SECOND AMENDED AND RESTATED REDUCING REVOLVING
AND TERM LOAN AGREEMENT
Dated as of November 6, 1998
among
PALACE STATION HOTEL & CASINO, INC.
BOULDER STATION, INC.
TEXAS STATION, INC.
ST. ▇▇▇▇▇▇▇ RIVERFRONT STATION, INC.
KANSAS CITY STATION CORPORATION
SUNSET STATION, INC.
THE LENDERS HEREIN NAMED
SOCIETE GENERALE,
as Documentation Agent
BANK OF SCOTLAND,
as Co-Agent
and
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Administrative Agent
TABLE OF CONTENTS
Page
-------
Article 1 DEFINITIONS AND ACCOUNTING TERMS ............................................... 2
1.1 Defined Terms ................................................................ 2
1.2 Use of Defined Terms ......................................................... 42
1.3 Accounting Terms ............................................................. 42
1.4 Rounding ..................................................................... 42
1.5 Exhibits and Schedules ....................................................... 43
1.6 References to "Borrowers and their Subsidiaries" ............................. 43
1.7 Miscellaneous Terms .......................................................... 43
Article 2 LOANS .......................................................................... 44
2.1 Loans-General ................................................................ 44
2.2 Alternate Base Rate Loans .................................................... 46
2.3 Eurodollar Rate Loans ........................................................ 46
2.4 Voluntary Reduction of Revolving Commitments ................................. 47
2.5 Automatic Reduction of Revolving Commitments ................................. 47
2.6 Automatic Reduction of Term Commitment ....................................... 47
2.7 Optional Termination of Commitments........................................... 48
2.8 Administrative Agent's Right to Assume Funds Available for Advances .......... 48
2.9 Swing Line ................................................................... 48
2.10 Refinancing .................................................................. 51
2.11 Collateral and Guaranty ...................................................... 51
2.12 Senior Indebtedness .......................................................... 51
Article 3 PAYMENTS AND FEES .............................................................. 52
3.1 Principal and Interest ....................................................... 52
3.2 Arrangement Fee .............................................................. 53
3.3 Upfront Fee .................................................................. 54
3.4 Commitment Fee ............................................................... 54
3.5 Agency Fee ................................................................... 54
3.6 Increased Commitment Costs ................................................... 54
3.7 Eurodollar Costs and Related Matters ......................................... 55
3.8 Late Payments ................................................................ 60
3.9 Computation of Interest and Fees ............................................. 60
3.10 Non-Banking Days ............................................................. 60
3.11 Manner and Treatment of Payments ............................................. 60
i
3.12 Funding Sources .............................................................. 62
3.13 Failure to Charge Not Subsequent Waiver ...................................... 62
3.14 Administrative Agent's Right to Assume Payments Will be Made by
Borrowers..................................................................... 62
3.15 Fee Determination Detail ..................................................... 62
3.16 Survivability ................................................................ 63
Article 4 REPRESENTATIONS AND WARRANTIES ................................................. 64
4.1 Existence and Qualification; Power; Compliance With Laws ..................... 64
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............................................ 67
4.10 Litigation ................................................................... 67
4.11 Binding Obligations .......................................................... 67
4.12 No Default ................................................................... 67
4.13 ERISA ........................................................................ 67
4.14 Regulation U; Investment Company Act ......................................... 68
4.15 Disclosure ................................................................... 68
4.16 Tax Liability ................................................................ 68
4.17 Projections .................................................................. 68
4.18 Hazardous Materials .......................................................... 69
4.19 Developed Properties ......................................................... 69
4.20 Gaming Laws .................................................................. 69
4.21 Security Interests ........................................................... 69
Article 5 BORROWERS 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 ......................................................... 72
5.6 Inspection Rights ............................................................ 72
ii
5.7 Keeping of Records and Books of Account ....................................... 72
5.8 Compliance With Agreements .................................................... 72
5.9 Use of Proceeds ............................................................... 72
5.10 Hazardous Materials Laws ...................................................... 73
5.11 Additional Real Property ...................................................... 73
5.12 Additional Vessels ............................................................ 73
5.13 Construction Monitoring ....................................................... 74
5.14 Year 2000 Compliance .......................................................... 74
5.15 Delivery of Documentation ..................................................... 74
Article 6 BORROWERS NEGATIVE COVENANTS .................................................... 75
6.1 Disposition of Property ....................................................... 75
6.2 Mergers ....................................................................... 75
6.3 Hostile Acquisitions .......................................................... 75
6.4 ERISA ......................................................................... 75
6.5 Change in Nature of Business .................................................. 75
6.6 Liens and Negative Pledges .................................................... 76
6.7 Indebtedness and Guaranty Obligations ......................................... 76
6.8 Transactions with Affiliates .................................................. 77
6.9 Fixed Charge Coverage ......................................................... 77
6.10 Borrowers Funded Debt Ratio ................................................... 78
6.11 Maintenance Capital Expenditures .............................................. 78
6.12 Expansion Capital Expenditures ................................................ 78
6.13 Investments ................................................................... 79
6.14 Leases ........................................................................ 80
6.15 New Capital Stock ............................................................. 80
6.16 Prepayments ................................................................... 80
Article 7 PALACE NEGATIVE COVENANTS ....................................................... 81
7.1 Limitation on Tax Payments ..................................................... 81
7.2 Management Fees ................................................................ 81
7.3 Other Payments to Parents ...................................................... 81
7.4 Minimum Tangible Net Worth ..................................................... 81
Article 8 PARENT AFFIRMATIVE COVENANTS .................................................... 82
8.1 Article 5 Covenants .......................................................... 82
8.2 Designated Senior Indebtedness ............................................... 82
8.3 Pledge Agreement (Missouri) .................................................. 82
iii
Article 9 PARENT NEGATIVE COVENANTS......................................................... 83
9.1 Payment of Subordinated Obligations ........................................... 83
9.2 Disposition of Property ....................................................... 83
9.3 Mergers ....................................................................... 84
9.4 Hostile Acquisitions .......................................................... 84
9.5 Distributions ................................................................ 84
9.6 ERISA ........................................................................ 85
9.7 Change in Nature of Business ................................................. 85
9.8 Liens and Negative Pledges ................................................... 85
9.9 Indebtedness and Guaranty Obligations ........................................ 86
9.10 Transactions with Affiliates ................................................. 87
9.11 Tangible Net Worth ........................................................... 88
9.12 Parent Funded Debt Ratio ..................................................... 88
9.13 Maintenance Capital Expenditures ............................................. 89
9.14 Expansion Capital Expenditures ............................................... 89
9.15 Investments .................................................................. 89
9.16 Amendments to Other Financial Instruments .................................... 90
9.17 Cash Accumulation ............................................................ 91
9.18 Prepayments .................................................................. 91
9.19 Unrestricted New Venture Entities ............................................ 91
Article 10 INFORMATION AND REPORTING REQUIREMENTS ......................................... 92
10.1 Financial and Business Information ........................................... 92
10.2 Compliance Certificates ...................................................... 95
Article 11 CONDITIONS ..................................................................... 96
11.1 Initial Advances, Etc. ....................................................... 96
11.2 Availability under Excess Revolving Facility ................................. 100
11.3 Any Advance. ................................................................. 100
Article 12 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT ........................... 102
12.1 Events of Default ............................................................ 102
12.2 Remedies Upon Event of Default ............................................... 105
12.3 Palace Event of Default and Remedies ......................................... 107
iv
Article 13 THE ADMINISTRATIVE AGENT ........................................................ 108
13.1 Appointment and Authorization ................................................ 108
13.2 Administrative Agent and Affiliates .......................................... 108
13.3 Proportionate Interest in any Collateral ..................................... 108
13.4 Lenders' Credit Decisions .................................................... 109
13.5 Action by Administrative Agent ............................................... 109
13.6 Liability of Administrative Agent ............................................ 110
13.7 Indemnification .............................................................. 112
13.8 Successor Administrative Agent ............................................... 112
13.9 Foreclosure on Collateral .................................................... 113
13.10 No Obligations of Borrowers .................................................. 113
Article 14 MISCELLANEOUS ................................................................... 114
14.1 Cumulative Remedies; No Waiver ............................................... 114
14.2 Amendments; Consents ......................................................... 114
14.3 Costs, Expenses and Taxes .................................................... 115
14.4 Nature of Lenders' Obligations ............................................... 116
14.5 Survival of Representations and Warranties ................................... 117
14.6 Notices ...................................................................... 117
14.7 Execution of Loan Documents .................................................. 117
14.8 Binding Effect; Assignment ................................................... 117
14.9 Right of Setoff .............................................................. 121
14.10 Sharing of Setoffs ........................................................... 121
14.11 Indemnity by Borrowers ....................................................... 122
14.12 Nonliability of the Lenders .................................................. 123
14.13 No Third Parties Benefited ................................................... 124
14.14 Confidentiality .............................................................. 124
14.15 Further Assurances ........................................................... 125
14.16 Integration .................................................................. 125
14.17 Governing Law ................................................................ 125
14.18 Severability of Provisions ................................................... 125
14.19 Headings ..................................................................... 126
14.20 Time of the Essence .......................................................... 126
14.21 Foreign Lenders and Participants ............................................. 126
14.22 Hazardous Material Indemnity ................................................. 127
14.23 Gaming Boards ................................................................ 128
14.24 Joint and Several ............................................................ 128
14.25 Waiver of Right to Trial by Jury ............................................. 128
14.26 Purported Oral Amendments .................................................... 128
v
Exhibits
--------
A - Commitments Assignment and Acceptance
B - Compliance Certificate
C - Deed of Trust Amendment
D - Line A Note
E - Line B Note
F - Line C Note
G - Omnibus Documents Amendment
H-1 - Opinion of Counsel
H-2 - Opinion of Counsel
H-3 - Opinion of Counsel
H-4 - Opinion of Counsel
I - Parent Guaranty
J - Pledge Agreement (Missouri)
K - Pricing Certificate
L - Request for Loan
M - Sibling Guaranty
N - Joint Borrower Provisions
Schedules
---------
1.1A Lender Commitments
1.1B Peripheral Assets
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 Hazardous Materials Matters
4.19 Developed Properties
6.9 Existing Borrowers Indebtedness
6.13 Existing Borrowers Investments
7 Palace Covenants
9.9 Existing Parent Indebtedness
9.15 Existing Parent Investments
vi
SECOND AMENDED AND RESTATED REDUCING REVOLVING
AND TERM LOAN AGREEMENT
Dated as of November 6, 1998
This SECOND AMENDED AND RESTATED REDUCING REVOLVING AND TERM LOAN
AGREEMENT is entered into by and among Palace Station Hotel & Casino, Inc., a
Nevada corporation ("Palace"), Boulder Station, Inc., a Nevada corporation
("Boulder"), Texas Station, Inc., a Nevada corporation ("Texas"), St. ▇▇▇▇▇▇▇
Riverfront Station, Inc., a Missouri corporation ("St. ▇▇▇▇▇▇▇"), Kansas City
Station Corporation, a Missouri corporation ("Kansas City") and Sunset Station,
Inc., a Nevada Corporation ("Sunset" and, collectively with Palace, Boulder,
Texas, St. ▇▇▇▇▇▇▇ and Kansas City, the "Borrowers"), Station Casinos, Inc.
("Parent") (but only for the purpose of making the covenants set forth in
Articles 8 and 9 hereof), 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 14.8 (collectively, the "Lenders" and
individually, a "Lender"), Societe Generale, as Documentation Agent, Bank of
Scotland, as Co-Agent, and Bank of America National Trust and Savings
Association, as Administrative Agent.
This Agreement amends and restates in its entirety that certain Amended
and Restated Reducing Revolving Loan Agreement dated as of March 19, 1996 (as
heretofore amended, the "Existing Loan Agreement") among Palace, Boulder, Texas,
St. ▇▇▇▇▇▇▇, Kansas City and Sunset (pursuant to Amendment No. 8 to the Existing
Loan Agreement), as the Borrowers, Parent (but only for the limited purposes
specified therein), the Banks party thereto, the Co-Agents and the
Administrative Agent (as "Managing Agent"). On the Amendment Effective Date, (a)
the Loans outstanding under the Existing Loan Agreement shall remain
outstanding, but the Line A Loans thereunder shall become evidenced by the Line
A Notes hereunder and the Line B Loans thereunder shall become evidenced by the
Line B Notes hereunder, (b) interest through the preceding day shall be payable
to the Banks under the Existing Loan Agreement as therein provided and (c) the
Lenders shall make such purchases and sales of their interests in the Loans
outstanding under the Existing Loan Agreement as are necessary to conform such
interests to the Pro Rata Shares of the Lenders under this Agreement. Subsequent
to the Amendment Effective Date, each Lender shall return its Line A Note and
Line B Note under the Existing Loan Agreement to the Administrative Agent for
cancellation and return to Borrowers.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
1
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:
"Adjusted EBITDA" means, with respect to any Person and with
respect to any fiscal period, the sum of (a) Net Income of that Person
for that period, plus (b) any non-operating non-recurring loss
reflected in such Net Income, minus (c) any non-operating non-recurring
gain reflected in such Net Income, plus (d) Interest Expense of that
Person for that period, plus (e) the aggregate amount of federal and
state taxes on or measured by income of that Person for that period
(whether or not payable during that period), plus (f) depreciation,
amortization and all other non-cash expenses of that Person for that
period, in each case as determined in accordance with Generally
Accepted Accounting Principles and adjusted by adding thereto any
Pre-Opening Expenses attributable to each New Venture.
"Adjusted Funded Debt" means, with respect to any Person and
as of any date of determination (without duplication), (a) the
aggregate amount of the principal of all Indebtedness of that Person
for borrowed money (including debt securities issued and outstanding)
on that date, plus (b) the aggregate amount of the principal portion of
all Capital Lease Obligations of that Person on that date, plus (c) the
aggregate amount available for drawing under all outstanding letters of
credit on that date for which that Person is the account party, plus
(d) the aggregate amount of the portion of the principal amount of the
Indebtedness of any other Person on that date subject to a Guaranty
Obligation of that Person plus (e) the aggregate amount of all Guaranty
Obligations of that Person not with respect to any Indebtedness that
has been (or in accordance with Financial Accounting Standards Board
Statement No. 5 should be) quantified and reflected on the most recent
balance sheet of that Person on or prior to that date and remains in
effect on that date; provided, however, that Adjusted Funded Debt shall
not include, in the case of Borrowers, any Indebtedness owed to Parent
or, in the case of Parent, any Indebtedness owed to any of the
Borrowers or to any Restricted Subsidiary; and provided, further, that
in no event shall the obligations of a Person under an operating lease
(as such term is defined in accordance with Generally Accepted
Accounting Principles) be deemed Adjusted Funded Debt of that Person.
2
"Administrative Agent" means Bank of America National Trust
and Savings Association, 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 Borrowers and the Lenders.
"Advance" means any advance made or to be made by any Lender
to Borrowers as provided in Article 2, and includes each Alternate Base
Rate Advance and Eurodollar Rate Advance.
"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 be an Affiliate of such corporation,
partnership or other Person.
"Agreement" means this Second Amended and Restated Reducing
Revolving and Term Loan Agreement, either as originally executed or as
it may from time to time be supplemented, modified, amended, restated
or extended.
"Alternate Base Rate" means, as of any date of determination,
the rate per annum (rounded upwards, if necessary, to the next 1/100 of
1%) equal to the higher of (a) the Reference Rate in effect on such
date and (b) the Federal Funds Rate in effect on such date plus 1/2 of
1% (50 basis points).
"Alternate Base Rate Advance" means (a) an Advance made under
Section 2.1(a) or 2.1(b) and specified to be an Alternate Base Rate
Advance in accordance with Article 2 and (b) under the circumstances
described in Section 3.7, an Advance made under Section 2.1(c) and
converted to an Alternate Base Rate Advance pursuant to Section 3.7.
3
"Alternate Base Rate Loan" means a Revolving Loan made
hereunder and specified to be an Alternate Base Rate Loan in accordance
with Article 2.
"Amendment Effective Date" means the time and Banking Day on
which the conditions set forth in Section 11.1 are satisfied or waived.
The Administrative Agent shall notify Borrowers and the Lenders of the
date that is the Amendment Effective Date.
"Amortization Amount" means (a) for March 31, 2000 and each
Amortization Date thereafter through and including December 31, 2004,
$187,500 and (b) for each Amortization Date thereafter, $17,812,500.
"Amortization Date" means March 31, 2000 and each Quarterly
Payment Date thereafter.
"Applicable Revolver Alternate Base Rate Margin" means, for
each Pricing Period, the interest rate margin set forth below
(expressed in basis points per annum) opposite the Applicable Revolver
Pricing Level for that Pricing Period.
Applicable Revolver
Pricing Level Margin
------------------- -------
I 0
II 25.00
III 37.50
IV 50.00
V 75.00
VI 100.00
VII 125.00
VIII 150.00
"Applicable Revolver Commitment Fee Rate" means, for each
Pricing Period, the rate set forth below (expressed in basis points per
annum) opposite the Applicable Revolver Pricing Level for that Pricing
Period:
4
Applicable Revolver
Pricing Level Commitment Fee
------------------- --------------
I 30.00
II 35.00
III 40.00
IV 43.75
V 43.75
VI 50.00
VII 50.00
VIII 50.00
"Applicable Revolver Eurodollar Rate Margin" means, for each
Pricing Period, the interest rate margin set forth below (expressed in
basis points per annum) opposite the Applicable Revolver Pricing Level
for that Pricing Period:
Applicable Revolver
Pricing Level Margin
------------------- ------
I 125.00
II 150.00
III 162.50
IV 175.00
V 200.00
VI 225.00
VII 250.00
VIII 275.00
"Applicable Revolver Pricing Level" means, for each Pricing
Period, the pricing level set forth below opposite the Parent Funded
Debt Ratio as of the last day of the Fiscal Quarter most recently ended
prior to the commencement of that Pricing Period:
Parent Funded
Pricing Level Debt Ratio
------------- --------------
I Less than 3.25 to 1.00
II Equal to or greater than 3.25 to 1.00
but less than 3.75 to 1.00
5
III Equal to or greater than 3.75
to 1.00 but less than 4.00 to 1.00
IV Equal to or greater than 4.00 to 1.00 but
less than 4.25 to 1.00
V Equal to or greater than 4.25 to 1.00 but
less than 4.75 to 1.00
VI Equal to or greater than 4.75 to 1.00 but
less than 5.00 to 1.00
VII Equal to or greater than 5.00 to 1.00 but less than
5.25 to 1.00
VIII Equal to or greater than5.25 to 1.00;
provided that (a) in the event that Borrowers do 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 Applicable Revolver Pricing Level
for that Pricing Period shall be Pricing Level VIII, and (b) if any
Pricing Certificate is subsequently determined to be in error, then the
resulting change in the Applicable Revolver Pricing Level shall be made
retroactively to the beginning of the relevant Pricing Period.
"Average Quarterly Adjusted Funded Debt" means, with respect
to any Person and as of the last day of each Fiscal Quarter, the
average principal amount of all Adjusted Funded Debt of that Person
outstanding on the last day of each of the three calendar months
comprising such Fiscal Quarter.
"Banking 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, Nevada or New York.
"Banks" has the meaning set forth in the Existing Loan
Agreement.
"Borrowers" has the meaning set forth in the preamble of this
Agreement.
"Borrowers Funded Debt Ratio" means the Funded Debt Ratio of
Borrowers; provided that (a) the components of such ratio shall be
calculated
6
for Borrowers on a combined basis and (b) Adjusted EBITDA of Borrowers
shall be adjusted by subtracting therefrom the applicable Management
Fee Factor.
"Boulder Deed of Trust" means a Deed of Trust (Fee) and/or a
Deed of Trust (Leasehold) executed by Boulder covering the real
property comprising the Boulder Station Hotel & Casino in Las Vegas,
Nevada.
"Capital Expenditure" means any expenditure that is treated as
a capital expenditure under Generally Accepted Accounting Principles,
including any amount which is required to be treated as an asset
subject to a Capital Lease Obligation and including interest required
by Generally Accepted Accounting Principles to be capitalized with
respect to such an expenditure. An Investment shall not be deemed a
Capital Expenditure. Subject to the last sentence of Section 6.16 and
Section 9.18, neither (a) the prepayment of any operating lease
permitted by Sections 6.16 or 9.18 nor (b) improvements or repairs to,
or replacement of, capital assets made with, or offset by, insurance
proceeds actually received by a Borrower or Parent, shall be deemed a
Capital Expenditure.
"Capital Lease Obligations" means all monetary obligations of
a Person under any leasing or similar arrangement which, in accordance
with Generally Accepted Accounting Principles, is classified as a
capital lease.
"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 Generally Accepted Accounting Principles,
consistently applied.
"Cash Equivalents" means, when used in connection with any
Person, that Person's Investments in:
(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 ▇▇▇▇▇'▇ Investors Service,
Inc. or AA by Standard & Poor's Rating Group (a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.), in each case due within one year from the
making of the Investment;
7
(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 ▇▇▇▇▇'▇ Investors Service, Inc. or A-1 by Standard & Poor's
Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.), 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
8
▇▇▇▇▇'▇ Investors Service, Inc. and AA by Standard & Poor's
Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.), 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;
(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 ▇▇▇▇▇'▇ Investors
Service, Inc. and AA by Standard & Poor's Rating Group (a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc.); 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
any State thereof, or a participation interest therein;
provided that (i) commercial paper issued by such corporation
is given on the date of such Investment a credit rating of at
least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. and AA by Standard
& Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.), (ii)
the amount of all such Investments issued by the same issuer
does not exceed $5,000,000 and (iii) the aggregate amount of
all such Investments does not exceed $15,000,000.
"Cash Income Taxes" means, with respect to any fiscal
period, taxes on or measured by the income of Borrowers that
are paid or currently payable in Cash by Borrowers or Parent
during that fiscal period.
"Cash Interest Expense" means Interest Expense that
is paid or currently payable in Cash.
"Certificate" means a certificate signed by a Senior
Officer or Responsible Official (as applicable) 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 40% or more of the outstanding
Common Stock and at
9
such time the Existing Equity Holders together shall fail to
beneficially own, directly or indirectly, at least
the same percentage of Common Stock as is beneficially owned
by such Unrelated Person, (b) Parent consolidates with or
merges into another Person or conveys, transfers or leases
its properties and assets substantially as an entirety to
any Person or any Person consolidates with or merges into
Parent, in either event pursuant to a transaction in which
the outstanding Common Stock is changed into or exchanged
for cash, securities or other property, with the effect
that any Unrelated Person (other than the Existing Equity
Holders) becomes the beneficial owner, directly or
indirectly, of 40% or more of Common Stock and at
such time the Existing Equity Holders together shall fail to
beneficially own, directly or indirectly, at least the same
percentage of Common Stock as is beneficially owned by such
Unrelated Person or (c) during any period of 24 consecutive
months, individuals who at the beginning of such period
constituted the board of directors of Parent (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 then still
in office who were either 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. For purposes of the
foregoing, the term "Unrelated Person" means any Person other
than (i) a Subsidiary of Parent, (ii) an employee stock
ownership plan or other employee benefit plan covering the
employees of Parent and its Subsidiaries or (iii) any of the
Existing Equity Holders, and the term "Existing Equity
Holders" means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and their executors,
administrators or the legal representatives of their estates,
their heirs, distributees and beneficiaries, any trust as to
which any of the foregoing is a settlor or co-settlor and any
corporation, partnership or other entity which is an Affiliate
of any of the foregoing, and any lineal descendants of such
Persons, but only to the extent that the beneficial ownership
of Common Stock held by such lineal descendants was directly
received (by gift, trust or sale) from any such Person.
"Co-Agent" means Bank of Scotland. The Co-Agent shall
have no rights, duties or responsibilities under the Loan
Documents beyond those of a Lender.
"Code" means the Internal Revenue Code of 1986, as
amended or replaced and as in effect from time to time.
10
"Collateral" means all of the collateral covered by
the Collateral Documents.
"Collateral Agent" means Bank of America National
Trust and Savings Association, as Collateral Agent for the
banks which are parties to the Existing Loan Agreement and the
banks which are parties to the Supplemental Loan Agreement.
"Collateral Documents" means, collectively, the
Security Agreement, the Trademark Collateral Assignment, the
Pledge Agreement (Nevada), the Deeds of Trust, the Preferred
Ship Mortgages, as amended in each case by the Omnibus
Documents Amendment or the Deed of Trust Amendment, the Pledge
Agreement (Missouri) (if and when executed and delivered
pursuant to Section 8.3) and any other security agreement,
pledge agreement, deed of trust, mortgage or other collateral
security agreement hereafter executed and delivered by
Borrowers or any of the Guarantors to secure the Obligations.
"Commitments" means the Revolving Commitments and the
Line C Commitment.
"Commitments Assignment and Acceptance" means a
commitment assignment and acceptance substantially in the form
of Exhibit A.
"Common Stock" means the common stock of Parent or
its successor.
"Compliance Certificate" means a certificate in the
form of Exhibit B, properly completed and signed by a Senior
Officer of Borrowers.
"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.
"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.
11
"Deed of Trust (Fee)" means a deed of trust in the
form of Exhibit C to the Existing Loan Agreement, either as
originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Deed of Trust (Leasehold)" means a deed of trust in
the form of Exhibit D to the Existing Loan Agreement, either
as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Deed of Trust Amendment" means an amendment to each
of the Existing Deeds of Trust substantially in the form of
Exhibit C.
