and neither Borrower nor any Significant Subsidiary is in violation of, or
default under, any Requirement of Law or Contractual Obligation, or any
indenture, loan or credit agreement described in Section 4.2(e), in any
respect that constitutes a Material Adverse Effect.
4.3 No Governmental Approvals Required.
(a) Except to the extent set forth on Schedule 4.3 or previously
obtained or made, no authorization, consent, approval, order, license or
permit from, or filing, registration or qualification with, any Government
Agency is or will be required to authorize or permit under applicable Laws
the execution, delivery and performance by Borrower and the Significant
Subsidiaries of the Loan Documents to which they are a Party.
(b) Except as set forth in Schedule 4.3, all consents, approvals,
permits, licenses, authorizations from, or filings with, any Government
Agency or any private Person or other third party which are required or
reasonably desirable to permit under applicable Laws or to otherwise
authorize the construction of the Lake Charles Project or the Belterra
Tower Project have been obtained by Borrower or the relevant Restricted
Subsidiary.
(c) All of the consents, approvals, permits, licenses and
authorizations described in Schedule 4.3 will be accomplished as of the
dates specified in Schedule 4.3.
4.4 Subsidiaries.
(a) Schedule 4.4 hereto correctly sets forth the (i) names, (ii)
form of legal entity, (iii) number of shares of Capital Stock issued and
outstanding, (iv) number of shares (or units) owned by Borrower or a
Subsidiary of Borrower (and specifying such owner), (v) number of
additional shares of such Capital Stock which the holders of any Rights of
Others are entitled to obtain upon the exercise thereof, and (vi)
jurisdictions of organization of all Subsidiaries of Borrower. Schedule 4.4
hereto correctly specifies which of the Subsidiaries of Borrower, as of the
Schedule Date stated therein, are Restricted Subsidiaries, Significant
Subsidiaries and Unrestricted Subsidiaries. Except as described in Schedule
4.4 or Schedule 6.15, or as permitted by Section 6.15, Borrower does not
own any Capital Stock or debt security which is convertible, or
exchangeable, for Capital Stock in any Person. Unless otherwise indicated
in Schedule 4.4, all of the outstanding shares of Capital Stock of each
Restricted Subsidiary are owned of record and beneficially by Borrower or
by the Subsidiary designated on Schedule 4.4, there are no outstanding
options, warrants or other rights to purchase Capital Stock of any such
Subsidiary, and all such Capital Stock so owned are duly authorized,
validly issued, fully paid and non-assessable, and were issued in
compliance with all applicable state and federal securities and other Laws,
and are free and clear of all Liens and Rights of Others, except for
Permitted Encumbrances and Permitted Rights of Others.
(b) Each Significant Subsidiary is duly formed, validly existing
and in good standing under the Laws of its jurisdiction of organization, in
the form of organization stated in Schedule 4.4 therefor, 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 makes such qualification necessary (except where
the failure to be so duly qualified and in good standing does not
constitute a Material Adverse Effect or the liquidation or dissolution of
any such Subsidiary is permitted by Section 6.3), and has all requisite
power and authority to conduct its business and to own and lease its
Properties.
-65-
(c) Each Restricted Subsidiary is in compliance with all Laws and
other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from,
and each such Subsidiary has accomplished all filings, registrations, and
qualifications with, or obtained exemptions from any of the foregoing from,
any Government Agency that are necessary for the transaction of its
business, except where the failure to be in such compliance, obtain such
authorizations, consents, approvals, orders, licenses, and permits,
accomplish such filings, registrations, and qualifications, or obtain such
exemptions, does not constitute a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Lenders the
audited consolidated financial statements of Borrower and its Subsidiaries for
the Fiscal Years ended December 31, 2001 and December 31, 2002. The financial
statements described in this Section fairly present in all material respects the
financial condition, results of operations and changes in financial position of
Borrower and its Subsidiaries as of such dates and for such periods in
conformity with GAAP, consistently applied.
4.6 No Other Liabilities; No Material Adverse Changes. As of the
Closing Date (a) Borrower and its Subsidiaries do not have any material
liability or material contingent liability required under GAAP to be reflected
or disclosed and not reflected or disclosed in the audited balance sheet for
Borrower's Fiscal Year ended December 31, 2002, other than liabilities and
contingent liabilities arising in the ordinary course of business since the date
of such balance sheet; and (b) no circumstance or event has occurred and is
continuing that constitutes a Material Adverse Effect since December 31, 2002.
As of any date subsequent to the Closing Date, no circumstance or event has
occurred and is continuing that constitutes a Material Adverse Effect since the
Closing Date.
4.7 Title to Property. As of the Schedule Date for Schedule 4.7,
Borrower and the Restricted Subsidiaries have valid title to the Property (other
than assets which are the subject of a Capital Lease Obligation) reflected in
the balance sheet described in Section 4.5 (other than items of Property or
exceptions to title which are in each case immaterial to Borrower and its
Subsidiaries, taken as a whole and Property subsequently sold or disposed of in
the ordinary course of business or sold or disposed of in a Disposition which is
otherwise permitted under this Agreement), free and clear of all Liens and
Rights of Others other than Liens or Rights of Others described in Schedule 4.7
or permitted by Section 6.8.
4.8 Intangible Assets. Borrower and the Restricted Subsidiaries own,
or possess the right to use to the extent necessary in their respective
businesses, all material trademarks, trade names, copyrights, patents, patent
rights, computer software, licenses and other Intangible Assets that are used in
the conduct of their businesses as now operated, and no such Intangible Asset,
to the knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or Intangible Asset of any other Person to the
extent that such conflict constitutes a Material Adverse Effect. Schedule 4.8
sets forth all trademarks, trade names and trade styles used by Borrower or any
of the Restricted Subsidiaries at any time within the five year period ending on
the Schedule Date for such Schedule.
4.9 Public Utility Holding Company Act. Neither Borrower nor any of
the Restricted Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully covered as to subject
matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series
-66-
of related matters, involving a claim against Borrower or any of the Restricted
Subsidiaries of less than $1,000,000, (c) matters of an administrative nature
not involving a claim or charge against Borrower or any of the Restricted
Subsidiaries and (d) matters set forth in Schedule 4.10, as of the Schedule Date
of Schedule 4.10, there are no actions, suits, proceedings or investigations
pending as to which Borrower or any of the Restricted Subsidiaries have been
served or have received notice or, to the knowledge of Borrower, threatened
against or affecting Borrower or any of the Restricted Subsidiaries or any
Property of any of them before any Government Agency.
4.11 Binding Obligations. Each of the Loan Documents to which Borrower
or the Significant Subsidiaries is a Party will, when executed and delivered by
such Party, constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, except as
enforcement may be limited by Debtor Relief Laws, Gaming Laws or equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion.
4.12 No Default. No event has occurred and is continuing that is a
Default or Event of Default.
4.13 ERISA.
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material respects with
ERISA and any other applicable Laws to the extent that non-compliance
constitutes a Material Adverse Effect;
(ii) such Pension Plan has not incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) that
constitutes a Material Adverse Effect;
(iii) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred that constitutes a Material Adverse Effect; and
(iv) neither Borrower nor any of its ERISA Affiliates has
engaged in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code) that constitutes a Material Adverse Effect.
(b) Neither Borrower nor any of its ERISA Affiliates has incurred
or expects to incur any withdrawal liability to any Multiemployer Plan that
constitutes a Material Adverse Effect.
4.14 Regulations T, U and X; Investment Company Act. No part of the
proceeds of any Loan, Swing Line Loan or Letter of Credit will be used to
purchase or carry, or to extend credit to others for the purpose of purchasing
or carrying, any Margin Stock in violation of Regulations T, U or X. Neither
Borrower nor any of the Restricted Subsidiaries is or is required to be
registered as an "investment company" under the Investment Company Act of 1940.
4.15 Disclosure. No written statement made by a Senior Officer to the
Administrative Agent or any Lender in connection with this Agreement, or in
connection with any Loan, as of the date thereof contained any untrue statement
of a material fact or omitted a material fact
-67-
necessary to make the statement made not misleading in light of all the
circumstances existing at the date the statement was made.
4.16 Tax Liability. Borrower and the Restricted Subsidiaries have
filed all tax returns which are required to be filed. Borrower and the
Restricted Subsidiaries have paid, or made provision for the payment of, all
taxes with respect to the periods, Property or transactions covered by said
returns, or pursuant to any assessment received by Borrower or any of the
Restricted Subsidiaries, except (a) such taxes the amount or validity of which
are as are being contested in good faith by appropriate proceedings and as to
which adequate reserves have been established and maintained in conformity with
GAAP, and (b) immaterial taxes so long as no material Property of Borrower or
any of the Restricted Subsidiaries is in jeopardy of being seized, levied upon
or forfeited.
4.17 Projections. As of the Closing Date, to the knowledge of
Borrower, the assumptions set forth in the Projections are reasonable and
consistent with each other and with all facts known to Borrower, and the
Projections are reasonably based on such assumptions. Nothing in this Section
4.17 shall be construed as a representation or covenant that the Projections in
fact will be achieved.
4.18 Hazardous Materials. Except as described in Schedule 4.18 (a)
neither Borrower nor any of the Restricted Subsidiaries at any time has disposed
of, discharged, released or threatened the release of any Hazardous Materials
on, from or under the Real Property in violation of any Hazardous Materials Law
that would individually or in the aggregate constitute a Material Adverse
Effect, (b) to the knowledge of Borrower, no condition exists that violates any
Hazardous Material Law affecting any Real Property except for such violations
that would not individually or in the aggregate constitute a Material Adverse
Effect, (c) no Real Property or any portion thereof is or has been utilized by
Borrower or any of the Restricted Subsidiaries as a site for the manufacture of
any Hazardous Materials and (d) to the extent that any Hazardous Materials are
used, generated or stored by Borrower or any of the Restricted Subsidiaries on
any Real Property, or transported to or from such Real Property by Borrower or
any of the Restricted Subsidiaries, such use, generation, storage and
transportation are in compliance in all material respects with all Hazardous
Materials Laws.
4.19 Gaming Laws. Borrower and the Restricted Subsidiaries are in
compliance with all applicable Gaming Laws in all respects which are material to
the operations, businesses and prospects of Borrower and the Restricted
Subsidiaries, taken as a whole. Without limitation on the foregoing, Borrower
and its Restricted Subsidiaries are in compliance with the Indiana Settlement
Agreement in all material respects, and have not received any notice from the
State of Indiana, its agencies or instrumentalities to the effect that they have
failed to comply with the terms of the Indiana Settlement Agreement in any
material respect.
4.20 Land Sales. As of the Closing Date, the Land Sale Contracts are
in full force and effect (although subject to the conditions precedent set forth
therein) and, to the best knowledge of Borrower, there is no material impediment
to the consummation of the transactions contemplated to occur thereunder.
4.21 Security Interests.
(a) From and after the date of its execution and delivery, the
Security Agreement creates a valid security interest in the Collateral
described therein securing the Obligations (subject to such qualifications
and exceptions as are contained in the applicable Uniform Commercial Code
with respect to the creation of security interests in Property to which
Article 9 of the applicable Uniform Commercial Code does not apply), which
security
-68-
interest is of first priority (subject only to Permitted Encumbrances,
Permitted Rights of Others, purchase money liens permitted under Section
6.8(f) and matters disclosed in Schedule 4.7 and to such qualifications and
exceptions as are contained in the applicable Uniform Commercial Code with
respect to the priority of security interests perfected by means other than
the filing of a financing statement), and all action necessary to perfect
the security interests so created, other than (i) filing of UCC-1 financing
statements with the appropriate Government Agency and (ii) delivery of each
of the instruments listed in Schedule I to the Security Agreement to the
parties indicated therein, have been taken and completed.
(b) From and after the date of its execution and delivery, the
Trademark Collateral Assignment creates a valid first priority collateral
assignment of the Collateral described therein securing the Obligations
(subject only to Permitted Encumbrances, Permitted Rights of Others, and
matters disclosed in Schedule 4.7) and, upon filing with the United States
Patent and Trademark Office, all action necessary to perfect the collateral
assignment so created will have been taken and completed.
(c) From and after the date of its execution and delivery, the
Pledge Agreement (General) creates a valid first priority security interest
in the Collateral described therein (including the Pledged Collateral
(General)) securing the Obligations (subject only to Permitted
Encumbrances, Permitted Rights of Others, and matters disclosed in Schedule
4.7) and, upon the delivery of any Certificates constituting Pledged
Collateral thereunder, all action necessary to perfect the security
interest so created will have been taken and completed.
(d) From and after the date of their execution and delivery, each
Pledge Agreement (Gaming Regulated) creates a valid first priority security
interest in the Collateral described therein (including the Pledged
Collateral (Gaming Regulated)) securing the Obligations (subject only to
Permitted Encumbrances, Permitted Rights of Others, and matters disclosed
in Schedule 4.7) and, upon the delivery of any Certificates constituting
Pledged Collateral thereunder, all action necessary to perfect the security
interest so created will have been taken and completed.
(e) Giving effect to the amendments thereto described in Article
8, each Existing Mortgage will continue to constitute a valid Lien in the
Collateral described therein securing the Obligations, other than those
arising under Sections 4.18, 5.12 and 12.22 (subject only to Permitted
Encumbrances, Permitted Rights of Others and matters described in Schedule
4.7), and all action necessary to perfect the Lien so created, other than
recordation or filing thereof with the appropriate Government Agencies,
will have been taken and completed.
(f) The Mortgages delivered on or prior to the Closing Date
pursuant to Section 8.1(a) hereof create a valid Lien in the Collateral
described therein securing the Obligations, other than those arising under
Sections 4.18, 5.12 and 12.22 (subject only to Permitted Encumbrances,
Permitted Rights of Others and matters described in Schedule 4.7), and all
action necessary to perfect the Lien so created, other than recordation or
filing thereof with the appropriate Government Agencies, will have been
taken and completed.
(g) Upon the execution and delivery thereof, each Preferred Ship
Mortgage creates a valid Lien in the Collateral described therein securing
the Obligations (subject only to Permitted Encumbrances, Permitted Rights
of Others and matters described in Schedule 4.7), and, upon the filing
thereof with the appropriate United States Coast Guard offices, all action
necessary to perfect the Lien so created, with the appropriate Government
Agencies, will have been taken and completed.
-69-
4.22 Lake Charles Project Entitlements.
(a) Except as set forth on Schedule 4.22, as of the Closing Date
the Borrower and its Restricted Subsidiaries have obtained all material
required permits, licenses and entitlements which are necessary or
reasonably desirable for the design, development, and construction of the
Lake Charles Project, and the conduct of gaming operations at the Lake
Charles Project, and such permits, licenses and entitlements remain
effective.
(b) As of the commencement of construction of the Lake Charles
Project, Borrower and Lake Charles have obtained the Lake Charles Lease,
the Cooperative Agreement, and each of the other material permits, licenses
and entitlements which are necessary for the commencement of the
construction of the Lake Charles Project, including without limitation each
of the items described on Schedule 4.22, provided that the Borrower and
Lake Charles may construct the temporary road to the site of the Lake
Charles Project.
-70-
ARTICLE 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of any of the Commitments remains in force, Borrower
shall, and shall cause each of the Restricted Subsidiaries to, unless the
Administrative Agent (with the written approval of those Lenders required by
Section 12.2) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof and upon their
respective income or profits or any part thereof, except that Borrower and the
Restricted Subsidiaries shall not be required to pay or cause to be paid (a) any
tax, assessment, charge or levy that is not yet past due, or is being contested
in good faith by appropriate proceedings so long as the relevant entity has
established and maintains adequate reserves for the payment of the same or (b)
any immaterial tax so long as no material Property of Borrower or any of the
Restricted Subsidiaries is in jeopardy of being seized, levied upon or
forfeited.
5.2 Preservation of Existence. Preserve and maintain their respective
existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Government Agency that are
necessary for the transaction of their respective business except (a) where the
failure to so preserve and maintain the existence of any Restricted Subsidiary
and such authorizations, rights, franchises, privileges, consents, approvals,
orders, licenses, permits, or registrations would not constitute a Material
Adverse Effect and (b) that a merger or conversion permitted by Section 6.3
shall not constitute a violation of this covenant; and qualify and remain
qualified to transact business in each jurisdiction in which such qualification
is necessary in view of their respective business or the ownership or leasing of
their respective Properties except where the failure to so qualify or remain
qualified would not constitute a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and protect all of
their respective Properties in good order and condition, subject to wear and
tear in the ordinary course of business, and not permit any waste of their
respective Properties, except that the failure to maintain, preserve and protect
a particular item of Property that is not of significant value, either
intrinsically or to the operations of Borrower and the Restricted Subsidiaries,
taken as a whole, shall not constitute a violation of this covenant.
5.4 Maintenance of Insurance. (a) Maintain liability, casualty and
other insurance which is consistent with the coverages (including all
deductibles and retentions) maintained by Borrower and the Restricted
Subsidiaries as of the Closing Date, provided that (i) the Majority Lenders
shall not unreasonably withhold their approval of changes to Borrower's
insurance program which are required to address current conditions in the
insurance marketplace, including the commercial unavailability or
impracticability of any particular coverage, (ii) Borrower shall not
unreasonably refuse to purchase any coverages requested by the Majority Lenders
which is reflective of insurance ordinarily carried by responsible companies
engaged in similar businesses and owning similar assets in the general areas in
which Borrower and the Restricted Subsidiaries operate. All such insurance shall
be carried through insurance companies rated A+ or better by A.M. Best.