"Deeds of Trust" means the Existing Deeds of Trust,
the New Kansas City Deed of Trust and any other deed of trust
required to be provided to the Administrative Agent pursuant
to Section 5.11.
"Deemed Intercompany Indebtedness" means, as of any
date of determination, an amount equal to the sum of (a) the
principal of all outstanding Indebtedness of Parent (other
than (i) Indebtedness owed to any of Borrowers or to a
Restricted Subsidiary and (ii) Indebtedness consisting of
Guaranty Obligations with respect to Indebtedness of Borrowers
owed to Persons other than Parent or a Restricted Subsidiary)
plus (b) the liquidation preference on all outstanding capital
stock of Parent that bears a dividend payable in Cash at a
specified rate or per share amount.
"Default" means any event that, with the giving of
any applicable notice or passage of time specified in Section
12.1, or both, would be an Event of Default.
"Default Rate" means the interest rate prescribed in
Section 3.9.
"Designated Deposit Account" means a deposit account
to be maintained by Borrowers with Bank of America National
Trust and Savings Association or one of its Affiliates, as
from time to time designated by Borrowers by written
notification to the Administrative Agent.
"Designated Eurodollar Market" means, with respect to
any Eurodollar Rate 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
12
Lenders for deposits of Dollars in the London Eurodollar
Market, the Cayman Islands Eurodollar Market or (c) if prime
banks in both the London and Cayman Islands Eurodollar Markets
are at the relevant time not accepting deposits of Dollars or
if the Administrative Agent determines in good faith that
neither the London nor the Cayman Islands Eurodollar Market
represents at the relevant time the effective pricing to the
Lenders for deposits of Dollars in such Eurodollar Market,
such other Eurodollar Market as may from time to time be
selected by the Administrative Agent with the approval of
Borrowers and the Requisite Lenders.
"Developed Property" means, as of any date of
determination, a casino, hotel, casino/hotel, resort,
casino/resort, riverboat casino, dockside casino, excursion
gambling boat, floating gaming facility, golf course,
entertainment center or similar facility owned by Parent or
any of its Subsidiaries (or owned by a Person in which Parent
or any of its Subsidiaries holds an Investment) and which is
at such date substantially complete and open for business.
"Disposition" means the voluntary sale, transfer or
other disposition of any asset of Borrowers other than (a)
Cash, Cash Equivalents, inventory or other assets sold, leased
or otherwise disposed of in the ordinary course of business of
Borrowers and (b) equipment sold or otherwise disposed of
where substantially similar equipment in replacement thereof
has theretofore been acquired, or thereafter within 90 days is
acquired, by Borrowers, or where Borrowers determine in good
faith that the failure to replace such equipment will not be
detrimental to the business of Borrowers.
"Disqualified Stock" means any capital stock,
warrants, options or other rights to acquire capital stock
(but excluding any debt security which is convertible, or
exchangeable, for capital stock), 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 a 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 Disquali fied Stock if they are redeemable prior
to the Term Maturity Date only if the board of directors of
Parent determines in its judgment that as a result of a holder
or beneficial owner owning such interests (i) Borrowers have
lost or may lose any license or franchise from any Gaming
Board held by Borrowers or any Subsidiary of Borrowers
necessary to conduct any portion of the business of Borrowers
or (ii) any Gaming Board has taken or may take action to
materially restrict or impair the operations of Borrowers,
which license, franchise or action
13
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.
"Distribution" means, with respect to any shares of
capital stock or any warrant or option to purchase an equity
security or other equity security issued by a Person, (i) the
retirement, redemption, purchase or other acquisition for Cash
or for Property by such Person of any such security, (ii) the
declaration or (without duplication) payment by such Person of
any dividend in Cash or in Property on or with respect to any
such security, (iii) any Investment by such Person in the
holder of 5% or more of any such security if a purpose of such
Investment is to avoid characterization of the transaction as
a Distribution and (iv) any other payment in Cash or Property
by such Person constituting a distribution under applicable
Laws with respect to such security.
"Documentation Agent" means Societe Generale. The
Documentation Agent shall have no rights, duties or
responsibilities under the Loan Documents beyond those of a
Lender.
"Dollars" or "$" means United States dollars.
"Domestic Reference Lender" means Bank of America
National Trust and Savings Association.
"Eligible Assignee" means (a) another Lender, (b)
with respect to any Lender, any Affiliate of that Lender, (c)
any commercial bank having a combined capital and surplus of
$100,000,000 or more, (d) any (i) savings bank, savings and
loan association or similar financial institution or (ii)
insurance company engaged in the business of writing insurance
which, in either case (A) has a net worth of $200,000,000 or
more, (B) is engaged in the business of lending money and
extending credit under credit facilities substantially similar
to those extended under this Agreement and (C) is
operationally and procedurally able to meet the obligations of
a Lender hereunder to the same degree as a commercial bank and
(e) any other financial institution (including a mutual fund
or other fund) having total assets of $250,000,000 or more
which meets the requirements set forth in subclauses (B) and
(C) of clause (d) above; provided that (I) each Eligible
Assignee must either (a) be organized under the Laws of the
United States of America, any State thereof or the District of
Columbia or (b) be organized under the Laws of the Cayman
Islands or any country which is a member of the Organization
for Economic Cooperation and Development, or a political
subdivision of such a country, and (i) act hereunder through a
branch, agency or funding office located in the United States
of
14
America and (ii) be exempt from withholding of tax on interest
and deliver the documents related thereto pursuant to Section
11.21 and (II) to the extent required under applicable Gaming
Laws, each Eligible Assignee must be registered with, approved
by, or not disapproved by (whichever may be required under
applicable Gaming Laws), all applicable Gaming Boards.
"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.
"Eurodollar Banking Day" means any Banking Day on
which dealings in Dollar deposits are conducted by and among
banks in the Designated Eurodollar Market.
"Eurodollar Lending Office" means, as to each Lender,
its office or branch so designated by written notice to
Borrowers 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 Governmental Agency having jurisdiction over
any Lender.
"Eurodollar Period" means, as to each Eurodollar Rate
Loan, the period commencing on the date specified by Borrowers
pursuant to Section 2.1(d) and ending 1, 2, 3 or 6 months (or,
with the written consent of all of the Revolver Lenders or
Term Lenders (as applicable), any other period) thereafter, as
specified by Borrowers in the applicable Request for Loan;
provided that:
(a) The first day of any Eurodollar Period shall be a
Eurodollar Banking Day;
(b) Any Eurodollar Period that would otherwise end on
a day that is not a Eurodollar Banking Day shall be extended
to the next succeeding Eurodollar Banking Day unless such
Eurodollar Banking Day falls in another
15
calendar month, in which case such Eurodollar Period shall end
on the next preceding Eurodollar Banking Day;
(c) Borrowers may not specify a Eurodollar Period
with respect to a Eurodollar Revolver Loan that extends beyond
the next Reduction Date unless the aggregate principal amount
of the Eurodollar Revolving Loans having a Eurodollar Period
ending after such Reduction Date is less than the Revolving
Commitments (after giving effect to any reduction thereto
scheduled to be made on such Reduction Date pursuant to
Section 2.5);
(d) Borrowers may not specify a Eurodollar Period
with respect to a Eurodollar Term Loan that extends beyond the
next Amortization Date unless the aggregate principal amount
of the Eurodollar Term Loans having a Eurodollar Period ending
after such Amortization Date is equal to or less than the
aggregate principal Indebtedness evidenced by the Line C Notes
(after giving effect to payment of the Amortization Amount
scheduled to be made on such Amortization Date pursuant to
Section 3.1(d)(ii));
(e) No Eurodollar Period with respect to a Eurodollar
Revolver Loan shall extend beyond the Revolver Maturity Date;
and
(f) No Eurodollar Period with respect to a Eurodollar
Term Loan shall extend beyond the Term Maturity Date.
"Eurodollar Rate" means, with respect to any
Eurodollar Rate Loan, the average of the interest rates per
annum (rounded upward, if necessary, to the next 1/100 of 1%)
at which deposits in Dollars are offered by the Eurodollar
Reference Lenders to prime banks in the Designated Eurodollar
Market at or about 11:00 a.m. local time in the Designated
Eurodollar Market, two (2) Eurodollar Banking Days before the
first day of the applicable Eurodollar Period in an aggregate
amount approximately equal to the amount of the Advance made
by the Eurodollar Reference Lender with respect to such
Eurodollar Rate Loan and for a period of time comparable to
the number of days in the applicable Eurodollar Period.
"Eurodollar Rate Advance" means (a) an Advance made
under Section 2.1(a) or 2.1(b) and specified to be a
Eurodollar Rate Advance in accordance with Article 2 and (b)
an Advance made under Section 2.1(c).
16
"Eurodollar Rate Loan" means (a) a Line A Loan or
Line B Loan made hereunder and specified to be a Eurodollar
Rate Loan in accordance with Article 2 and (b) a Line C Loan.
"Eurodollar Reference Lenders" means (a) Bank of
America National Trust and Savings Association, (b) Bank of
Scotland and (c) Societe Generale.
"Eurodollar Revolver Loan" means a Eurodollar Loan
that is a Line A Loan or Line B Loan.
"Eurodollar Term Loan" means a Eurodollar Loan that
is a Line C Loan.
"Event of Default" shall have the meaning provided in
Section 12.1 and shall include a Palace Event of Default.
"Excess Revolving Facility" means the credit facility
extended to Borrowers by the Lenders pursuant to the Line B
Commitment.
"Existing Deeds of Trust" means the Palace Deed of
Trust, the Boulder Deed of Trust, the Texas Deed of Trust, the
St. ▇▇▇▇▇▇▇ Deed of Trust, the Kansas City Deed of Trust and
the Sunset Deed of Trust.
"Existing Loan Agreement" has the meaning set forth
in the preamble to this Agreement.
"Existing Other Subordinated Debt" means (a) Parent's
9-3/4% senior subordinated notes due 2007 and (b) Parent's
10-l/8% senior subordinated notes due 2006.
"Existing Redeemable Subordinated Debt" means
Parent's 9-5/8% senior subordinated notes due 2003.
"Expansion Capital Expenditure" means a Capital
Expenditure that is not a Maintenance Capital Expenditure.
"Expansion Capital Expenditure Basket" means, as of
any date of determination, the sum of (a) $50,000,000, minus
(b) if at such date the Target Leverage Ratio Election is not
in effect, the amount (if any) by which the aggregate
repurchase/redemption prices theretofore paid by Parent to
repurchase or redeem Preferred Stock exceeds $10,000,000 and
plus (c) if at such date either (i) the Target Leverage Ratio
Election is in effect or (ii) (A) the Parent
17
Funded Debt Ratio was 4.00 to 1.00 or lower for the two (2)
Fiscal Quarters then most recently ended and (B) Parent has
provided to the Administrative Agent financial projections for
at least the next four (4) Fiscal Quarters demonstrating that
the Parent Funded Debt Ratio is projected to be at 4.00 to
1.00 or lower for each of such Fiscal Quarters, $50,000,000.
"Federal Funds Rate" means, as of any date of
determination, the rate set forth in the weekly statistical
release designated as H.15(519), or any successor publication,
published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such date opposite the caption
"Federal Funds (Effective)". If for any relevant date such
rate is not yet published in H.15(519), the rate for such date
will be the rate set forth in the daily statistical release
designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published
by the Federal Reserve Bank of New York (including any such
successor, the "Composite 3:30 p.m. Quotation") for such date
under the caption "Federal Funds Effective Rate". If on any
relevant date the appropriate rate for such date is not yet
published in either H.15(519) or the Composite 3:30 p.m.
Quotations, the rate for such date will be the arithmetic mean
of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that
date by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative
Agent. For purposes of this Agreement, any change in the
Alternate Base Rate due to a change in the Federal Funds Rate
shall be effective as of the opening of business on the
effective date of such change.
"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
Borrowers or Parent, as applicable, ending on each June 30,
September 30, December 31 and March 31.
"Fiscal Year" means the fiscal year of Borrowers or
Parent, as applicable, (a) commencing on April 1, 1998 and
ending on December 31, 1998 and (b) commencing on January 1,
1999, and each January 1 thereafter, and ending on the next
following December 31.
"Fixed Charge Coverage" means, as of the last day of
each Fiscal Quarter, the ratio of (a) Adjusted EBITDA of
Borrowers for the fiscal period consisting of that Fiscal
Quarter and the three immediately preceding Fiscal Quarters
minus Cash Income Taxes of Borrowers for such fiscal period to
18
(b) the sum of (i) Interest Charges of Borrowers for such
fiscal period with respect to Indebtedness other than
Indebtedness owed to Parent or a Restricted Subsidiary plus
(ii) Maintenance Capital Expenditures of Borrowers made during
such fiscal period plus (iii) the aggregate of (A) all
principal payments on the Notes made during such fiscal period
required by Section 3.1(d)(i) and Section 3.1(d)(ii), (B) all
voluntary principal prepayments on the Notes made during such
fiscal period to the extent that such prepayment reduced or
eliminated the amount of a subsequent principal payment on the
Notes which would otherwise be required by Section 3.1(d)(i)
or Section 3.1(d)(ii) and (C) all scheduled principal payments
on all Indebtedness of Borrowers during such fiscal period and
plus (iv) Interest Charges of Borrowers for such fiscal period
with respect to Deemed Intercompany Indebtedness calculated at
an interest rate that is not less than the Minimum
Intercompany Rate.
"Funded Debt Ratio" means, with respect to any Person
and as of the last day of each Fiscal Quarter, the ratio of
(a) Average Quarterly Adjusted Funded Debt of that Person for
that Fiscal Quarter to (b) Adjusted EBITDA of that Person for
the fiscal period consisting of that Fiscal Quarter and the
three immediately preceding Fiscal Quarters.
"Gaming Board" means, collectively, (a) the Nevada
Gaming Commission, (b) the Nevada State Gaming Control Board,
(c) the Missouri Gaming Commission and (d) any other
Governmental Agency that holds regulatory, licensing or permit
authority over gambling, gaming or casino activities conducted
by Borrowers within its jurisdiction.
"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 Borrowers within its jurisdiction.
"Generally Accepted Accounting Principles" means, as
of any date of determination, accounting principles (a) set
forth i 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.
19
"Government Securities" means readily marketable (a)
direct full faith and credit obligations of the United States
of America or obligations guaranteed by the full faith and
credit of the United States of America and (b) obligations of
an agency or instrumentality of, or corporation owned,
controlled or sponsored by, the United States of America that
are generally considered in the securities industry to be
implicit obligations of the United States of America.
"Governmental 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
(including any Gaming Board), or (c) any court or
administrative tribunal of competent jurisdiction.
"Guarantors" means Parent and the Sibling Guarantors.
"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 Borrowers.
20
"Hazardous Materials" means substances defined as
"hazardous substances" pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 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. Section 1801, et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., or as
"friable asbestos" pursuant to the Toxic Substances
Control Act, 15 U.S.C. Section 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.
"Immaterial Subsidiary" means, as of any date of
determination, (a) in the case of a Subsidiary of any of the
Borrowers, a Subsidiary that has on such date total assets
with a book value or fair market value (whichever is greater)
less than $100,000 and (b) in the case of a Subsidiary of
Parent (other than a Subsidiary of any of the Borrowers), a
Subsidiary that has on such date total assets with a book
value or fair market value (whichever is greater) less than
$3,500,000.
"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
fair market value of such assets as determined in good faith
by such Person, (c) Capital Lease Obligations of such Person,
(d) indebtedness of such Person arising under bankers'
acceptance facilities or under facilities for thediscount 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; provided
that in no event shall the obligations of a Person under an
operating lease (as such term is defined under Generally
Accepted Accounting Principles) be deemed Indebtedness of that
Person.
21
"Intangible Assets" means assets that are considered
intangible assets under Generally Accepted Accounting
Principles, including customer lists, goodwill, copyrights,
trade names, trademarks and patents.
"Intercreditor Agreement" means the Amended and
Restated Intercreditor Agreement, dated as of the Amendment
Effective Date executed by the Administrative Agent on behalf
of the Lenders, and First Security Trust Company of Nevada
(the "Trustee"), on behalf of the holders (the "Holders")
party to that certain Participation Agreement dated as of
September 25, 1996, among the Trustee, Parent and the Holders.
"Interest Charges" means, with respect to any Person
and as of the last day of any fiscal period, the sum of (a)
Cash Interest Expense of that Person plus (b) all interest
currently payable by that Person in Cash incurred during that
fiscal period which is capitalized under Generally Accepted
Accounting Principles.
"Interest Differential" means, with respect to any
prepayment of a Eurodollar Rate Loan on a day other than the
last day of the applicable Interest Period and with respect to
any failure to borrow a Eurodollar Rate Loan on the date or in
the amount specified in any Request for Loan, (a) the
Eurodollar Rate payable (or, with respect to a failure to
borrow, the Eurodollar Rate which would have been payable)
with respect to the Eurodollar Rate Loan minus (b) the
Eurodollar Rate on, or as near as practicable to the date of
the prepayment or failure to borrow for a Eurodollar Rate Loan
with an Interest Period commencing on such date and ending on
the last day of the Interest Period of the Eurodollar Rate
Loan so prepaid or which would have been borrowed on such
date.
"Interest Expense" means, with respect to any Person
and as of the last day of any fiscal period, the sum of (a)
all interest, fees, charges and related expenses paid or
payable (without duplication) for that fiscal period by that
Person to a lender in connection with borrowed money
(including any obligations for fees, charges and related
expenses payable to the issuer of any letter of credit) or the
deferred purchase price of assets that are considered
"interest expense" under Generally Accepted Accounting
Principles plus (b) the portion of rent paid or payable
(without duplication) for that fiscal period by that Person
under Capital Lease Obligations that should be treated as
interest in accordance with Financial Accounting Standards
Board Statement No. 13.
22
"Interest Period" means, with respect to any
Eurodollar Rate Loan, the related Eurodollar Period.
"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. An Investment in a Person consisting of
the guaranty of an obligation of such Person shall not be
deemed outstanding following the termination or expiration of
such guaranty. Swap Agreements shall not be deemed
Investments.
"Joinder Agreement" means a joinder agreement to be
executed and delivered pursuant to Section 6.2 by Parent
substantially in the form of Exhibit F to the Existing Loan
Agreement, either as originally executed or as it may from
time to time be supplemented, modified, amended, extended or
supplanted.
"Kansas City Deed of Trust" means a Deed of Trust
executed by Kansas City covering (a) the leasehold estate in
the real property comprising the Kansas City Riverfront
Station Casino dockside facilities, (b) the leasehold estate
for pipeline purposes in the adjacent river levee owned by the
Birmingham Drainage District, (c) the fee simple estate in
certain adjacent real property acquired from Kansas City Power
and Light Company and (d) the leasehold estate in certain
adjacent real property commonly referred to as the "Western
Acreage".
"Kansas City Local Shares" means the shares of
capital stock of Kansas City that were or may be issued to
certain Persons in connection with development agreements
entered between Kansas City and Governmental Agencies located
in Kansas City, Missouri.
"Landlord Consent" means a landlord consent
certificate executed by each of the lessors with respect to a
leasehold estate comprising Collateral, substantially in the
form of Exhibit G to the Existing Loan Agreement, either as
23
originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or
supplanted.
"Laws" means, collectively, all international,
foreign, federal, state and local statutes, treaties, rules,
regulations, ordinances, codes and administrative or judicial
precedents.
"Lead Arranger" means BancAmerica Securities, Inc.
"Lender" has the meaning set forth in the preamble to
this Agreement.
"License Revocation" means the revocation,
involuntary 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
Parent or any Subsidiary of Parent.
"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 currently effective
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 currently
effective agreement to give any financing statement (other
than a precautionary financing statement with respect to a
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.
"Line A Commitment" means, subject to Sections 2.4
and 2.5, $72,000,000. The respective Pro Rata Shares of the
Revolver Lenders with respect to the Line A Commitment are set
forth in Schedule 1.1.
"Line A Note" means any of the promissory notes made
by Borrowers to a Revolver Lender evidencing Advances under
that Lender's Pro Rata Share of the Line A Commitment,
substantially in the form of Exhibit D, either as originally
executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or supplanted.
"Line A Loan" means any Loan made under the Line A
Commitment.
24
"Line B Commitment" means, subject to Sections 2.4
and 2.5, $278,000,000. The respective Pro Rata Shares of the
Revolver Lenders with respect to the Line B Commitment are set
forth in Schedule 1.1.
"Line B Loan" means a Loan made under the Line B
Commitment.
"Line B Note" means any of the promissory notes made
by Borrowers to a Revolver Lender evidencing Advances under
that Lender's Pro Rata Share of the Line B Commitment,
substantially in the form of Exhibit E, either as originally
executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or supplanted.
"Line C Commitment" means $75,000,000, as such amount
may be reduced pursuant to Section 2.6. The respective Pro
Rata Shares of the Term Lenders with respect to the Line C
Commitment are set forth in Schedule 1.1.
"Line C Note" means any of the promissory notes made
by Borrowers to a Term Lender evidencing Advances under that
Lender's Pro Rata Share of the Line C Commitment,
substantially in the form of Exhibit F, either as originally
executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or supplanted.
"Line C Loan" means the Loan made under the Line C
Commitment.
"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 Parent Guaranty, the Sibling Guaranty, the
Collateral Documents, any Secured Swap Agreement, the Swing
Line Note and any other agreements of any type or nature
hereafter executed and delivered by Borrowers or the
Guarantors to the Administrative Agent, any Lender or the
Swing Line 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 Capital Expenditure" means a Capital
Expenditure for the maintenance, repair, restoration or
refurbishment of any Developed Property, excluding any Capital
Expenditures which materially adds to or further improves such
Developed Property.
25
"Majority Lenders" means, when used in Section 6.12,
Lenders having in the aggregate more than 50% of the
Commitments then in effect.
"Management Fee Factor" means $12,000,000.
"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 had or could reasonably
be expected to have any material adverse effect whatsoever
upon the validity or enforceability of any Loan Document
(other than as a result of any action or inaction of the
Administrative Agent, any Lender or any Affiliate of any
Lender), (b) has been or could reasonably be expected to be
material and adverse to the business or condition (financial
or otherwise) of Borrowers or (c) has materially impaired or
could reasonably be expected to materially impair the ability
of Borrowers to perform the Obligations.
"Minimum Intercompany Rate" means, as of any date of
determination, the interest rate that is the weighted (by
principal amount outstanding or liquidation preference, as
applicable) daily average of (a) the effective after-tax
interest rates payable as of that date on all outstanding
Indebtedness of Parent (other than Indebtedness owed to any of
Borrowers or to a Restricted Subsidiary) and (b) the effective
after-tax rate (calculated by converting the per share
dividend amount with reference to the related per share
liquidation preference) at which dividends, if not paid in
Cash, will accrue and cumulate as of that date on all
outstanding capital stock of Parent (including Permitted
Preferred Stock).
"Model Indenture" means the Indenture dated as of
April 3, 1997 between Parent and First Union National Bank
covering Parent's 9-3/4% senior subordinated notes due 2007.
"Multiemployer Plan" means any employee benefit plan
of the type described in Section 4001(a)(3) of ERISA to which
Borrowers or any of their ERISA Affiliates contribute or are
obligated to contribute.
"Negative Pledge" means a Contractual Obligation that
contains a covenant binding on Borrowers or any of the
Guarantors 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
Sections 6.6 or 9.8
26
which affects only the Property that is the subject of such
permitted Lien and (b) any such covenant that does not apply
to Liens securing the Obligations.
"Net Income" means, with respect to any Person and
with respect to any fiscal period, the net income of that
Person for that period, determined in accordance with
Generally Accepted Accounting Principles, consistently
applied; provided that (a) Net Income for Borrowers shall be
determined on a combined basis and (b) Net Income for Parent
shall be determined on a consolidated basis.
"New Kansas City Deed of Trust" means a Deed of Trust
executed by Kansas City covering the two adjacent parcels of
wetlands mitigation property near "Jackass Bend" in ▇▇▇▇▇▇▇
County, Missouri acquired by Kansas City in 1997, as amended,
supplemented or otherwise modified from time to time.
"New Venture" means a casino, hotel, casino/hotel,
resort, casino/resort, riverboat casino, dockside casino,
excursion gambling boat, floating gaming facility, golf
course, entertainment center or similar facility (or any site
or proposed site for any of the foregoing) owned or to be
owned by Parent or any of its Subsidiaries (or owned or to be
owned by a Person in which Parent or any of its Subsidiaries
or a New Venture Entity owned directly or indirectly by Parent
or any of its Subsidiaries holds an Investment) and which is
not at the Amendment Effective Date a Developed Property;
provided that the acquisition by St. ▇▇▇▇▇▇▇ of any TIF Real
Property shall be considered, in conjunction with its
acquisition of all other TIF Real Property, to be a New
Venture.
"New Venture Entity" means (a) the Person that
directly owns a New Venture, and (b) any holding company for
such a Person whose sole assets consist (directly or
indirectly through another New Venture Entity) of Investments
in that Person.
"Notes" means the Line A Notes, the Line B Notes and
the Line C Notes.
"Obligations" means all present and future
obligations of every kind or nature of Borrowers or the
Guarantors at any time and from time to time owed to the
Administrative Agent 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
Borrowers.
27
"Omnibus Documents Amendment" means the Second
Omnibus Documents Amendment amending various Loan Documents to
be executed by Borrowers, the Administrative Agent and the
Collateral Agent, in the form of Exhibit G, as of the
Amendment Effective Date, together with all ancillary
amendments to the Loan Documents referred to therein.
"Opinions of Counsel" means the favorable written
legal opinions of (a) Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special
counsel to Borrowers and the Guarantors and (b) ▇▇▇▇▇▇▇
▇▇▇▇▇▇, special Nevada counsel to Borrowers and the
Guarantors, (c) King, Hershey, Coleman, ▇▇▇▇ & ▇▇▇▇▇, special
Missouri counsel to Kansas City and (d) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
special Missouri counsel to St. ▇▇▇▇▇▇▇, substantially in the
form of Exhibits ▇-▇, ▇-▇, ▇-▇ and H-4, respectively.
"Palace Deed of Trust" means a Deed of Trust (Fee)
and/or Deed of Trust (Leasehold) executed by Palace covering
the real property comprising the Palace Station Hotel & Casino
in Las Vegas, Nevada.
"Palace Event of Default" shall have the meaning
provided in Section 12.3.
"Parent" has the meaning set forth in the preamble to
this Agreement.
"Parent Funded Debt Ratio" means the Funded Debt
Ratio of Parent; provided that the components of such ratio
shall be calculated for Parent on a consolidated basis, except
that such calculations shall exclude any amounts or items
attributable to Unrestricted New Venture Entities.
"Parent Guaranty" means the continuing guaranty of
the Obligations to be executed and delivered by Parent, in the
form of Exhibit I, either as originally executed or as it may
from time to time be supplemented, modified, amended, extended
or supplanted.
"Parent Tangible Net Worth" means, as of any date of
determination, the consolidated Stockholders' Equity of Parent
and its Subsidiaries on that date minus the aggregate
Intangible Assets of Parent and its Subsidiaries on that date.
"Party" means any Person other than the
Administrative Agent, the Lenders and any Affiliate of any
Lender, which now or hereafter is a party to any of the Loan
Documents.
28
"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 Borrowers or to which Borrowers
contributes or has an obligation to contribute.
"Peripheral Assets" means (a) the capital stock or
assets of Southwest Gaming Services, Inc., (b) the capital
stock or assets of Southwest Services, Inc., (c) the
out-of-service riverboat commonly known as "Casino St.
▇▇▇▇▇▇▇" and (d) each other asset listed on Schedule 1.1B.
"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 material Property
is subject to a material impending 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
material Property is subject to a material impending 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 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 which in the aggregate do
29
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 Governmental
Agency to control or regulate, or obligations or duties to any
Governmental Agency with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental
Agency to control or regulate, or obligations or duties to any
Governmental 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;
(i) statutory 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 material Property is
subject to a material impending 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 or similar
legislation, including Liens of judgments thereunder which are
not currently dischargeable;
30
(m) Liens consisting of pledges or deposits of
Property to secure performance in connection with operating
leases made in the ordinary course of business, 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);
(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 Borrowers;
(q) Liens consisting of deposits of Property to
secure (or in lieu of) surety, appeal or customs bonds;
(r) Liens created by or resulting from any litigation
or legal proceeding in the ordinary course of 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
impending risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the
ordinary course of business but not in connection with the
incurrence of any Indebtedness, which do not in the aggregate,
when taken together with all other Liens, 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.
"Permitted Preferred Stock" means (a) the Preferred
Stock, (b) the convertible preferred stock issuable to
Crescent Real Estate Equities Company, a Texas real estate
investment trust ("Crescent"), pursuant to Section 5.17 of the
Agreement and Plan of Merger dated as of January 16, 1998
between Parent and Crescent, as generally described in the
letter dated February 24, 1998 from Parent to the Missouri
Gaming Commission or (c) preferred stock of Parent that (i) is
not subject to mandatory redemption or mandatory exchange for
any debt
31
security of Parent, or any redemption or such exchange at the
election of any holder thereof, in each case prior to December
31, 2006, (ii) if it bears a scheduled dividend rate in excess
of 9.5%, permits the payment of dividends in excess of 9.5%
through at least December 31, 2006 in the form of additional
shares of such preferred stock and (iii) is issued pursuant to
charter documents and/or a governing agreement that contains
representations, warranties, covenants, change of control
provisions, events of default and other provisions determined
by the Requisite Lenders (in the exercise of their reasonable
judgment from the perspective of a senior lender) to be not
more favorable to the holders of such preferred stock than
those applicable to the Preferred Stock.
"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 or 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 fair market 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 and (d) a license, or
similar right, of or to Intangible Assets granted in the
ordinary course of business.
"Permitted Sale/Leaseback" means the sale to a Person
not an Affiliate of Parent, and subsequent leaseback, of any
or all of the currently incomplete vessels and related
dockside facilities located at St. ▇▇▇▇▇▇▇, Missouri.
"Permitted Senior Notes" means Indebtedness of Parent
that (a) is not secured by any Lien on any Property of Parent
or any of its Subsidiaries, (b) is not the subject of a
Guaranty Obligation of any Subsidiary of Parent, (c) does not
have any principal or sinking fund payment due prior to
December 31, 2006, (d) is issued pursuant to a governing
agreement that contains representations, warranties,
covenants, change of control provisions, events of default and
other provisions not more onerous to Parent than those
contained in this Agreement and (e) is otherwise reasonably
acceptable in form to the Requisite Lenders.
"Permitted Subordinated Debt" means Indebtedness of
Parent that (i) does not have any principal or sinking fund
payment due prior to December 31, 2006, (ii) is subordinated
(including interest blockage and delayed acceleration
provisions) to the Obligations to at least the same degree as
is set forth in the Model Indenture and (iii) is issued
pursuant to a governing agreement that contains
representations, warranties, covenants, change of
32
control provisions, events of default and other provisions
substantially identical to those in the Model Indenture or
determined by the Requisite Lenders (in the exercise of their
reasonable judgment from the perspective of a senior lender)
to be not more favorable to the holders of such Indebtedness
than those contained in the Model Indenture.
"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 or Governmental Agency.
"Pledge Agreement (Missouri)" means a pledge
agreement substantially in the form of Exhibit J, either as
originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Pledge Agreement (Nevada)" means the Pledge
Agreement executed and delivered by Parent in connection with
the Existing Loan Agreement covering the Pledged Collateral
(Nevada).
"Pledge Agreements" means the Pledge Agreement
(Nevada) and the Pledge Agreement (Missouri).
"Pledged Collateral (Missouri)" means certificates
evidencing 100% of the shares of St. ▇▇▇▇▇▇▇ and Kansas City
(other than any Kansas City Local Shares).
"Pledged Collateral (Nevada)" means certificates
evidencing 100% of the shares of capital stock of Palace,
Boulder, Texas and Sunset.
"Preferred Ship Mortgage" means the preferred ship
mortgage executed and delivered by Kansas City in the form of
Exhibit O to the Existing Loan Agreement, either as originally
executed or as it may from time to time be supplemented,
modified, amended, extended or supplanted.
"Preferred Stock" means the $.01 par value
convertible preferred stock of Parent.
"Pre-Opening Expenses" means, with respect to any
fiscal period, the amount of expenses (other than Interest
Expense) classified as "pre-opening expenses" on the
applicable financial statements of Parent and its Subsidiaries
33
for such period, prepared in accordance with Generally
Accepted Accounting Principles consistently applied.
"Pricing Certificate" means a certificate in the form
of Exhibit K, properly completed and signed by a Senior
Officer of Borrowers.
"Pricing Period" means (a) the period commencing on
the Amendment Effective Date and ending on February 15, 1999,
(b) the period commencing on each February 16 and ending on
the next following May 15, (c) the period commencing on each
May 16 and ending on the next following August 15, (d) the
period commencing on each August 16 and ending on the next
following November 15 and (e) the period commencing on each
November 16 and ending on the next following February 15.
"Prior Palace Credit Facility" means that certain
Reducing Revolving Credit Agreement dated as of May 23, 1993
among Palace, Bank of America NT & SA, as administrative
agent, and the banks party thereto, as heretofore amended.
"Projections" means the financial projections
contained in the Confidential Information Memorandum dated
September 1998 distributed by or on behalf of Borrowers to the
Lenders on or about September 23, 1998.
"Property" means any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or
intangible.
"Pro Rata Share" means, with respect to each Lender,
the percentage of the Commitments set forth opposite the name
of that Lender on Schedule 1.1A, as such percentage may be
increased or decreased pursuant to a Commitments Assignment
and Acceptance executed in accordance with Section 14.8.
"Quarterly Payment Date" means each June 30,
September 30, December 31 and March 31.
"Real Property" means, as of any date of
determination, all real Property then or theretofore owned,
leased or occupied by any of Borrowers.
"Reduction Amount" means, with respect to each
Reduction Date, the amount set forth below opposite that
Reduction Date:
34
Reduction Date Amount
-------------- ---------
September 30, 1999 $ 7,000,000
December 31, 1999
through June 30, 2000 12,250,000
September 30, 2000
through June 30, 2001 14,000,000
September 30, 2001
through September 30, 2003 17,500,000
provided, however, that if the Subordinated Debt Refinancing
has not occurred by December 31, 2000, the Reduction Amounts
for March 31, 2002 and each Reduction Date thereafter shall be
as follows:
Reduction Date Amount
-------------- ----------
March 31, 2002 $35,000,000
June 30, 2002
and September 30, 2002 38,500,000
"Reduction Date" means September 30, 1999 and each
Quarterly Payment Date thereafter.
"Reference Rate" means the rate of interest publicly
announced from time to time by the Domestic Reference Lender
in San Francisco, California (or other headquarters city of
the Domestic Reference Lender), as its "reference rate." It is
a rate set by the Domestic Reference Lender based upon various
factors including the Domestic Reference Lender'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 the Reference Rate announced by the Domestic
Reference Lender shall take effect at the opening of business
on the day specified in the public announcement of such
change.
"Refinancing Facility" means the credit facility
extended to Borrowers by the Lenders pursuant to the Line A
Commitment.
35
"Regulation D" means Regulation D, as at any time
amended, of the Board of Governors of the Federal Reserve
System, or any other regulation in substance substituted
therefor.
"Regulation U" means Regulation U, 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 Loan" means a written request for a Loan
substantially in the form of Exhibit L, signed by a
Responsible Official of any of Borrowers, on behalf of
Borrowers, and properly completed to provide all information
required to be included therein.
"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 any
Law, or judgment, award, decree, writ or determination of a
Governmental 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.
"Requisite Lenders" means (a) as of any date of
determination if the Commitments are then in effect, Lenders
having in the aggregate 66-2/3% or more of the Commitments
then in effect and (b) as of any date of determination if the
Commitments have then been terminated and there is then any
Indebtedness evidenced by the Notes, Lenders holding Notes
evidencing in the aggregate 66-2/3% or more of the aggregate
Indebtedness then evidenced by the Notes.
"Responsible Official" means (a) when used with
reference to a Person other than an individual, any corporate
officer of such Person, general partner of such Person,
corporate officer of a corporate general partner of such
Person, or corporate officer of a corporate general partner of
a partnership that is a general partner of such Person, or any
other responsible official thereof duly acting on behalf
thereof, and (b) 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 Parent or any
of its Subsidiaries as having been authorized by all necessary
corporate partnership and/or other action on the part of
Parent or such Subsidiary; provided that such Responsible
Official has been designated as a Responsible Official for
purposes of this Agreement in a written notice signed by a
Senior Officer and delivered to the Administrative Agent,
which notice has not been cancelled or superseded.
36
"Restricted Subsidiary" means, as of any date of
determination, all Subsidiaries of Parent other than (a) the
Borrowers and (b) Unrestricted New Venture Entities.
"Revolver Lenders" means those Lenders set forth in
Schedule 1.1 as holding a Pro Rata Share of the Line A
Commitment and Line B Commitment.
"Revolver Maturity Date" means (a) if the
Subordinated Debt Refinancing has occurred on or before
December 31, 2000, the earlier of (i) the fifth anniversary of
the Closing Date and (ii) September 30, 2003 and (b) if the
Subordinated Debt Refinancing has not occurred on or before
December 31, 2000, December 31, 2002.
"Revolving Commitments" means the Line A Commitment
and the Line B Commitment.
"Revolving Loan" means a Line A Loan or a Line B
Loan.
"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 that Property, and any option or 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) no covenant restricting the
use or disposition of Property of such Person contained in any
Contractual Obligation of such Person and (b) no 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 be deemed to constitute a Right of Others.
"Secured Swap Agreement" means a Swap Agreement
between Borrowers or Parent (or all or any of them) and a
Lender (or an Affiliate of a Lender) that is secured by a Lien
on the Collateral that complies with the applicable provisions
of Section 13.3.
"Security Agreement" means the security agreement
executed and delivered by Borrowers, in the form of Exhibit R
to the Existing Loan Agreement, either as originally executed
or as it may from time to time be supplemented, modified,
amended, extended or supplanted.
"Senior Officer" means (a) the chief executive
officer, (b) the president, (c) any executive vice president,
(d) any senior vice president, (e) the chief
37
financial officer, (f) the treasurer or (g) any assistant
treasurer, in each case of any of the Borrowers or Parent, as
applicable.
"Sibling Guarantors" means (a) Southwest Gaming
Services, Inc., (b) Southwest Services, Inc., (c) Green Valley
Station, Inc., (d) Tropicana Station, Inc., and (e) any other
future Restricted Subsidiary that (i) is a Wholly-Owned
Subsidiary and (ii) is not an Immaterial Subsidiary.
"Sibling Guaranty" means the continuing guaranty of
the Obligations to be executed and delivered by the Sibling
Guarantors, in the form of Exhibit M, either as originally
executed or as it may from time to time be supplemented,
modified, amended, extended or supplanted.
"Special Eurodollar Circumstance" means the
application or adoption after the Amendment Effective Date of
any Law or interpretation, or any change therein or thereof,
or any change in the interpretation or administration thereof
by any Governmental 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 Governmental Agency, central
bank or comparable authority.
"St. ▇▇▇▇▇▇▇ Deed of Trust" means a Deed of Trust
(Fee) executed by St. ▇▇▇▇▇▇▇ covering (a) the fee simple real
property comprising the St. ▇▇▇▇▇▇▇ Riverfront Station in St.
▇▇▇▇▇▇▇, Missouri and (b) the other fee simple real property
owned by St. ▇▇▇▇▇▇▇ located in St. ▇▇▇▇▇▇▇, Missouri
consisting of approximately 16 parcels comprising
approximately 294 acres in the aggregate.
"Stockholders' Equity" means, as of any date of
determination and with respect to any Person, the consolidated
stockholders' equity of the Person as of that date determined
in accordance with Generally Accepted Accounting Principles;
provided that there shall be excluded from Stockholders'
Equity any amount attributable to Disqualified Stock.
"Subordinated Debt Refinancing" means the refinancing
in its entirety of the Existing Redeemable Subordinated Debt
through the issuance of Permitted Subordinated Debt; provided
that if the Target Leverage Ratio Election is then in effect,
such refinancing may also be through the issuance of Permitted
Senior Notes.
38
"Subordinated Obligations" means (a) the Existing
Redeemable Subordinated Debt, (b) the Existing Other
Subordinated Debt and (c) any Permitted Subordinated Debt.
"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 either
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 securities having ordinary voting power for
the election of directors or other governing body (other than
securities 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.
"Sunset" means Sunset Station, Inc., a Nevada
corporation.
"Sunset Deed of Trust" means the Deed of Trust dated
as of September 25, 1996, as amended, executed by Sunset
creating a Lien on the real Property comprising the Sunset
Station Casino Hotel in Henderson, Nevada.
"Supplemental Loan Agreement" means the Supplemental
Revolving Loan Agreement dated as of September 11, 1998 among
Borrowers, Bank of America NT&SA, as managing agent and the
banks party thereto.
"Swap Agreement" means a written agreement between
Borrowers or Parent (or all or any of them) 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 Borrowers
pursuant to Section 2.9.
"Swing Line Lender" means Bank of America National
Trust and Savings Association, acting through its Las Vegas
Commercial Banking Division.
"Swing Line Loans" means loans made by the Swing Line
Lender to Borrowers pursuant to Section 2.9.
39
"Swing Line Note" means the promissory note executed
by Borrowers in favor of the Swing Line Lender in connection
with the Swing Line.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal Indebtedness of
Borrowers on all Swing Line Loans then outstanding.
"Target Leverage Ratio Election" means a written
notice, in form acceptable to the Administrative Agent,
delivered by Parent to the Administrative Agent stating that
Parent irrevocably elects to amend Section 9.12 to provide
that the maximum Parent Funded Debt Ratio thereafter shall be
4.00 to 1.00, in which case such Section shall thereupon be
deemed so amended without any further action on the part of
the Lenders, Borrowers or Administrative Agent; provided that
the Target Leverage Ratio Election shall automatically be
deemed made on September 30, 2001.
"Term Lenders" means the Lenders set forth in
Schedule 1.1 as holding a Pro Rata Share of the Line C
Commitment.
"Term Loan" means the Line C Loan.
"Term Maturity Date" means December 31, 2005.
"Termination Agreement" means the Termination and
Consent Agreement dated as of the Amendment Effective Date by
and among Borrowers, Parent, the Collateral Agent, Bank of
America National Trust and Savings Association as managing
agent under the Existing Loan Agreement and as managing agent
under the Supplemental Loan Agreement, and Bank of America
National Trust and Savings Association, Societe Generale and
Bank of Scotland, as banks under the Supplemental Loan
Agreement.
"Texas" means Texas Station, Inc., a Nevada
corporation.
"Texas Deed of Trust" means a Deed of Trust
(Leasehold) executed by Texas covering the Texas Gambling Hall
& Hotel, located in Las Vegas, Nevada, as amended,
supplemented or otherwise modified from time to time.
"TIF Real Property" means any Real Property acquired
by St. ▇▇▇▇▇▇▇ pursuant to the exercise of eminent domain by
the City of St. ▇▇▇▇▇▇▇.
40
"Title Company" means Commonwealth Land Title
Company, acting through its representative, Nevada Title
Insurance Company, or such other title insurance company as is
reasonably acceptable to the Administrative Agent.
"to the best 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 trademark
collateral assignment executed and delivered by Borrowers (and
by Parent as record owner of certain trademarks) in the form
of Exhibit T to the Existing Loan Agreement, 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 an Alternate Base Rate Loan or Advance, or a Eurodollar
Rate Loan or Advance.
"Unrestricted New Venture Entity" means (a) any New
Venture in which any single Person other than Parent and its
Subsidiaries owns an equity interest that is larger than the
equity interest owned by Parent and its Subsidiaries and (b)
any other New Venture Entity (except a Restricted Subsidiary)
designated by Parent to be an Unrestricted New Venture Entity
by a then effective written notice to the Administrative
Agent; provided that Parent may, by written notice to the
Administrative Agent, terminate any such designation if (i)
the aggregate Investments theretofore made by Parent in such
New Venture Entity does not exceed $10,000,000, (ii) such New
Venture Entity is either a Wholly-Owned Subsidiary or, if not,
each other holder of an equity interest in such New Venture
Entity is reasonably acceptable to the Requisite Lenders and
(iii) no Default or Event of Default then exists or would
result therefrom, whereupon such New Venture Entity shall
become an additional borrower hereunder.
"Unrestricted New Venture Entity Basket" means zero
Dollars.
41
"Vessel Lienor Consent" means a vessel lienor consent
certificate executed by each holder of a Lien on the riverboat
vessels owned by St. ▇▇▇▇▇▇▇ that are part of the St. ▇▇▇▇▇▇▇
Riverfront Station, substantially in the form of Exhibit U to
the Existing Loan Agreement, either as originally executed or
as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplemented.
"Wholly-Owned Subsidiary" means a Subsidiary of
Parent, 100% of the capital stock of which is owned, directly
or indirectly, by Parent, except for director's qualifying
shares required by applicable Laws.
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,
Generally Accepted Accounting Principles applied on a consistent basis, except
as otherwise specifically prescribed herein. In the event that Generally
Accepted Accounting Principles change during the term of this Agreement such
that the covenants contained in Sections 6.9, 6.10, 7.4, 9.11 or 9.12 would then
be calculated in a different manner or with different components, (a) Parent,
Borrowers and the Lenders agree to amend this Agreement in such respects as are
necessary to conform those covenants as criteria for evaluating Parent's or
Borrowers' financial condition to substantially the same criteria as were
effective prior to such change in Generally Accepted Accounting Principles and
(b) Parent and Borrowers shall be deemed to be in compliance with the covenants
contained in the aforesaid Sections if and to the extent that Parent and
Borrowers would have been in compliance therewith under Generally Accepted
Accounting Principles as in effect immediately prior to such change, but shall
have the obligation to deliver each of the materials described in Article 10 to
the Administrative Agent and the Lenders, on the dates therein specified, with
financial data presented in a manner which conforms with Generally Accepted
Accounting Principles as in effect immediately prior to such change.
1.4 Rounding. Any financial ratios required to be maintained by
Borrowers or Parent 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
42
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 "Borrowers and their Subsidiaries". Any reference
herein to "Borrowers and their Subsidiaries" or the like shall refer solely to
Borrowers during such times, if any, as Borrowers 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 not limitation.
43
Article 2
LOANS
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 Amendment
Effective Date through the Revolver Maturity Date, each Revolver
Lender shall, pro rata according to that Lender's Pro Rata Share of
the then applicable Line A Commitment, make Advances to Borrowers
under the Line A Commitment in such amounts as Borrowers may request
that do not result in (a) the aggregate principal amount outstanding
under the Line A Notes to exceed the Line A Commitment or (b) the
sum of (i) the aggregate principal amount outstanding under the Line
A Notes and Line B Notes plus (ii) the Swing Line Outstandings
(after giving effect to any concurrent payment thereof with the
proceeds of such Advances) to exceed the Revolving Commitments.
Subject to the limitations set forth herein, Borrowers may borrow,
repay and reborrow under the Line A Commitment without premium or
penalty.
(b) Subject to the terms and conditions set forth in this
Agreement (including those set forth in Section 11.2), at any time and
from time to time from the Amendment Effective Date through the
Revolver Maturity Date, each Lender shall, pro rata according to that
Lender's Pro Rata Share of the then applicable Line B Commitment, make
Advances to Borrowers under the Line B Commitment in such amounts as
Borrowers may request that do not result in (a) the aggregate principal
amount outstanding under the Line B Notes to exceed the Line B
Commitment or (b) the sum of (i) the aggregate principal amount
outstanding under the Line A Notes and Line B Notes plus (ii) the Swing
Line Outstandings (after giving effect to any concurrent payment
thereof with the proceeds of such Advances) to exceed the Revolving
Commitments. Subject to the limitations set forth herein, Borrowers may
borrow, repay and reborrow under the Line B Commitment without premium
or penalty.
(c) Subject to the terms and conditions set forth in this
Agreement on the Amendment Effective Date, each Term Lender shall, pro
rata according to that Lender's Pro Rata Share of the Line C
Commitment, make an Advance to Borrowers under the Line C Commitment in
such amounts as Borrowers may request that do not result in the
aggregate principal amount outstanding under the Line C Notes to exceed
the Line C Commitment.
44
Borrowers may not borrow under the Line C Commitment subsequent to the
Amendment Effective Date.
(d) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i)
date of such Loan, (ii) type of Loan, (iii)amount of such Loan, and
(iv) in the case of a Eurodollar Rate Loan, the Interest Period for
such Loan. Unless the Administrative Agent has notified, in its sole
and absolute discretion, Borrowers to the contrary, a Loan may be
requested by telephone by a Responsible Official of Borrowers, in which
case Borrowers shall confirm such request by promptly delivering a
Request for Loan in person or by telecopier conforming to the preceding
sentence to the Administrative Agent. Administrative Agent shall incur
no liability whatsoever hereunder in acting upon any telephonic request
for Loan purportedly made by a Responsible Official of Borrowers, and
Borrowers hereby agree to indemnify the Administrative Agent from any
loss, cost, expense or liability as a result of so acting.
(e) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Revolver Lender or Term Lender
(as applicable) 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 of the
Loan. Not later than 10:00 a.m., California time, on the date specified
for any Loan (which must be a Banking Day), each Revolver Lender or
Term Lender (as applicable) 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 11, all Advances shall be
credited on that date in immediately available funds to the Designated
Deposit Account.
(f) Unless the Requisite Lenders otherwise consent, each
Alternate Base Rate Loan shall be not less than $5,000,000 and each
Eurodollar Rate Loan shall be not less than $10,000,000 and, except to
the extent necessary to permit a Line C Loan to accommodate payment of
an Amortization Amount without incurring breakage costs under Section
3.7(e), in an integral multiple of $1,000,000.
(g) The Advances made by each Lender under the Line A Commitment
shall be evidenced by that Lender's Line A Note. The Advances made by
each Lender under the Line B Commitment shall be evidenced by that
45
Lender's Line B Note. The Advance made by each Lender under the Line C
Commitment shall be evidenced by that Lender's Line C Note.
(h) Subject to Sections 3.7(c) and (e), a Request for Loan shall
be irrevocable upon the Administrative Agent's first notification
thereof.
(i) If no Request for Loan (or telephonic request for Loan
referred to in the second sentence of Section 2.1(d), 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 Eurodollar
Rate Loan, then on the last day of such Interest Period, such
Eurodollar Rate Loan shall be automatically converted into an Alternate
Base Rate Loan in the same amount.