-71-
(b) in any event, Borrower shall maintain and keep in force the
following insurance:
(i) at all times during any period of construction, and with
respect to any Property affected by such construction, a policy or
policies of builder's "all risk" insurance in nonreporting form in an
amount not less than the full insurable completed value of such
portion of the affected Property on a replacement cost basis;
(ii) with respect to any Property not covered by a policy or
policies described in Section 5.4(b)(i), a policy or policies of fire
and hazards "all risk" insurance providing extended coverage in an
amount not less $150,000,000 (provided that, in the case of the Lake
Charles Project, such coverage amount shall be increased to an amount
reasonably requested by the Administrative Agent (but not less than
$200,000,000) on or before April 1, 2004), calculated on a replacement
cost basis;
(iii) business interruption insurance (including insurance
against income loss during a period of at least one year);
(iv) comprehensive liability insurance naming on an
"occurrence" basis, against claims for "personal injury" liability,
including bodily injury, death or property damage liability, with an
aggregate limit of not less than $50,000,000;
(v) policies of worker's compensation insurance as may be
required by applicable laws (including employer's liability insurance,
if required by the Administrative Agent), covering all employees of
Borrower, the Restricted Subsidiaries and the Lake Charles Contractor,
LEEVAC and their respective subcontractors; and
(vi) If any Property is required to be insured pursuant to
the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Act of 1968, and the regulations promulgated thereunder,
because it is located in an area which has been identified by the
Secretary of Housing and Urban Development as a Flood Hazard Area,
then Borrower shall provide, maintain and keep in force at all times a
flood insurance policy covering the Property in limits that would
exceed the damage caused by what is expected to be the most severe
flood (or any greater limits to the extent required by applicable law
from time to time).
(c) Each such policy shall name the Administrative Agent as an
additional insured, and shall to the extent relevant, include a waiver of
subrogation against the Administrative Agent and the Lenders, contain a
provision that provides for a severability of interests, and shall provide
that an act or omission by one of the insured shall not reduce or avoid
coverage with respect to the other insureds, insure against loss or damage
by hazards customarily included within "all risk" and "extended coverage"
policies and any other risks or hazards which the Administrative Agent or
the Majority Lenders may reasonably specify (and shall include boiler and
machinery insurance), shall contain a Lender's Loss Payable Endorsement in
a form acceptable to the Administrative Agent in favor of the
Administrative Agent and shall be primary and noncontributory with any
other insurance carried by the Administrative Agent or the Lenders.
-72-
Borrower shall supply the Administrative Agent with certificates of
each policy required hereunder and any other policy of insurance maintained in
connection with any of the Property, and, if requested, an original or underlyer
of each such policy and all endorsements thereto. When any insurance policy
required hereunder expires, Borrower shall furnish the Administrative Agent with
proof acceptable to the Administrative Agent that the policy has been
reinstated, renewed or a new policy issued, continuing in force the insurance
covered by the policy which expired. If Borrower fails to pay any such premium,
the Administrative Agent shall have the right, but not the obligation, to obtain
reasonable replacement coverage and advance funds to pay the premiums for it on
behalf of the Lenders. Borrower shall repay the Administrative Agent immediately
on demand for any advance for such premiums, which shall be considered to be an
additional Loan bearing interest from the date of demand at the Default Rate.
5.5 Compliance With Laws. Comply with all Requirements of Law
noncompliance with which constitutes a Material Adverse Effect, except that
Borrower and the Restricted Subsidiaries need not comply with a Requirement of
Law then being contested by any of them in good faith by appropriate
proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any time during
regular business hours and as often as reasonably requested (but not so as to
materially interfere with the business of Borrower or any of its Subsidiaries)
permit the Administrative Agent or any Lender, or any authorized employee, agent
or representative thereof, to examine, audit and make copies and abstracts from
the records and books of account of, and to visit and inspect the Properties of,
Borrower and its Subsidiaries and to discuss the affairs, finances and accounts
of Borrower and its Subsidiaries with any of their officers, key employees or
accountants and, upon request, furnish promptly to the Administrative Agent or
any Lender true copies of all financial information made available to the board
of directors or audit committee of the board of directors of Borrower.
5.7 Keeping of Records and Books of Account. Keep adequate records and
books of account reflecting all financial transactions in conformity with GAAP,
consistently applied, and in material conformity with all applicable
requirements of any Government Agency having regulatory jurisdiction over
Borrower or any of the Restricted Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply with all
Contractual Obligations under all material agreements, indentures, leases and/or
instruments to which any one or more of them is a party, whether such material
agreements, indentures, leases or instruments are with a Lender or another
Person, including without limitation the Indiana Settlement Agreement, except
for any such Contractual Obligations (a) the performance of which would cause a
Default or (b) then being contested by any of them in good faith by appropriate
proceedings or if the failure to comply with such agreements, indentures, leases
or instruments does not constitute a Material Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of Loans, Letters of Credit and
Swing Line Loans as follows: (a) in respect of the Term Loans made on the
Closing Date, to fund the Completion Reserve Account to assure the funding of
construction costs associated with Committed Projects, (b) for Capital
Expenditures and Investments permitted hereunder, including without limitation
the Lake Charles Project and the Belterra Tower Project, and (c) for other
working capital and general corporate purposes of Borrower and the Restricted
Subsidiaries.
5.10 Future Collateral. Upon the acquisition by Borrower or any
Significant Subsidiary of (a) any Capital Stock of a new Subsidiary (other than
a Subsidiary properly designated as an Unrestricted Subsidiary), deliver the
certificates evidencing such stock (or interest) in pledge to
-73-
the Administrative Agent (or its designee to the extent required by applicable
Gaming Laws) pursuant to the Pledge Agreement (General) or a Pledge Agreement
(Gaming Regulated), as the case may be, (b) any Investment in certificated
securities or instruments, deliver all such securities and instruments in pledge
to the Administrative Agent pursuant to the Security Agreement, and (c) any fee
simple interest in Real Property, any leasehold interest in Real Property
requiring aggregate rental payments in excess of $250,000 per annum, or any
vessel or vehicle, any uncertificated Investment or securities entitlement or
any other interest in other Property which is not subject to a perfected Lien
under the Collateral Documents (other than any such Property which, under
applicable Gaming Laws, cannot be subject to a Lien or cannot be subject to a
Lien under applicable Gaming Laws without first obtaining the consent of a
Government Agency under Gaming Laws (in which case Borrower shall diligently
pursue all required consents)), execute and deliver to the Administrative Agent
such Collateral Documents as are appropriate therefor, as requested by the
Administrative Agent, to create a Lien thereon securing the Obligations subject
in priority only to matters described on Schedule 4.7 as of the Closing Date,
Permitted Encumbrances, Permitted Rights of Others, purchase money liens (if
any) permitted under Section 6.8(f) and Liens existing thereon prior to such
acquisition (and not done in contemplation thereof).
5.11 New Significant Subsidiaries. Cause each of its Restricted
Subsidiaries which hereafter becomes a Significant Subsidiary promptly upon so
becoming (and in any event within fifteen Business Days) to execute and deliver
to the Administrative Agent an instrument of joinder of the Subsidiary Guaranty,
Security Agreement and the Trademark Collateral Assignment, and execute and
deliver to the Administrative Agent such Mortgages covering its Real Property as
the Administrative Agent may request.
5.12 Hazardous Materials Laws. Keep and maintain all Real Property and
each portion thereof in compliance in all material respects with all applicable
Hazardous Materials Laws and promptly notify the Administrative Agent in writing
(attaching a copy of any pertinent written material) of (a) any and all material
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened in writing by a Government Agency pursuant
to any applicable Hazardous Materials Laws, (b) any and all material claims made
or threatened in writing by any Person against Borrower relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials and (c) discovery by any Senior Officer of Borrower of any
material occurrence or condition on any Real Property adjoining or in the
vicinity of such Real Property that could reasonably be expected to cause such
Real Property or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of such Real Property under any
applicable Hazardous Materials Laws.
5.13 Post-Closing Filings with Gaming Authorities. Promptly after the
Closing Date, make filings with the Gaming Boards of all relevant jurisdictions
in respect of the transactions contemplated by the Loan Documents to the extent
that such filings are required by applicable Gaming Laws.
5.14 The Lake Charles Vessel. The Lake Charles Vessel will be
constructed pursuant to the Vessel Construction Contract at one or more
shipyards by LEEVAC, and delivered to the coffer cell located at the site of the
Lake Charles Project by LEEVAC and, in relation thereto Borrower and its
Restricted Subsidiaries shall:
(a) Assure that completion bonds acceptable to the Administrative
Agent or to the Majority Lenders are obtained and maintained by LEEVAC (or
on its behalf) at all times prior to the delivery of the Lake Charles
Vessel to Lake Charles in accordance with the Vessel Construction Contract
and its acceptance by the Borrower, provided that the amount
-74-
thereof shall not be required to exceed the total consideration payable
under the Vessel Construction Contract;
(b) Prior to final acceptance of the Lake Charles Vessel from
LEEVAC and the final payment of the "Acceptance Payment" described in the
Vessel Construction Contract, consult with the Construction Consultant
regarding the conformity of the Lake Charles Vessel with the specifications
of the Vessel Construction Contract;
(c) Promptly apply for, and receive prior to the Lake Charles
Opening Date, appropriate certifications of the Lake Charles Vessel from
the United States Coast Guard; and
(d) Promptly execute and deliver to the Administrative Agent a
Preferred Ship Mortgage with respect to the Lake Charles Vessel, in any
event within ten Business Days following the delivery of the Lake Charles
Vessel to Lake Charles (or, if later, the date upon which all Coast Guard
certifications required for a valid and perfected Preferred Ship Mortgage
with respect thereto have been obtained).
-75-
ARTICLE 6
NEGATIVE COVENANTS
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of any of the Commitments remains in force, Borrower
shall not, and shall not permit any of the Restricted Subsidiaries to, unless
the Administrative Agent (with the written approval of that portion of the
Lenders required by Section 12.2) otherwise consents:
6.1 Payment of Subordinated Obligations. Pay any (a) principal
(including sinking fund payments) or any other amount (other than scheduled
interest payments) with respect to any Subordinated Obligation, or purchase or
redeem (or offer to purchase or redeem) any Subordinated Obligation, or deposit
any monies, securities or other Property with any trustee or other Person to
provide assurance that the principal or any portion thereof of any Subordinated
Obligation will be paid when due or otherwise to provide for the defeasance of
any Subordinated Obligation or (b) scheduled interest on any Subordinated
Obligation unless the payment thereof is then required and permitted pursuant to
the terms of the Indenture governing such Subordinated Obligation; provided,
however, that this Section shall not apply to prohibit the redemption or
retirement of Existing Subordinated Obligations in any amount in exchange for,
or using the proceeds of, New Subordinated Obligations issued in compliance with
Section 6.9 or using the proceeds of equity securities of Borrower; provided
that no Default or Event of Default exists or would result therefrom.
6.2 Disposition of Property. Make any Disposition of its Property,
whether now owned or hereafter acquired, except:
(a) a Disposition by Borrower to a Restricted Subsidiary, or by a
Restricted Subsidiary to Borrower or another Restricted Subsidiary;
(b) a Disposition of any Investment in an Unrestricted
Subsidiary;
(c) Dispositions of Permitted Sale Assets (either directly or by
way of the Disposition of a Subsidiary formed for the sole purpose of
effecting the Disposition of Permitted Sale Assets) in arm's length
transactions involving third parties which are not Affiliates of Borrower
when no Default or Event of Default exists or would result therefrom,
provided that (i) concurrently therewith Borrower makes the deposits to the
Completion Reserve Account which are required by Section 9.4 (unless the
Completion Reserve Account has then been terminated in accordance with the
provisions hereof), and (ii) Borrower shall concurrently create, and
thereafter maintain, all appropriate reserves for any tax liabilities
associated with such Disposition on its books and records;
(d) Any Disposition consisting of a grant of a Permitted
Encumbrance or a Permitted Right of Others;
(e) Any Disposition of Borrower's direct or indirect interests in
the casino and related businesses currently conducted in Argentina through
Foreign Subsidiaries, including any associated rights of the Borrower and
the Restricted Subsidiaries in operating agreements for such businesses;
and
(f) other Dispositions of Property not constituting Permitted
Sale Assets (i) in any one transaction or series of related transactions
having a value not in excess of
-76-
$5,000,000, and (ii) having an aggregate value not in excess of $15,000,000
in any Fiscal Year and not in excess of $25,000,000 during the term of this
Agreement.
6.3 Mergers. Merge or consolidate with or into any Person, liquidate,
or change their respective forms of organization except:
(a) mergers and consolidations of a Subsidiary of Borrower into
Borrower or a Restricted Subsidiary (with Borrower or the Restricted
Subsidiary as the surviving entity) or of Restricted Subsidiaries with each
other, provided that Borrower and each of such Subsidiaries have executed
such amendments to the Loan Documents as the Administrative Agent may
reasonably determine are appropriate as a result of such merger or
consolidation;
(b) a merger or consolidation of Borrower or any Restricted
Subsidiary with any other Person, provided that (i) either (A) Borrower or
the Restricted Subsidiary is the surviving entity or (B) the surviving
entity is a Person organized under the Laws of a State of the United States
of America or the District of Columbia and, as of the date of such merger
or consolidation, expressly assumes, by an appropriate instrument, the
Obligations of Borrower or the Restricted Subsidiary, as the case may be,
(ii) giving effect thereto on a pro-forma basis, no Default or Event of
Default exists or would result therefrom and (iii) as a result thereof, no
Change in Control has occurred;
(c) a conversion of any of the Restricted Subsidiaries to another
form of organization when no Default or Event of Default exists or would
result therefrom, provided that Borrower and such Restricted Subsidiary
execute any documents reasonably requested by the Administrative Agent in
relation thereto; or
(d) any liquidation or dissolution of any Restricted Subsidiary
which results in any remaining assets of that Restricted Subsidiary being
effectively transferred to Borrower or to another Restricted Subsidiary.
6.4 Hostile Acquisitions. Make any offer to purchase or acquire, or
consummate a purchase or acquisition of, 5% or more of the Capital Stock of any
Person if the board of directors or management of such Person has notified
Borrower or any of its Subsidiaries in writing that it opposes such offer or
purchase and such notice has not been withdrawn or superseded.
6.5 Distributions. Make any Distribution, whether from capital, income
or otherwise, and whether in Cash or other Property, except:
(a) Distributions by any Subsidiary of Borrower to Borrower or
any Restricted Subsidiary,
(b) Distributions by a Subsidiary of Borrower to other Persons
owning shares of Capital Stock of that Subsidiary that are in the same
proportion as a concurrent Distribution by that Subsidiary to Borrower or
any Restricted Subsidiary;
(c) Distributions payable solely in Common Stock or any other
Capital Stock which is not Disqualified Stock;
-77-
(d) Distributions made to repurchase or redeem Capital Stock to
the extent necessary to prevent a License Revocation, the making of which
is financed by the incurrence of Indebtedness permitted by Section 6.9(i);
and
(e) Distributions made when no Default or Event of Default exists
or would result therefrom consisting of the repurchase or redemption of
Capital Stock of Borrower owned by any employee or director of Borrower in
connection with the termination, disengagement or resignation of such
employee or director, provided that the consideration therefor consists of
Indebtedness of Borrower in an aggregate principal amount not to exceed
$1,000,000 which requires no cash interest payments or amortization prior
to the date which is one year following the Term Maturity Date.
6.6 ERISA. At any time, permit any Pension Plan to: (i) engage in any
non-exempt "prohibited transaction" (as defined in Section 4975 of the Code);
(ii) fail to comply with ERISA or any other applicable Laws; (iii) incur any
material "accumulated funding deficiency" (as defined in Section 302 of ERISA);
or (iv) terminate in any manner, which, with respect to each event listed above,
constitutes a Material Adverse Effect or (b) withdraw, completely or partially,
from any Multiemployer Plan if to do so constitutes a Material Adverse Effect.
6.7 Change in Nature of Business. Make any material change in the
nature of the business of Borrower and the Restricted Subsidiaries, taken as a
whole.
6.8 Liens and Negative Pledges. Create, incur, assume or suffer to
exist any Lien or Negative Pledge of any nature upon or with respect to any of
their respective Properties, or engage in any sale and leaseback transaction
with respect to any of their respective Properties, whether now owned or
hereafter acquired, except:
(a) Permitted Encumbrances;
(b) Liens and Negative Pledges under the Loan Documents;
(c) Liens and Negative Pledges existing on the Closing Date and
disclosed in Schedule 4.7 and any refinancings, refundings, renewals,
extensions or amendments thereof, provided that the obligations secured or
benefited thereby are not increased;
(d) any Lien or Negative Pledge on Capital Stock or any security
which is convertible into Capital Stock issued by Borrower or any
Restricted Subsidiary that holds, directly or indirectly through a holding
company or otherwise, a registration, finding of suitability or license
under any applicable Gaming Law; provided that this clause (d) shall apply
only so long as applicable Gaming Laws provide that the creation of any
restriction on the disposition of any of such Capital Stock shall not be
effective without the prior approval of the relevant Gaming Board and, if
such Gaming Laws at any time cease to so provide, then this clause (d)
shall be of no further effect; and provided further that if at any time
Borrower creates or suffers to exist a Lien or Negative Pledge covering
such Capital Stock in favor of the holder of any other Indebtedness, it
will (subject to any approval required under applicable Gaming Laws)
concurrently grant a pari-passu Lien or Negative Pledge likewise covering
such securities in favor of the Administrative Agent for the benefit of the
Lenders;
-78-
(e) Liens on Property acquired by Borrower or any of the
Restricted Subsidiaries that were in existence at the time of the
acquisition of such Property and were not created in contemplation of such
acquisition;
(f) Liens securing Indebtedness permitted by Section 6.9(f) on
and limited to the capital assets acquired, constructed or financed with
the proceeds of such Indebtedness or with the proceeds of any Indebtedness
directly or indirectly refinanced by such Indebtedness; and
(g) Until the date upon which the initial Loans under the
Revolving Commitment are made, Liens on approximately $5,000,000 in cash
collateral provided by Borrower to Bank of America, in its individual
capacity, in respect of the Existing Letter of Credit and additional
letters of credit issued in support of the ordinary course requirements of
the Borrower and its Restricted Subsidiaries.