(j) If a Loan is to be made on the same date that another Loan is
due and payable, Borrowers 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 Alternate Base Rate Loans. Each request by Borrowers for an
Alternate Base Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for loan referred to in the second sentence of
Section 2.1(d), if applicable) received by the Administrative Agent, at the
Administrative Agent's Office, not later than 9:00 a.m. California time, on the
date (which must be a Banking Day) of the requested Alternate Base Rate Loan.
All Loans shall constitute Alternate Base Rate Loans unless properly designated
as a Eurodollar Rate Loan pursuant to Section 2.3.
2.3 Eurodollar Rate Loans.
(a) Each request by Borrowers for a Eurodollar Rate Loan shall be
made pursuant to a Request for Loan (or telephonic or other request for
Loan referred to in the second sentence of Section 2.1(d), 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 (3) Eurodollar Banking Days before the first day of the
applicable Eurodollar Period.
(b) On the date which is two (2) Eurodollar Banking Days before
the first day of the applicable Eurodollar Period, the Administrative
Agent shall confirm its determination of the applicable Eurodollar Rate
(which determination shall be conclusive in the absence of manifest
error) and promptly
46
shall give notice of the same to Borrowers and the Lenders by telephone
or telecopier (and if by telephone, promptly confirmed by telecopier).
(c) Unless the Administrative Agent and the Requisite Lenders
otherwise consent, no more than fifteen (15) Eurodollar Rate Loans
(whether under the Line A Commitment, Line B Commitment or Line C
Commitment) shall be outstanding at any one time.
(d) No Eurodollar Rate Loan under the Line A Commitment or the
Line B Commitment may be requested during the continuation of a Default
or Event of Default.
(e) Nothing contained herein shall require any Lender to fund any
Eurodollar Rate Advance in the Designated Eurodollar Market.
2.4 Voluntary Reduction of Revolving Commitments. Borrowers shall have
the right, at any time and from time to time, without penalty or charge, upon at
least three (3) Banking Days' prior written notice by a Responsible Official of
Borrowers to the Administrative Agent, voluntarily to reduce, permanently and
irrevocably, 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 Revolving Commitments, provided that the
Line A Commitment may not be reduced or terminated so long as any portion of the
Line B Commitment remains in effect. The Administrative Agent shall promptly
notify the Lenders of any reduction or termination of the Revolving Commitments
under this Section. Any voluntary reduction of the Revolving Commitments under
this Section shall be applied to reduce the Reduction Amount for the next
following Reduction Date (to the extent of such reduction) and thereafter to
subsequent Reduction Dates (to the extent not previously applied) in the order
of their occurrence.
2.5 Automatic Reduction of Revolving Commitments. Subject to the last
sentence of Section 2.4, on each Reduction Date, (a) the Line B Commitment shall
automatically be reduced by the applicable Reduction Amount until the Line B
Commitment is reduced to zero and (b) after the Line B Commitment is reduced to
zero, the Line A Commitment shall automatically be reduced by the applicable
Reduction Amount.
2.6 Automatic Reduction of Term Commitment. At the close of business
on the Amendment Effective Date, any unused portion of the Line C Commitment
shall automatically terminate.
47
2.7 Optional Termination of Commitments. Following the occurrence of a
Change in Control, the Requisite Lenders may in their sole and absolute
discretion elect, during the thirty (30) day period immediately subsequent to
the later of (a) such occurrence or (b) the earlier of (i) receipt of Borrowers'
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, and all Indebtedness then
evidenced by the Notes shall become due and payable, effective on the date which
is thirty (30) days subsequent to written notice from the Administrative Agent
to Borrowers thereof.
2.8 Administrative Agent's Right to Assume Funds Available for
Advances. Unless the Administrative Agent shall have been notified by any Lender
no later than 11:00 a.m. on the Banking 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
Borrowers a corresponding amount. If the Administrative Agent has made funds
available to Borrowers 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 Borrowers and Borrowers 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 Borrowers 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 share of the Commitments or to prejudice any
rights which the Administrative Agent or Borrowers may have against any Lender
as a result of any default by such Lender hereunder.
2.9 Swing Line.
(a) Subject to the terms and conditions of this Agreement, the
Swing Line Lender shall from time to time from the Amendment Effective
Date through the day prior to the Revolver Maturity Date make Swing
Line Loans to Borrowers in such amounts as Borrowers may request,
provided that (i) after
48
giving effect to such Swing Line Loan, the Swing Line Outstandings do
not exceed $15,000,000 and the aggregate of the Swing Line
Outstandings, the Line A Loans and the Line B Loans do not exceed the
Revolving Commitments, (ii) without the consent of all of the Lenders,
no Swing Line Loan may be made during the continuation of an Event of
Default and (iii) the Swing Line Lender has not given at least
twenty-four (24) hours prior notice to Borrowers that availability
under the Swing Line is suspended or terminated. Borrowers may borrow,
repay and reborrow under this Section without premium or penalty.
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 Borrowers made to the Administrative Agent not later than 1:00 p.m.,
California time, on the Banking 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(a) or 2.1(b) (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 Borrowers instruct 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 Banking Day, such payment shall be deemed
received on the next Banking Day. The Swing Line Lender shall promptly
notify the Administrative Agent of the Swing Loan Outstandings each
time there is a change therein and promptly notify the Administrative
Agent and the Lenders if it suspends or terminates availability under
the Swing Line.
(b) Swing Line Loans shall bear interest at the rate set forth in
the Swing Line Note. 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 Revolver Maturity Date. The Swing Line Lender shall
be responsible for invoicing Borrowers for such interest. The interest
payable on Swing Line Loans is solely for the account of the Swing Line
Lender (subject to clause (c) below).
(c) The Swing Line Loans shall be payable within five (5) Banking
Days after demand made by the Swing Line Lender and in any event on the
Revolver Maturity Date.
49
(d) Upon the making of a Swing Line Loan in accordance with
Section 2.9(a), each Revolver 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 Line A Commitment times the
amount of the Swing Line Loan. Upon demand made by the Swing Line
Lender, each Lender shall, according to its Pro Rata Share of the Line
A Commitment, promptly provide to the Swing Line Lender its purchase
price therefor in an amount equal to its participation therein. The
obligation of each Revolver 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; provided that no Revolver
Lender shall be obligated to purchase its Pro Rata Share of (i) Swing
Line Loans to the extent that Swing Line Outstandings are in excess of
$15,000,000 or to the extent that the sum of the Indebtedness evidenced
by the Line A Notes and the Line B Notes plus the Swing Line
Outstandings exceeds the Revolving Commitments or (ii) any Swing Line
Loan made (absent the consent of all of the Revolver Lenders) during
the continuation of an Event of Default. Each Revolver 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 Borrowers for principal and interest and shall
share, in accordance with that pro rata participation, in any principal
payment made by Borrowers with respect to such claim and in any
interest payment made by Borrowers (but only with respect to periods
subsequent to the date such Revolver Lender paid the Swing Line Lender
its purchase price) with respect to such claim.
(e) In the event that the Swing Line Outstandings are outstanding
ten (10) consecutive Banking Days, then on the next Banking Day (unless
Borrowers have made other arrangements acceptable to the Swing Line
Lender to pay the Swing Line Outstandings in full), Borrowers shall
request a Loan pursuant to Section 2.1(a) or 2.1(b) sufficient to pay
the Swing Line Outstandings in full. In addition, upon any demand for
payment of the Swing Line Outstandings by the Swing Line Lender (unless
Borrowers have made other arrangements acceptable to the Swing Line
Lender to reduce the Swing Line Outstandings to $0), Borrowers shall
request a Loan pursuant to Section 2.1(a) or 2.1(b) sufficient to repay
all Swing Line Outstandings (and, for this purpose, Section 2.1(f)
shall not apply). In each case, the Administrative Agent shall
automatically provide the responsive Advances made by each Revolver
Lender to the Swing Line Lender (which the Swing Line Lender shall then
apply to the Swing Line Outstandings). In the event that
50
Borrowers so fail to request such 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 Borrowers, cause
Advances to be made by the Revolver Lenders under the Line A Commitment
or Line B Commitment (as specified by the Administrative Agent) in
amounts which are sufficient to reduce the Swing Line Outstandings as
required above. The conditions precedent set forth in Article 11 shall
not apply to Advances to be made by the Revolver Lenders pursuant to
the three preceding sentences, but the Revolver Lenders shall not be
obligated to make such Advances to the extent that the conditions set
forth in Section 2.9(a)(i), (ii) and (iii) were not satisfied as to any
Swing Line Loan which is part of such Swing Line Outstandings. The
proceeds of such Advances shall be paid directly to the Swing Line
Lender for application to the Swing Line Outstandings.
2.10 Refinancing. Borrowers, the Administrative Agent and the Lenders
intend that the Refinancing Facility be deemed an amendment, restatement and
refinancing of the Prior Palace Credit Facility, to the extent not expressly
otherwise provided for in this Agreement.
2.11 Collateral and Guaranty. The Obligations shall be secured by the
Collateral pursuant to the Collateral Documents and be guaranteed by Parent
pursuant to the Parent Guaranty and by the Sibling Guarantors pursuant to the
Sibling Guaranty.
2.12 Senior Indebtedness. The Obligations shall be "Senior
Indebtedness" with respect to all Subordinated Obligations.
51
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 Alternate Base Rate Loan on each
Quarterly Payment Date shall be due and payable on that day. Except as
otherwise provided in Section 3.9, the unpaid principal amount of any
Alternate Base Rate Loan shall bear interest at a fluctuating rate per
annum equal to the Alternate Base Rate plus the Applicable Revolver
Alternate Base Rate Margin. Each change in the interest rate under this
Section 3.1(b) due to a change in the Alternate Base Rate shall take
effect simultaneously with the corresponding change in the Alternate
Base Rate.
(c) Interest accrued on each Eurodollar Rate Loan which is for a
term of three months or less shall be due and payable on the last day
of the related Eurodollar Period. Interest accrued on each other
Eurodollar Rate Loan shall be due and payable on the date which is
three months after the date such Eurodollar Rate Loan was made (and, in
the event that all of the Revolver Lenders or Term Lenders (as
applicable) have approved a Eurodollar Period of longer than six
months, every three months thereafter through the last day of the
Eurodollar Period) and on the last day of the related Eurodollar
Period. Except as otherwise provided in Section 3.8, the unpaid
principal amount of any Eurodollar Revolver Loan shall bear interest at
a rate per annum equal to the Eurodollar Rate for that Eurodollar
Revolver Loan plus the Applicable Revolver Eurodollar Rate Margin.
Except as otherwise provided in Section 3.9, the unpaid principal
amount of any Eurodollar Term Loan shall bear interest at a rate per
annum equal to the Eurodollar Rate for that Eurodollar Term Loan plus
3.25% (325 basis points).
(d) If not sooner paid, the principal Indebtedness evidenced by
the Notes shall be payable as follows:
52
(i) the amount, if any, by which (A) the sum of (I) the
principal Indebtedness evidenced by the Line A Notes plus (II) the
Swing Line Outstandings at any time exceeds the then applicable
Line A Commitment or (B) the principal Indebtedness evidenced by
the Line B Notes at any time exceeds the then applicable Line B
Commitment, shall in each case be payable immediately;
(ii) the Line C Notes shall be payable on each Amortization
Date by the related Amortization Amount;
(iii) the principal Indebtedness evidenced by the Line A
Notes and Line B Notes shall in any event be payable on the
Revolver Maturity Date; and
(iv) the principal Indebtedness evidenced by the Line C
Notes shall in any event be payable on the Term Maturity Date.
(e) The Notes 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 Banking Day) in the case of an Alternate Base Rate
Loan, and, in the case of a Eurodollar Rate Loan, three (3) Banking
Days before the date of prepayment, which notice shall identify the
date and amount of the prepayment and the Loan(s) being prepaid, (iii)
each prepayment of principal on any Eurodollar Rate Loan shall be
accompanied by payment of interest accrued to the date of payment on
the amount of principal paid, (iv) any payment or prepayment of all or
any part of any Eurodollar Rate Loan on a day other than the last day
of the applicable Interest Period shall be subject to Section 3.7(e)
and (v) upon any partial prepayment of a Eurodollar Rate Loan that
reduces it below $10,000,000, the remaining portion thereof shall
automatically convert to an Alternate Base Rate Loan. Any voluntary
prepayment of the Line C Notes shall be applied to the remaining
Amortization Amounts, each in an amount that in the same proportion as
such Amortization Amount bears to the aggregate of such remaining
Amortization Amounts.
3.2 Arrangement Fee. On the Amendment Effective Date, Borrowers shall
pay to the Lead Arranger the balance of the arrangement fee as
53
heretofore agreed upon by letter agreement between Borrowers and the Lead
Arranger. Such arrangement fee is for the services of the Lead Arranger in
arranging the credit facilities under this Agreement and is fully earned when
paid. The arrangement fee paid to the Lead Arranger is solely for its own
account and is nonrefundable.
3.3 Upfront Fee. On the Amendment Effective Date, Borrowers shall pay
to the Administrative Agent, for the respective accounts of the Lenders pro rata
according to their Pro Rata Share of the Commitments, an upfront fee in an
amount set forth in a letter from the Lead Arranger to each Lender and
acknowledged by that Lender and by Borrowers 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 fee paid
to each Lender is solely for its own account and is nonrefundable.
3.4 Commitment Fee. From the Amendment Effective Date, Borrowers shall
pay to the Administrative Agent, for the ratable accounts of the Revolver
Lenders pro rata according to their Pro Rata Share of the Revolving Commitments,
a commitment fee equal to the daily Applicable Revolver Commitment Fee Rate per
annum times the average daily amount by which the Revolving Commitments exceed
the aggregate daily principal Indebtedness evidenced by the Line A Notes and
Line B Notes (but not the Swing Line Outstandings). The commitment fee shall be
payable quarterly in arrears on each Quarterly Payment Date and on the Revolver
Maturity Date.
3.5 Agency Fee. Borrowers shall pay to the Administrative Agent an
agency fee in such amounts and at such times as heretofore agreed upon by letter
agreement between Borrowers 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.
3.6 Increased Commitment Costs. If any Lender shall determine in good
faith that the introduction after the Amendment Effective 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 Governmental 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 not imposed as a result of such
Lender's or such corporation's failure to comply with any other Laws, affects or
would affect the amount of capital required or
54
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 ten (10) Banking Days after demand of such
Lender, Borrowers 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 Borrowers shall not be
obligated to pay any such amount which arose prior to the date which is ninety
(90) days preceding the date of such demand or is attributable to periods prior
to the date which is ninety (90) days preceding the date of such demand. Each
Lender's determination of such amounts shall be conclusive in the absence of
manifest error.
3.7 Eurodollar Costs and Related Matters.
(a) In the event that any Governmental 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, Borrowers shall pay that
Lender within five (5) Banking Days after demand all amounts
necessary to compensate such Lender (determined as though such
Lender's Eurodollar Lending Office had funded 100% of its Eurodollar
Rate Advance in the Designated Eurodollar Market) in respect of the
imposition of such reserve requirements (provided, that Borrowers
shall not be obligated to pay any such amount which arose prior to
the date which is ninety (90) days preceding the date of such demand
or is attributable to periods prior to the date which is ninety (90)
days preceding the date of such demand). 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:
(1) shall subject any Lender or its Eurodollar Lending
Office to any tax, duty or other charge or cost with respect to
any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar Rate
Advances, or shall change the basis of taxation of payments to any
Lender attributable to the principal of or interest on any
Eurodollar Rate Advance or any other amounts due under this
Agreement in respect of any Eurodollar Rate
55
Advance, any of its Notes evidencing Eurodollar Rate Loans or its
obligation to make Eurodollar Rate Advances (provided, that
Borrowers shall not be obligated to pay any such amount which
arose prior to the date which is ninety (90) days preceding the
date of such demand or is attributable to periods prior to the
date which is ninety (90) days preceding the date of such demand),
excluding (i) taxes imposed on or measured in whole or in part by
its overall net income 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" and (ii) 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
Borrowers with the appropriate form or forms required by Section
14.21, to the extent such forms are then required by applicable
Laws;
(2) 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
(3) shall impose on any Lender or its Eurodollar Lending
Office or the Designated Eurodollar Market any other condition
affecting any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans, its obligation to make Eurodollar Rate
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 Eurodollar Rate Advance or
in respect of any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar Rate
Advances or reduces the amount of any sum received or receivable by
such Lender or its Eurodollar Lending Office with respect to any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate
Loans or its obligation to make Eurodollar Rate Advances (assuming such
Lender's Eurodollar Lending Office had funded 100% of its Eurodollar
Rate Advance in the Designated Eurodollar Market), then, within five
(5) Banking Days after demand by such Bank (with a copy to the
Administrative Agent), Borrowers shall pay to such Lender such
additional
56
amount or amounts as will compensate such Lender for such increased
cost or reduction (determined as though such Bank's Eurodollar Lending
Office had funded 100% of its Eurodollar Rate Advance in the Designated
Eurodollar Market). A statement of any Lender claiming compensation
under this subsection 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
Eurodollar Rate 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 Eurodollar
Rate 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 Borrowers. Upon receipt of such
notice, the outstanding principal amount of such Lender's Eurodollar
Rate Advances, together with accrued interest thereon, automatically
shall be converted to Alternate Base Rate Advances on either (1) the
last day of the Eurodollar Period(s) applicable to such Eurodollar Rate
Advances if such Lender may lawfully continue to maintain and fund such
Eurodollar Rate Advances to such day(s) or (2) immediately if such
Lender may not lawfully continue to fund and maintain such Eurodollar
Rate Advances to such day(s), provided that in such event the
conversion shall not be subject to payment of a prepayment fee under
Section 3.7(e). Each Lender agrees to endeavor promptly to notify
Borrowers of any event of which it has actual knowledge, occurring
after the Amendment Effective 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
Eurodollar Rate Loan, such Lender shall fund such amount as an
Alternate Base Rate Advance for the same period of time, and such
amount shall be treated in all respects as an Alternate Base Rate
Advance. Any Lender whose obligation to make Eurodollar Rate Advances
has been suspended under this Section shall promptly notify the
Administrative Agent and Borrowers of the cessation of the Special
Eurodollar Circumstance which gave rise to such suspension.
57
(d) Notwithstanding any other provision of this Agreement, (i)
all references to "Lender" in this Section 3.7 shall include the Term
Lenders and (ii) all references to Eurodollar Rate Advances shall
include Eurodollar Rate Advances made in connection with the Term Loan
(each a "Term Loan Advance"). Any Term Loan Advance, together with
accrued interest thereon, that is converted to an Alternate Base Rate
Advance pursuant to Sections 3.7(c) or 3.7(e), shall (A) bear interest
at a rate per annum equal to the Alternate Base Rate plus one and
one-quarter percent (1.25%) and (B) convert back to a Eurodollar Rate
Advance as soon as practicable following the cessation of the Special
Eurodollar Circumstance or the circumstances described in clause (1) or
(2) of Section 3.1(e), as applicable, which gave rise to the
conversion. If the amounts charged to Borrowers pursuant to Sections
3.7(a) and 3.7(b) make it commercially unreasonable for Borrowers to
maintain the Term Loan as a Eurodollar Rate Loan, Borrowers shall be
permitted to convert each Term Loan Advance to an Alternate Base Rate
Advance at any time thereafter upon notice to the Administrative Agent
(it being understood and agreed that Borrowers may so convert such
portions of any Term Loan Advance as may be necessary to avoid breakage
costs under Section 3.7(f)). A Term Loan Advance so converted shall
bear interest as set forth above and shall be re-converted to a
Eurodollar Rate Advance upon three (3) Eurodollar Banking Days' notice
to the Administrative Agent following the cessation of the Special
Eurodollar Circumstance or the circumstances described in Section
3.7(e) or the determination by the Lender that it no longer chooses to
require Borrowers to pay such amounts.
(e) If, with respect to any proposed Eurodollar Rate Loan:
(1) 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 Eurodollar Period; or
(2) the Requisite 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 Eurodollar Period, or (ii) will
not adequately and fairly reflect the cost to such Lenders of
making the applicable Eurodollar Rate Advances;
58
then the Administrative Agent forthwith shall give notice thereof to
Borrowers and the Lenders, whereupon until the Administrative Agent
notifies Borrowers that the circumstances giving rise to such
suspension no longer exist, the obligation of the Lenders to make any
future Eurodollar Rate Advances shall be suspended. Upon any such
suspension, the Term Loan Advances shall be converted to Alternate Base
Rate Advances in accordance with Section 3.7(d) as of the first day of
the Interest Period during which such circumstances arise.
(f) Upon payment or prepayment of any Eurodollar Rate Advance
(other than as the result of a conversion required under Section
3.7(c)), on a day other than the last day in the applicable Eurodollar
Period (whether voluntarily, involuntarily, by reason of acceleration,
or otherwise), or upon the failure of Borrowers (for a reason other
than the breach by a Lender of its obligation pursuant to Sections
2.1(a) or 2.1(b) to make an Advance or the suspension of any Lender's
obligation to make or maintain Eurodollar Rate Loans under Section 3.7)
to borrow on the date or in the amount specified for a Eurodollar Rate
Loan in any Request for Loan, Borrowers shall pay to the appropriate
Lender within ten (10) Banking Days after demand a prepayment fee or
failure to borrow fee, as the case may be (determined as though 100% of
the Eurodollar Rate Advance had been funded in the Designated
Eurodollar Market) equal to the sum of:
(1) the principal amount of the Eurodollar Rate 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 Eurodollar Period], divided by 360, times the
applicable Interest Differential (provided that the product of the
foregoing formula must be a positive number); plus
(2) 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.
(g) Each Lender agrees to endeavor promptly to notify Borrowers
of any event of which it has actual knowledge, occurring after the
Amendment Effective Date, which will entitle such Lender to
compensation pursuant to clause (a) or clause (b) of this Section 3.7,
and agrees to designate a
59
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 3.7 shall set forth the basis upon which
it has been determined that such an amount is due from Borrowers, a
calculation of the amount due, and a certification that the
corresponding costs have been incurred by the Lender.
3.8 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, it shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the
sum of the Alternate Base Rate plus the Applicable Revolver Alternate Base Rate
Margin plus 2%, to the fullest extent permitted by applicable Laws. Accrued and
unpaid interest on past due amounts (including, without limitation, 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.
3.9 Computation of Interest and Fees. Computation of interest and fees
under this Agreement shall be calculated on the basis of a year of 360 days and
the actual number of days elapsed. 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.
3.10 Non-Banking Days. If any payment to be made by Borrowers or any
other Party under any Loan Document shall come due on a day other than a Banking
Day, payment shall instead be considered due on the next succeeding Banking Day
and the extension of time shall be reflected in computing interest and fees.
3.11 Manner and Treatment of Payments.
(a) Each payment hereunder (except payments pursuant to Sections
3.6, 3.7, 14.3, 14.11 and 14.22) 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 the Lenders or the
60
Administrative Agent, as the case may be, in immediately available
funds not later than 11:00 a.m. California time, on the day of payment
(which must be a Banking Day). All payments received after such time,
on any Banking Day, shall be deemed received on the next succeeding
Banking 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 Banking Day and not so made available
to the account of a Lender on that Banking 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.
(b) 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.
(c) Each Lender shall use its best efforts to keep a record (in
writing or by an electronic data entry system) of Advances made by it
and payments received by it with respect to each of its Notes and,
subject to Section 13.6(g), such record shall, as against Borrowers, be
presumptive evidence of the amounts owing. Notwithstanding the
foregoing sentence, the failure by any Lender to keep such a record
shall not affect Borrowers' obligation to pay the Obligations.
(d) Each payment of any amount payable by Borrowers 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 Governmental Agency,
central bank or comparable authority, excluding (i) taxes imposed on or
measured in whole or in part by its overall net income 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" and (ii) 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 Borrowers
with the appropriate form or forms required by Section 14.21, 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"). To the extent that Borrowers are obligated by
applicable Laws to make any deduction or withholding on account of
Taxes from any amount payable to any Lender under this Agreement,
61
Borrowers shall (i) make such deduction or withholding and pay the same
to the relevant Governmental 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 Borrowers.
3.12 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.
3.13 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 3.8), 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 3.8), 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.
3.14 Administrative Agent's Right to Assume Payments Will be Made by
Borrowers. Unless the Administrative Agent shall have been notified by Borrowers
prior to the date on which any payment to be made by Borrowers hereunder is due
that Borrowers do not intend to remit such payment, the Administrative Agent
may, in its discretion, assume that Borrowers have 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 Borrowers have 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.
3.15 Fee Determination Detail. The Administrative Agent, and any
Lender, shall provide reasonable detail to Borrowers regarding the manner in
which the amount of any payment to the Administrative Agent and the Lenders, or
that
62
Lender, under Article 3 has been determined, concurrently with demand for such
payment.
3.16 Survivability. All of Borrowers' obligations under Sections 3.6
and 3.7 shall survive for the ninety (90) day period following the date on which
the Commitments are terminated and all Loans hereunder are fully paid, and
Borrowers shall remain obligated thereunder for all claims under such Sections
made by any Lender to Borrowers prior to the expiration of such period.