6.9 Indebtedness and Guaranty Obligations. Create, incur or assume any
Indebtedness or Guaranty Obligation except:
(a) Indebtedness of Borrower in respect of the Existing
Subordinated Obligations, and Guaranty Obligations in respect thereof
executed by Restricted Subsidiaries which have issued guarantees of the
Obligations hereunder and which are subordinated on the same terms as the
Existing Subordinated Obligations;
(b) other Indebtedness and Guaranty Obligations existing on the
Closing Date and disclosed in Schedule 6.8;
(c) Indebtedness and Guaranty Obligations under the Loan
Documents;
(d) Indebtedness and Guaranty Obligations owed to Borrower or any
Restricted Subsidiary;
(e) New Subordinated Obligations (and Guaranty Obligations issued
by Persons which have guaranteed the Obligations and which are subordinated
on the same terms), all of the proceeds of which are used to refinance
Existing Subordinated Obligations;
(f) in addition to any such obligations described on Schedule
6.8, Indebtedness consisting of Capital Lease Obligations, structured or
synthetic leases, or other Indebtedness incurred to finance the purchase or
construction of capital assets (which shall be deemed to have been so
incurred if the Indebtedness is incurred at or within 90 days before or
after the purchase or construction of the capital asset), or to refinance
any such Indebtedness, provided that the aggregate principal amount of all
outstanding Indebtedness under this clause (f) does not exceed $35,000,000
at any time;
(g) Indebtedness consisting of one or more Swap Agreements,
provided that the aggregate notional amount of Indebtedness covered by all
Secured Swap Agreements shall not exceed $125,000,000;
(h) Guaranty Obligations in support of the obligations of a
Restricted Subsidiary, provided that (i) such obligations are not
prohibited by this Agreement, (ii) no Disposition has been made of any
equity interests of such Subsidiary in breach of Section 6.2, and (iii)
Borrower and its other Restricted Subsidiaries shall not issue Guaranty
Obligations in
-79-
support of the Ogle Haus Note or the other Indebtedness and obligations of
Ogle Haus, LLC; and
(i) Indebtedness consisting of Securityholder Notes issued in
consideration of the repurchase or redemption of securities of Borrower to
the extent that such repurchase or redemption is necessary to prevent a
License Revocation.
6.10 Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of Borrower other than (a) salary, bonus, employee stock
option and other compensation arrangements with directors or officers in the
ordinary course of business, (b) transactions that are fully disclosed to the
board of directors (or executive committee thereof) of Borrower and expressly
authorized by a resolution of the board of directors (or executive committee) of
Borrower which is approved by a majority of the directors (or executive
committee) not having an interest in the transaction, (c) transactions between
or among Borrower and the Restricted Subsidiaries, and (d) transactions on
overall terms at least as favorable to Borrower or the Restricted Subsidiaries
as would be the case in an arm's-length transaction between unrelated parties of
equal bargaining power.
6.11 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio, as of the Fiscal Quarter ending June 30, 2003, or as of the last day of
any subsequent Fiscal Quarter, to be less than the ratio set forth below
opposite such Fiscal Quarter:
Fiscal Quarters Ending Ratio
---------------------- -----
Closing Date through December 31, 2004 1.05:1.00
March 31, 2005 1.10:1.00
June 30, 2005 1.25:1.00
September 30, 2005 and thereafter 1.50:1.00
6.12 Net Senior Debt Ratio. Permit the Net Senior Debt Ratio, as of
the Fiscal Quarter ending June 30, 2003 or as of the last day of any subsequent
Fiscal Quarter, to be greater than the ratio set forth below opposite such
Fiscal Quarter:
Fiscal Quarters Ending Ratio
---------------------- -----
Closing Date through September 30, 2003 1.50:1.00
December 31, 2003 1.75:1.00
March 31, 2004 through March 31, 2005 2.00:1.00
June 30, 2005 and thereafter 1.50:1.00
6.13 Net Total Debt Ratio. Permit the Net Total Debt Ratio, as of the
Fiscal Quarter ending June 30, 2003 or as of the last day of any subsequent
Fiscal Quarter, to be greater than the ratio set forth below opposite such
Fiscal Quarter:
-80-
Fiscal Quarters Ending Ratio
---------------------- -----
Closing Date though June 30, 2003 6.25:1.00
September 30, 2003 and December 31, 2003 6:75:1.00
March 31, 2004 and June 30, 2004 7.05:1.00
September 30, 2004 7.25:1.00
December 31, 2004 7.00:1.00
March 31, 2005 6.50:1.00
June 30, 2005 5.75:1.00
September 30, 2005 5.00:1.00
December 31, 2005 and March 31, 2006 4.50:1.00
June 30, 2006 and September 30, 2006 4.25:1.00
December 31, 2006 and thereafter 4.00:1.00
6.14 Capital Expenditures. Make, or become legally obligated to make,
any Capital Expenditure except:
(a) Capital Expenditures associated with the Lake Charles Project
which do not result in the aggregate Capital Expenditures (including for
this purpose, capitalized interest and capitalized pre-opening expenses)
associated with that project (whether made prior to or after the date of
this Agreement) being in excess of $325,000,000, provided that the Lake
Charles Budget may be increased in an amount, not to exceed $20,000,000,
which is equal to a portion of the Secondary Earned Basket Amount if the
Borrower notifies the Administrative Agent in writing of such allocation
and concurrently deposits the amount of the increase into the Completion
Reserve Account (or, if the Completion Reserve Account has then been
terminated, into a blocked account with the Administrative Agent subject to
drawing requirements which are similar to those set forth in Section 8.4
and in any event reasonably acceptable to the Administrative Agent);
(b) Capital Expenditures (including for this purpose, capitalized
interest and capitalized pre-opening expenses) associated with the Belterra
Tower Project which do not result in the aggregate Capital Expenditures
associated with that project (whether made prior to or after the date of
this Agreement) being in excess of $37,000,000;
(c) Capital Expenditures in an aggregate amount not to exceed
$10,000,000 during the term of this Agreement, for enhancements of
Borrower's existing Biloxi, New Orleans, Bossier City, Belterra, Reno and
card club facilities (and, to the extent of $500,000, which amount shall
constitute part of the $10,000,000 amount, for any other facilities or
proposed facilities of Borrower), provided that, following the completion
of the Belterra Tower Project, this $10,000,000 amount may be increased to
an amount not in excess of $60,000,000 (less any portion of the Secondary
Earned Basket Amount allocated to the Lake Charles Budget in accordance
with clause (a) of this Section) by a portion of the Secondary Earned
Basket Amount which is not duplicative of any increase to the amount by
which the provisions for Capital Expenditures under Sections 6.14(a) and
6.14(e) and Investments under Section 6.15(j) are increased by reason of
the Secondary Earned Basket Amount;
-81-
(d) Maintenance and Miscellaneous Capital Expenditures not in
excess of $23,000,000 in any Fiscal Year, provided that (i) following the
Lake Charles Opening Date this amount shall increase to $25,000,000 in any
Fiscal Year for the then current Fiscal Year and for each subsequent Fiscal
Year, (ii) the aggregate amount of Capital Expenditures permitted to be
made in any Fiscal Year may be increased by an amount, not to exceed
$5,000,000 during any Fiscal Year, by the amount of any Capital
Expenditures permitted by this clause (d) and not expended in the
immediately preceding Fiscal Year, and (iii) the aggregate amount of
Capital Expenditures permitted to be made in any Fiscal Year may also be
increased by the amount, not to exceed $1,500,000 in any Fiscal Year, which
is received by Borrower in consideration of the sale, transfer or other
disposition of worn out or obsolete Property sold by Borrower and its
Restricted Subsidiaries and replaced by Property performing the same or a
similar function within 180 days; and
(e) Other Capital Expenditures in an aggregate amount not to
exceed the sum of (i) a portion of the Primary Earned Basket Amount which
does not duplicate any portion thereof allocated to Investments made
pursuant to Section 6.15(j) and (ii) a portion of the Secondary Earned
Basket Amount which is not duplicative of any increase to the amount by
which the provisions for Capital Expenditures under Sections 6.14(a) and
6.14(c) and Investments under Section 6.15(j) are increased by reason of
the Secondary Earned Basket Amount, provided that the aggregate amount
expended under this clause (e) shall not exceed $10,000,000.
6.15 Investments. Make or suffer to exist any Investment, except:
(a) Investments in existence on the Closing Date and disclosed on
Schedule 6.15;
(b) Investments consisting of Cash and Cash Equivalents;
(c) Investments consisting of loans and advances to officers,
directors and employees of Borrower and the Restricted Subsidiaries in the
ordinary course of business, (including, without limitation, for travel,
entertainment, relocation and analogous expenses);
(d) Investments of Borrower in any Restricted Subsidiary and
Investments of any Restricted Subsidiary in another Restricted Subsidiary
(but not any Investments made after the Closing Date in Unrestricted
Subsidiaries except as permitted below in this Section);
(e) Investments consisting of the extension of credit to
customers or suppliers of Borrower and the Restricted Subsidiaries in the
ordinary course of business and any Investments received in satisfaction or
partial satisfaction thereof;
(f) Investments received in connection with the settlement of a
bona fide dispute with another Person or in satisfaction of judgments;
(g) Investments representing all or a portion of the sales price
of Property sold or services provided to another Person;
(h) Investments consisting of Guaranty Obligations permitted by
Section 6.9;
-82-
(i) Investments consisting of 100 shares or less of publicly
traded equity securities of Persons engaged in any business in which
Borrower is engaged, which Investments do not exceed $100,000 in the
aggregate at any time;
(j) Other Investments in an aggregate amount not to exceed the
sum of (i) a portion of the Primary Earned Basket Amount which does not
duplicate any portion thereof allocated to Capital Expenditures made
pursuant to Section 6.14(e) and (ii) a portion of the Secondary Earned
Basket Amount which is not duplicative of any increase to the amount by
which the provisions for Capital Expenditures under Sections 6.14(a),
6.14(c) and 6.14(e) are increased by reason of the Secondary Earned Basket
Amount, provided that the aggregate amount expended under this clause (j)
shall not exceed $10,000,000; and
(k) Investments made following the Closing Date by Casino Magic
Corp., a Minnesota corporation ("CMAG"), in the Argentina Subsidiaries,
made using the proceeds of cash Distributions or other cash payments made
to CMAG by the Argentina Subsidiaries following May 9, 2003, and in an
amount not to exceed $3,000,000 in any Fiscal Year.
6.16 Subsidiary Indebtedness. Permit (whether or not otherwise
permitted under Section 6.9) any Restricted Subsidiary to create, incur, assume
or suffer to exist any Indebtedness or Guaranty Obligation, except (a)
Indebtedness and Guaranty Obligations in existence on the Closing Date, (b) the
Subsidiary Guaranty, (c) Indebtedness owed to Borrower or another Restricted
Subsidiary, (d) Capital Lease Obligations and purchase money obligations of a
Restricted Subsidiary in respect of Property used by that Subsidiary or another
Restricted Subsidiary, (e) other Indebtedness incurred in the ordinary course of
business not in excess, with respect to any Restricted Subsidiary, of $500,000,
and (f) subordinated Guaranty Obligations of Subordinated Obligations which are
no more favorable to the holders thereof than the similar Guaranty Obligations
executed in respect of the Existing Subordinated Obligations existing as of the
Closing Date.
6.17 Amendments to Subordinated Obligations. Amend or modify any term
or provision of any indenture, agreement or instrument evidencing or governing
any Subordinated Obligation in any respect that does or could adversely affect
the interests of the Lenders.
6.18 In-Balance Requirement. Fail to satisfy the In-Balance
Requirement as of the Closing Date and as of the last day of any calendar month
ending prior to the Lake Charles Completion Date.
6.19 Lake Charles Project.
(a) Fail to commence construction of the Lake Charles Project by
September 30, 2003 (but in any event prior to the date required by the
Louisiana Gaming Control Board as a condition to licensure of the Lake
Charles Project), or, fail to diligently pursue the Lake Charles Project to
completion not later than March 31, 2005 (but in any event prior to the
date required by the Louisiana Gaming Control Board as a condition to
licensure of the Lake Charles Project);
(b) Fail to provide the Construction Consultant with all
reasonably requested access to the Lake Charles Project construction site
without unreasonable delay (except for any portions thereof not controlled
by Borrower and its Restricted Subsidiary or the Lake Charles Contractor),
and access to the Construction Plan, Construction Budget,
-83-
Construction Timetable and all related plans, budgets, drawings, timetables
and other related papers;
(c) Fail to provide the Construction Consultant with all
information reasonably requested by the Administrative Agent or the
Construction Consultant in connection with the preparation of the monthly
Construction Progress Report to the Lenders;
(d) Fail to cooperate in the preparation of each Construction
Progress Report and, if requested in writing by the Administrative Agent,
fail to cause the Lake Charles Project Architect and the Lake Charles
Contractor to certify that the improvements constructed as of the date of
any Construction Progress Report conform to the Construction Plans in all
material respects;
(e) Fail to maintain a full set of the current working drawings
at the construction office for the Lake Charles Project for review by the
Construction Consultant;
(f) Fail, within 15 days following any written request by the
Administrative Agent, to deliver, to the extent not previously delivered
(i) then current Construction Plans for the Lake Charles Project certified
as true and correct by the Lake Charles Architect, (ii) then current lists
of the names, addresses and telephone numbers of each material contractor,
material subcontractor and material supplier with respect to the Lake
Charles Project and the dollar value and amounts paid with respect to the
related contracts, and (iii) then current versions of the Construction
Timetable and a status report and log describing all executed contracts and
subcontracts to which Borrower or any of its Restricted Subsidiaries are
party for such work;
(g) Make any change to the Construction Plans or Construction
Budget which would (i) allocate or require the allocation of more than
$1,000,000 (in the aggregate of all such allocations) of the general
contingency of the "contingency" line item in the Construction Budget to
any single line item without the prior written consent of the
Administrative Agent (not to be unreasonably withheld or delayed), or more
than $5,000,000 of such contingency to any single line item without the
consent of the Majority Lenders, provided, in each case, that no such
consent shall be required in respect of the allocation of any portion of
the approximately $6,400,000 general contingency set forth in the prime
construction contract with the Lake Charles Contractor, (ii) increase the
overall Construction Budget to an amount (including for this purpose,
capitalized interest and capitalized pre-opening expenses) which exceeds
$325,000,000 (except as permitted by Section 6.14(a)), or (iii) result in
the deletion of any of the amenities described on Schedule 1.1D, or make
any change to the Construction Timetable which would result in any
benchmark described therein being delayed for more than three months from
the date indicated in the Construction Timetable, or, in any event make any
change to the Construction Plans, the Construction Budget or the
Construction Timetable which would cause the Lake Charles Opening Date to
occur after December 31, 2004;
(h) Fail to construct the Lake Charles Project in a good and
workmanlike manner in accordance with sound building practices and without
material deviation from the Construction Plans, and comply in all material
respects with all existing Laws and requirements of all Government Agencies
having jurisdiction over the Lake Charles Project;
(i) Fail to promptly pay prior to delinquency (subject to
applicable retentions) or otherwise discharge all Liens and other material
claims for labor done and
-84-
materials and services furnished in connection with the construction of the
Lake Charles Project, other than Permitted Encumbrances, and except for
Liens and other claims contested in good faith by appropriate proceedings
and without prejudice to the Construction Timetable, provided that any such
claims and Liens are covered by such payment bonds or title insurance
policy endorsements as may be reasonably requested by the Administrative
Agent;
(j) Fail to properly obtain as and when required, comply with and
keep in effect all material permits, licenses and approvals which are
required to be obtained from Government Agencies in order to construct and
occupy the Lake Charles Project as of the then current stage of
construction, and deliver copies of all such permits, licenses and
approvals to the Administrative Agent promptly following a written request
therefor;
(k) Fail to promptly notify the Administrative Agent if Borrower
or any Restricted Subsidiary pays $1,000,000 or more for any construction
materials for the Lake Charles Project that are not located on the site of
the Lake Charles Project (other than any such payments in respect of the
Lake Charles Vessel made prior to its delivery to the site in material
conformity with the terms of the Vessel Construction Contract), or will not
be delivered within thirty days after such payment (describing such
construction materials, the purchase price therefor and the location
thereof) and, if requested by the Administrative Agent in writing provide
to the Administrative Agent the written acknowledgment of the Person having
custody of such construction materials of the existence of the
Administrative Agent's Lien on such construction materials and the right of
the Administrative Agent, as against such Person, to have access to and to
remove such construction materials (subject to the requirement of the
payment of any remaining purchase price for such materials);
(l) Fail on or before the Lake Charles Completion Date, to
provide the Administrative Agent with a written certificate executed by the
Lake Charles Architect, Lake Charles Contractor and the Construction
Consultant (and any other relevant contracting parties reasonably requested
by the Administrative Agent) certifying that the Lake Charles Project has
been completed in all material respects in accordance with the Construction
Plans and that the Lake Charles Project has been or is ready to be opened
for business together with a Certificate executed by a Senior Officer to
that effect, and such assurances as the Administrative Agent may require
that the Lake Charles Project complies in all material respects with all
applicable zoning, building and land use Laws; or
(m) Fail, as soon as practicable after the Lake Charles
Completion Date, to provide the Administrative Agent with an ALTA survey of
the Lake Charles Project as of the Lake Charles Completion Date that (i)
sets forth all recorded easements and licenses burdening the Lake Charles
Project Property as of the Lake Charles Completion Date, (ii) reflects no
encroachments onto the Lake Charles Project Property and no encroachments
by the Lake Charles Project onto adjoining real property, and (iii)
certifies the legal description of the Lake Charles Project Property to be
the same as that set forth in the title insurance policy referred to in
Section 8.1(a).
6.20 Permitted Asset Sales. Fail to diligently pursue the consummation
of the Disposition of the Property which is the subject of the Land Sale
Contracts either (a) through the diligent pursuit of the Land Sale Contract, or
(b) to the extent any Land Sale Contract has been terminated or the prospects of
its consummation have been impaired in Borrower's reasonable judgment, though
other appropriate efforts.
-85-
6.21 Commencement of Lake Charles Project. Commence physical
construction of the Lake Charles Project prior to the recordation of the Lake
Charles Mortgage.
6.22 Impediments to Distributions. Permit any Restricted Subsidiary to
enter into any Agreement limiting or prohibiting the making of Distributions by
that Restricted Subsidiary to the Borrower, or restricting the ability of that
Restricted Subsidiary to make Loans to or Investments in the Borrower.
-86-
ARTICLE 7
INFORMATION AND REPORTING REQUIREMENTS
7.1 Financial and Business Information. So long as any Advance remains
unpaid, or any other Obligation remains unpaid, or any portion of any of the
Commitments remains in force, Borrower shall, unless the Administrative Agent
(with the written approval of the Majority Lenders) otherwise consents, at
Borrower's sole expense, deliver to the Administrative Agent for distribution by
it to the Lenders, a sufficient number of copies for all of the Lenders of the
following:
(a) As soon as practicable, and in any event by the thirtieth
calendar day in the next following month (but not later than the last
Business Day of such calendar month), an operating revenue report for the
preceding calendar month (other than a month that is the last month of a
Fiscal Quarter or Fiscal Year, in which case the operating revenue report
for such month shall be delivered as soon as practicable and in any event
within 60 days after the end of such calendar month) for each Gaming
Property, in a form reasonably acceptable to the Administrative Agent,
together with a written narrative statement discussing any significant
trends reflected therein signed by a Senior Officer of Borrower;
(b) As soon as practicable, and in any event within 50 days after
the end of each Fiscal Quarter (other than the fourth Fiscal Quarter in
each Fiscal Year), (i) the consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and the consolidated
statements of operations and cash flows for such Fiscal Quarter, and the
portion of the Fiscal Year ended with such Fiscal Quarter and (ii)
supporting consolidating financial information in the form approved by the
Administrative Agent prior to the Closing Date or such other form as may be
acceptable to the Administrative Agent. Such financial statements shall be
certified by a Senior Officer of Borrower as fairly presenting the
financial condition, results of operations and cash flows of Borrower and
its Subsidiaries in accordance with GAAP (other than footnote disclosures),
consistently applied, as at such date and for such periods, subject only to
normal year-end accruals and audit adjustments;
(c) As soon as practicable, and in any event within 50 days after
the end of the fourth Fiscal Quarter in each Fiscal Year, a Pricing
Certificate setting forth a preliminary calculation of the Net Total Debt
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 Borrower and its
Subsidiaries for such Fiscal Quarter, and as soon as practicable
thereafter, in the event of any material variance in the actual calculation
of the Net Total Debt Ratio from such preliminary calculation, a revised
Pricing Certificate setting forth the actual calculation thereof;
(d) As soon as practicable, and in any event within 105 days
after the end of each Fiscal Year, (i) the consolidated balance sheet of
Borrower and its Subsidiaries as at the end of such Fiscal Year and the
consolidated statements of operations, stockholders' equity and cash flows,
in each case of Borrower and its Subsidiaries, for such Fiscal Year and
(ii) supporting consolidating financial information in the form approved by
the Administrative Agent prior to the Closing Date or such other form as
may be acceptable to the Administrative Agent. Such financial statements
shall be prepared in accordance with GAAP, consistently applied, and such
consolidated balance sheet and consolidated statements shall be accompanied
by a report of independent public accountants of recognized standing
selected by Borrower and reasonably satisfactory to the Majority Lenders,
which report shall be prepared in accordance with generally accepted
auditing standards as at such date, and shall not be
-87-
subject to any qualifications or exceptions as to the scope of the audit
nor to any other qualification or exception determined by the Majority
Lenders in their good faith business judgment to be adverse to the
interests of the Lenders. 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 Borrower's financial
calculations as at the end of such Fiscal Year (which shall accompany such
certificate) under Sections 6.11 through 6.14, and Section 6.18 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 Borrower in the manner prescribed by this Agreement;
(e) As soon as practicable, and in any event within 60 days after
the commencement of each Fiscal Year, a budget and projection of Borrower's
statement of operations by Fiscal Quarter for that Fiscal Year and within
105 days after the commencement of each Fiscal Year, a budget and
projection of Borrower's balance sheet for that Fiscal Year and a budget
and projection of Borrower's statement of operations and balance sheet by
Fiscal Year for the next two succeeding Fiscal Years, all in reasonable
detail;
(f) Promptly after request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee
of the board of directors) of Borrower by independent accountants in
connection with the accounts or books of Borrower or any of its
Subsidiaries, or any audit of any of them;
(g) Promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent
to the stockholders of Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which Borrower may
file or be required to file with the Securities 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 Lenders pursuant
to other provisions of this Section 7.1;
(h) Promptly after the same are available, copies of any written
communication to Borrower or any of the Restricted Subsidiaries from any
Gaming Board advising it of any material violation of or material
non-compliance with any Gaming Law by Borrower or any of the Restricted
Subsidiaries;
(i) Promptly after request by the Administrative Agent or any
Lender, copies of any other report or other document that was filed by
Borrower or any of the Restricted Subsidiaries with any Government Agency;
(j) Promptly upon a Senior Officer becoming aware, and in any
event within ten Business Days after becoming aware, of the occurrence of
any (i) "reportable event" (as such term is defined in Section 4043 of
ERISA) or (ii) "prohibited transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) in connection with any Pension
Plan or any trust created thereunder, telephonic notice specifying the
nature thereof, and, no more than five Business Days after such telephonic
notice, written notice again specifying the nature thereof and specifying
what action Borrower or any of the
-88-
Restricted Subsidiaries is taking or proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service with
respect thereto;
(k) As soon as practicable, and in any event within two Business
Days after a Senior Officer determines that any condition or event which
constitutes a Default or Event of Default has occurred, telephonic notice
specifying the nature and period of existence thereof, and, no more than
two Business Days after such telephonic notice, written notice again
specifying the nature and period of existence thereof and specifying what
action Borrower or any of its Restricted Subsidiaries is taking or proposes
to take with respect thereto;
(l) Promptly upon a Senior Officer becoming aware that (i) any
Person has commenced a legal proceeding with respect to a claim against
Borrower or any of the Restricted Subsidiaries that is $5,000,000 or more
in excess of the amount that is covered by insurance, (ii) any creditor or
lessor under a material credit agreement or material lease has asserted a
default thereunder on the part of Borrower or any of the Restricted
Subsidiaries which constitutes a Material Adverse Effect, (iii) any Person
has commenced a legal proceeding with respect to a claim against Borrower
or any of the Restricted Subsidiaries under a contract that is not a credit
agreement or material lease in excess of $5,000,000 or which constitutes a
Material Adverse Effect, (iv) any labor union has notified Borrower of its
intent to strike Borrower or any of the Restricted Subsidiaries on a date
certain and such strike would involve more than 100 employees of Borrower
and the Restricted Subsidiaries, or (v) any Gaming Board has indicated its
intent to consider or act upon a License Revocation or a fine or penalty of
$1,000,000 or more with respect to Borrower or any of the Restricted
Subsidiaries, a written notice describing the pertinent facts relating
thereto and what action Borrower or the Restricted Subsidiaries is taking
or proposes to take with respect thereto;
(m) In respect of each calendar month ending prior to the Lake
Charles Completion Date, as soon as practicable, and in any event by the
thirtieth calendar day in the next following month (but not later than the
last Business Day of such calendar month), an In-Balance Certificate and
such information as may be reasonably required for the preparation of a
Construction Progress Report with respect to the Lake Charles Project
(which Construction Progress Reports shall promptly be distributed by the
Administrative Agent to the Lenders as and when received), provided that in
respect of each December, Borrower shall have forty-five days to deliver
the In-Balance Certificate and other information required by this clause
(m); and
(n) Such other data and information as from time to time may be
reasonably requested by the Administrative Agent, any Lender (through the
Administrative Agent) or the Majority Lenders.
7.2 Compliance Certificates. So long as any Advance remains unpaid, or
any other Obligation remains unpaid or unperformed, or any portion of any of the
Commitments remains outstanding, Borrower shall, at Borrower's sole expense,
deliver to the Administrative Agent for distribution by it to the Lenders
concurrently with the financial statements required pursuant to Sections 7.1(b)
and 7.1(d), Compliance Certificates signed by a Senior Officer of Borrower.
-89-
ARTICLE 8
CONDITIONS
8.1 Conditions to the Closing Date. The obligation of each of the
Lenders to make the initial Advances to be made by them under this Agreement,
the obligation of the Issuing Lender to issue the initial Letter of Credit, and
the obligation of the Swing Line Lender to make the initial Swing Line Loan,
each are subject to the following conditions precedent, each of which shall be
satisfied prior to the making of such initial Advances, the issuance of such
initial Letter of Credit and the making of the initial Swing Line Loan (unless
all of the Lenders, in their sole and absolute discretion, shall agree
otherwise):
(a) The Administrative Agent shall have received all of the
following, each of which shall be originals unless otherwise specified,
each properly executed by a Responsible Official of each party thereto,
each dated as of the Closing Date and each in form and substance
satisfactory to the Administrative Agent and its legal counsel (unless
otherwise specified or, in the case of the date of any of the following,
unless the Administrative Agent otherwise agrees or directs):
(i) at least one executed counterpart of this Agreement,
together with arrangements satisfactory to the Administrative Agent
for additional executed counterparts, sufficient in number for
distribution to the Lenders and Borrower;
(ii) Notes executed by Borrower in favor of each Lender,
each in a principal amount equal to that Lender's Pro Rata Share of
each of the Commitments;
(iii) the Swing Line Note;
(iv) with respect to Borrower and each Significant
Subsidiary, such documentation as the Administrative Agent may
reasonably require to establish the due organization, valid existence
and good standing of Borrower and each such Subsidiary, its
qualification to engage in business in each material jurisdiction in
which it is engaged in business or required to be so qualified, its
authority to execute, deliver and perform any Loan Documents to which
it is a Party, the identity, authority and capacity of each
Responsible Official thereof authorized to act on its behalf,
including certified copies of articles of incorporation or other
similar organizational documents and amendments thereto, bylaws,
partnership or operating agreements, as applicable, and amendments
thereto, certificates of good standing and/or qualification to engage
in business, tax clearance certificates, certificates of corporate
resolutions, incumbency certificates, Certificates of Responsible
Officials, and the like;
(v) the Opinions of Counsel;
(vi) the Subsidiary Guaranty executed by each of the other
Significant Subsidiaries;
(vii) [Reserved]
(viii) a Certificate signed by a Senior Officer of Borrower
stating that (a) as of the date thereof, the representations and
warranties of Borrower contained in Article 4 are true and correct,
(b) Borrower and the other Parties are in
-90-
compliance with all the terms and provisions of the Loan Documents and
no Default or Event of Default has occurred and remains continuing,
and (c) that, giving pro forma effect to the transactions contemplated
to occur on the Closing Date, Borrower is in compliance with the
In-Balance covenant set forth in Section 6.18 hereof, and attaching
calculations demonstrating such compliance;
(ix) evidence acceptable to the Administrative Agent that
the credit facilities contemplated by this Agreement have received
ratings of not less than B+ (stable outlook) from Standard & Poor's
and B1 (stable outlook) from Moody's;
(x) the Security Agreement executed by Borrower and each of
the Significant Subsidiaries, together with each of the instruments
listed in Schedule I to the Security Agreement, executed by the
parties indicated therein;
(xi) such financing statements on Form UCC-1 executed by
Borrower and each Significant Subsidiary with respect to the Security
Agreement as the Administrative Agent may request;
(xii) the Pledge Agreement (General) executed by Borrower
and each of its relevant Restricted Subsidiaries together with all
certificates constituting the corresponding Pledged Collateral
(General), accompanied by appropriate stock powers or assignments
endorsed in blank;
(xiii) Amendments to the pledge agreements executed pursuant
to the Existing Loan Agreement in respect of those of the Restricted
Subsidiaries which are Nevada or Mississippi gaming licensees, or
registered holding companies therefor, in form and substance
acceptable to the Administrative Agent;
(xiv) the Pledge Agreements (Gaming Regulated) in form and
substance acceptable to the Administrative Agent executed by Borrower
and each of its relevant Restricted Subsidiaries together with all
certificates constituting the corresponding Pledged Collateral (Gaming
Regulated), accompanied by appropriate stock powers or assignments
endorsed in blank;
(xv) the Preferred Ship Mortgages executed by the
appropriate Significant Subsidiaries;
(xvi) the Trademark Collateral Assignment executed by
Borrower and the Significant Subsidiaries;
(xvii) the Belterra Mortgage and other Mortgages in respect
of all other Real Property Collateral other than the Lake Charles
Project and portions of the Casino Magic Biloxi property not now
subject to an Existing Mortgage;
(xviii) Deeds of Trust or Mortgages in respect of any
Permitted Sale Assets which are not "Gaming Properties" other than the
Ogle Haus;
(xix) Amendments to the Existing Mortgages executed by the
appropriate Significant Subsidiaries;
-91-
(xx) an agreement executed by the Construction Consultant
and Borrower pursuant to which the Borrower agrees to pay the fees and
expenses of the Construction Consultant to monitor the construction of
the Lake Charles Project;
(xxi) written appraisals by a qualified independent
appraiser acceptable to the Administrative Agent and complying in all
respects with FIRREA of each of the Gaming Properties (other than the
Lake Charles Project) that are in form and substance acceptable to the
Administrative Agent in its sole and absolute discretion;
(xxii) assurances from the Title Company that it is prepared
to issue one or more ALTA extended coverage lenders policies insuring
the Liens of the Mortgages (other than the approximately 296 acres of
undeveloped land in the Reno, Nevada, area) in an amount not less than
the aggregate fair market value of the Real Property Collateral
(provided, however, that the aggregate title insurance amount shall
not exceed the Commitments), subject to such exceptions as are
reasonably acceptable to the Administrative Agent, with such title
policy endorsements as the Administrative Agent may reasonably require
and with such assurances as the Administrative Agent may reasonably
require from title re-insurers acceptable to the Administrative Agent;
(xxiii) "Phase I" environmental reports with respect to each
of the Gaming Properties prepared by a qualified independent
environmental expert acceptable to the Administrative Agent, together
with a Certificate of a Senior Officer of Borrower to the effect that,
after appropriate inquiry, he or she has no knowledge of any event or
circumstance that has occurred since the dates thereof that would
increase in any significant respect the exposure under Hazardous
Materials Laws with respect thereto;
(xxiv) the current drafts of the Lake Charles Lease, the
Cooperative Agreement, the Architect's Contract, the Construction
Contract and the Vessel Construction Contract; and
(xxv) such assurances as the Administrative Agent deems
appropriate that the relevant Gaming Boards have approved the
transactions contemplated by the Loan Documents to the extent that
such approval is required by applicable Gaming Laws (including without
limitation any required approvals of the Collateral Documents and the
Liens granted thereunder);
(b) The fees payable on the Closing Date pursuant to Article 3
shall have been paid.
(c) The reasonable costs and expenses of the Administrative Agent
in connection with the preparation of the Loan Documents payable pursuant
to Section 12.3, and invoiced to Borrower prior to the Closing Date, shall
have been paid.
(d) The representations and warranties of Borrower contained in
Article 4 shall be true and correct.
(e) Borrower and any other Parties shall be in compliance with
all the terms and provisions of the Loan Documents and no Default or Event
of Default shall have occurred and be continuing.
-92-
(f) The Administrative Agent shall be satisfied that, upon filing
or recordation of the Collateral Documents with the appropriate Government
Agencies, the Lien of the Collateral Documents will be a first priority
perfected Lien on all of the assets of Borrower and the Significant
Subsidiaries (other than any Property which, under applicable Gaming Laws
cannot be subjected to the Lien of the Administrative Agent), subject only
to Permitted Encumbrances, Permitted Rights of Others, the matters
described on Schedule 4.7 and such other matters as are acceptable to the
Administrative Agent.
(g) Such other assurances, certificates, documents, consents or
opinions as the Administrative Agent reasonably may require.
(h) the credit facilities described in the Existing Loan
Agreement shall be deemed replaced by those described herein, and the
lenders under the Existing Loan Agreement shall have received the payment
of any obligations outstanding thereunder.
(i) All legal matters relating to the Loan Documents shall be
satisfactory to Sheppard, Mullin, Richter & Hampton LLP, special counsel to
the Administrative Agent.