63
Article 4
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to the Lenders that:
4.1 Existence and Qualification; Power; Compliance With Laws. Each of
Palace, Boulder, Texas, St. ▇▇▇▇▇▇▇, Kansas City and Sunset is a corporation
duly formed, validly existing and in good standing under the Laws of Nevada (in
the case of Palace, Boulder, Texas and Sunset) and Missouri (in the case of St.
▇▇▇▇▇▇▇ and Kansas City). Parent is a corporation duly formed, validly existing
and in good standing under the Laws of Nevada and each of the Sibling Guarantors
is a corporation duly formed, validly existing and in good standing under the
Laws of its state of incorporation. Each of Borrowers and the Guarantors is duly
qualified or registered to transact business and is in good standing in each
other jurisdiction in which the conduct of its business or the ownership or
leasing of its Properties makes such qualification or registration necessary,
except where the failure so to qualify or register and to be in good standing
would not constitute a Material Adverse Effect. Each of Borrowers and the
Guarantors 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. The chief
executive offices of each of Borrowers is located in Nevada. All outstanding
shares of capital stock of Parent are 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. Each of
Borrowers and the Guarantors 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 Governmental Agency that are necessary for the
transaction of its business, except where the failure so to comply, obtain
authorizations, etc., 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 each of
Borrowers and each of the Guarantors of the Loan Documents to which it is a
Party have been duly authorized by all necessary corporate action, and do not
and will not:
(a) Require any consent or approval not heretofore obtained of
any partner, director, stockholder, security holder or creditor of such
Party;
64
(b) Violate or conflict with any provision of such Party's
charter, articles of incorporation or bylaws, 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 Liens and Rights
of Others created by the Loan Documents);
(d) Violate any Requirement of Law applicable to such Party,
subject to obtaining the authorizations from, or filings with, the
Governmental 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
Contractual Obligation (other than the Loan Documents) to which such
Party is a party or by which such Party or any of its Property is bound
or affected;
and none of Borrowers or any of the Guarantors is in violation of, or default
under, any Requirement of Law or Contractual Obligation, including any
Contractual Obligation described in Section 4.2(e), in any respect that
constitutes a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as set forth in
Schedule 4.3 or previously obtained or made, no authorization, consent,
approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Agency is or will be required to authorize
or permit under applicable Laws the execution, delivery and performance by each
of the Borrowers and the Guarantors of the Loan Documents to which it is a
Party.
4.4 Subsidiaries. None of Borrowers has any Subsidiaries, except that
Kansas City owns 100% of the outstanding capital stock of Station Casino Kansas
City Restaurants, Inc. Schedule 4.4 hereto correctly sets forth the names, form
of legal entity, number of shares of capital stock issued and outstanding, and
the record owner thereof and jurisdictions of organization of all Subsidiaries
of Parent and specifies, as of the Amendment Effective Date, which thereof are
Restricted Subsidiaries and which thereof are Immaterial Subsidiaries. Unless
otherwise indicated in Schedule 4.4, all of the outstanding shares of capital
stock, or all of the units of equity interest, as the case may be, of each
Restricted Subsidiary are owned of record and beneficially by Parent, there are
no outstanding options, warrants or other rights to purchase capital stock of
any such Subsidiary, and all such shares or equity interests 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
65
all Liens and Rights of Others, except for Permitted Encumbrances and Permitted
Rights of Others.
4.5 Financial Statements. Borrowers have furnished to the Lenders (a)
the audited consolidated financial statements of Parent and its Subsidiaries for
the Fiscal Year ended March 31, 1998 and (b) the unaudited consolidated and
consolidating balance sheet and statement of operations of Parent and its
Subsidiaries for the Fiscal Quarter ended June 30, 1998. The financial
statements described in clause (a) fairly present in all material respects the
financial condition, results of operations and changes in financial position,
and the balance sheet and statement of operations described in clause (b) fairly
present the financial condition and results of operations of Parent and its
Subsidiaries as of such dates and for such periods in conformity with Generally
Accepted Accounting Principles, consistently applied.
4.6 No Other Liabilities; No Material Adverse Changes. Borrowers do
not have any material liability or material contingent liability required under
Generally Accepted Accounting Principles to be reflected or disclosed and not
reflected or disclosed in the balance sheet described in Section 4.5(b), other
than liabilities and contingent liabilities arising in the ordinary course of
business since the date of such financial statements. As of the Amendment
Effective Date, no circumstance or event has occurred that constitutes a
Material Adverse Effect since June 30, 1998. As of any date subsequent to the
Amendment Effective Date, no circumstance or event has occurred that constitutes
a Material Adverse Effect since the Amendment Effective Date.
4.7 Title to Property. Each Borrower has valid title to its respective
Property (other than assets which are the subject of a Capital Lease Obligation)
reflected in the balance sheet described in Section 4.5(b), other than items of
Property or exceptions to title which are in each case immaterial to Borrowers
and Property subsequently sold or disposed of in the ordinary course of
business, free and clear of all Liens and Rights of Others, other than Liens or
Rights of Others described in Schedule 4.7, Permitted Rights of Others or Liens
permitted by Section 6.6.
4.8 Intangible Assets. Each Borrower owns, or possesses the right to
use to the extent necessary in its business, all material trademarks, trade
names, copyrights, patents, patent rights, computer software, licenses and other
Intangible Assets that are used in the conduct of its businesses as now
operated, and no such Intangible Asset, to the best knowledge of Borrowers,
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 Borrowers
66
at any time within the five (5) year period ending on the Amendment Effective
Date and sets forth the owner of record of each thereof.
4.9 Public Utility Holding Company Act. Neither any of Borrowers nor
any Guarantor is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
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 of
related matters, involving a claim against Parent or any of its Subsidiaries of
less than $1,000,000, (c) matters of an administrative nature not involving a
claim or charge against Parent or any of its Subsidiaries and (d) matters set
forth in Schedule 4.10, there are no actions, suits, proceedings or
investigations pending as to which Parent or any of its Subsidiaries have been
served or have received notice or, to the best knowledge of Borrowers,
threatened against or affecting Parent or any of its Subsidiaries or any
Property of any of them before any Governmental Agency.
4.11 Binding Obligations. Each of the Loan Documents to which any of
Borrowers or the Guarantors 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
noncompliance could reasonably be expected to have a Material
Adverse Effect;
67
(ii) such Pension Plan has not incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) that
could reasonably be expected to have a Material Adverse Effect;
(iii) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred that could reasonably be expected to have a
Material Adverse Effect; and
(iv) none of Parent nor any of its Subsidiaries has engaged
in any non-exempt "prohibited transaction" (as defined in Section
4975 of the Code) that could reasonably be expected to have a
Material Adverse Effect.
(b) None of Parent nor any of its Subsidiaries has incurred or
expects to incur any withdrawal liability to any Multiemployer Plan
that could reasonably be expected to have a Material Adverse Effect.
4.14 Regulation U; Investment Company Act. No part of the proceeds of
any Loan hereunder 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 Regulation U. Neither Parent nor any of its 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 of
Parent 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 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. Parent and its Subsidiaries have filed all tax
returns which are required to be filed, and 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 Parent or any
of its Subsidiaries, except (a) such taxes, if any, as are being contested in
good faith by appropriate proceedings and as to which adequate reserves have
been established and maintained and (b) immaterial taxes so long as no material
Property of Parent or any of its Subsidiaries is at impending risk of being
seized, levied upon or forfeited.
4.17 Projections. Borrowers have formulated the assumptions set forth
in the Projections based on their historical experience in the relevant business
or financial context, have adjusted such assumptions to take account of what
Borrowers
68
believe to be current and projected business and financial conditions and have
performed what Borrowers believe is a reasonably thorough due diligence process
with respect to such assumptions. As of the Amendment Effective Date, Borrowers
believe that the assumptions set forth in the Projections are reasonable and
consistent with each other and with all facts known to Borrowers, and that 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, as of
the Amendment Effective Date (a) none of Borrowers 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 best knowledge of Borrowers, 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
Borrowers 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
Borrowers on any Real Property, or transported to or from such Real Property by
Borrowers, such use, generation, storage and transportation are in compliance
with all Hazardous Materials Laws except for such non-compliance that would not
constitute a Material Adverse Effect or be materially adverse to the interests
of the Lenders.
4.19 Developed Properties. As of the Amendment Effective Date, the
facilities described on Schedule 4.19 comprise all of the Developed Property
owned by Parent and its Subsidiaries.
4.20 Gaming Laws. Each Borrower is in compliance with all applicable
Gaming Laws except for such non-compliance that would not constitute a Material
Adverse Effect.
4.21 Security Interests. Upon the execution and delivery of the Omnibus
Documents Amendment, the Security Agreement will continue to create a valid
first priority security interest in the Collateral described therein securing
the Obligations (subject only to Permitted Encumbrances, Permitted Rights of
Others, Liens permitted under Section 6.6(e) and matters disclosed in Schedule
4.7 and to such qualifications and exceptions as are contained in the Uniform
Commercial Code with respect to the priority of security interests perfected by
means other than the filing of a financing statement or with respect to the
creation of security interests in Property to which Division 9 of the Uniform
Commercial Code does not apply) and all action
69
necessary to perfect the security interests so created, other than filing of the
UCC-1 financing statements delivered to the Administrative Agent pursuant to
Section 11.1 with the appropriate Governmental Agency have been taken and
completed. Upon the execution and delivery of the Omnibus Documents Amendment,
the Trademark Collateral Assignment will continue to create a valid first
priority collateral assignment of the Collateral described therein securing the
Obligations (subject to the matters disclosed in Schedule 4.7) and all action
necessary to perfect the collateral assignment so created, other than the filing
thereof with the United States Patent and Trademark Office, will have been taken
and completed. Upon execution and delivery of the Pledge Agreement (Missouri),
the Pledge Agreement (Missouri) will create a valid first priority security
interest in the Pledged Collateral (Missouri) and upon delivery of the Pledged
Collateral (Missouri) to the Administrative Agent (or its designee) in the State
of Missouri, all action necessary to perfect the security interest so created
will have been taken and completed. Upon the execution and delivery of the
Omnibus Documents Amendment, the Pledge Agreement (Nevada) will continue to
create a valid first priority security interest in the Pledged Collateral
(Nevada) and upon delivery of the Pledged Collateral (Nevada) to the
Administrative Agent (or its designee) in the State of Nevada, all action
necessary to perfect the security interest so created has been taken and
completed. Upon the execution and delivery of the Deed of Trust Amendment with
respect to each of the Deeds of Trust, such Deed of Trust will continue to
create a valid Lien in the Collateral described therein securing the
Obligations, other than those arising under Sections 4.18, 5.10 and 14.22,
(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
Governmental Agencies, will have been taken and completed. Upon the execution
and delivery of the Omnibus Documents Amendment, the Preferred Ship Mortgage
will continue to create a valid Lien in the Collateral described therein
securing the Obligations (subject only to Permitted Encumbrances and Permitted
Rights of Others), and all action necessary to perfect the Lien so created,
other than recordation or filing thereof with the appropriate Governmental
Agencies, will have been taken and completed.
70
Article 5
BORROWERS 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 the Commitments remains in force, Borrowers shall,
unless the Administrative Agent (with the written approval of the Requisite
Lenders) 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 Borrowers 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 Borrowers is at material risk of
impending seizure, levy or forfeiture.
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 Governmental Agency that are
necessary for the transaction of their respective business 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 Borrowers and their Subsidiaries, taken as
a whole, shall not constitute a violation of this covenant.
5.4 Maintenance of Insurance. Maintain liability, casualty and other
insurance (subject to customary deductibles and retentions) with responsible
insurance companies in such amounts and against such risks as is carried by
responsible
71
companies engaged in similar businesses and owning similar assets in the general
areas in which Borrowers operate and, in any event, such insurance as may be
required under the Deeds of Trust.
5.5 Compliance With Laws. Comply, within the time period, if any,
given for such compliance by the relevant Governmental Agency or Agencies with
enforcement authority, with all Requirements of Law noncompliance with which
constitutes a Material Adverse Effect, except that Borrowers 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 Parent 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,
Parent and its Subsidiaries and to discuss the affairs, finances and accounts of
Parent and its Subsidiaries with any of their officers, key employees or
accountants.
5.7 Keeping of Records and Books of Account. Keep adequate records and
books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles, consistently applied, and in material
conformity with all applicable requirements of any Governmental Agency having
regulatory jurisdiction over Borrowers.
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, 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 made on the Amendment
Effective Date to refinance the Indebtedness under the Existing Loan Agreement
and the Supplemental Loan Agreement, and the proceeds of subsequent Line A Loans
and Line B Loans for working capital and general corporate purposes.
72
5.10 Hazardous Materials Laws. Keep and maintain all Real Property and
each portion thereof in compliance with all applicable Hazardous Materials Laws
(except for such non-compliance that would not constitute a Material Adverse
Effect or be materially adverse to the interests of the Lenders) 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 Governmental Agency pursuant to any applicable Hazardous Materials
Laws, (b) any and all material claims made or threatened in writing by any
Person against Borrowers relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials and (c)
discovery by any Senior Officer of any of Borrowers 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.
5.11 Additional Real Property. Upon the acquisition by any Borrower
after the Amendment Effective Date of any Real Property (other than TIF Real
Property), promptly provide to the Administrative Agent such deeds of trust in
the form of the Deed of Trust (Fee) and/or Deed of Trust (Leasehold), as
applicable, covering such Real Property, together with such appraisals, title
insurance policies and environmental reports as the Administrative Agent or
Requisite Lenders may reasonably request. Upon the acquisition after the
Amendment Effective Date of any TIF Real Property, St. ▇▇▇▇▇▇▇ shall promptly
(a) use its best efforts to obtain any necessary approvals of the relevant
Governmental Agency and (b) subject to such approvals, provide to the
Administrative Agent such deeds of trust in the form of the Deed of Trust (Fee)
covering such Real Property, together with such appraisals, title insurance
policies and environmental reports as the Administrative Agent or the Requisite
Lenders may reasonably request; provided that (i) the Obligations secured by
such a deed of trust on a particular parcel of TIF Property shall not exceed the
acquisition cost to St. ▇▇▇▇▇▇▇ for such parcel and (ii) St. ▇▇▇▇▇▇▇ need not so
provide such a deed of trust with respect to any parcel of TIF Real Property if
the acquisition cost thereof to St. ▇▇▇▇▇▇▇, when aggregated with the
acquisition costs of all other parcels of TIF Real Property previously acquired
by St. ▇▇▇▇▇▇▇ and not covered by a Deed of Trust theretofore provided to the
Administrative Agent, is less than $5,000,000.
5.12 Additional Vessels. Upon the acquisition by any Borrower after the
Amendment Effective Date of any vessel documented under the Laws of the United
States of America, promptly provide to the Administrative Agent a duly executed
73
preferred ship mortgage in the form of the Preferred Ship Mortgage covering such
vessel, and upon the acquisition after the Amendment Effective Date of any
vessel that is not so documented, promptly provide to the Administrative Agent
such other appropriate Collateral Documents with respect thereto as the
Administrative Agent may request, together in each case with such related legal
opinions, certificates and other documentation as the Administrative Agent or
Requisite Lenders may reasonably request.
5.13 Construction Monitoring. Engage Bank of America Construction
Services Group (or a comparable construction monitoring firm mutually acceptable
to Borrowers and the Administrative Agent) at their expense to provide to
Borrowers and the Administrative Agent such construction progress reports as the
Administrative Agent may reasonably request with respect to any single expansion
project involving Expansion Capital Expenditures of $25,000,000 or more.
5.14 Year 2000 Compliance. (a) Take such steps as are reasonably
necessary to assure that, prior to November 1, 1999, Borrowers and the
Restricted Subsidiaries are Year 2000 Compliant and (b) with respect to all
vendors of Borrowers and the Restricted Subsidiaries that are material to the
business of Borrowers and whose ability to perform their business obligations to
Borrowers may be materially affected by their not being Year 2000 Compliant,
take such steps as are reasonably necessary to prevent a Material Adverse Effect
resulting from such non-compliance of any such vendor. The term "Year 2000
Compliant" means, for purposes of the foregoing, that all hardware, software,
firmware, equipment, goods, and systems used by or on behalf of a Person to
perform date-sensitive functions, will properly perform such date-sensitive
functions on and after January 1, 2000.
5.15 Delivery of Documentation. Not later than sixty (60) days
following the Amendment Effective Date, Borrowers shall cause to be delivered to
the Administrative Agent (a) the Intercreditor Agreement and (b) the Road
Crossing License Consent and Agreement, dated as of November 6, 1998, by the
Missouri Department of Natural Resources, as Licensor, and St. ▇▇▇▇▇▇▇
Riverfront Station, Inc., as Licensee, for the benefit of Bank of America
National Trust and Savings Association, as Administrative Agent, each duly
executed by each party thereto other than the Administrative Agent.
74
Article 6
BORROWERS NEGATIVE COVENANTS
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitments remains in force, Borrowers shall not,
unless the Administrative Agent (with the written approval of the Requisite
Lenders or, if required by Section 14.2, of all of the Lenders) otherwise
consents:
6.1 Disposition of Property. Make any Disposition of its Property,
whether now owned or hereafter acquired except: (a) a Disposition to another
Borrower, (b) Dispositions of any of the Peripheral Assets to a Person that is
not an Affiliate of Parent, (c) a Disposition of assets included in any
Permitted Sale/ Leaseback, (d) Disposition of Investments (other than
Investments in a Subsidiary of any Borrower that is not an Immaterial
Subsidiary) and (e) Dispositions of Property with an aggregate book value or
fair market value (whichever is greater) in the Fiscal Year ending December 31,
1998 not exceeding $4,000,000 or in any other Fiscal Year not exceeding
$6,000,000.
6.2 Mergers. Merge or consolidate with or into any Person, except (a) a
merger or consolidation with another Borrower or (b) a merger or consolidation
of a Restricted Subsidiary with and into a Borrower or (c) a merger or
consolidation with or into Parent; provided that Parent concurrently executes a
Joinder Agreement.
6.3 Hostile Acquisitions. Directly or indirectly use the proceeds of
any Loan in connection with the acquisition of part or all of a voting interest
of five percent (5%) or more in any corporation or other business entity if such
acquisition is opposed by the board of directors or management of such
corporation or business entity.
6.4 ERISA. (a) 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, could reasonably be expected to result in a Material Adverse
Effect, or (b) withdraw, completely or partially, from any Multiemployer Plan if
to do so could reasonably be expected to result in a Material Adverse Effect.
6.5 Change in Nature of Business. Make any material change in the
nature of the business of Borrowers.
75
6.6 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 Amendment
Effective Date and disclosed in Schedule 4.7 and any
renewals/extensions or amendments thereof; provided that the
obligations secured or benefited thereby are not increased;
(d) Liens on Property acquired by Borrowers that were in
existence at the time of the acquisition of such Property and were not
created in contemplation of such acquisition and Negative Pledges
limited to such Property;
(e) Liens securing Indebtedness permitted by Section 6.7(d) 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
Negative Pledges limited to such capital assets;
(f) Liens consisting of, or on assets owned by other Persons
which are leased to any Borrower under, an operating lease excluded
from the definition of Indebtedness and Negative Pledges limited to
such assets; and
(g) any Permitted Sale/Leaseback.
6.7 Indebtedness and Guaranty Obligations. Create, incur or assume any
Indebtedness or Guaranty Obligation except:
(a) Indebtedness and Guaranty Obligations existing on the
Amendment Effective Date and disclosed in Schedule 4.7, and
refinancings, renewals, extensions or amendments that do not increase
the amount thereof;
(b) Indebtedness and Guaranty Obligations under the Loan
Documents;
76
(c) Indebtedness owed to Parent;
(d) Indebtedness consisting of (i) Capital Lease Obligations
(and Guaranty Obligations with respect to such Capital Lease
Obligations of another Borrower), (ii) Guaranty Obligations incurred,
or letters of credit issued, as credit enhancement for bonds issued by
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ Development District, a Missouri municipal
transportation district, or (iii) Indebtedness otherwise incurred to
finance the purchase or construction of capital assets (which shall be
deemed to exist if the Indebtedness is incurred at or within 180 days
before or after the purchase or construction of the capital asset, or
to refinance any such Indebtedness (and such Guaranty Obligations);
provided that the aggregate principal amount of such Indebtedness
outstanding at any time, when added to the Indebtedness of Parent then
outstanding permitted by Section 9.9(e), does not exceed $25,000,000;
and provided further that upon the incurring of any such Indebtedness,
any Lien created by the Collateral Documents on such capital assets
shall be terminated and the Administrative Agent shall execute and
deliver such releases of such Lien on such capital assets as Borrowers
may request; and provided further that Indebtedness incurred under this
Agreement shall not be deemed for purposes of this clause (d) to have
been incurred to finance the purchase or construction of capital assets
or to have refinanced any such Indebtedness; and
(e) Indebtedness consisting of one or more Swap Agreements or
Guaranty Obligations with respect to obligations of any of Borrowers or
of Parent under one or more Swap Agreements; provided, that the
aggregate notional amount of Indebtedness covered by all Secured Swap
Agreements does not exceed $200,000,000.
6.8 Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of Borrowers 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 of Parent and expressly authorized by a resolution of the
board of directors of Parent which is approved by a majority of the directors
not having an interest in the transaction, (c) transactions expressly permitted
by this Agreement, (d) transactions between Borrowers and any Guarantor and (e)
transactions on overall terms at least as favorable to Borrowers as would be the
case in an arm's-length transaction between unrelated parties of equal
bargaining power.
6.9 Fixed Charge Coverage. Permit the Fixed Charge Coverage, as of the
last day of any Fiscal Quarter ending after the Amendment Effective Date, to be
77
less than the ratio set forth below opposite the period during which such Fiscal
Quarter ends:
Period Ratio
------ -----
Amendment Effective Date through 1.40 to 1.00
March 31, 1999
June 30, 1999 1.50 to 1.00
and thereafter
6.10 Borrowers Funded Debt Ratio. Permit the Borrowers Funded Debt
Ratio, as of the last day of any Fiscal Quarter ending after the Amendment
Effective Date, to be greater than 2.50 to 1.00.
6.11 Maintenance Capital Expenditures. Make, or become legally
obligated to make, any Maintenance Capital Expenditure in any Fiscal Year if,
giving effect thereto, the aggregate of all Maintenance Capital Expenditures
made by Borrowers in that Fiscal Year plus all Maintenance Capital Expenditures
made by Parent in that Fiscal Year would exceed (a) $18,000,000 for the Fiscal
Year ending December 31, 1998 or (b) $25,000,000 for any subsequent Fiscal Year;
provided, that such amount shall be increased for the Fiscal Year ending
December 31, 2000 and each subsequent Fiscal Year by the amount (not exceeding
$3,000,000), if any, by which actual Maintenance Capital Expenditures of
Borrowers and Parent in the immediately preceding Fiscal Year were less than
$25,000,000.
6.12 Expansion Capital Expenditures.
(a) Make, or enter into any legally binding commitment to
make, any Expansion Capital Expenditure if, giving effect thereto, the
aggregate Expansion Capital Expenditures subsequent to the Amendment
Effective Date and prior to the Revolver Maturity Date would exceed the
Expansion Capital Expenditures Basket without the prior written consent
of the Majority Lenders;
(b) Make, or enter into any legally binding commitment to
make, any Expansion Capital Expenditure if the aggregate Expansion
Capital Expenditures reasonably anticipated with respect thereto will
exceed $25,000,000 without the prior written consent of the Majority
Lenders (and the Lenders agree to use their best efforts to respond to
any request by Borrowers to provide such consent within ten (10)
Banking Days after the date such request is
78
made, but without any implication that the failure of any Lender to
respond within such period shall be construed as consent);
(c) Make any Expansion Capital Expenditure at any location
other than (i) a Developed Property located in the State of Nevada and
(ii) up to $15,000,000 for a new parking garage at Kansas City
Riverfront Station, in each case without the prior written consent of
the Majority Lenders; and
(d) Make, or enter into any legally binding commitment to
make, any Expansion Capital Expenditure if a Default or Event of
Default then exists or would result therefrom (except an Expansion
Capital Expenditure made pursuant to a legally binding commitment
entered into prior thereto in compliance with the other provisions of
this Section 6.12).
6.13 Investments. Make or suffer to exist any Investment, other than:
(a) Investments in existence on the Amendment Effective Date
and disclosed on Schedule 6.13;
(b) Investments consisting of Cash and Cash Equivalents;
(c) Investments consisting of advances to officers, directors
and employees of Borrowers for travel, entertainment, relocation and
analogous ordinary business purposes;
(d) Investments consisting of or evidencing the extension of
credit to customers or suppliers of Borrowers in the ordinary course of
business and any Investments received in satisfaction or partial
satisfaction thereof;
(e) Investments received in connection with the settlement of
a bona fide dispute with another Person;
(f) Investments representing all or a portion of the sales
price of Property sold or services provided to another Person;
(g) Investments required by any Gaming Board;
(h) Investments in Parent, another Borrower or a Restricted
Subsidiary; and
79
(i). Investments in Wholly-Owned Subsidiaries that are
Immaterial Subsidiaries that do not exceed in the aggregate $500,000
outstanding at any time.
6.14 Leases. Enter into, as lessor, any lease of Real Property covering
premises of 25,000 square feet or more for a term of five years or more for a
purpose not directly related to the operation of the casino/hotel/entertainment
business without the prior written approval of the Requisite Lenders (which will
not be unreasonably withheld).