8.2 Each Revolving Obligation and each Withdrawal from the Completion
Reserve Account. The obligation of each Lender to make any Advance which
increases the principal amount of the Outstanding Obligations (other than the
initial Term Loans) and the obligation of the Issuing Lender to issue a Letter
of Credit, and the right of the Borrower to make each withdrawal from the
Completion Reserve Account, are each subject to the following conditions
precedent (unless that portion of the Lenders required by Section 12.2 shall
otherwise agree in their sole and absolute discretion):
(a) except (i) for representations and warranties which expressly
speak as of a particular date or are no longer true and correct as a result
of a change which is permitted by this Agreement or (ii) as disclosed by
Borrower and approved in writing by the Majority Lenders, the
representations and warranties contained in Article 4 (other than Sections
4.4(a), 4.6 (first sentence), 4.10, and 4.17) shall be true and correct on
and as of the date of the Advance as though made on that date;
(b) other than matters then described in Schedule 4.10 or not
required as of the Schedule Date thereof to be therein described, there
shall not be then pending or threatened any action, suit, proceeding or
investigation against or affecting Borrower or any of the Restricted
Subsidiaries or any Property of any of them before any Government Agency
that constitutes a Material Adverse Effect;
(c) the Administrative Agent shall have timely received a Request
for Loan\\Withdrawal Certificate in compliance with Article 2 (or
telephonic or other request for Loan referred to in Section 2.1(c), if
applicable) or the Issuing Lender shall have received a Request for Letter
of Credit, as the case may be, in compliance with Article 2;
(d) the Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, such other assurances,
certificates, documents or consents related to the foregoing as the
Administrative Agent or such Lenders reasonably may require;
-93-
(e) as of each such request prior to the Lake Charles Completion
Date (other than the request submitted in connection with the making of the
Term Loans), the Borrower shall have certified that the proceeds of the
requested Advance, Swing Line Loan, Letter of Credit or withdrawal from the
Completion Reserve Account will not be used, directly or indirectly, to
finance or support the costs of the design, development or construction of
the Lake Charles Project (including any costs described in the Construction
Budget), or shall have satisfied each of the conditions precedent set forth
in Section 8.4 if such proceeds will be used, directly or indirectly, to
finance or support the costs of the design, development or construction of
the Lake Charles Project (including any costs described in the Construction
Budget);
(f) $40,000,000 of Net After Tax Proceeds shall have been
deposited into the Completion Reserve Account in accordance with Section
9.4(b) or June 30, 2004 shall not have occurred; and
(g) the Administrative Agent shall have received each of the
following in respect of the Lake Charles Project, in each case prior to
August 31, 2003, and in each case substantially in the form of the drafts
heretofore circulated by the Administrative Agent's counsel or otherwise
acceptable to the Managing Agents (or to the Majority Lenders) and to the
Administrative Agent's counsel:
(i) an executed Mortgage with respect to the Lake Charles
Lease securing the Subsidiary Guaranty, which shall have been properly
recorded and shall be subject only to Permitted Encumbrances (it being
understood that the Borrower will not commence the construction of any
work of improvement on the site of the Lake Charles Project unless and
until such Mortgage has been executed, delivered and recorded);
(ii) evidence satisfactory to the Managing Agents (or to the
Majority Lenders) that the option (currently held by the Borrower) to
acquire a leasehold in respect of the approximately 97 acre "option
parcel" adjacent to the approximately 224 acre main site for the Lake
Charles Project (y) has been transferred to Lake Charles and is
subject to the Mortgage referred to in clause (i) of this Section or
(z) is subject to a similar Mortgage executed by the Borrower in favor
of the Administrative Agent;
(iii) executed Mortgages with respect to that portion of the
Casino Magic Biloxi property not now subject to an Existing Mortgage;
(iv) an executed Landlord Consent in respect of the Lake
Charles Lease from the Lake Charles Harbor and Terminal District,
substantially in the form of Exhibit H-2, and with such changes
thereto as may be acceptable to the Administrative Agent and its
counsel;
(v) copies of any amendments following the Closing Date to
the Cooperative Agreement (each of which shall be reasonably
acceptable to the Administrative Agent);
(vi) the final executed Lake Charles Lease, any amendments
to the Cooperative Agreement, the Architect's Contract, the
Construction Contract and the Vessel Construction Contract, each of
which shall be reasonably consistent with
-94-
the drafts thereof presented in accordance with Section 8.1, with such
changes as may be reasonably acceptable to the Managing Agents or the
Majority Lenders;
(vii) the Collateral Assignment of Architect's Contract, the
Collateral Assignment of Cooperative Agreement, the Collateral
Assignment of Construction Contract and the Collateral Assignment of
the Vessel Construction Contract, in each case executed by the parties
thereto;
(viii) a written appraisal by a qualified independent
appraiser acceptable to the Administrative Agent and complying in all
respects with FIRREA of the Lake Charles Project demonstrating an
"as-built" value of not less than $325,000,000;
(ix) a Certificate of a Senior Officer of Borrower
certifying as to the accuracy of the final drafts of the Construction
Budget, the Construction Plans and the Construction Timetable
delivered to the Administrative Agent and the Construction Consultant
(which final drafts shall be consistent in all material respects with
the drafts heretofore provided to the Administrative Agent and
otherwise reasonably acceptable to the Managing Agents (or to the
Majority Lenders));
(x) an ALTA Survey of the Lake Charles Project site,
certified to the Administrative Agent in a manner acceptable to the
Administrative Agent, which survey shall describe, as subject to the
Lake Charles Lease, land which in any event includes the approximately
226 acres of land described as parcels 1 and 3 on the boundary survey
dated October 15, 2002 prepared for the Lake Charles Architect and
delivered to the Administrative Agent;
(xi) an ALTA lenders policy of title insurance in the amount
of the Commitments with respect to the Mortgages in respect of the
Lake Charles Lease and Lake Charles Project site referred to in this
Section, together with the endorsements to coverage and reinsurance
acceptable to the Administrative Agent;
(xii) a Landlord Consent and Agreement substantially in the
form of the Model Landlord Consent and Agreement (with such revisions
thereto as may be acceptable to the Administrative Agent) executed by
each lessor of any portion of the Real Property which has not
previously delivered a Landlord Consent and Agreement of continuing
applicability, other than the Lake Charles Project;
(xiii) written confirmations of the Landlord Consent and
Agreements previously furnished by the lessors of all other Real
Property Collateral, in form and substance acceptable to the
Administrative Agent;
(xiv) an opinion of Marshall, Hill, Cassas & deLipkau as to
perfection of the security interest of the Administrative Agent in the
water rights associated with Boomtown Reno in the office of the Nevada
State Engineer in accordance with Nevada Law;
(xv) such assurances or confirmations as the Administrative
Agent may require regarding the acceptability of the interest rates
provided for herein under the approvals of the Indiana Gaming
Commission heretofore delivered to the Administrative Agent
-95-
(xvi) the Construction Consultant shall have conducted an
acceptable review of the Construction Timetable, the Construction
Budget, the Construction Plans and the Construction Contract; and
(xvii) a certificate of insurance issued by Borrower's
insurance carrier or agent with respect to the insurance required to
be maintained pursuant to the Mortgages, together with a lenders' loss
payable endorsement on a form acceptable to the Administrative Agent
and in any event providing for not less than thirty days notice to the
Administrative Agent prior to cancellation of the underlying policy
(or, in the case of any proposed cancellation for non-payment of
premiums, 10 days notice).
(h) All legal matters relating to the Lake Charles Project shall
be satisfactory to Sheppard, Mullin, Richter & Hampton LLP, special counsel
to the Administrative Agent.
8.3 Conditions to Revolving Obligations Which Exceed $25,000,000 and
to Withdrawals From The Completion Reserve Account. The obligation of each
Revolving Lender to make any Advance, the obligation of the Issuing Lender to
issue any Letter of Credit, and the obligation of the Swing Line Lender to make
any Swing Line Loan, in each case to the extent that the same results in the
Revolving Obligations being in excess of $25,000,000, and the right of the
Borrower to make each withdrawal from the Completion Reserve Account, are each
subject to the following conditions precedent, each of which shall be satisfied
prior to the making or issuance of any such Loan, Letter of Credit or Swing Line
Loan or the making of any such withdrawal (unless that portion of the Lenders
required by Section 12.2 shall otherwise agree in their sole discretion):
(a) The conditions precedent set forth in Section 8.2 shall have
been satisfied;
(b) Except in the case of any withdrawal of funds from the
Completion Reserve Account which does not result in the aggregate amount
withdrawn from the Completion Reserve Account following the Closing Date
being in excess of $25,000,000, Borrower shall have deposited into the
Completion Reserve Account, Net After Tax Proceeds in an aggregate amount
which is not less than $40,000,000 (in addition to any funds deposited
therein from the proceeds of the Term Commitment or otherwise) in
accordance with Section 9.4(b);
(c) Borrower shall have demonstrated to the satisfaction of the
Administrative Agent that it has, during the period following September 30,
2002, expended not less than $90,000,000 of the Excess Cash to finance
Committed Projects and transactional expenses associated with this
Agreement;
(d) Unless the Lake Charles Completion Date has occurred,
Borrower shall certify to the Administrative Agent and the Lenders that the
In-Balance Requirement has been satisfied as of the last day of then most
recently ended calendar month for which the delivery of an In-Balance
Certificate is required to have been delivered pursuant to Section 7.1(m);
(e) Unless the Lake Charles Completion Date has occurred,
Borrower shall certify to the Administrative Agent and the Lenders that
there has been no material and adverse change to the sources or uses of the
components of the In-Balance Requirement which
-96-
would indicate that Borrower does not have sufficient sources of funds to
finance the Committed Capital Expenditure Amount; and
(f) In the case of any Loan, Letter of Credit or Swing Line Loan,
the entire amount of the Completion Reserve Account shall have been
expended in accordance with the terms hereof, or the Completion Reserve
Account shall have been terminated in accordance with Section 9.5 or
Section 9.6; and
(g) The Administrative Agent (or the Majority Lenders) and the
Construction Consultant shall be satisfied with the completion bonds
provided by the Lake Charles Contractor in respect of the obligations of
the Lake Charles Contractor and LEEVAC, provided that the amount of such
bonds shall not be required to exceed the total consideration payable under
the relevant contract.
8.4 Conditions to Lake Charles Project Financings. The obligation of
each Revolving Lender to make any Advance, the obligation of the Issuing Lender
to issue any Letter of Credit, and the right of the Borrower to make each
withdrawal from the Completion Reserve Account, in each case to the extent that
the same will be used to finance or support to finance or support the costs of
the design, development or construction of the Lake Charles Project (including
any costs described in the Construction Budget), are each subject to the
following conditions precedent, each of which shall be satisfied prior to the
making or issuance of any such Loan or Letter of Credit or the making of any
such withdrawal (unless that portion of the Lenders required by Section 12.2
shall otherwise agree in their sole discretion):
(a) No Swing Line Loans shall be requested under this Section;
(b) Not later than the third Business Day of each calendar month,
Borrower shall submit, or shall cause the Lake Charles Contractor to
submit, to the Administrative Agent and the Construction Consultant a draft
Draw Package, detailing all expenses associated with the Lake Charles
Project anticipated to be paid during that calendar month;
(c) On one or more dates which are mutually convenient to the
Borrower and the Construction Consultant, but in any event prior to the
tenth day of each calendar month, Borrower shall cause representatives of
the Borrower and the Lake Charles Contractor to be available to meet with
the Construction Consultant at the site of the Lake Charles Project to
review the initial Draw Package submitted by the Borrower, and shall
attempt to resolve any discrepancies associated with the draft Draw
Package.
(d) Not later than the fifteenth day of each calendar month (or,
if such date is not a Business Day, on the next Business Day), Borrower
shall submit, or shall cause the Lake Charles Contractor to submit, a
revised and final Draw Package to the Administrative Agent and the
Construction Consultant, together with any supporting materials requested
by the Administrative Agent or the Construction Consultant in response to
the draft Draw Package for that calendar month, provided that the
Administrative Agent shall endeavor to provide any such requests as
promptly as possible. The final Draw Package shall be appropriately
executed by the Lake Charles Architect and the Lake Charles Contractor or
other appropriate contracting parties, and shall be accompanied by a
Request for Loan\\Withdrawal Certificate stating the amount of the Loans
and Withdrawals requested by Borrower in relation to the Draw Package and
specifying that the same are to be credited to the Borrower on the last day
of the current calendar month.
-97-
(e) The Construction Consultant shall have delivered a
Construction Progress Report to the Administrative Agent detailing its
findings in relation to the Lake Charles Project through the then current
month, and shall have approved the funding of the amount requested in the
Request for Loan\\Withdrawal Certificate referred to in clause (d) (or a
portion thereof mutually agreed upon as appropriate by the Administrative
Agent, the Construction Consultant and the Borrower upon any discussion or
review of the final Draw Package).
(f) The requested Loan or withdrawal from the Completion Reserve
Account shall be made on the last Business Day of the related calendar
month.
-98-
ARTICLE 9
THE COMPLETION RESERVE ACCOUNT
9.1 General. Borrower has established, and hereafter agrees to
maintain the Completion Reserve Account. Concurrently with the Closing Date, the
net proceeds of the Term Loans made on the Closing Date (after deduction of the
original issue discount contemplated by Section 3.4, shall be deposited into the
Completion Reserve Account). Borrower hereby grants a security interest to the
Administrative Agent in the Completion Account to secure the Obligations.
9.2 Investments and Withdrawals. Borrower may direct the
Administrative Agent regarding investment of funds contained in the Completion
Reserve Account in Cash Equivalents. Borrower shall not have any right to
withdraw funds from the Completion Reserve Account (or any of the income upon
investment thereof), except (a) for the financing of the Committed Capital
Expenditure Amount subject to the fulfillment of the conditions precedent set
forth in Sections 8.3 and 8.4, and (b) upon any termination of the Completion
Reserve Account in accordance with Section 9.5.
9.3 Priority of Distributions. In the event that the Lenders elect to
exercise their remedies under Article 10 upon the occurrence of any Event of
Default, or upon early application of the Completion Reserve Account in
accordance with Section 9.6, the funds contained in the Completion Reserve
Account shall be applied (a) first, to the reasonable expenses of the
Administrative Agent, (b) second to the outstanding principal amount of, and
interest on, the Term Loans until the same are paid in full, (c) third, to the
outstanding principal amount of, and interest on, the Revolving Loans and to the
other Obligations until the same are paid in full, and then (d) returned to
Borrower or the other Persons legally entitled thereto. In the event that the
Completion Reserve Account is closed as contemplated by Section 9.5 without any
such exercise of remedies, then any funds then remaining in the Completion
Reserve Account shall be used as described in Section 9.5, provided that,
notwithstanding the foregoing provisions of this Section, any amounts deposited
into the Completion Reserve Account by reason of the Secondary Earned Basket
Amount shall be (i) deemed utilized by withdrawals from the Completion Reserve
Account following their deposit prior to funds contained in the Completion
Reserve Account derived from other sources, but (ii) to the extent not so
utilized, shall be distributed ratably the holders of all of the Obligations
(without priority as to any Lender).
9.4 Required Deposits. Borrower shall make the following deposits into
the Completion Reserve Account, in each case on the relevant dates set forth
below:
(a) On the Closing Date, the net proceeds of the Term Loans made
on the Closing Date (after deduction of original issue discount);
(b) On the date of the receipt by Borrower or its Restricted
Subsidiaries of any Net After Tax Proceeds prior to the date upon which the
Completion Reserve Account is terminated pursuant to Section 9.5 or Section
9.6, until $40,000,000 in Net After Tax Proceeds has been so deposited;
(c) On the date of the receipt by Borrower or its Restricted
Subsidiaries of any Net After Tax Proceeds which, in the aggregate, exceed
$45,000,000 following the
-99-
Closing Date, in an amount equal to 50% thereof, unless Borrower elects to
prepay the Loans instead using such amount in accordance with Section
3.1(e)(vi);
(d) On the date of the receipt by Borrower or its Restricted
Subsidiaries of any proceeds of the issuance of any proceeds of Qualifying
Indebtedness, in the amount of the net cash proceeds to Borrower and its
Restricted Subsidiaries.
9.5 Post Construction Termination of the Completion Reserve Account.
(a) On the date which is six months following the Lake Charles Completion Date,
Borrower shall direct the Administrative Agent to notify the Lenders that the
Completion Reserve Account is to be closed, and that the Term Lenders, at their
sole option, are entitled to a ratable prepayment of the Term Loans in
accordance with this Section.
(b) On the fifth Business Day following the provision of such
notice by the Administrative Agent, Borrower shall direct the
Administrative Agent to disburse and apply the then remaining funds in the
Completion Reserve Account ratably in the proportion that the Revolving
Commitment and the Term Loan Commitment then bear to one another:
(1) To the then outstanding Revolving Loans (and/or, to the
extent relevant, to the Swing Line Loans), but without reducing the
Revolving Commitment; and
(2) In the event that a majority in interest of the Term
Lenders elect to receive the prepayment of the Term Loans under this
Section, to the outstanding Term Loans.
In the event that fewer than a majority in interest of the Term
Lenders elect to receive the prepayment, then no Term Lender shall be
entitled to prepayment of its Term Loans, and the funds otherwise
payable to the Term Lenders shall be distributed to Borrower or to the
Person or Persons otherwise legally entitled thereto.
9.6 Early Termination of the Completion Reserve Account. In the event
that on July 1, 2004, Borrower has failed to deposit $40,000,000 or more of Net
After Tax Proceeds into the Completion Reserve Account in accordance with
Section 9.4(b) then, on that date, the Administrative Agent shall terminate the
Completion Reserve Account and apply the funds contained therein to the
Obligations in the order of preference described in Section 9.3.
-100-
ARTICLE 10
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
10.1 Events of Default. The existence or occurrence of any one or more
of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal on any of the Loans, or
any portion thereof, on the date when due; or
(b) Borrower fails to pay any interest on any of the Loans, or
any fees under Sections 3.5, 3.6, 3.7 or 3.8 or any portion thereof, within
two Business Days after the date when due; or fail to pay any other fee or
amount payable to the Lenders under any Loan Document, or any portion
thereof, within five Business Days after demand therefor; or
(c) Borrower fails to comply with any of the covenants contained
in Article 6; or
(d) Borrower fails to comply with Section 7.1(k) in any respect
that is materially adverse to the interests of the Lenders; or
(e) Borrower, any of the Significant Subsidiaries or any other
Party fails to perform or observe any other covenant or agreement (not
specified in clause (a), (b), (c) or (d) above) contained in any Loan
Document on its part to be performed or observed within thirty calendar
days after the giving of notice by the Administrative Agent of such
Default; or
(f) Any representation or warranty of Borrower or any of the
Significant Subsidiaries made in any Loan Document, or in any certificate
or other writing delivered by Borrower or such Significant Subsidiary
pursuant to any Loan Document, proves to have been false or misleading when
made or reaffirmed; or
(g) Borrower or any of the Restricted Subsidiaries (i) fails to
pay the principal, or any principal installment, of any present or future
indebtedness for borrowed money of $10,000,000 or more, or any guaranty of
present or future indebtedness for borrowed money of $10,000,000 or more,
on its part to be paid, when due (or within any stated grace period),
whether at the stated maturity, upon acceleration, by reason of required
prepayment or otherwise or (ii) fails to perform or observe any other term,
covenant or agreement on its part to be performed or observed, or suffers
any event of default to occur, in connection with any present or future
indebtedness for borrowed money of $10,000,000 or more, or of any guaranty
of present or future indebtedness for borrowed money of $10,000,000 or
more, if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to
declare such indebtedness due before the date on which it otherwise would
become due or the right to require Borrower or any Restricted Subsidiary to
redeem or purchase, or offer to redeem or purchase, all or any portion of
such indebtedness; or
(h) Any event occurs which gives the holder or holders of any
Subordinated Obligation (or an agent or trustee on its or their behalf) the
right to declare such Subordinated Obligation due before the date on which
it otherwise would become due, or the right to require the issuer thereof
to redeem or purchase, or offer to redeem or purchase, all or
-101-
any portion of any Subordinated Obligation; or the trustee for, or any
holder of, a Subordinated Obligation breaches any subordination provision
applicable to such Subordinated Obligation; or
(i) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement or action (or omission
to act) of the Administrative Agent or the Lenders or satisfaction in full
of all the Obligations ceases to be in full force and effect, fails to
constitute a valid Lien on the Properties of Borrower and its Significant
Subsidiaries in the manner contemplated thereby, or is declared by a court
of competent jurisdiction to be null and void, invalid or unenforceable in
any respect which, in any such event in the reasonable opinion of the
Majority Lenders, is materially adverse to the interests of the Lenders; or
any Party thereto denies in writing that it has any or further liability or
obligation under any Loan Document, that the Liens of the Administrative
Agent are invalid, or purports to revoke, terminate or rescind same; or
(j) A final judgment against any of Borrower or any of the
Restricted Subsidiaries is entered for the payment of money in excess of
$5,000,000 and, absent procurement of a stay of execution, such judgment
remains unsatisfied for thirty calendar days after the date of entry of
judgment, or in any event later than five days prior to the date of any
proposed sale thereunder; or any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of
the Property of any such Person and is not released, vacated or fully
bonded within thirty calendar days after its issue or levy; or
(k) Borrower or any of the Significant Subsidiaries institutes or
consents to the institution of any proceeding under a Debtor Relief Law
relating to it or to all or any material part of its Property, or is unable
or admits in writing its inability to pay its debts as they mature, or
makes an assignment for the benefit of creditors; or applies for or
consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all
or any material part of its Property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed
without the application or consent of that Person and the appointment
continues undischarged or unstayed for sixty calendar days; or any
proceeding under a Debtor Relief Law relating to any such Person or to all
or any part of its Property is instituted without the consent of that
Person and continues undismissed or unstayed for sixty calendar days; or
(l) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any
other Loan Document; or
(m) A final judgment is entered by a court of competent
jurisdiction that any Subordinated Obligation is not subordinated in
accordance with its terms to the Obligations; or
(n) Any Pension Plan maintained by Borrower or any of the
Restricted Subsidiaries is determined to have a material "accumulated
funding deficiency" as that term is defined in Section 302 of ERISA and
which constitutes a Material Adverse Effect; or
(o) The occurrence of a License Revocation that continues for
three consecutive calendar days affecting gaming operations accounting for
five percent or more of the consolidated gross revenues for the most
recently ended Fiscal Quarter of Borrower and the Restricted Subsidiaries.
-102-
10.2 Remedies Upon Event of Default. Without limiting any other rights
or remedies of the Administrative Agent or the Lenders provided for elsewhere in
this Agreement, or the other Loan Documents, or by applicable Law or in equity,
or otherwise:
(a) Upon the occurrence, and during the continuance, of any Event
of Default other than an Event of Default described in Section 10.1(k):
(i) the Commitments to make Advances, the obligation of the
Issuing Lender to issue Letters of Credit and all other obligations of
the Administrative Agent or the Lenders and all rights of Borrower and
any other Parties under the Loan Documents shall be suspended without
notice to or demand upon Borrower, which are expressly waived by
Borrower, except that that portion of the Lenders required pursuant to
Section 12.2 may waive an Event of Default or, without waiving,
determine, upon terms and conditions satisfactory to such Lenders to
reinstate the Commitments and such other obligations and rights and
make further Advances, and cause the Issuing Lender to issue further
Letters of Credit which waiver or determination shall apply equally
to, and shall be binding upon, all the Lenders;
(ii) the Issuing Lender may, with the approval of the
Administrative Agent on behalf of the Majority Lenders, demand
immediate payment by Borrower of an amount equal to the aggregate
amount of all outstanding Letters of Credit to be held by the Issuing
Lender in an interest-bearing cash collateral account as collateral
hereunder; and
(iii) the Majority Lenders may request the Administrative
Agent to, and the Administrative Agent thereupon shall, terminate the
Commitments and/or declare all or any part of the unpaid principal of
all Loans, all interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents to be forthwith due and
payable, whereupon the same shall become and be forthwith due and
payable, without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived by
Borrower.
(b) Upon the occurrence of any Event of Default described in
Section 10.1(k):
(i) the Commitments to make Advances, the obligation of the
Issuing Lender to issue Letters of Credit and all other obligations of
the Administrative Agent or the Lenders and all rights of Borrower and
any other Parties under the Loan Documents shall terminate without
notice to or demand upon Borrower, which are expressly waived by
Borrower, except that all of the Lenders may waive the Event of
Default or, without waiving, determine, upon terms and conditions
satisfactory to all the Lenders, to reinstate the Commitments and such
other obligations and rights and make further Advances and to cause
the Issuing Lender to issue further Letters of Credit, which
determination shall apply equally to, and shall be binding upon, all
the Lenders;
(ii) an amount equal to the aggregate amount of all
outstanding Letters of Credit shall be immediately due and payable to
the Issuing Lender without notice to or demand upon Borrower, which
are expressly waived by Borrower, to be
-103-
held by the Issuing Lender in an interest-bearing cash collateral
account as collateral hereunder; and
(iii) the unpaid principal of all Loans, all interest
accrued and unpaid thereon and all other amounts payable under the
Loan Documents shall be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any kind,
all of which are expressly waived by Borrower.
(c) Upon the occurrence of any Event of Default, the Lenders and
the Administrative Agent, or any of them, without notice to (except as
expressly provided for in any Loan Document) or demand upon Borrower, which
are expressly waived by Borrower (except as to notices expressly provided
for in any Loan Document), may proceed (but only with the consent of the
Majority Lenders) to protect, exercise and enforce their rights and
remedies under the Loan Documents against Borrower and any other Party and
such other rights and remedies as are provided by Law or equity (as further
described in Section 10.3).
(d) The order and manner in which the Lenders' rights and
remedies are to be exercised shall be determined by the Majority Lenders in
their sole discretion, and all payments received by the Administrative
Agent and the Lenders, or any of them, shall be applied first to the costs
and expenses (including Attorney Costs of the Administrative Agent or any
Lender) of the Administrative Agent and of the Lenders, and thereafter paid
pro rata to the Lenders in the same proportions that the aggregate
Obligations owed to each Lender under the Loan Documents bear to the
aggregate Obligations owed under the Loan Documents to all the Lenders,
without priority or preference among the Lenders. Regardless of how each
Lender may treat payments for the purpose of its own accounting, for the
purpose of computing Borrower's Obligations hereunder and under the Notes,
payments shall be applied first, to the costs and expenses of the
Administrative Agent and the Lenders, as set forth above, second, to the
payment of accrued and unpaid interest due under any Loan Documents to and
including the date of such application (ratably, and without duplication,
according to the accrued and unpaid interest due under each of the Loan
Documents), and third, to the payment of all other amounts (including
principal and fees) then owing to the Administrative Agent or the Lenders
under the Loan Documents. Amounts due to a Lender under a Secured Swap
Agreement shall be considered a principal amount for purposes of the
preceding sentence. No application of payments will cure any Event of
Default, or prevent acceleration, or continued acceleration, of amounts
payable under the Loan Documents, or prevent the exercise, or continued
exercise, of rights or remedies of the Lenders hereunder or thereunder or
at Law or in equity.
10.3 Gaming Laws and Liquor Laws. Any other provision of this
Agreement or any other Loan Document to the contrary notwithstanding, all
rights, remedies and powers provided in this Loan Agreement and the other Loan
Documents including in respect of the Collateral, may be exercised only to the
extent and in the manner that the exercise thereof does not violate any
applicable Gaming Laws, and all provisions of this Loan Agreement and the other
Loan Documents relative to the Collateral are intended to be subject to all
applicable mandatory provisions of the Gaming Laws and to be limited solely to
the extent necessary to not render the provisions of this Agreement and the
other Loan Documents invalid or unenforceable, in whole or in part. The
Administrative Agent will timely apply for and receive all required approvals of
the applicable Gaming Board for the sale or other disposition of any Collateral,
including without limitation any interest in any Restricted Subsidiary holding
any gaming license and any gaming equipment regulated by Gaming Laws (including
any such sale or disposition of gaming equipment consisting of slot machines,
gaming tables, cards, dice, gaming chips, player tracking systems, and all other
"gaming devices" (as such
-104-
terms or words of like import referring thereto are defined in the applicable
Gaming Laws), and "associated equipment" (as such term or words of like import
referring thereto are defined in the applicable Gaming Laws)). Without limiting
the foregoing, the Lenders and Secured Party acknowledge that (i) they are
subject to being called forward by Gaming Boards or Liquor Authorities, in their
discretion, for licensing or a finding of suitability or to file or provide
other information, and (ii) all rights, remedies and powers in or under this
Agreement may be exercised only to the extent that the exercise thereof does not
violate any applicable provisions of the Gaming Laws and the Liquor Laws and
only to the extent that required approvals (including prior approvals) are
obtained from the requisite Gaming Board and the Liquor Authorities. The Lenders
and Secured Party agree to cooperate with the Gaming Board and the Liquor
Authorities in connection with the provision of such documents or other
information as may be requested by such Gaming Board and the Liquor Authorities.
-105-
ARTICLE 11
THE ADMINISTRATIVE AGENT
11.1 Appointment and Authorization.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere herein or in any other Loan
Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship
with any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing
sentence, the use of the term "agent" herein and in the other Loan
Documents with reference to the Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising
under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting
parties.
(b) The Issuing Lender shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith, and the Issuing Lender shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article 11 with
respect to any acts taken or omissions suffered by the Issuing Lender in
connection with Letters of Credit issued by it or proposed to be issued by
it and the applications and agreements for letters of credit pertaining to
such Letters of Credit as fully as if the term "Administrative Agent" as
used in this Article 11 and in the definition of "Agent-Related Person"
included the Issuing Lender with respect to such acts or omissions, and
(ii) as additionally provided herein with respect to the Issuing Lender.
11.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
11.3 Liability of Administrative Agent. No Agent-Related Person shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Party or any other party to any Loan Document
-106-
to perform its obligations hereunder or thereunder. No Agent-Related Person
shall be under any obligation to any Lender or participant to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Party or any Affiliate thereof.
11.4 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel
(including counsel to any Party), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under any Loan
Document unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of that portion of the Lenders required by Section 12.2) and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Article 8, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to
the Closing Date specifying its objection thereto.
11.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Majority
Lenders in accordance with Article 10; provided, however, that unless and until
the Administrative Agent has received any such direction, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable or
in the best interest of the Lenders.
11.6 Credit Decision; Disclosure of Information by Administrative
Agent. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Party or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed
-107-
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower and the other Parties. Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.
11.7 Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Party and without limiting the obligation of any Party to do so),
pro rata, and hold harmless each Agent-Related Person from and against any and
all Indemnified Liabilities incurred by it; provided, however, that no Lender
shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of that portion
of the Lenders required by Section 12.2 shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of Borrower. The undertaking in
this Section shall survive termination of the Commitments, the payment of all
other Obligations and the resignation of the Administrative Agent.
11.8 Administrative Agent in its Individual Capacity. Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with each of the Parties and their respective Affiliates as though Bank of
America were not the Administrative Agent or the Issuing Lender hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Party or its Affiliates (including information that
may be subject to confidentiality obligations in favor of such Party or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans, Bank
of America shall have the same rights and powers under this Agreement as any
other Lender and may exercise such rights and powers as though it were not the
Administrative Agent or the Issuing Lender, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
-108-
11.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders; provided
that any such resignation by Bank of America shall also constitute its
resignation as Issuing Lender and Swing Line Lender. If the Administrative Agent
resigns under this Agreement, the Majority Lenders shall appoint from among the
Lenders a successor administrative agent for the Lenders, which successor
administrative agent shall be consented to by Borrower at all times other than
during the existence of an Event of Default (which consent of Borrower shall not
be unreasonably withheld or delayed). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, the
Person acting as such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent, Issuing Lender
and Swing Line Lender and the respective terms "Administrative Agent," "Issuing
Lender" and "Swing Line Lender" shall mean such successor administrative agent,
Issuing Lender and swing line lender, and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated and
the retiring Issuing Lender's and Swing Line Lender's rights, powers and duties
as such shall be terminated, without any other or further act or deed on the
part of such retiring Issuing Lender or Swing Line Lender or any other Lender,
other than the obligation of the successor Issuing Lender to issue letters of
credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or to make other arrangements satisfactory to the
retiring Issuing Lender to effectively assume the obligations of the retiring
Issuing Lender with respect to such Letters of Credit. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article 11 and Sections 12.3, 12.11 and 12.22 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Majority Lenders appoint a successor
agent as provided for above.
11.10 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Party, the Administrative Agent (irrespective of
whether the principal of any Loan or Letter of Credit Obligation shall then be
due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
Borrower) shall be entitled and empowered, by intervention in such proceeding or
otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, Letter of
Credit Obligations and all other Obligations that are owing and unpaid and
to file such other documents as may be necessary or advisable in order to
have the claims of the Lenders and the Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under Sections 2.4(i) and (j), 3.2, 3.9, 3.10 and 12.3) allowed in such
judicial proceeding; and
(b) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute the same;
-109-
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 3.9, 3.10 and 12.3.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
11.11 Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Administrative Agent, at its option and in its discretion,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Commitments and payment in full of all Obligations (other than contingent
indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in
connection with any Disposition permitted hereunder or under any other Loan
Document (including without limitation any Disposition of Permitted Sale
Assets permitted hereunder), or (iii) subject to Section 12.2, if approved,
authorized or ratified in writing by the Majority Lenders; and
(b) to release any Significant Subsidiary from its obligations
under the Subsidiary Guaranty, if such Person ceases to be a Subsidiary as
a result of a transaction permitted hereunder and to correspondingly
release any equity securities of that Subsidiary Guaranty which are pledged
to the Administrative Agent.
Upon request by the Administrative Agent at any time, the Majority
Lenders will confirm in writing the Administrative Agent's authority to release
or subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations under the Subsidiary Guaranty
pursuant to this Section.
11.12 Other Agents; Arrangers and Managers. None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a "Syndication Agent," "Documentation Agents," "Joint Lead Arranger,"
"Co-Arranger," "Managing Agents," "co-agent," "book manager," "lead manager,"
"arranger," "lead arranger" or "co-arranger" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than,
in the case of such Lenders, those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders or other Persons so identified shall
have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders or other Persons so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder.
-110-
ARTICLE 12
MISCELLANEOUS
12.1 Cumulative Remedies; No Waiver. The rights, powers, privileges
and remedies of the Administrative Agent and the Lenders provided herein or in
any Note or other Loan Document are cumulative and not exclusive of any right,
power, privilege or remedy provided by Law or equity. No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power,
privilege or remedy may be, or may be deemed to be, a waiver thereof; nor may
any single or partial exercise of any right, power, privilege or remedy preclude
any other or further exercise of the same or any other right, power, privilege
or remedy. The terms and conditions of Article 8 hereof are inserted for the
sole benefit of the Administrative Agent and the Lenders; the same may be waived
in whole or in part, with or without terms or conditions, in respect of any Loan
or Letter of Credit without prejudicing the Administrative Agent's or the
Lenders' rights to assert them in whole or in part in respect of any other Loan
or Letter of Credit.