6.15 New Capital Stock. Issue any shares of capital stock to any Person
other than Parent, except for the Kansas City Local Shares.
6.16 Prepayments. Prepay any Indebtedness, or, subject to the last
sentence of this Section 6.16, prepay rent under any operating lease, prior to
the date when the same is due and payable, except (a) Indebtedness under this
Agreement, (b) rent under that certain Ground Lease dated June 17, 1994 between
Sunset (as assignee from Parent), as lessee, and Navillus Investment Co. and
certain other Persons, as lessor, (c) rent under that certain Equipment Sublease
dated as of September 25, 1996 between Sunset and Parent and (d) Indebtedness
not described above, which when added to Indebtedness of Parent theretofore
prepaid pursuant to Section 9.18(b), does not exceed $15,000,000. For purposes
of this Section 6.16, the exercise by a Borrower of a purchase option contained
in an operating lease shall not constitute a prepayment of rent; provided,
however, that the exercise of any such option shall be subject to the
limitations on Capital Expenditures set forth in this Agreement.
80
Article 7
PALACE NEGATIVE COVENANTS
So long as any Advance under the Line A Commitment remains unpaid, or
any portion of the Line A Commitment remains in force, Palace shall not, unless
the Administrative Agent (with the written approval of the Requisite Lenders)
otherwise consents:
7.1 Limitation on Tax Payments. Pay, or become liable to pay, to any of
its Affiliates any federal income taxes in excess of the amount permitted by
Section 5.23 of the Prior Palace Credit Agreement (as in effect on July 5, 1995
immediately prior to termination thereof), a true and correct copy of which
(together with the related definitions) is attached hereto as Schedule 7 and
incorporated herein by this reference.
7.2 Management Fees. Pay, or become liable to pay, to any of its
Affiliates any management fees or overhead allocations in excess of the amount
permitted by Section 5.24 of the Prior Palace Credit Agreement (as in effect on
July 5, 1995 immediately prior to termination thereof), a true and correct copy
of which (together with the related definitions) is attached hereto as Schedule
7 and incorporated herein by this reference.
7.3 Other Payments to Parents. Pay, or become liable to pay, to any of
its Affiliates any other amount not described in Sections 7.1 or 7.2 in excess
of the amount permitted by Section 6.01(A) of the Prior Palace Credit Agreement
(as in effect on July 5, 1995 immediately prior to termination thereof), a true
and correct copy of which (together with the related definitions) is attached
hereto as Schedule 7 and incorporated herein by this reference; provided that
the term "Event of Default" as used in such Section shall be deemed to be an
Event of Default under this Agreement.
7.4 Minimum Tangible Net Worth. Permit its Tangible Net Worth (as
defined in the Prior Palace Credit Agreement) to be less than the minimum amount
required by Section 6.01(F) of the Prior Palace Credit Agreement (as in effect
on July 5, 1995 immediately prior to termination thereof), a true and correct
copy of which (together with the related definitions) is attached hereto as
Schedule 7 and incorporated herein by this reference.
81
Article 8
PARENT AFFIRMATIVE COVENANTS
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitments remains in force, Parent shall, and
shall cause each of the Restricted Subsidiaries to, unless the Administrative
Agent (with the written approval of the Requisite Lenders) otherwise consents:
8.1 Article 5 Covenants. Comply with the affirmative covenants
contained in Sections 5.1 through 5.8 and 5.10, mutatis mutandis.
8.2 Designated Senior Indebtedness. Upon the issuance of any Permitted
Subordinated Debt, deliver to the trustee under the related indenture a written
statement (in a form reasonably acceptable to the Administrative Agent)
designating the Obligations as "Designated Senior Indebtedness" thereunder.
8.3 Pledge Agreement (Missouri). Use its best efforts to obtain, and
diligently pursue such best efforts until release from this covenant by the
Requisite Lenders, the approval of the Missouri Gaming Commission to the
execution and delivery by Parent of the Pledge Agreement (Missouri) and the
delivery to the Administrative Agent of the Pledged Collateral (Missouri), and
promptly following the obtaining of such approval, execute and deliver the
Pledge Agreement (Missouri) and deliver the Pledged Collateral (Missouri) to the
Administrative Agent, together with such related legal opinions, certificates
and other documentation as the Administrative Agent and the Requisite Lenders
may reasonably request.
82
Article 9
PARENT NEGATIVE COVENANTS
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitments remains in force, Parent shall not,
and shall not permit any of the Restricted Subsidiaries to, unless the
Administrative Agent (with the written approval of the Requisite Lenders or, if
required by Section 14.2, of all of the Lenders) otherwise consents:
9.1 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 except (i) the redemption or prepayment of the
Existing Redeemable Subordinated Debt (including any redemption or prepayment
premium) pursuant to the Subordinated Debt Refinancing or (ii) the redemption or
prepayment of any of the Existing Other Subordinated Debt (including any
redemption or prepayment premium) pursuant to the issuance of Permitted
Subordinated Debt or (b) scheduled interest on any Subordinated Obligation
unless the payment thereof is then permitted pursuant to the terms of the
Indenture governing such Subordinated Obligation;
provided, however, that this Section shall not apply to prohibit any payment
consisting of the repurchase or redemption of Subordinated Obligations to the
extent necessary to prevent a License Revocation if (i) no Default or Event of
Default then exists which will not be cured by such payment, (ii) the purchase
or redemption price paid is not in excess of the par value thereof and (iii)
Parent has notified the Administrative Agent in writing of the necessity to
invoke this proviso at least ten (10) Banking Days (or such shorter period as
may be necessary in order to comply with a regulation or order of the relevant
Gaming Board) in advance.
9.2 Disposition of Property. Make any Disposition of its Property,
whether now owned or hereafter acquired, except:
(a) a Disposition by a Restricted Subsidiary to Parent or to a
Borrower;
83
(b) a Disposition of any of the Peripheral Assets (and upon
any such Disposition, any Sibling Guarantor which is the subject of
such Disposition shall be released from the Sibling Guaranty);
(c) Dispositions of Property with an aggregate book value or
fair market value (whichever is greater) in the Fiscal Year ending
December 31, 1998 not exceeding $4,000,000 or in any other Fiscal Year
not exceeding $5,000,000; and
(d) Dispositions of Investments (other than Investments in a
Subsidiary of Parent that is not an Immaterial Subsidiary);
provided that the applicability of this Section to any gaming license issued by
the State of Nevada, or to any Person that holds such a gaming license, is
subject to the approval of the Nevada Gaming Commission (if required by
applicable Law) or, if not so required, to the receipt by Parent of written
confirmation by the Nevada Gaming Commission that it is not so required (and
Parent agrees to use its best efforts to promptly obtain such approval or
written confirmation).
9.3 Mergers. Merge or consolidate with or into any Person, except
(a) mergers or consolidations permitted by Section 6.2 and (b) mergers and
consolidations of a Restricted Subsidiary into another Restricted Subsidiary,
into a Borrower or into Parent.
9.4 Hostile Acquisitions. Directly or indirectly use any moneys
received from any Borrower that represent the proceeds of any Loan in connection
with the acquisition of part or all of a voting interest of five percent (5%) or
more in any corporation or other business entity if such acquisition is opposed
by the board of directors or management of such corporation or business entity.
9.5 Distributions. Make any Distribution, whether from capital, income
or otherwise, and whether in Cash or other Property, except:
(a) dividends payable solely in Common Stock or rights to
purchase Common Stock;
(b) repurchases of Common Stock from employees of Parent
pursuant to customary employee stock repurchase agreements at a price
not in excess of fair market value and not in any event more than
$2,000,000 in the aggregate during the term of this Agreement;
84
(c) scheduled dividends on Permitted Preferred Stock; provided
that (i) the face amount of such Permitted Preferred Stock does not
exceed $216,000,000 and (ii) no Default or Event of Default then exists
or would result therefrom;
(d) dividends payable by a Restricted Subsidiary to Parent or
another Restricted Subsidiary; and
(e) repurchases or redemption of Common Stock and Permitted
Preferred Stock; provided that, if the Target Leverage Ratio Election
is not then in effect, the aggregate repurchase/redemption prices paid
does not exceed either (i) $30,000,000 for all Common Stock and
Permitted Preferred Stock repurchased or redeemed or (ii) $10,000,000
for all Common Stock repurchased or redeemed; and provided further that
no Default or Event of Default then exists or would result therefrom;
provided, however, that this Section shall not apply to prohibit a Distribution
consisting of the repurchase or redemption of capital stock of Parent to the
extent necessary to prevent a License Revocation if (i) no Default or Event of
Default then exists which will not be cured by such Distribution, (ii) the
purchase or redemption price paid is not in excess of the amount specified in
article 5 of Parent's articles of incorporation and (iii) Borrowers have
notified the Administrative Agent in writing of the necessity to invoke this
proviso at least ten (10) Banking Days (or such shorter period as may be
necessary in order to comply with a regulation or order of the relevant Gaming
Board) in advance.
9.6 ERISA. (a) 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, could reasonably be expected to result in a Material Adverse
Effect, or (b) withdraw, completely or partially, from any Multiemployer Plan if
to do so could reasonably be expected to result in a Material Adverse Effect.
9.7 Change in Nature of Business. Make any material change in the
nature of the business of Parent and its Subsidiaries, taken as a whole.
9.8 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
85
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 Amendment
Effective Date and disclosed in Schedule 4.7 and any renewals or
extensions thereof; provided that the obligations secured or benefited
thereby are not increased;
(d) Liens on Property acquired by Parent 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 and Negative Pledges limited to such Property; and
(e) Liens consisting of, or on assets owned by other Persons
which are leased to Parent under, an operating lease excluded from the
definition of Indebtedness and Negative Pledges limited to such assets;
provided that the applicability of this Section to any gaming license issued by
the State of Nevada, or to any Person that holds such a gaming license, is
subject to the approval of the Nevada Gaming Commission (if required by
applicable Law) or, if not so required, to the receipt by Parent of written
confirmation by the Nevada Gaming Commission that it is not so required (and
Parent agrees to use its best efforts to promptly obtain such approval or
written confirmation).
9.9 Indebtedness and Guaranty Obligations. Create, incur or assume any
Indebtedness or Guaranty Obligation except:
(a) Indebtedness and Guaranty Obligations existing on the
Amendment Effective Date and disclosed in Schedule 9.9;
(b) Indebtedness and Guaranty Obligations under the Loan
Documents;
(c) Permitted Subordinated Debt that refinances the Existing
Redeemable Subordinated Debt and/or the Existing Other Subordinated
Debt in a principal amount not in excess of the principal amount of
such Redeemable
86
Subordinated Debt and/or Existing Other Subordinated Debt, as the case
may be (plus any redemption or prepayment premium) then outstanding;
(d) Permitted Senior Notes that refinance the Existing
Redeemable Subordinated Debt in a principal amount not in excess of the
principal amount thereof (plus any redemption or prepayment premium)
then outstanding; provided that at the time of issuance thereof, the
Target Leverage Ratio Election is in effect;
(e) Indebtedness consisting of (i) Capital Lease Obligations,
(ii) Guaranty Obligations incurred, or letters of credit issued, as
credit enhancement for bonds issued by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Development District, a Missouri municipal transportation district, or
(iii) Indebtedness otherwise incurred to finance the purchase or
construction of capital assets (which shall be deemed to exist if the
Indebtedness is incurred at or within 180 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 such
Indebtedness outstanding at any time, when added to the Indebtedness of
Borrowers then outstanding permitted by Section 6.7(d), does not exceed
$25,000,000;
(f) Indebtedness consisting of one or more Swap Agreements;
(g) Indebtedness of a Restricted Subsidiary owed to Parent,
any Borrower or another Restricted Subsidiary;
(h) Guaranty Obligations in support of the obligations of any
Borrower or a Restricted Subsidiary; and
(i) Guaranty Obligations consisting of an Investment permitted
by Section 9.15.
9.10 Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of Parent 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 of Parent and expressly authorized by a resolution of the
board of directors of Parent which is approved by a majority of the directors
not having an interest in the transaction, (c) transactions between or among any
of Parent, Borrowers and the Restricted Subsidiaries, and (d) transactions on
overall terms at least as favorable to Parent or the
87
Restricted Subsidiaries as would be the case in an arm's-length transaction
between unrelated parties of equal bargaining power.
9.11 Tangible Net Worth. Permit Parent Tangible Net Worth, as of the
last day of any Fiscal Quarter ending after the Amendment Effective Date, to be
less than the sum of (a) $288,000,000, plus (b) an amount equal to 95% of Net
Income earned in each Fiscal Quarter ending after July 1, 1998 (with no
deduction for a net loss in any such Fiscal Quarter), plus (c) an amount equal
to 100% of the aggregate increases in Stockholders' Equity of Parent after the
Amendment Effective Date by reason of the issuance and sale of capital stock of
Parent (including upon any conversion of debt securities of Parent into such
capital stock), minus (d) the aggregate amount expended to date for repurchases
of Common Stock and Permitted Preferred Stock permitted by Sections 9.5(b) and
9.5(e), minus (e) preferred stock dividends paid in Cash or Property (other than
capital stock of Parent) permitted by Section 9.5(c) minus (f) losses incurred
by reason of the Dispositions permitted by Sections 6.1(b), 6.1(c) and 9.2(b),
minus (g) any write-down of assets required by Generally Accepted Accounting
Principles and minus (h) any Pre-Opening Expenses incurred after the Amendment
Effective Date attributable to a New Venture.
9.12 Parent Funded Debt Ratio. Permit the Parent Funded Debt Ratio, as
of the last day of any Fiscal Quarter ending after the Amendment Effective Date,
to be greater than the ratio set forth below opposite the date upon which, or
period during which, such Fiscal Quarter ends:
Date or Period Ratio
-------------- -----
Amendment Effective Date
through December 31, 1998 5.50 to 1.00
March 31, 1999 5.45 to 1.00
June 30, 1999 5.25 to 1.00
September 30, 1999 5.15 to 1.00
December 31, 1999 5.00 to 1.00
March 31, 2000 4.85 to 1.00
June 30, 2000 4.75 to 1.00
88
September 30, 2000 4.60 to 1.00
December 31, 2000 4.50 to 1.00
March 31, 2001 4.25 to 1.00
June 30, 2001 4.15 to 1.00
September 30, 2001
and thereafter 4.00 to 1.00
9.13 Maintenance Capital Expenditures. Make, or become legally
obligated to make, any Maintenance Capital Expenditure in any Fiscal Year if,
giving effect thereto, the aggregate of all Maintenance Capital Expenditures
made by Parent in that Fiscal Year plus all Maintenance Capital Expenditures
made by Borrower in that Fiscal Year would exceed (a) $18,000,000 for the Fiscal
Year ending December 31, 1998 or (b) $25,000,000 for any subsequent Fiscal Year;
provided that such amount shall be increased for the Fiscal Year ending December
31, 2000 and each subsequent Fiscal Year by the amount (not exceeding
$3,000,000), if any, by which actual Maintenance Capital Expenditures in the
immediately preceding Fiscal Year were less than $25,000,000.
9.14 Expansion Capital Expenditures. Make, or enter into any legally
binding commitment to make, any Expansion Capital Expenditure.
9.15 Investments. Make or suffer to exist any Investment, other than:
(a) Investments in existence on the Amendment Effective Date
and disclosed on Schedule 9.15;
(b) Investments consisting of Cash and Cash Equivalents;
(c) Investments consisting of advances to officers, directors
and employees of Parent and the Restricted Subsidiaries for travel,
entertainment, relocation and analogous ordinary business purposes;
(d) Investments of Parent in any of Borrowers or any
Wholly-Owned Subsidiary that is a Restricted Subsidiary and Investments
of any Restricted Subsidiary in another Wholly-Owned Subsidiary that is
a Restricted Subsidiary;
89
(e) Investments in Restricted Subsidiaries that are not
Wholly-Owned Subsidiaries; provided that the aggregate of all such
Investments (including any described in Schedule 9.15) does not exceed
$5,000,000;
(f) Investments consisting of or evidencing the extension of
credit to customers or suppliers of Parent or any Restricted Subsidiary
in the ordinary course of business and any Investments received in
satisfaction or partial satisfaction thereof;
(g) Investments received in connection with the settlement of
a bona fide dispute with another Person;
(h) Investments representing all or a portion of the sales
price of Property sold or services provided to another Person;
(i) Investments consisting of Guaranty Obligations permitted
by Section 9.9; and
(j) Investments required by any Gaming Board;
(k) Investments in vendors or prospective vendors to Parent or
any of its Subsidiaries; provided that (i) such Investments do not
constitute a controlling interest in such vendors, (ii) the amount of
such Investments does not exceed in the aggregate $5,000,000
outstanding at any time and (iii) the amount of such Investments plus
the Investments permitted by clause (l) below does not exceed in the
aggregate $10,000,000 outstanding at any time;
(l) Investments in Wholly-Owned Subsidiaries that are
Immaterial Subsidiaries that do not exceed in the aggregate $10,000,000
outstanding at any time;
(m) Investments in or to finance the purchase by others of
Kansas City Local Shares not to exceed $4,000,000; and
(n) Investments in Unrestricted New Venture Entities permitted
by Section 9.19.
9.16 Amendments to Other Financial Instruments. Amend or modify any
term or provision of any indenture, agreement or instrument evidencing or
governing any Subordinated Obligation or Permitted Preferred Stock in any
respect that will or may adversely affect the interests of the Lenders.
90
9.17 Cash Accumulation. Hold as assets of Parent or the Restricted
Subsidiaries (in the aggregate) Cash and Cash Equivalents in excess of the sum
of (a) the amount necessary to make the next scheduled interest or dividend
payment on the Existing Redeemable Subordinated Debt, Existing Other
Subordinated Debt, Permitted Subordinated Debt and Permitted Preferred Stock
provided that such payment date is not more than five (5) Banking Days in the
future, plus (b) the amount necessary to fund casino bankroll in the ordinary
course of business, plus (c) any amount required to be held by Parent or such
Restricted Subsidiary by any Gaming Board plus (d) $2,000,000; provided that for
purposes of this Section 9.17, the term "Cash" shall not include funds on
deposit in bank accounts of Parent or any Restricted Subsidiary that are not
'collected balances'.
9.18 Prepayments. Prepay any Indebtedness, or, subject to the last
sentence of this Section 9.18, prepay rent under any operating lease, prior to
the date when the same is due and payable, except (a) rent under that certain
Equipment Lease dated September 25, 1996 between Parent and First Security Trust
Company of Nevada, (b) the Existing Redeemable Subordinated Debt and the
Existing Other Subordinated Debt to the extent permitted by Section 9.1 and (c)
Indebtedness not described above which, when added to Indebtedness of Borrowers
theretofore prepaid pursuant to Section 6.16(d), does not exceed $15,000,000.
For purposes of this Section 9.18, the exercise by Parent of a purchase option
contained in an operating lease shall not constitute a prepayment of rent;
provided, however, that the exercise of any such purchase option shall be
subject to the limitations on Capital Expenditures set forth in this Agreement.
9.19 Unrestricted New Venture Entities. Make any Investment in an
Unrestricted New Venture Entity if, giving effect thereto, the aggregate of all
such Investments made subsequent to the Amendment Effective Date would exceed
the Unrestricted New Venture Entity Basket.
91
Article 10
INFORMATION AND REPORTING REQUIREMENTS
10.1 Financial and Business Information. So long as any Advance remains
unpaid, or any other Obligation remains unpaid, or any portion of the
Commitments remains in force, Borrowers shall, unless the Administrative Agent
(with the written approval of the Requisite Lenders) otherwise consents, at
Borrowers' 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 within 30 days
after the end of each calendar month, a consolidated and consolidating
(in accordance with past consolidating practices of Parent) summary
statement of operations of Parent and its Subsidiaries for such
calendar month, in a form reasonably acceptable to the Administrative
Agent, together with a written report as to current operating data and
a narrative statement discussing any significant trends reflected
therein;
(b) As soon as practicable, and in any event within 60 days
after the end of each Fiscal Quarter (other than the fourth Fiscal
Quarter in any Fiscal Year), (i) the consolidated balance sheet of
Parent and its Subsidiaries as at the end of such Fiscal Quarter and
the consolidated statement of operations for such Fiscal Quarter, and
its statement of cash flows for the portion of the Fiscal Year ended
with such Fiscal Quarter and (ii) the consolidating (in accordance with
past consolidating practices of Parent) balance sheets and statements
of operations as at and for the portion of the Fiscal Year ended with
such Fiscal Quarter, all in reasonable detail. Such financial
statements shall be certified by a Senior Officer of Parent as fairly
presenting the financial condition, results of operations and cash
flows of Parent and its Subsidiaries in accordance with Generally
Accepted Accounting Principles (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 45 days
after the end of each Fiscal Quarter, a Pricing Certificate setting
forth a preliminary calculation of the Parent Funded 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 Parent and its
Subsidiaries for such Fiscal Quarter, and as soon as practicable
thereafter, in the event of any material variance in the
92
actual calculation of the Parent Funded 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 120 days
after the end of each Fiscal Year, (i) the consolidated balance sheet
of Parent 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 Parent and its Subsidiaries for such Fiscal
Year and (ii) consolidating (in accordance with past consolidating
practices of Parent) balance sheets and statements of operations, in
each case as at the end of and for the Fiscal Year, all in reasonable
detail. Such financial statements shall be prepared in accordance with
Generally Accepted Accounting Principles, 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 Parent and reasonably satisfactory to the
Requisite Lenders, which report shall be prepared in accordance with
generally accepted auditing standards as at such date, and shall not be
subject to any qualifications or exceptions as to the scope of the
audit nor to any other qualification or exception determined by the
Requisite Lenders in their good faith business judgment to be 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 Parent's financial calculations as at the end of such
Fiscal Year (which shall accompany such certificate) under Sections
6.9, 6.10, 7.4, 9.11 and 9.12 , 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 Parent in the manner prescribed by this Agreement;
(e) As soon as practicable, and in any event within 45 days
after the commencement of each Fiscal Year, a budget and projection by
Fiscal Quarter for that Fiscal Year and by Fiscal Year for the next
four succeeding Fiscal Years, including for the first such Fiscal Year,
projected consolidated and consolidating balance sheets, statements of
operations and statements of cash flow and, for the second and third
such Fiscal Years, projected consolidated and
93
consolidating condensed balance sheets and statements of operations and
cash flows, of Parent and its Subsidiaries, 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 Parent by independent
accountants in connection with the accounts or books of Parent or any
of its Subsidiaries, or any audit of any of them;
(g) As soon as practicable, and in any event within 45 days
(or, in the case of the fourth Fiscal Quarter in each Fiscal Year, 90
days) after the end of each Fiscal Quarter, a written report, in form
and detail reasonably acceptable to the Administrative Agent, with
respect to the status of any Expansion Capital Expenditures then
underway;
(h) 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 Parent, and copies of all
annual, regular, periodic and special reports and registration
statements which Parent 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 10.1;
(i) Promptly after the same are available, copies of the
Nevada "Regulation 6.090 Report" and "6-A Report", and copies of any
written communication to Parent or Borrowers from any Gaming Board
advising it of a violation of or non-compliance with any Gaming Law by
Parent, any Borrower or any Sibling Guarantor;
(j) Promptly after request by the Administrative Agent or any
Lender, copies of any other report or other document that was filed by
Borrowers with any Governmental Agency;
(k) Promptly upon a Senior Officer of any Borrower becoming
aware, and in any event within ten (10) Banking 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 (5) Banking Days after such telephonic
94
notice, written notice again specifying the nature thereof and
specifying what action Borrowers is taking or proposes to take with
respect thereto, and, when known, any action taken by the Internal
Revenue Service with respect thereto;
(l) As soon as practicable, and in any event within two (2)
Banking Days after a Senior Officer of any Borrower becomes aware of
the existence of any condition or event which constitutes a Default or
Event of Default, telephonic notice specifying the nature and period of
existence thereof, and, no more than two (2) Banking Days after such
telephonic notice, written notice again specifying the nature and
period of existence thereof and specifying what action Borrowers are
taking or propose to take with respect thereto;
(m) Promptly upon a Senior Officer of any Borrower becoming
aware that (i) any Person has commenced a legal proceeding with respect
to a claim against any Borrower that is $10,000,000 or more in excess
of the amount thereof that is fully covered by insurance, (ii) any
creditor under a credit agreement involving Indebtedness of $10,000,000
or more or any lessor under a lease involving aggregate rent of
$10,000,000 or more has asserted a default thereunder on the part of
any Borrower, (iii) any Person has commenced a legal proceeding with
respect to a claim against any Borrower under a contract that is not a
credit agreement or material lease in excess of $10,000,000 or which
otherwise may reasonably be expected to result in a Material Adverse
Effect, (iv) any labor union has notified any Borrower of its intent to
strike such Borrower on a date certain and such strike would involve
more than 100 employees of such Borrower 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 any Borrower, a
written notice describing the pertinent facts relating thereto and what
action such Borrower is taking or proposes to take with respect
thereto; 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 Requisite Lenders.
10.2 Compliance Certificates. So long as any Advance remains unpaid, or
any other Obligation remains unpaid or unperformed, or any portion of the
Commitments remains outstanding, Borrowers shall, at Borrowers' sole expense,
deliver to the Administrative Agent for distribution by it to the Lenders
concurrently with the financial statements required pursuant to Sections 10.1(b)
and 10.1(d), Compliance Certificates signed by a Senior Officer of Borrowers.