12.2 Amendments; Consents.
(a) No amendment, modification, supplement, extension,
termination or waiver of any provision of this Agreement or any other Loan
Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the
written consent of the Majority Lenders (or, as set forth in clauses (b)
and (c), that greater portion of the Lenders required by this Section
12.2), and, in the case of any amendment, modification or supplement of or
to any Loan Document to which Borrower or any Significant Subsidiary is a
Party, signed by each such Party, and then only in the specific instance
and for the specific purpose given.
(b) Without the written consent of each affected Lender, no
amendment, modification, supplement, termination, waiver or consent may be
effective:
(1) To reduce or forgive the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on,
any Note, or the amount of any commitment fee payable to any Lender,
or any other fee or amount payable to any Lender under the Loan
Documents;
(2) To increase the amount of the Commitments or the Pro
Rata Share of any Lender (except as provided in Section 2.8 and
Section 2.12);
(3) To waive an Event of Default consisting of the failure
of Borrower to pay principal, interest or any commitment fee when due;
(4) To amend (i) the term "Revolving Maturity Date" without
the consent of all of the Revolving Lenders, (ii) the term "Term
Maturity Date" without the consent of all of the Term Lenders, or
(iii) to shorten the "Revolving Maturity Date" without the consent of
the Term Lenders, or (iv) to shorten the "Term Maturity Date" without
the consent of the Revolving Lenders;
(5) To otherwise postpone any date fixed for any payment of
principal of (including any Term Loan amortization payment),
prepayment of principal of or any installment of interest on, any Note
or any installment of any
-111-
commitment fee, or to release any Significant Subsidiary from the
Subsidiary Guaranty (except as to any Subsidiary which is the subject
of a permitted Disposition);
(6) To release any material portion of the Collateral except
as otherwise expressly provided for in any Loan Document;
(7) To amend the provisions of the definition of "Majority
Lenders", the definition of "Required Lenders", or this Section 12.2
or to amend or waive Section 6.4;
(8) To delete the requirement that the Completion Reserve
Account be maintained in accordance with Article 9;
(9) To amend the provisions of Section 3.14(d), 9.3 and
10.2(d) to alter the manner in which payments are allocated amongst
the Administrative Agent, the Revolving Lenders and the Term Lenders;
(10) to delete the requirement for any mandatory prepayment
of the Loans described in Article 3;
(11) to modify the manner in which proceeds received from
Collateral or other realization upon the Collateral are applied to the
Obligations; or
(12) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Lenders.
(c) Without the consent of the Required Lenders, no amendment,
modification, supplement, termination, waiver or consent may be effective:
(1) to amend, modify, supplement, terminate, or waive the
provisions of Sections 6.11, 6.12 or 6.13 or the definitions of "Net
Senior Debt Ratio," "Net Total Debt Ratio," "Fixed Charge Coverage
Ratio" or any of the constituent definitions of such financial ratios
which would alter the manner in which the same are calculated or the
periods for which any components of these ratios are calculated;
(2) to amend, modify, supplement, terminate, or waive the
provisions of Section 6.18, the definition of "In-Balance
Requirement," the requirement of delivery of In-Balance Certificates
or any of the definitions set forth herein in a manner which would
alter the manner in which the In-Balance Requirement is calculated; or
(3) to amend, modify, supplement, terminate, or waive the
provisions of Sections 8.1, 8.2(e), 8.3(b), (c), (d), (e) or (f) or
Article 9.
(d) Any amendment, modification, supplement, termination, waiver
or consent pursuant to this Section 12.2 shall apply equally to, and shall
be binding upon, all the Lenders and the Administrative Agent.
12.3 Costs, Expenses and Taxes. Borrower agrees (a) to pay or
reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development,
-112-
preparation, negotiation and execution of this Agreement and the other Loan
Documents, any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), the consummation and administration of the
transactions contemplated hereby and thereby, including all Attorney Costs and
the exercise of its rights under Section 5.6, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. Borrower
shall also pay on demand the expenses of the Construction Consultant in
connection with the monitoring services provided by the Construction Consultant
(all as more fully set out in a letter agreement between the Administrative
Agent and Borrower). The foregoing costs and expenses shall include all search,
filing, recording, title insurance and appraisal charges and fees and taxes
related thereto, and other out-of-pocket expenses incurred by the Administrative
Agent and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. All amounts due under this
Section 12.3 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the termination of the Commitments
and repayment of all other Obligations.
12.4 Nature of Lenders' Obligations. The obligations of the Lenders
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the
Administrative Agent or the Lenders or any of them pursuant hereto or thereto
may, or may be deemed to, make the Lenders a partnership, an association, a
joint venture or other entity, either among themselves or with Borrower or any
Affiliate of Borrower. Each Lender's obligation to make any Advance pursuant
hereto is several and not joint or joint and several, and in the case of the
initial Advance only is conditioned upon the performance by all other Lenders of
their obligations to make initial Advances. A default by any Lender will not
increase the Pro Rata Share of the Commitments attributable to any other Lender.
Any Lender not in default may, if it desires, assume in such proportion as the
nondefaulting Lenders agree the obligations of any Lender in default, but is not
obligated to do so. The Administrative Agent agrees that it will use its best
efforts either to induce the other Lenders to assume the obligations of a Lender
in default or to obtain another Lender, reasonably satisfactory to Borrower, to
replace such a Lender in default.
12.5 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Advance or the issuance of a Letter of Credit,
and shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
12.6 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be
mailed, faxed or delivered to the applicable address, facsimile number or
(subject to subsection (c) below) electronic mail address, and all
-113-
notices and other communications expressly permitted hereunder to be given
by telephone shall be made to the applicable telephone number, as follows:
(i) if to Borrower, the Administrative Agent, the Issuing
Lender or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person
on the signature pages hereof or to such other address, facsimile
number, electronic mail address or telephone number as shall be
designated by such party in a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile
number, electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile
number, electronic mail address or telephone number as shall be
designated by such party in a notice to Borrower, the Administrative
Agent, the Issuing Lender and the Swing Line Lender.
All such notices and other communications shall be deemed to be given or
made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by
or on behalf of the relevant party hereto; (B) if delivered by mail, four
Business Days after deposit in the mails, postage prepaid; (C) if delivered
by facsimile, when sent and receipt has been confirmed by telephone; and
(D) if delivered by electronic mail (which form of delivery is subject to
the provisions of subsection (c) below), when delivered; provided, however,
that notices and other communications to the Administrative Agent, the
Issuing Lender and the Swing Line Lender pursuant to Article 2 shall not be
effective until actually received by such Person. In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness
of any such documents and signatures shall, subject to applicable Law, have
the same force and effect as manually-signed originals and shall be binding
on all Parties, the Administrative Agent and the Lenders. The
Administrative Agent may also require that any such documents and
signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit
the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet
and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as
provided in Article 7, and to distribute Loan Documents for execution by
the parties thereto, and may not be used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The
Administrative Agent and the Lenders shall be entitled to rely and act upon
any notices (including telephonic Requests for Letter of Credit)
purportedly given by or on behalf of Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation
thereof. Borrower shall indemnify each Agent-Related Person and each Lender
from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of
Borrower. All telephonic notices to and other communications with the
Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.
-114-
12.7 Execution of Loan Documents. Unless the Administrative Agent
otherwise specifies with respect to any Loan Document, (a) this Agreement and
any other Loan Document may be executed in any number of counterparts and any
party hereto or thereto may execute any counterpart, each of which when executed
and delivered will be deemed to be an original and all of which counterparts of
this Agreement or any other Loan Document, as the case may be, when taken
together will be deemed to be but one and the same instrument and (b) execution
of any such counterpart may be evidenced by a telecopier transmission of the
signature of such party. The execution of this Agreement or any other Loan
Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.
12.8 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the
provisions of subsection (d) of this Section, or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection
(f) or (h) of this Section, or (iv) to an SPC in accordance with the
provisions of subsection (g) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon
any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection
(d) of this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Pro Rata Share of the
Commitments and the Loans (including for purposes of this subsection (b),
participations in Letter of Credit Obligations and in Swing Line Loans) at
the time owing to it); provided that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender's
Commitments and the Obligations at the time owing to it, or in the case of
an assignment to a Lender or an Affiliate of a Lender or an Approved Fund
with respect to a Lender, the aggregate amount of the relevant Commitment
(which for this purpose includes Loans outstanding thereunder) subject to
each such assignment, determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent or, if "Trade Date" is specified in the Assignment and
Acceptance, as of the Trade Date, shall not be less than $1,000,000 unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); (ii) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement with respect to the
Loans or the Commitment assigned, except that this clause (ii) shall not
apply to rights in respect of Swing Line Loans; (iii) each assignment of a
Pro Rata Share must be approved by the Administrative Agent unless the
Person that is the proposed assignee is itself a Lender (or in the case of
an assignment of an interest in the Term Loans only, an Affiliate of a
Lender or an Approved Fund, and in each case whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee), such consent not
to unreasonably withheld; and (iv) the parties to each assignment shall
-115-
execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500
(provided that only a single such fee shall be required in respect of
concurrent assignments to not more than five Approved Funds managed by a
single manager or advisor). Subject to acceptance and recording thereof by
the Administrative Agent pursuant to subsection (c) of this Section, from
and after the effective date specified in each Assignment and Acceptance,
the Eligible Assignee thereunder shall be a party to this Agreement and, to
the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned
by such Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 3.9, 3.10, 12.3 and 12.11 with respect
to facts and circumstances occurring prior to the effective date of such
assignment). Upon request, Borrower (at its expense) shall execute and
deliver appropriate Notes to the assignee Lender. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that
does not comply with this subsection shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as
an agent of Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and Letter of Credit
Obligations owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and
Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by Borrower
and any Lender, at any reasonable time and from time to time upon
reasonable prior notice. In the event a Lender assigns an interest in its
Term Loan to any Affiliate of such Lender or an Approved Fund of such
Lender and does not notify the Borrower or the Administrative Agent of such
assignment, (i) the assigning Lender shall keep and maintain a supplemental
register of each such assignment which is not reflected in the
Administrative Agent's Register, (ii) until the assigning Lender delivers
to the Agent a fully executed copy of the assignment and acceptance
agreement pertaining to such assignment in accordance with this Section
12.8, the Administrative Agent, the Lenders and the Borrower shall be
entitled to treat the assigning Lender as the party to this Agreement
(without regard to the assignee), and (iii) the assigning Lender shall, at
the request of Borrower or the Administrative Agent, promptly provide
access to, or a copy of, such supplemental register and any information
concerning the assignee.
(d) Any Lender may at any time, without the consent of, or notice
to, Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or Borrower or any of Borrower's Affiliates or
Subsidiaries ) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion
of its Commitment and/or the Loans (including such Lender's participations
in Letter of Credit Obligations and/or Swing Line Loans) owing to it);
provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii)
Borrower, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations
-116-
under this Agreement. Any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender
will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 12.2
that directly affects such Participant. Subject to subsection (e) of this
Section, Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.9, 3.10 and 3.14(f) to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to subsection
(b) of this Section. To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 12.9 as though it were a
Lender, provided such Participant agrees to be subject to Section 12.10 as
though it were a Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Sections 3.9, 3.10 or 3.14(f) than the applicable Lender
would have been entitled to receive with respect to the participation sold
to such Participant, unless the sale of the participation to such
Participant is made with Borrower's prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of Section 3.10 unless Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of Borrower, to comply with Section 12.21 as though it were a
Lender.
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.
(g) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and Borrower (an "SPC") the option to
provide all or any part of any Advance that such Granting Lender would
otherwise be obligated to make pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to fund any
Advance, and (ii) if an SPC elects not to exercise such option or otherwise
fails to make all or any part of such Advance, the Granting Lender shall be
obligated to make such Advance pursuant to the terms hereof. Each party
hereto hereby agrees that (i) neither the grant to any SPC nor the exercise
by any SPC of such option shall increase the costs or expenses or otherwise
increase or change the obligations of Borrower under this Agreement
(including its obligations under Sections 3.9, 3.10 and 3.14(f)), (ii) no
SPC shall be liable for any indemnity or similar payment obligation under
this Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment,
waiver or other modification of any provision of any Loan Document, remain
the lender of record hereunder. The making of a Advance by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and
as if, such Advance were made by such Granting Lender. In furtherance of
the foregoing, each party hereto hereby agrees (which agreement shall
survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding
commercial paper or other senior Indebtedness of any SPC, it will not
institute against, or join any other Person in instituting against, such
SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation
proceeding under the laws
-117-
of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without
prior consent of Borrower and the Administrative Agent and with the payment
of a processing fee of $3,500, assign all or any portion of its right to
receive payment with respect to any Advance to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Advances to any rating agency, commercial paper dealer or
provider of any surety or guarantee or credit or liquidity enhancement to
such SPC.
(h) Notwithstanding anything to the contrary contained herein,
any Lender that is a Fund may create a security interest in all or any
portion of the Loans owing to it and the Note, if any, held by it to the
trustee for holders of obligations owed, or securities issued, by such Fund
as security for such obligations or securities, provided that unless and
until such trustee actually becomes a Lender in compliance with the other
provisions of this Section 12.8, (i) no such pledge shall release the
pledging Lender from any of its obligations under the Loan Documents and
(ii) such trustee shall not be entitled to exercise any of the rights of a
Lender under the Loan Documents even though such trustee may have acquired
ownership rights with respect to the pledged interest through foreclosure
or otherwise.
(i) Notwithstanding anything to the contrary contained herein, if
at any time Bank of America assigns all of its Commitment and Loans
pursuant to subsection (b) above, Bank of America may, (i) upon 30 days'
notice to Borrower and the Lenders, resign as Issuing Lender and/or (ii)
upon 30 days' notice to Borrower, resign as Swing Line Lender. In the event
of any such resignation as Issuing Lender or Swing Line Lender, Borrower
shall be entitled to appoint from among the Lenders a successor Issuing
Lender or Swing Line Lender hereunder; provided, however, that no failure
by Borrower to appoint any such successor shall affect the resignation of
Bank of America as Issuing Lender or Swing Line Lender, as the case may be.
If Bank of America resigns as Issuing Lender, it shall retain all the
rights and obligations of the Issuing Lender hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation
as Issuing Lender and all Letter of Credit Obligations with respect thereto
(including the right to require the Lenders to make Base Advances or fund
risk participations in Unreimbursed Amounts pursuant to Section 2.4). If
Bank of America resigns as Swing Line Lender, it shall retain all the
rights of the Swing Line Lender provided for hereunder with respect to
Swing Line Loans made by it and outstanding as of the effective date of
such resignation, including the right to require the Lenders to make Base
Advances or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.10.
12.9 Right of Setoff. If an Event of Default has occurred and is
continuing, the Administrative Agent or any Lender (but in each case only with
the consent of the Majority Lenders) may exercise its rights under Article 9 of
the Uniform Commercial Code and other applicable Laws and, to the extent
permitted by applicable Laws, apply any funds in any deposit account maintained
with it by Borrower and/or any Property of Borrower in its possession against
the Obligations.
12.10 Sharing of Setoffs. Each Lender severally agrees that if it,
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject to applicable
Laws: (a) the Lender exercising the right of setoff, banker's lien or
counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from the other Lender a participation
in the Obligations held by the other Lender and shall pay to the other Lender a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker's lien or counterclaim
or receipt of payment shall be in the same proportion that
-118-
existed prior to the exercise of the right of setoff, banker's lien or
counterclaim or receipt of payment; and (b) such other adjustments and purchases
of participations shall be made from time to time as shall be equitable to
ensure that all of the Lenders share any payment obtained in respect of the
Obligations ratably in accordance with each Lender's share of the Obligations
immediately prior to, and without taking into account, the payment; provided
that, if all or any portion of a disproportionate payment obtained as a result
of the exercise of the right of setoff, banker's lien, counterclaim or otherwise
is thereafter recovered from the purchasing Lender by Borrower or any Person
claiming through or succeeding to the rights of Borrower, the purchase of a
participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest. Each Lender that
purchases a participation in the Obligations pursuant to this Section 12.10
shall from and after the purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased. Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in an Obligation so purchased may exercise any and all
rights of setoff, banker's lien or counterclaim with respect to the
participation as fully as if the Lender were the original owner of the
Obligation purchased.
12.11 Indemnity by Borrower. Whether or not the transactions
contemplated hereby are consummated, Borrower shall indemnify and hold harmless
each Agent-Related Person, the Joint Lead Arrangers, the Co-Arranger, the
Syndication Agent, the Documentation Agents, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents, trustees, advisors
and attorneys-in-fact (collectively the "Indemnitees") from and against any and
all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Indemnitee in any way relating to or
arising out of or in connection with (a) the execution, delivery, enforcement,
performance or administration of any Loan Document or any other agreement,
letter or instrument delivered in connection with the transactions contemplated
thereby or the consummation of the transactions contemplated thereby, (b) any
Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the Issuing Lender to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit), or
(c) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory (including any investigation of, preparation for, or defense of any
pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities") , in all cases, whether or not
caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date). All amounts due under this
Section 12.11 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.
-119-
12.12 Nonliability of the Lenders. Borrower acknowledges and agrees
that:
(a) Any inspections of any Property of Borrower made by or
through the Administrative Agent or the Lenders are for purposes of
administration of the Loan only and Borrower is not entitled to rely upon
the same (whether or not such inspections are at the expense of Borrower);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Administrative Agent or the Lenders
pursuant to the Loan Documents, neither the Administrative Agent nor the
Lenders shall be deemed to have warranted or represented the sufficiency,
legality, effectiveness or legal effect of the same, or of any term,
provision or condition thereof, and such acceptance or approval thereof
shall not constitute a warranty or representation to anyone with respect
thereto by the Administrative Agent or the Lenders;
(c) The relationship between Borrower and the Administrative
Agent and the Lenders is, and shall at all times remain, solely that of
borrower and lenders; neither the Administrative Agent nor the Lenders
shall under any circumstance be construed to be partners or joint venturers
of Borrower or its Affiliates; neither the Administrative Agent nor the
Lenders shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with Borrower or its
Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
neither the Administrative Agent nor the Lenders undertake or assume any
responsibility or duty to Borrower or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Borrower or its Affiliates
of any matter in connection with its Property or the operations of Borrower
or its Affiliates; Borrower and its Affiliates shall rely entirely upon
their own judgment with respect to such matters; and any review,
inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by the Administrative Agent or the Lenders in
connection with such matters is solely for the protection of the
Administrative Agent and the Lenders and neither Borrower nor any other
Person is entitled to rely thereon; and
(d) The Administrative Agent and the Lenders shall not be
responsible or liable to any Person for any loss, damage, liability or
claim of any kind relating to injury or death to Persons or damage to
Property caused by the actions, inaction or negligence of Borrower and/or
its Affiliates and Borrower hereby indemnifies and holds the Administrative
Agent and the Lenders harmless on the terms set forth in Section 12.11 from
any such loss, damage, liability or claim.
12.13 No Third Parties Benefited. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Administrative Agent and the Lenders in connection with the Loans
and Letters of Credit, and is made for the sole benefit of Borrower, the
Administrative Agent and the Lenders, and the Administrative Agent's and the
Lenders' successors and assigns. Except as provided in Sections 12.8 and 12.11,
no other Person shall have any rights of any nature hereunder or by reason
hereof.
12.14 Confidentiality. Each Lender agrees to hold any confidential
information that it may receive from Borrower pursuant to this Agreement in
confidence, except for disclosure: (a) to other Lenders; (b) to legal counsel
and accountants for Borrower or any Lender or any affiliate of any Lender; (c)
to other professional advisors to Borrower or any Lender, provided that the
recipient has accepted such information subject to a confidentiality agreement
substantially similar to this Section 12.14; (d) to regulatory officials having
jurisdiction over that Lender; (e) to any Gaming
-120-
Board having regulatory jurisdiction over Borrower or its Subsidiaries, provided
that each Lender agrees to use its best efforts to notify Borrower of any such
disclosure unless prohibited by applicable Laws; (f) as required by Law or legal
process or in connection with any legal proceeding to which that Lender and
Borrower are adverse parties; (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 interests hereunder or a participation interest in its
Note, provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 12.14, and (h)
to any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees in writing to be
bound by the provisions of this Section 12.14. For purposes of the foregoing,
"confidential information" shall mean any information respecting Borrower or its
Subsidiaries reasonably considered by Borrower to be confidential, other than
(i) information previously filed with any Government Agency and available to the
public, (ii) information previously published in any public medium from a source
other than, directly or indirectly, that Lender, and (iii) information
previously disclosed by Borrower to any Person not associated with Borrower
without a confidentiality agreement or obligation substantially similar to this
Section 12.14. Notwithstanding the foregoing provisions of this Section, any
party to this Agreement or any other Loan Document (and any employee,
representative, or other agent of any party to this Agreement or any other Loan
Document) may disclose to any and all Persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement or any other Loan Document and all materials of any kind (including
opinions and other tax analyses) that are provided to it relating to such tax
treatment or tax structure. However, any such information relating to the tax
treatment or tax structure is required to be kept confidential to the extent
necessary to comply with any applicable federal or state securities Laws.
Nothing in this Section shall be construed to create or give rise to any
fiduciary duty on the part of the Administrative Agent or the Lenders to
Borrower.
12.15 Further Assurances. Borrower and the Significant Subsidiaries
shall, at their expense and without expense to the Lenders or the Administrative
Agent, do, execute and deliver such further acts and documents as the Majority
Lenders or the Administrative Agent from time to time reasonably require for the
assuring and confirming unto the Lenders or the Administrative Agent of the
rights hereby created or intended now or hereafter so to be, or for carrying out
the intention or facilitating the performance of the terms of any Loan Document.
12.16 Integration. This Agreement, together with the other Loan
Documents and the letter agreements referred to in Sections 3.3, 3.7 and 3.8,
comprise the complete and integrated agreement of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
rights or remedies in favor of the Administrative Agent or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.
12.17 Governing Law. Except to the extent otherwise provided therein,
each Loan Document shall be governed by, and construed and enforced in
accordance with, the local Laws of the State of New York.
12.18 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable or invalid as to any party or in
any jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or
-121-
the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
12.19 Headings. Article and Section headings in this Agreement and the
other Loan Documents are included for convenience of reference only and are not
part of this Agreement or the other Loan Documents for any other purpose.
12.20 Time of the Essence. Time is of the essence of the Loan
Documents.
12.21 Foreign Lenders and Participants.
(a) Each Foreign Lender shall deliver to the Administrative
Agent, prior to receipt of any payment subject to withholding under the
Code (or upon accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Foreign
Lender by Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such Foreign
Lender by Borrower pursuant to this Agreement) or such other evidence
satisfactory to Borrower and the Administrative Agent that such Foreign
Lender is entitled to an exemption from, or reduction of, U.S. withholding
tax and U.S. backup withholding taxes, including any exemption pursuant to
Section 881(c) of the Code. Thereafter and from time to time, each such
Foreign Lender shall (i) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence as is
satisfactory to Borrower and the Administrative Agent of any available
exemption from or reduction of, United States withholding taxes in respect
of all payments to be made to such Foreign Lender by Borrower pursuant to
this Agreement, (ii) promptly notify the Administrative Agent of any change
in circumstances which would modify or render invalid any claimed exemption
or reduction, and (iii) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as
may be reasonably necessary (including the re-designation of its Lending
Office) to avoid any requirement of applicable Laws that Borrower make any
deduction or withholding for taxes from amounts payable to such Foreign
Lender.
(b) Each Foreign Lender, to the extent it does not act or ceases
to act for its own account with respect to any portion of any sums paid or
payable to such Lender under any of the Loan Documents (for example, in the
case of a typical participation by such Lender), shall deliver to the
Administrative Agent on the date when such Foreign Lender ceases to act for
its own account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the determination
of the Administrative Agent (in the reasonable exercise of its discretion),
(i) two duly signed completed copies of the forms or statements required to
be provided by such Lender as set forth above, to establish the portion of
any such sums paid or payable with respect to which such Lender acts for
its own account that is not subject to U.S. withholding tax, and (ii) two
duly signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required under
the Code, to establish that such Lender is not acting for its own account
with respect to a portion of any such sums payable to such Lender.
-122-
(c) Borrower shall not be required to pay any additional amount
to any Foreign Lender (i) with respect to any Taxes required to be deducted
or withheld on the basis of the information, certificates or statements of
exemption such Lender transmits with an IRS Form W-8IMY pursuant to this
Section or (B) if such Lender shall have failed to satisfy the foregoing
provisions of this Section; provided that if such Lender shall have
satisfied the requirement of this Section on the date such Lender became a
Lender or ceased to act for its own account with respect to any payment
under any of the Loan Documents, nothing in this Section 12.21(c) shall
relieve Borrower of its obligation to pay any such amounts in the event
that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence
at a subsequent date establishing the fact that such Lender or other Person
for the account of which such Lender receives any sums payable under any of
the Loan Documents is not subject to withholding or is subject to
withholding at a reduced rate.
(d) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of
the Loan Documents with respect to which Borrower is not required to pay
additional amounts under this Section.
(e) Upon the request of the Administrative Agent, each Lender
that is not a Foreign Lender shall deliver to the Administrative Agent two
duly signed completed copies of IRS Form W-9. If such Lender fails to
deliver such forms, then the Administrative Agent may withhold from any
interest payment to such Lender an amount equivalent to the applicable
back-up withholding tax imposed by the Code, without reduction.
(f) If any Government Agency asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any
tax or other amount from payments made to or for the account of any Lender,
such Lender shall indemnify the Administrative Agent therefor, including
all penalties and interest, any taxes imposed by any jurisdiction on the
amounts payable to the Administrative Agent under this Section, and costs
and expenses (including Attorney Costs) of the Administrative Agent. The
obligation of the Lenders under this Section shall survive the termination
of the Commitments, repayment of all other Obligations hereunder and the
resignation of the Administrative Agent.
12.22 Hazardous Material Indemnity. Borrower hereby agrees to
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) the Administrative Agent and each of the Lenders and their
respective directors, officers, employees, agents, successors and assigns from
and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders, judgments, remedial
action requirements, enforcement actions of any kind, and all costs and expenses
incurred in connection therewith (including but not limited to reasonable
attorneys' fees and the reasonably allocated costs of attorneys employed by the
Administrative Agent or any Lender, and expenses to the extent that the defense
of any such action has not been assumed by Borrower), arising directly or
indirectly out of (i) the presence on, in, under or about any Real Property of
any Hazardous Materials, or any releases or discharges of any Hazardous
Materials on, under or from any Real Property and (ii) any activity carried on
or undertaken on or off any Real Property by Borrower or any of its predecessors
in title, whether prior to or during the term of this Agreement, and whether by
Borrower or any predecessor in title or any employees, agents, contractors or
subcontractors of Borrower or any predecessor in title, or any third persons at
any time occupying or present on any Real Property, in connection with the
handling, treatment, removal, storage, decontamination, clean-up, transport or
disposal of any
-123-
Hazardous Materials at any time located or present on, in, under or about any
Real Property. The foregoing indemnity shall further apply to any residual
contamination on, in, under or about any Real Property, or affecting any natural
resources, and to any contamination of any Property or natural resources arising
in connection with the generation, use, handling, storage, transport or disposal
of any such Hazardous Materials, and irrespective of whether any of such
activities were or will be undertaken in accordance with applicable Laws, but
the foregoing indemnity shall not apply to Hazardous Materials on any Real
Property, the presence of which is caused by the Administrative Agent or the
Lenders. Borrower hereby acknowledges and agrees that, notwithstanding any other
provision of this Agreement or any of the other Loan Documents to the contrary,
the obligations of Borrower under this Section (and under Sections 4.18 and
5.12) shall be unlimited corporate obligations of Borrower and shall not be
secured by any Lien on any Real Property. Any obligation or liability of
Borrower to any Indemnitee under this Section 12.22 shall survive the expiration
or termination of this Agreement and the repayment of all Loans and the payment
and performance of all other Obligations owed to the Lenders.
12.23 Gaming Boards. The Administrative Agent and each of the Lenders
agree to cooperate with all Gaming Boards in connection with the administration
of their regulatory jurisdiction over Borrower and its Subsidiaries, including
the provision of such documents or other information as may be requested by any
such Gaming Board relating to Borrower or any of its Subsidiaries or to the Loan
Documents.
12.24 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
[Remainder of this page intentionally left blank - signature pages follow]
-124-
12.25 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES THAT
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR
THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN
WRITING THAT COMPLIES WITH SECTION 12.2. BORROWER AGREES THAT IT WILL NOT RELY
ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS
BY ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY BANK THAT DOES NOT
COMPLY WITH SECTION 12.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR
SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
PINNACLE ENTERTAINMENT. INC.
By: /s/ Daniel R. Lee
----------------------------------------
Daniel R. Lee, Chief Executive Officer
Address:
Pinnacle Entertainment, Inc.
Suite 1800
3800 Howard Hughes Parkway
Las Vegas, NV 89109
Telecopier: (702) 784-7778
Telephone: (702) 784-7777
BANK OF AMERICA, N.A., as Administrative
Agent
By: /s/ Janice Hammond
----------------------------------------
Janice Hammond, Vice President
Address:
Bank of America, N.A.
Agency Management Los Angeles
555 South Flower Street, 17th Floor
Los Angeles, California 90071
Attn: Janice Hammond
Vice President
Telecopier: (213) 345-1213
Telephone: (213) 345-1210
BANK OF AMERICA, N.A., as a Revolving
Lender and as a Term Lender
By: /s/ Scott L. Faber
----------------------------------------
Scott L. Faber, Managing Director
Address:
Bank of America, N.A.
555 South Flower Street, 17th Floor
Los Angeles, California 90071
Attn: Scott L. Faber, Managing Director
Telecopier: (213) 345 1215
Telephone: (213) 345 1196
With a copy to:
Bank of America, N.A.
555 South Flower Street, 17th Floor
Los Angeles, California 90071
Attn: William S. Newby, Managing Director
Telecopier: (213) 345-1194
Telephone: (213) 345-1214
BEAR STEARNS CORPORATE LENDING INC., as
a Revolving Lender
By: /s/ Keith C. Barnish
---------------------------------------------
Keith C. Barnish, Executive Vice President
Address:
Bear Stearns & Co. Inc.
383 Madison Avenue, 8/th/ Floor
New York, NY 10179
Attn: Keith C. Barnish, Executive Vice President
Telecopier: 212-272-8540
Telephone: 212-272-6082
With a copy to:
Bear Stearns & Co. Inc.
383 Madison Avenue, 8/th/ Floor
New York, NY 10179
Attn: Stephen G. O'Keefe, Vice President
Telecopier: 212-272-9184
Telephone: 212-272-9430
SOCIETE GENERALE, as a Revolving Lender
and as a Term Lender
By: /s/ Thomas K. Day
----------------------------------------
Thomas K. Day
Title: Managing Director
-------------------------------------
Address for Notices:
Mary Brickley, Director
Societe Generale
Four Embarcadero Center, Suite 1200
San Francisco, CA 94111
415/646-7328
415/646-7200 general
415/989-9922 FAX
mary.brickley@us.socgen.com
HIBERNIA NATIONAL BANK, as a Revolving
Lender
By: /s/ Ross S. Wales
----------------------------------------
Ross S. Wales
Title: Vice President
-------------------------------------
Address: 313 Carondelet Street
-------------------------------------
New Orleans, Louisiana 70130
--------------------------------------------
--------------------------------------------
Telecopier: (504) 533-2060
--- --------------
Telephone: (504) 533-5719
--- --------------
CIBC INC. , as a Revolving Lender
By: /s/ Paul J. Chakmak
----------------------------------------
Name: Paul J. Chakmak
Title: Managing Director
CIBC World Markets Corp., as Agent
Address for Notices:
CIBC Inc.
10880 Wilshire Boulevard, Suite 1700
Los Angeles, CA 90024
Attention: Paul J. Chakmak
Telecopier: (310) 446-3610
Telephone: (310) 446-3535
BANK OF SCOTLAND, as a Revolving Lender
and as a Term Lender
By: /s/ Joseph Fratus
----------------------------------------
Joseph Fratus
Title: First Vice President
-------------------------------------
Address: 565 5th Avenue
-----------------------------------
New York, NY 10017
--------------------------------------------
--------------------------------------------
Telecopier: (212) 687-4412
Telephone: (212) 450-0875
Attn: Shirley Vargas
KZH ING-2 LLC, as a Term Lender
By: /s/ Dorian Herrera
----------------------------------------
Dorian Herrera
Title: Authorized Agent
-------------------------------------
Address:
KZH ING 2-LLC
c/o JPMorgan Chase Bank
4 MetroTech Center, 10th Floor
Brooklyn, NY 11245
Attention: Virginia Conway
Telecopier: (718) 242-6220
Telephone: (718) 242-4932
KZH CYPRESSTREE-1 LLC, as a Term Lender
By: /s/ Dorian Herrera
----------------------------------------
Dorian Herrera
Title: Authorized Agent
-------------------------------------
Address:
KZH CypressTree-1 LLC
c/o JPMorgan Chase Bank
4 MetroTech Center, 10th Floor
Brooklyn, NY 11245
Attention: Virginia Conway
Telecopier: (718) 242-6220
Telephone: (718) 242-4932
KZH STERLING LLC, as a Term Lender
By: /s/ Dorian Herrera
----------------------------------------
Dorian Herrera
Title: Authorized Agent
-------------------------------------
Address:
KZH STERLING LLC
c/o JPMorgan Chase Bank
4 MetroTech Center, 10th Floor
Brooklyn, NY 11245
Attention: Virginia Conway
Telecopier: (718) 242-6220
Telephone: (718) 242-4932
ABLECO FINANCE LLC, as a Revolving
Lender and a Term Lender
By: /s/ Kevin Genda
----------------------------------------
Name: Kevin Genda
---------------------------------------
Title: SVP
-------------------------------------
Address:
Ableco Finance LLC
450 Park Ave.
--------------------------------------------
New York, N.Y. 10022
--------------------------------------------
Telecopier: (212) 891-1541
Telephone: (212) 891-2117
A3 FUNDING LP, as a Revolving Lender and
a Term Lender
By: A3 Fund Management LLC, its General
Partner
By: /s/ Kevin Genda
------------------------------------
Name: Kevin Genda
-----------------------------------
Title: V.P.
---------------------------------
Address:
450 Park Ave.
--------------------------------------------
New York, N.Y. 10022
--------------------------------------------
--------------------------------------------
Telecopier: (212) 891-1541
Telephone: (212) 891-2117
CONTINENTAL CASUALTY COMPANY, as a
Term Lender
By: /s/ Marilou R. McGirr
----------------------------------------
Name: Marilou R. McGirr
----------------------------------------
Title: Vice President
-------------------------------------
Address:
Continental Casualty Company
CNA Plaza - 23 South
--------------------------------------------
Chicago, IL 60685
--------------------------------------------
Telecopier: (312) 817-1680
Telephone: (312) 822-4376