95
Article 11
CONDITIONS
11.1 Initial Advances, Etc.. The obligation of each Lender to make the
initial Advance to be made by it is subject to the following conditions
precedent, each of which shall be satisfied prior to the making of the initial
Advances (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 Amendment Effective 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):
(1) at least one (1) 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
Borrowers;
(2) a Line A Note executed by Borrowers in favor of
each Revolver Lender, in a principal amount equal to that
Revolver Lender's Pro Rata Share of the Line A Commitment;
(3) a Line B Note executed by Borrowers in favor of
each Revolver Lender, in a principal amount equal to that
Revolver Lender's Pro Rata Share of the Line B Commitment;
(4) a Line C Note executed by Borrowers in favor of
each Term Lender, in a principal amount equal to that Term
Lender's Pro Rata Share of the Line C Commitment;
(5) the Omnibus Collateral Documents Amendment
executed by Borrowers;
(6) such financing statements on Form UCC-1 executed
by Borrowers with respect to the Security Agreement as the
Administrative Agent may request;
96
(7) the Parent Guaranty executed by Parent;
(8) the Sibling Guaranty executed by the Sibling
Guarantors;
(9) a written consent and acknowledgment executed by
Parent confirming the continued effectiveness of the Pledge
Agreement (Nevada) in form and substance acceptable to the
Administrative Agent;
(10) a Deed of Trust Amendment with respect to the
Palace Deed of Trust executed by Palace;
(11) a Deed of Trust Amendment with respect to the
Boulder Deed of Trust executed by Boulder;
(12) a Deed of Trust Amendment with respect to the
Texas Deed of Trust executed by Texas;
(13) a Deed of Trust Amendment with respect to the St.
▇▇▇▇▇▇▇ Deed of Trust executed by St. ▇▇▇▇▇▇▇;
(14) a Deed of Trust Amendment with respect to the
Kansas City Deed of Trust executed by Kansas City;
(15) a Deed of Trust Amendment with respect to the
Sunset Deed of Trust executed by Sunset;
(16) the New Kansas City Deed of Trust executed by
Kansas City;
(17) assurances from the Title Company that it is
prepared to issue such endorsements with respect to the title
insurance policies issued in connection with the Existing Loan
Agreement 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;
(18) assurances from the Title Company that it is
prepared to issue its ALTA lenders title policy insuring the
Lien of the St. ▇▇▇▇▇▇▇ Deed of Trust in an amount not less
than an amount acceptable to the Administrative Agent and the
Lien of the Kansas City Deed of Trust and the New Kansas City
97
Deed of Trust in an amount not less than an amount acceptable
to the Administrative Agent (provided, however, that the
aggregate title insurance amount with respect to the Deeds of
Trust shall not exceed the Commitments), subject only to such
exceptions as are reasonably acceptable to the Administrative
Agent and the Requisite Lenders, 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;
(19) with respect to each Borrower and each of the
Guarantors, such documentation as the Administrative Agent may
require to establish the due organization, valid existence and
good standing of such Borrower and each such Guarantor, 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 and amendments thereto, bylaws 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;
(20) the Opinions of Counsel, together with copies of
all factual certificates and legal opinions delivered to such
counsel in connection with such opinion upon which such
counsel has relied;
(21) a certificate of insurance issued by Borrowers'
insurance carrier or agent with respect to the insurance
required to be maintained pursuant to the Deeds of Trust,
together with lenders' loss payable endorsements thereof on
Form 438BFU or other form acceptable to the Administrative
Agent;
(22) written confirmations from the landlords of all
leaseholds covered by the Deeds of Trust confirming that the
respective Landlord Consent previously delivered in connection
with the Existing Loan Agreement remains effective;
(23) RESERVED;
98
(24) the Termination Agreement executed by each of the
parties thereto;
(25) 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;
(26) a Certificate of a Senior Officer of Parent
certifying that incurrence by Borrowers of the Obligations
will not violate the Indentures governing any Subordinated
Obligation;
(27) a Certificate of a Senior Officer of each of the
Borrowers certifying that the conditions specified in Sections
11.1(g) and 11.1(h) have been satisfied; and
(28) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent or the
Requisite Lenders reasonably may require.
(b) The arrangement fee payable pursuant to Section 3.2 shall
have been paid.
(c) The upfront fee payable pursuant to Section 3.3 shall have
been paid.
(d) Any agency fees payable on the Amendment Effective Date
pursuant to Section 3.5 shall have been paid.
(e) The reasonable costs and expenses of the Administrative
Agent in connection with the preparation of the Loan Documents payable
pursuant to Section 14.3, and invoiced to Borrowers prior to the
Amendment Effective Date, shall have been paid.
(f) Parent shall have delivered to the trustees under the
Indentures governing all Subordinated Obligations a written statement
designating the Obligations as "Designated Senior Indebtedness" under
such Indentures.
(g) The representations and warranties of Borrowers contained
in Article 4 shall be true and correct.
99
(h) Borrowers and any other Parties shall be in compliance
with all the terms and provisions of the Loan Documents, and giving
effect to the initial Advance no Default or Event of Default shall have
occurred and be continuing.
(i) All legal matters relating to the Loan Documents shall be
satisfactory to Sheppard, Mullin, ▇▇▇▇▇▇▇ & Hampton LLP, special
counsel to the Administrative Agent.
(j) The Amendment Effective Date shall have occurred on or
before November 30, 1998.
11.2 Availability under Excess Revolving Facility. The obligation of
each Revolver Lender to make any Advance under the Line B Commitment is subject
to the condition precedent that such Advance is permitted to be incurred under
Section 4.06 of the Indentures governing the Existing Redeemable Subordinated
Debt and the Existing Other Subordinated Debt.
11.3 Any Advance. The obligation of each Lender to make any Advance is
subject to the following conditions precedent (unless the Requisite Lenders, in
their sole and absolute discretion, shall agree otherwise):
(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 any Borrower and approved in writing by the
Requisite Lenders, the representations and warranties contained in
Article 4 (other than Sections 4.4, 4.6 (first sentence), 4.10, 4.17
and 4.19) shall be true and correct on and as of the date of the
Advance as though made on that date;
(b) other than matters described in Schedule 4.10 or not
required as of the Amendment Effective Date to be therein described,
there shall not be then pending or threatened any action, suit,
proceeding or investigation against or affecting Parent or any of its
Subsidiaries or any Property of any of them before any Governmental
Agency that constitutes a Material Adverse Effect;
(c) the Administrative Agent shall have timely received a
Request for Loan in compliance with Article 2 (or telephonic or other
request
100
for Loan referred to in the second sentence of Section 2.1(d), if
applicable), in compliance with Article 2; and
(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 Requisite Lenders reasonably
may require.
101
Article 12
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
12.1 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) Borrowers fail to pay any principal on any of the Notes,
or any portion thereof, on the date when due; or
(b) Borrowers fail to pay any interest on any of the Notes, or
any fees under Sections 3.4 or 3.5, or any portion thereof, within two
(2) Banking 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 (5) Banking Days after demand therefor; or
(c) Borrowers fail to comply with any of the covenants
contained in Article 6 or Parent fails to comply with any of the
covenants contained in Article 9; or
(d) Borrowers fail to comply with Section 10.1(l) in any
respect that is materially adverse to the interests of the Lenders; or
(e) Borrowers 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 twenty (20) Banking Days after the giving
of notice by the Administrative Agent on behalf of the Requisite
Lenders of such Default; or
(f) Any representation or warranty of Borrowers or any of the
Guarantors made in any Loan Document, or in any certificate or other
writing delivered by Borrowers or such Guarantor pursuant to any Loan
Document, proves to have been incorrect when made or reaffirmed in any
respect that is materially adverse to the interests of the Lenders; or
(g) Borrowers or any of the Guarantors (i) fails to pay the
principal, or any principal installment, of any present or future
Indebtedness of $10,000,000 or more, or any guaranty of present or
future Indebtedness 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
102
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 of $10,000,000 or more, or of any
guaranty of present or future Indebtedness 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 Borrowers or any of the
Guarantors to redeem or purchase, or offer to redeem or purchase, all
or any portion of such Indebtedness (provided, that for the purpose of
this clause (g), the principal amount of Indebtedness consisting of a
Swap Agreement shall be the amount which is then payable by the
counterparty to close out the Swap Agreement); 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 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 (other than a Secured Swap Agreement),
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 payment
Obligations, ceases to be in full force and effect or is declared by a
court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect which is materially adverse to the
interests of the Lenders; or any Collateral Document ceases (other than
by action or inaction of the Administrative Agent or any Lender) to
create a valid and effective Lien in any material Collateral covered
thereby; or any Party thereto denies in writing that it has any or
further liability or obligation under any (other than a Secured Swap
Agreement) Loan Document, or purports to revoke, terminate or rescind
same; or
(j) A final judgment against any of (i) Borrowers, (ii) Parent
or (iii) any Sibling Guarantor that then has total assets of
$10,000,000 or more is entered for the payment of money in excess of
$5,000,000 (not covered by insurance or for which an insurer has
reserved its rights) and, absent procurement of a stay of execution,
such judgment remains unsatisfied for thirty (30) calendar days after
the date of entry of judgment, or in any event later than
103
five (5)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 (30)
calendar days after its issue or levy; or
(k) Any of (i) Borrowers, (ii) Parent or (iii) any Sibling
Guarantor that then has total assets of $10,000,000 or more 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 (60) 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
(60) 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)
applicable to any Borrower or other Party (excluding an Event of
Default applicable to a counterparty other than any Borrower under a
Secured Swap Agreement) 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 Parent or any of its
Subsidiaries is determined to have a material "accumulated funding
deficiency" as that term is defined in Section 302 of ERISA in excess
of an amount equal to 5% of the consolidated total assets of Parent and
its Subsidiaries as of the most-recently ended Fiscal Quarter; or
(o) The occurrence of a License Revocation that continues for
three (3) consecutive calendar days.
104
12.2 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
12.1(k) with respect to any Borrower:
(1) the Commitments to make Advances and all other
obligations of the Administrative Agent or the Lenders and all
rights of Borrowers and any other Parties under the Loan
Documents shall be suspended without notice to or demand upon
Borrowers, which are expressly waived by Borrowers, except
that all of the Lenders or the Requisite Lenders (as the case
may be, in accordance with Section 14.2) may waive an Event of
Default or, without waiving, determine, upon terms and
conditions satisfactory to the Lenders or Requisite Lenders,
as the case may be, to reinstate the Commitments and such
other obligations and rights and make further Advances, which
waiver or determination shall apply equally to, and shall be
binding upon, all the Lenders; and
(2) the Requisite 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 Notes, 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 Borrowers.
(b) Upon the occurrence of any Event of Default described in
Section 12.1(k) with respect to any Borrower:
(1) the Commitments to make Advances and all other
obligations of the Administrative Agent or the Lenders and all
rights of Borrowers and any other Parties under the Loan
Documents shall terminate without notice to or demand upon
Borrowers, which are expressly waived by Borrowers, 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
105
other obligations and rights and make further Advances, which
determination shall apply equally to, and shall be binding
upon, all the Lenders; and
(2) the unpaid principal of all Notes, 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
Borrowers.
(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 Borrowers, which are expressly waived by Borrowers (except as
to notices expressly provided for in any Loan Document), may proceed
(but only with the consent of the Requisite Lenders) to protect,
exercise and enforce their rights and remedies under the Loan
Documents against Borrowers and any other Party and such other
rights and remedies as are provided by Law or equity.
(d) The order and manner in which the Lenders' rights and
remedies are to be exercised shall be determined by the Requisite
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 reasonable
attorneys' fees and disbursements and the reasonably allocated costs
of attorneys employed by the Administrative Agent or by 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
payment Obligations owed to each Lender under the Loan Documents
bear to the aggregate payment 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
Borrowers' payment Obligations hereunder and under the Notes,
payments of the proceeds from the exercise of the Lenders' rights
and remedies 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 the Lenders 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. No application of payments of the proceeds
from the exercise of the Lenders' rights
106
and remedies 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 for the collection or recovery of all unpaid
payment Obligations.
12.3 Palace Event of Default and Remedies. The failure of Palace,
whatever the reason therefor and under any circumstances whatever, to comply
with any of the covenants contained in Article 7 shall constitute a Palace Event
of Default. Upon the occurrence of a Palace Event of Default, the Administrative
Agent and the Lenders shall have all the rights and remedies described in
Section 12.2 but only with respect to the Line A Commitment, Line A Loans and
the Line A Notes.
107
Article 13
THE ADMINISTRATIVE AGENT
13.1 Appointment and Authorization. Subject to Section 13.8, each
Lender hereby irrevocably appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms thereof
or are reasonably incidental, as determined by the Administrative Agent,
thereto. This appointment and authorization is intended solely for the purpose
of facilitating the servicing of the Loans and does not constitute appointment
of the Administrative Agent as trustee for any Lender or as representative of
any Lender for any other purpose and, except as specifically set forth in the
Loan Documents to the contrary, the Administrative Agent shall take such action
and exercise such powers only in an administrative and ministerial capacity.
13.2 Administrative Agent and Affiliates. Bank of America National
Trust and Savings Association (and each successor Administrative Agent) has the
same rights and powers under the Loan Documents as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the term
"Lender" or "Lenders" includes Bank of America National Trust and Savings
Association in its individual capacity. Bank of America National Trust and
Savings Association (and each successor Administrative Agent) and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
banking, trust or other business with Borrowers, any Subsidiary thereof, or any
Affiliate of Borrowers or any Subsidiary thereof, as if it were not the
Administrative Agent and without any duty to account therefor to the Lenders.
Bank of America National Trust and Savings Association (and each successor
Administrative Agent) need not account to any other Lender for any monies
received by it for reimbursement of its costs and expenses as Administrative
Agent hereunder, or for any monies received by it in its capacity as a Lender
hereunder. The Administrative Agent shall not be deemed to hold a fiduciary
relationship with any Lender and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
13.3 Proportionate Interest in any Collateral. The Administrative
Agent, on behalf of all the Lenders, shall hold in accordance with the Loan
Documents all items of any collateral or interests therein received or held by
the Administrative Agent. Subject to the Administrative Agent's and the Lenders'
rights to reimbursement for their costs and expenses hereunder (including
reasonable attorneys' fees and disbursements and other professional services and
the reasonably allocated costs of
108
attorneys employed by the Administrative Agent or a Lender) and subject to the
application of payments in accordance with Section 12.2(d), each Lender shall
have an interest in the Lenders' interest in the Collateral or interests therein
in the same proportions that the aggregate Obligations owed such 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,
except that Obligations owed to any Lender (or Affiliate of a Lender) under a
Secured Swap Agreement shall be secured on a pari passu basis with all other
Obligations up to an amount equal to the Administrative Agent's then customary
credit risk factor for Swap Agreements times the notional amount of Indebtedness
covered by such Secured Swap Agreement and shall be secured on a subordinate
basis as to amounts in excess of such amount.
13.4 Lenders' Credit Decisions. Each Lender agrees that it has,
independently and without reliance upon the Administrative Agent, any other
Lender or the directors, officers, agents, employees or attorneys of the
Administrative Agent or of any other Lender, and instead in reliance upon
information supplied to it by or on behalf of Borrowers and upon such other
information as it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each Lender also agrees that
it shall, independently and without reliance upon the Administrative Agent, any
other Lender or the directors, officers, agents, employees or attorneys of the
Administrative Agent or of any other Lender, continue to make its own
independent credit analyses and decisions in acting or not acting under the Loan
Documents.
13.5 Action by Administrative Agent.
(a) Absent actual knowledge of the Administrative
Agent of the existence of a Default, the Administrative Agent
may assume that no Default has occurred and is continuing,
unless the Administrative Agent (or the Lender that is then
the Administrative Agent) has received notice from Borrowers
stating the nature of the Default or has received notice from
a Lender stating the nature of the Default and that such
Lender considers the Default to have occurred and to be
continuing.
(b) The Administrative Agent has only those
obligations under the Loan Documents as are expressly set
forth therein.
(c) Except for any obligation expressly set forth in
the Loan Documents and as long as the Administrative Agent may
assume that no Event of Default has occurred and is
continuing, the Administrative Agent may, but shall not be
required to, exercise its discretion to act or not act, except
that the
109
Administrative Agent shall be required to act or not act upon
the instructions of the Requisite Lenders (or of all the
Lenders, to the extent required by Section 11.2) and those
instructions shall be binding upon the Administrative Agent
and all the Lenders, provided that the Administrative Agent
shall not be required to act or not act if to do so would be
contrary to any Loan Document or to applicable Law or would
result, in the reasonable judgment of the Administrative
Agent, in substantial risk of liability to the Administrative
Agent.
(d) If the Administrative Agent has received a notice
specified in clause (a), the Administrative Agent shall
immediately give notice thereof to the Lenders and shall act
or not act upon the instructions of the Requisite Lenders (or
of all the Lenders, to the extent required by Section 14.2),
provided that the Administrative Agent shall not be required
to act or not act if to do so would be contrary to any Loan
Document or to applicable Law or would result, in the
reasonable judgment of the Administrative Agent, in
substantial risk of liability to the Administrative Agent, and
except that if the Requisite Lenders (or all the Lenders, if
required under Section 14.2) fail, for five (5) Banking Days
after the receipt of notice from the Administrative Agent, to
instruct the Administrative Agent, then the Administrative
Agent, in its sole discretion, may act or not act as it deems
advisable for the protection of the interests of the Lenders.
(e) The Administrative Agent shall have no liability
to any Lender for acting, or not acting, as instructed by the
Requisite Lenders (or all the Lenders, if required under
Section 14.2), notwithstanding any other provision hereof.
13.6 Liability of Administrative Agent. Neither the Administrative
Agent nor any of its directors, officers, agents, employees or attorneys shall
be liable for any action taken or not taken by them under or in connection with
the Loan Documents, except for their own gross negligence or willful misconduct.
Without limitation on the foregoing, the Administrative Agent and its directors,
officers, agents, employees and attorneys:
(a) May treat the payee of any Note as the holder
thereof until the Administrative Agent receives notice of
the assignment or transfer thereof, in form satisfactory to
the Administrative Agent, signed by the payee, and may treat
each Lender as the owner of that Lender's interest in the
Obligations for all purposes of this Agreement until the
Administrative Agent receives notice of
110
the assignment or transfer thereof, in form satisfactory to
the Administrative Agent, signed by that Lender.
(b) May consult with legal counsel (including
in-house legal counsel), accountants (including in-house
accountants) and other professionals or experts selected by
it, or with legal counsel, accountants or other professionals
or experts for Borrowers and/or their Subsidiaries or the
Lenders, and shall not be liable for any action taken or not
taken by it in good faith in accordance with any advice of
such legal counsel, accountants or other professionals or
experts.
(c) Shall not be responsible to any Lender for any
statement, warranty or representation made in any of the Loan
Documents or in any notice, certificate, report, request or
other statement (written or oral) given or made in connection
with any of the Loan Documents.
(d) Except to the extent expressly set forth in the
Loan Documents, shall have no duty to ask or inquire as to the
performance or observance by Parent or its Subsidiaries of any
of the terms, conditions or covenants of any of the Loan
Documents or to inspect any Collateral or the Property, books
or records of Parent or its Subsidiaries.
(e) Will not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness,
effectiveness, sufficiency or value of any Loan Document, any
other instrument or writing furnished pursuant thereto or in
connection therewith, or any Collateral.
(f) Will not incur any liability to any Lender by
acting or not acting in reliance upon any Loan Document,
notice, consent, certificate, statement, request or other
instrument or writing believed in good faith by it to be
genuine and signed or sent by the proper party or parties.
(g) Will not incur any liability for any arithmetical
error in computing any amount paid or payable by the Borrowers
or any Subsidiary or Affiliate thereof or paid or payable to
or received or receivable from any Lender under any Loan
Document, including, without limitation, principal, interest,
commitment fees, Advances and other amounts; provided that,
promptly upon discovery of such an error in computation, the
Administrative Agent, the Lenders and (to the extent
applicable) Borrowers and/or their Subsidiaries or Affiliates
shall make such adjustments as are necessary to correct such
error and
111
to restore the parties to the position that they would have
occupied had the error not occurred.
13.7 Indemnification. Each Lender shall, ratably in accordance with its
Pro Rata Share of the Commitments (if the Commitments are then in effect) or in
accordance with its proportion of the aggregate Indebtedness then evidenced by
the Notes (if the Commitments have then been terminated), indemnify and hold the
Administrative Agent, the Co-Agents and their respective directors, officers,
agents, employees and attorneys harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including reasonable
attorneys' fees and disbursements and allocated costs of attorneys employed by
the Administrative Agent) that may be imposed on, incurred by or asserted
against it or them in any way relating to or arising out of the Loan Documents
(other than losses incurred by reason of the failure of Borrowers to pay the
Indebtedness represented by the Notes) or any action taken or not taken by it as
Administrative Agent thereunder, except such as result from its own gross
negligence or willful misconduct. Without limitation on the foregoing, each
Lender shall reimburse the Administrative Agent upon demand for that Lender's
Pro Rata Share of any out-of-pocket cost or expense incurred by the
Administrative Agent in connection with the negotiation, preparation, execution,
delivery, amendment, waiver, restructuring, reorganization (including a
bankruptcy reorganization), enforcement or attempted enforcement of the Loan
Documents, to the extent that Borrowers or any other Party is required by
Section 14.3 to pay that cost or expense but fails to do so upon demand. Nothing
in this Section 13.7 shall entitle the Administrative Agent or any indemnitee
referred to above to recover any amount from the Lenders if and to the extent
that such amount has theretofore been recovered from Borrowers or any of their
Subsidiaries. To the extent that the Administrative Agent or any indemnitee
referred to above is later reimbursed such amount by Borrowers or any of its
Subsidiaries, it shall return the amounts paid to it by the Lenders in respect
of such amount.
13.8 Successor Administrative Agent. The Administrative Agent may, and
at the request of the Requisite Lenders shall, resign as Administrative Agent
upon reasonable notice to the Lenders and Borrowers effective upon acceptance of
appointment by a successor Administrative Agent. If the Administrative Agent
shall resign as Administrative Agent under this Agreement, the Requisite Lenders
shall appoint from among the Lenders a successor Administrative Agent for the
Lenders, which successor Administrative Agent shall be approved by Borrowers
(and such approval 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
112
Lenders and the Borrowers, a successor Administrative Agent from among the
Lenders. Upon the acceptance of its appointment as successor Administrative
Agent hereunder, such successor Administrative Agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor Administrative Agent and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article 13, and
Sections 14.3, 14.11 and 14.22, 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. Notwithstanding the foregoing, if (a) the Administrative Agent has
not been paid its agency fees under Section 3.6 or has not been reimbursed for
any expense reimbursable to it under Section 14.3, in either case for a period
of at least one (1) year and (b) no successor Administrative Agent has accepted
appointment as Administrative Agent by the date which is thirty (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 Requisite Lenders appoint a successor
Administrative Agent as provided for above.
13.9 Foreclosure on Collateral. In the event of foreclosure or
enforcement of the Lien created by any of the Collateral Documents, title to the
Collateral covered thereby shall be taken and held by the Administrative Agent
(or an Affiliate or designee thereof) pro rata for the benefit of the Lenders in
accordance with the Obligations outstanding to each of them and shall be
administered in accordance with the standard form of collateral holding
participation agreement used by the Administrative Agent in comparable
syndicated credit facilities.
13.10 No Obligations of Borrowers. Nothing contained in this Article 13
shall be deemed to impose upon Borrowers any obligation in respect of the due
and punctual performance by the Administrative Agent of its obligations to the
Lenders under any provision of this Agreement, and Borrowers shall have no
liability to the Administrative Agent or any of the Lenders in respect of any
failure by the Administrative Agent or any Lender to perform any of its
obligations to the Administrative Agent or the Lenders under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing under the Loan
Documents provides that such payments shall be made by Borrowers to the
Administrative Agent for the account of the Lenders, Borrowers' obligations to
the Lenders in respect of such payments shall be deemed to be satisfied upon the
making of such payments to the Administrative Agent in the manner provided by
this Agreement.
113
Article 14
MISCELLANEOUS
14.1 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 11 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
without prejudicing the Administrative Agent's or the Lenders' rights to assert
them in whole or in part in respect of any other Loan.
14.2 Amendments; Consents. 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 the Borrowers or any other Party therefrom, may in any event be
effective unless in writing signed by the Requisite Lenders (and, in the case of
any amendment, modification or supplement of or to any Loan Document to which
any of the Borrowers or any of the Guarantors is a Party, signed by each such
Party, and, in the case of any amendment, modification or supplement to Article
13, signed by the Administrative Agent), and then only in the specific instance
and for the specific purpose given; and, without the approval in writing of all
the Lenders, no amendment, modification, supplement, termination, waiver or
consent may be effective:
(a) To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on,
any Note, or the amount of the Commitments or the Pro Rata Share of any
Lender 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
or to waive an Event of Default consisting of the failure of Borrowers
to pay when due principal, interest or any commitment fee;
(b) To postpone any date fixed for any payment of principal of,
prepayment of principal of or any installment of interest on, any Note
or any installment of any commitment fee, or to extend the term of the
Commitments.
114
(c) To release the Parent Guaranty, the Sibling Guaranty, or any
material portion of the Collateral except as expressly provided for in
any Loan Document (provided that the Administrative Agent is authorized
to release the Lien created by the Collateral Documents on (i) assets
secured by Indebtedness permitted by Sections 6.7(d) or 6.7(e), (ii)
assets which are the subject of a Disposition permitted by Section 6.1
and (iii) assets the sale, transfer or other disposition of which is
not a Disposition;
(d) To amend the provisions of the definition of "Amortization
Amount," "Amortization Date," "Reduction Amount," "Reduction Date,"
"Requisite Lenders," "Majority Lenders," "Revolver Maturity Date" or
"Term Maturity Date"; or
(e) To amend or waive Articles 11 or 12, this Section 14.2, or
Sections 6.3 or 9.4; or
(f) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Lenders.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 14.2 shall apply equally to, and shall be binding upon, all the
Lenders and the Administrative Agent.
14.3 Costs, Expenses and Taxes. Borrowers shall pay within five (5)
Banking Days after demand, accompanied by an invoice therefor, the reasonable
costs and expenses of the Administrative Agent in connection with the
negotiation, preparation, syndication, execution and delivery of the Loan
Documents and any amendment thereto or waiver thereof. Borrowers shall also pay
on demand, accompanied by an invoice therefor, the reasonable costs and expenses
of the Administrative Agent and the Lenders in connection with the refinancing,
restructuring, reorganization (including a bankruptcy reorganization) and
enforcement or attempted enforcement of the Loan Documents, and any matter
related thereto. The foregoing costs and expenses shall include filing fees,
recording fees, title insurance fees, appraisal fees, search fees, and other
out-of-pocket expenses and the reasonable fees and out-of-pocket expenses of any
legal counsel (including reasonably allocated costs of legal counsel employed by
the Administrative Agent or any Lender), independent public accountants and
other outside experts retained by the Administrative Agent or any Lender,
whether or not such costs and expenses are incurred or suffered by the
Administrative Agent or any Lender in connection with or during the course of
any bankruptcy or insolvency proceedings of any of Borrowers or
115
any Subsidiary thereof. Such costs and expenses shall also include, in the case
of any amendment or waiver of any Loan Document requested by Borrowers, the
administrative costs of the Administrative Agent reasonably attributable
thereto. Borrowers shall pay any and all documentary and other taxes, excluding
(i) taxes imposed on or measured in whole or in part by its overall net income
imposed on it 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" or (ii) 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 Borrowers with the appropriate form or forms
required by Section 14.21, to the extent such forms are then required by
applicable Laws, and all costs, expenses, fees and charges payable or determined
to be payable in connection with the filing or recording of this Agreement, any
other Loan Document or any other instrument or writing to be delivered hereunder
or thereunder, or in connection with any transaction pursuant hereto or thereto,
and shall reimburse, hold harmless and indemnify on the terms set forth in 14.11
the Administrative Agent and the Lenders from and against any and all loss,
liability or legal or other expense with respect to or resulting from any delay
in paying or failure to pay any such tax, cost, expense, fee or charge or that
any of them may suffer or incur by reason of the failure of any Party to perform
any of its Obligations. Any amount payable to the Administrative Agent or any
Lender under this Section 14.3 shall bear interest from the second Banking Day
following the date of demand for payment at the Default Rate.
14.4 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 the Borrowers or
any Affiliate of any of Borrowers. 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 Borrowers, to replace such a Lender in default.
116
14.5 Survival of Representations and Warranties. All representations
and warranties contained herein or in any other Loan Document, or in any
certificate or other writing delivered by or on behalf of any one or more of the
Parties to any Loan Document, will survive the making of the Loans hereunder and
the execution and delivery of the Notes, and have been or will be relied upon by
the Administrative Agent and each Lender, notwithstanding any investigation made
by the Administrative Agent or any Lender or on their behalf.
14.6 Notices. Except as otherwise expressly provided in the Loan
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied, dispatched by commercial courier or
delivered to the appropriate party at the address set forth on the signature
pages of this Agreement or other applicable Loan Document or, as to any party to
any Loan Document, at any other address as may be designated by it in a written
notice sent to all other parties to such Loan Document in accordance with this
Section. Except as otherwise expressly provided in any Loan Document, if any
notice, request, demand, direction or other communication required or permitted
by any Loan Document is given by mail it will be effective on the earlier of
receipt or the fourth Banking Day after deposit in the United States mail with
first class or airmail postage prepaid; if given by telegraph or cable, when
delivered to the telegraph company with charges prepaid; if given by telecopier,
when sent; if dispatched by commercial courier, on the scheduled delivery date;
or if given by personal delivery, when delivered.
14.7 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.
14.8 Binding Effect; Assignment.
(a) This Agreement and the other Loan Documents to which
Borrowers are a Party will be binding upon and inure to the benefit of
Borrowers, the Administrative Agent, each of the Lenders, and their
respective
117
successors and assigns, except that Borrowers may not assign their
rights hereunder or thereunder or any interest herein or therein
without the prior written consent of all the Lenders. Any attempted
assignment by any Borrower in contravention of this Section 14.8(a)
shall be null and void. Each Lender represents that it is not acquiring
its Note with a view to the distribution thereof within the meaning of
the Securities Act of 1933, as amended (subject to any requirement that
disposition of such Note must be within the control of such Lender).
Any Lender may at any time pledge its Note or any other instrument
evidencing its rights as a Lender under this Agreement to a Federal
Reserve Bank, but no such pledge shall release that Lender from its
obligations hereunder or grant to such Federal Reserve Bank the rights
of a Lender hereunder absent foreclosure of such pledge.
(b) From time to time following the Amendment Effective Date,
each Lender may assign to one or more Eligible Assignees all or any
portion of its Pro Rata Share of the Commitments; provided that (i)
such Eligible Assignee, if not then a Lender or an Affiliate of the
assigning Lender, shall be approved by each of the Administrative Agent
and (if no Event of Default then exists) Borrowers (neither of which
approvals shall be unreasonably withheld or delayed), (ii) such
assignment shall be evidenced by a Commitments Assignment and
Acceptance, a copy of which shall be furnished to the Administrative
Agent as hereinbelow provided, (iii) except in the case of an
assignment to an Affiliate of the assigning Lender, to another Lender
or of the entire remaining Commitments of the assigning Lender, the
assignment shall not assign a Pro Rata Share of the Commitments that is
equivalent to less than $3,000,000 (or $1,000,000 with respect to any
assignment occurring on the Amendment Effective Date) , (iv) the
assignment shall assign the same Pro Rata Share of the Line A
Commitment and the Line B Commitment, but need not with respect to the
Line C Commitment and (v) the effective date of any such assignment
shall be as specified in the Commitments Assignment and Acceptance, but
not earlier than the date which is five (5) Banking Days after the date
the Administrative Agent has received the Commitments Assignment and
Acceptance. Upon the effective date of such Commitments Assignment and
Acceptance, the Eligible Assignee named therein shall be a Lender for
all purposes of this Agreement, with the Pro Rata Share of the
Commitments therein set forth and, to the extent of such Pro Rata
Share, the assigning Lender shall be released from its further
obligations under this Agreement. Borrowers agree that they shall
execute and deliver (against delivery by the assigning Lender to
Borrowers of its Note) to such assignee Lender, Notes evidencing that
assignee Lender's Pro Rata Share of the Commitments, and to the
assigning
118
Lender, Notes evidencing the remaining balance Pro Rata Share retained
by the assigning Lender.
(c) By executing and delivering a Commitments Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and agrees
that: (i) other than the representation and warranty that it is the
legal and beneficial owner of the Pro Rata Share of the Commitments
being assigned thereby free and clear of any adverse claim, the
assigning Lender has made no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness or
sufficiency of this Agreement or any other Loan Document; (ii) the
assigning Lender has made no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrowers or
the performance by Borrowers of the Obligations; (iii) it has received
a copy of this Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 10.1 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Commitments Assignment
and Acceptance; (iv) it will, independently and without reliance upon
the Administrative Agent or any Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement; (v) it appoints and authorizes the Administrative Agent to
take such action and to exercise such powers under this Agreement as
are delegated to the Administrative Agent by this Agreement; and (vi)
it will perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed by it
as a Lender.
(d) The Administrative Agent shall maintain at the Administrative
Agent's Office a copy of each Commitments Assignment and Acceptance
delivered to it and a register (the "Register") of the names and
address of each of the Lenders and the Pro Rata Share of the
Commitments held by each Lender, giving effect to each Commitments
Assignment and Acceptance. The Register shall be available during
normal business hours for inspection by Borrowers or any Lender upon
reasonable prior notice to the Administrative Agent. After receipt of a
completed Commitments Assignment and Acceptance executed by any Lender
and an Eligible Assignee, and receipt of an assignment fee of $2,500
from such Lender or Eligible Assignee, the Administrative Agent shall,
promptly following the effective date thereof, provide to Borrowers and
the Lenders a revised Schedule 1.1A giving effect thereto. Borrowers,
the Administrative Agent and the Lenders shall deem and
119
treat the Persons listed as Lenders in the Register as the holders and
owners of the Pro Rata Share of the Commitments listed therein for all
purposes hereof, and no assignment or transfer of any such Pro Rata
Share of the Commitments shall be effective, in each case unless and
until a Commitments Assignment and Acceptance effecting the assignment
or transfer thereof shall have been accepted by the Administrative
Agent and recorded in the Register as provided above. Prior to such
recordation, all amounts owed with respect to the applicable Pro Rata
Share of the Commitments shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of
any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee
of the corresponding Pro Rata Share of the Commitments.
(e) Each Lender may from time to time grant participations to one
or more Lenders or other financial institutions (including another
Lender) in a portion of its Pro Rata Share of the Commitments;
provided, however, 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, (iii) the participating Lenders or other financial
institutions shall not be a Lender hereunder for any purpose except, if
the participation agreement so provides, for the purposes of Sections
3.7, 3.8, 14.11 and 14.22 but only to the extent that the cost of such
benefits to Borrowers does not exceed the cost which Borrowers would
have incurred in respect of such Lender absent the participation, (iv)
Borrowers, 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 under this Agreement, (v) the
participation interest shall be expressed as a percentage of the
granting Lender's Pro Rata Share of the Commitments as it then exists
and shall not restrict an increase in the Commitments, or in the
granting Lender's Pro Rata Share of the Commitments, so long as the
amount of the participation interest is not affected thereby and (vi)
the consent of the holder of such participation interest shall not be
required for amendments or waivers of provisions of the Loan Documents
other than those which (A) extend any Amortization Date, Reduction
Date, the Revolver Maturity Date, the Term Maturity Date or any other
date upon which any payment of money is due to the Lenders, (B) reduce
the rate of interest on the Notes, any fee or any other monetary amount
payable to the Lenders, (C) reduce the amount of any installment of
principal due under the Notes, or (D) release the Parent Guaranty, the
Sibling Guaranty or any material portion of the Collateral (except as
otherwise expressly provided for in any Loan Document).
120
(f) Notwithstanding anything in this Section 14.8 to the
contrary, the rights of the Lenders to make assignments of, and grant
participations in, their Pro Rata Shares of the Commitments shall be
subject to the approval of any Gaming Board, to the extent required by
applicable Gaming Laws, and to compliance with applicable securities
laws.
14.9 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 Requisite Lenders) may (a) exercise its rights under Article
9 of the Uniform Commercial Code and other applicable Laws and (b) to the extent
permitted by applicable Laws, apply any funds in any deposit account maintained
with it by Borrowers and/or any Property of Borrowers in its possession against
the Obligations.
14.10 Sharing of Setoffs. Each Lender severally agrees that if it,
through the exercise of any right of setoff, Lender's lien or counterclaim
against Borrowers, 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 each of the other Lenders a
participation in the Obligations held by the other Lenders and shall pay to the
other Lenders 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 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 Borrowers or any Person claiming through
or succeeding to the rights of Borrowers, 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 14.10 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. Borrowers expressly consent to
the foregoing arrangements
121
and agree 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.
14.11 Indemnity by Borrowers. Borrowers agree to indemnify, save and
hold harmless the Administrative Agent, the Co-Agents and each Lender and their
respective directors, officers, agents, attorneys and employees (collectively
the "Indemnitees") from and against: (a) any and all claims, demands, actions or
causes of action (except a claim, demand, action, or cause of action for any
amount excluded from the definition of "Taxes" in Section 3.12(d)) if the claim,
demand, action or cause of action arises out of or relates to any act or
omission (or alleged act or omission) of Borrowers, their Affiliates or any of
their officers, directors or stockholders relating to the Commitments, the use
or contemplated use of proceeds of any Loan, or the relationship of Borrowers
and the Lenders under this Agreement; (b) any administrative or investigative
proceeding by any Governmental Agency arising out of or related to a claim,
demand, action or cause of action described in clause (a) above; and (c) any and
all liabilities, losses, costs or expenses (including reasonable attorneys' fees
and the reasonably allocated costs of attorneys employed by any Indemnitee and
disbursements of such attorneys and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; provided that no Indemnitee shall be
entitled to indemnification for any loss caused by its own gross negligence or
willful misconduct or for any loss asserted against it by another Indemnitee. If
any claim, demand, action or cause of action is asserted against any Indemnitee,
such Indemnitee shall promptly notify Borrowers, but the failure to so promptly
notify Borrowers shall not affect Borrowers' obligations under this Section
unless such failure materially prejudices Borrowers' right to participate in the
contest of such claim, demand, action or cause of action, as hereinafter
provided. Such Indemnitee may (and shall, if requested by Borrowers in writing)
contest the validity, applicability and amount of such claim, demand, action or
cause of action and shall permit Borrowers to participate in such contest. Any
Indemnitee that proposes to settle or compromise any claim or proceeding for
which Borrowers may be liable for payment of indemnity hereunder shall give
Borrowers written notice of the terms of such proposed settlement or compromise
reasonably in advance of settling or compromising such claim or proceeding and
shall obtain Borrowers' prior consent (which shall not be unreasonably withheld
or delayed). In connection with any claim, demand, action or cause of action
covered by this Section 14.11 against more than one Indemnitee, all such
Indemnitees shall be represented by the same legal counsel (which may be a law
firm engaged by the Indemnitees or attorneys employed by an Indemnitee or a
combination of the foregoing) selected by the Indemnitees and reasonably
acceptable to Borrowers; provided,
122
that if such legal counsel determines in good faith that representing all such
Indemnitees would or could result in a conflict of interest under Laws or
ethical principles applicable to such legal counsel or that a defense or
counterclaim is available to an Indemnitee that is not available to all such
Indemnitees, then to the extent reasonably necessary to avoid such a conflict of
interest or to permit unqualified assertion of such a defense or counterclaim,
each affected Indemnitee shall be entitled to separate representation by legal
counsel selected by that Indemnitee and reasonably acceptable to Borrowers, with
all such legal counsel using reasonable efforts to avoid unnecessary duplication
of effort by counsel for all Indemnitees; and further provided that the
Administrative Agent (as an Indemnitee) shall at all times be entitled to
representation by separate legal counsel (which may be a law firm or attorneys
employed by the Administrative Agent or a combination of the foregoing). Any
obligation or liability of Borrowers to any Indemnitee under this Section 14.11
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.
14.12 Nonliability of the Lenders. Borrowers acknowledge and agree
that:
(a) Any inspections of any Property of Borrowers made by or
through the Administrative Agent or the Lenders are for purposes of
administration of the Loan only and Borrowers are not entitled to rely
upon the same (whether or not such inspections are at the expense of
Borrowers);
(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 Borrowers and the Administrative
Agent and the Lenders is, and shall at all times remain, solely that
of borrowers and lenders; neither the Administrative Agent nor the
Lenders shall under any circumstance be construed to be partners or
joint venturers of Borrowers or their 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 Borrowers or their Affiliates, or to owe any
fiduciary duty to Borrowers or their Affiliates; neither the
Administrative Agent
123
nor the Lenders undertake or assume any responsibility or duty to
Borrowers or their Affiliates to select, review, inspect, supervise,
pass judgment upon or inform Borrowers or their Affiliates of any
matter in connection with their Property or the operations of
Borrowers or their Affiliates; Borrowers and their 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 Borrowers 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 Borrowers
and/or its Affiliates and Borrowers hereby indemnify and hold the
Administrative Agent and the Lenders harmless on the terms set forth in
Section 14.11 from any such loss, damage, liability or claim.
14.13 No Third Parties Benefited. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrowers, the Administrative Agent and the Lenders in connection with the
Loans, and is made for the sole benefit of Borrowers, the Administrative Agent
and the Lenders, and the Administrative Agent's and the Lenders' successors and
assigns. Except as provided in Sections 14.8 and 14.11, no other Person shall
have any rights of any nature hereunder or by reason hereof.
14.14 Confidentiality. Each Lender agrees to hold any confidential
information that it may receive from Borrowers pursuant to this Agreement in
confidence, except for disclosure: (a) to other Lenders; (b) to legal counsel
and accountants for Borrowers or any Lender; (c) to other professional advisors
to Borrowers or any Lender, provided that the recipient has accepted such
information subject to a confidentiality agreement substantially similar to this
Section 14.14; (d) to regulatory officials having jurisdiction over that Lender;
(e) to any Gaming Board having regulatory jurisdiction over Parent or its
Subsidiaries, provided that each Lender agrees to notify Borrowers of any such
disclosure unless prohibited by applicable Laws; (f) as required by Law or legal
process, provided that each Lender agrees to notify Borrowers of any such
disclosures unless prohibited by applicable Laws, or in connection with any
legal proceeding to which that Lender and any of Borrowers are adverse parties;
and (g) to another financial institution in connection with a disposition or
proposed disposition to that financial institution of all or part of that
Lender's
124
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 14.14. For purposes of the foregoing,
"confidential information" shall mean any information respecting Parent or its
Subsidiaries reasonably considered by Borrowers to be confidential, other than
(i) information previously filed with any Governmental 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 Borrowers to any Person not associated with Borrowers
without a confidentiality agreement or obligation substantially similar to this
Section 14.14. 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
Borrowers.
14.15 Further Assurances. Borrowers and the Guarantors 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 Requisite 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 Collateral Document.
14.16 Integration. This Agreement, together with the other Loan
Documents and the letter agreements referred to in Sections 3.2, 3.3 and 3.5,
comprises 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.
14.17 Governing Law. Except to the extent otherwise provided therein,
each Loan Document shall be governed by, and construed and enforced in
accordance with, the Laws of California applicable to contracts made and
performed in California.
14.18 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
125
invalid without affecting the remaining provisions or 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.
14.19 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.
14.20 Time of the Essence. Time is of the essence of the Loan
Documents.
14.21 Foreign Lenders and Participants. Each Lender that is
incorporated or otherwise organized under the Laws of a jurisdiction other than
the United States of America or any State thereof or the District of Columbia
shall deliver to Borrowers (with a copy to the Administrative Agent), on or
before the Amendment Effective Date (or on or before accepting an assignment or
receiving a participation interest herein pursuant to Section 14.8, if
applicable) two duly completed copies, signed by a Responsible Official, of
either Form 1001 (relating to such Lender and entitling it to a complete
exemption from withholding on all payments to be made to such Lender by
Borrowers pursuant to this Agreement) or Form 4224 (relating to all payments to
be made to such Lender by the Borrowers pursuant to this Agreement) of the
United States Internal Revenue Service or such other evidence (including, if
reasonably necessary, Form W-9) satisfactory to Borrowers and the Administrative
Agent that no withholding under the federal income tax laws is required with
respect to such Lender. Thereafter and from time to time, each such Lender shall
(a) promptly submit to Borrowers (with a copy 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
Borrowers and the Administrative Agent of any available exemption from, United
States withholding taxes in respect of all payments to be made to such Lender by
Borrowers pursuant to this Agreement and (b) 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 Eurodollar
Lending Office, if any) to avoid any requirement of applicable Laws that
Borrowers make any deduction or withholding for taxes from amounts payable to
such Lender. In the event that Borrowers or the Administrative Agent become
aware that a participation has been granted pursuant to Section 14.8(e) to a
financial institution that is incorporated or otherwise organized under the Laws
of a jurisdiction other than the United States of America, any State thereof or
the District of Columbia, then, upon request made by Borrowers or the
Administrative Agent to the Lender which granted
126
such participation, such Lender shall cause such participant financial
institution to deliver the same documents and information to Borrowers and the
Administrative Agent as would be required under this Section if such financial
institution were a Lender.
14.22 Hazardous Material Indemnity. Each of Borrowers 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 Borrowers), 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 Borrowers or any of its
predecessors in title, whether prior to or during the term of this Agreement,
and whether by Borrowers or any predecessor in title or any employees, agents,
contractors or subcontractors of Borrowers 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 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. Borrowers hereby acknowledge and agree
that, notwithstanding any other provision of this Agreement or any of the other
Loan Documents to the contrary, the obligations of Borrowers under this Section
(and under Sections 4.18 and 5.10) shall be unlimited corporate obligations of
Borrowers and shall not be secured by any Lien on any Real Property. Any
obligation or liability of Borrowers to any Indemnitee under this Section 14.22
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.
127
14.23 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 Borrowers and its Subsidiaries, including
the provision of such documents or other information as may be requested by any
such Gaming Board relating to Parent or any of its Subsidiaries or to the Loan
Documents.
14.24 Joint and Several. Each of Borrowers shall be obligated for all
of the Obligations on a joint and several basis, notwithstanding which of
Borrowers may have directly received the proceeds of any particular Loan. Each
of Borrowers acknowledges and agrees that, for purposes of the Loan Documents,
Borrowers constitute a single integrated financial enterprise and that each
receives a benefit from the availability of credit under this Agreement to all
of Borrowers. Each of Borrowers waive all defenses arising under the Laws of
suretyship, to the extent such Laws are applicable, in connection with its joint
and several obligations under this Agreement. Without limiting the foregoing,
each of Borrowers agrees to the Joint Borrower Provisions set forth in Exhibit
N, incorporated by this reference.
14.25 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 PARTY 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 SOUNDING 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 TO THE FULLEST
EXTENT PERMITTED BY LAW.
14.26 Purported Oral Amendments. BORROWERS EXPRESSLY ACKNOWLEDGE THAT
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE A PARTY MAY ONLY
BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 14.2.
BORROWERS AGREE THAT THEY WILL NOT RELY ON ANY
128
COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY
REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY
WITH SECTION 14.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
[THIS SPACE INTENTIONALLY LEFT BLANK - SIGNATURE PAGES TO FOLLOW]
129
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
PALACE STATION HOTEL & CASINO, INC.,
as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President
BOULDER STATION, INC., as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President
TEXAS STATION, INC., as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President
S-1
ST. ▇▇▇▇▇▇▇ RIVERFRONT STATION, INC., as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President
KANSAS CITY STATION CORPORATION, as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President
SUNSET STATION, INC., as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President
S-2
STATION CASINOS, INC., solely for purposes of
Articles 8 and 9
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Executive Vice President
Address for all the foregoing:
c/o Station Casinos, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Executive Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Address:
Bank of America National Trust and Savings
Association
US Corporate Group
Agency Management #20529
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Address:
Bank of America National Trust and Savings
Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Bank of America National Trust and
Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 11th Floor
(LA-5777)
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Managing Director
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-5
SOCIETE GENERALE, as Documentation Agent
and a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
Address:
Societe Generale
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, as Co-Agent and a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇ TAT
----------------------------------------
▇▇▇▇▇ ▇▇▇▇ Tat
Senior Vice President
Address:
Bank of Scotland
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇ Tat
Senior Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-7
ABN AMRO BANK, N.V., as a Lead Arranger and
a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Group Vice President and Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Vice President
Address:
ABN AMRO Bank, N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Credit Administration
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Copies to:
ABN AMRO Bank, N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Loan Administration
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
ABN AMRO Bank N.V.,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-8
THE FIRST NATIONAL BANK OF CHICAGO, as
a Lead Arranger and a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
First Vice President
Address:
The First National Bank of Chicago
10th Floor, Suite 0634
One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-9
▇▇▇▇▇ FARGO BANK, N.A., as a Lead Arranger
and a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Address:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-10
CIBC INC., as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Exceutive Director
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp., as agent
Address:
CIBC Inc.
Suite 2600
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Executive Director
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-11
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC., as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇
---------------------------------
Vice President
Address:
Bank Austria Creditanstalt Corporate Finance, Inc.
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-12
BANK OF HAWAII, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Address:
Bank of Hawaii
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-13
BANKBOSTON, NATIONAL ASSOCIATION, as
a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Managing Director
Address:
BankBoston, National Association
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-14
FIRST SECURITY BANK, N.A., as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Vice President
Address:
First Security Bank, N.A.
Corporate Banking
15 East ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Address:
Summit Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-16
THE CIT GROUP/EQUIPMENT FINANCING,
INC., as a Lender
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------------
▇.▇. ▇▇▇▇▇▇
---------------------------------
Assistant Vice President
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-17
FOOTHILL INCOME TRUST, L.P., as a Lender
By: FIT GP, LLC, its General Partner
By: /s/ M.E. ▇▇▇▇▇▇▇
---------------------------------
M.E. ▇▇▇▇▇▇▇
---------------------------------
Managing Member
Address:
Foothill Income Trust, L.P.
c/o Foothill Capital Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-18
NATIONSBANK, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Attorney-in-Fact
Address:
NationsBank, N.A.
NationsBank Corporate Center
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-19
PILGRIM PRIME RATE TRUST, as a Lender
By: Pilgrim Investments, Inc.,
as its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Senior Vice President
Address:
Pilgrim Prime Rate Trust
Two Renaissance Square
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-20