EXHIBIT 10.57
LOAN AGREEMENT
Among
ISLE OF CAPRI HOTELS - BOSSIER CITY, L.L.C.,
as Borrower
AND
HIBERNIA NATIONAL BANK,
as Bank
$19,000,000 CONSTRUCTION AND TERM LOANS
Dated: DECEMBER 9, 1997
TABLE OF CONTENTS
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ARTICLE 1 GENERAL TERMS.................................................. 1
Section 1.01 Terms Defined Above.................................... 1
Section 1.02 Certain Definitions.................................... 1
Section 1.03 Accounting Terms and Determinations.................... 7
ARTICLE 2 THE CREDIT..................................................... 7
Section 2.01 Commitment to Lend..................................... 7
Section 2.02 Interest Rates......................................... 9
Section 2.03 Borrower's Equity Contribution......................... 9
Section 2.04 Construction Advances................................. 10
Section 2.05 Borrowing Procedure for Construction Costs............. 10
Section 2.06 Requests for Advances.................................. 11
Section 2.07 Retainage Advance...................................... 12
Section 2.08 Modified Advance Procedure............................. 13
Section 2.09 Borrowing Procedure for Advances for Equipment......... 13
Section 2.10.[INTENTIONALLY LEFT BLANK]............................. 14
Section 2.11 Prepayments............................................ 14
Section 2.12 Commitment Fees........................................ 14
Section 2.13 Business Days.......................................... 15
Section 2.14 Nature of Commitment................................... 15
Section 2.15 Payments............................................... 15
Section 2.16 Use of Proceeds........................................ 15
Section 2.17 Closing of the Construction Loan....................... 15
Section 2.18 Closing and Funding of the Term Loan................... 17
ARTICLE 3 SECURITY FOR THE OBLIGATIONS................................... 17
Section 3.01 Security............................................... 18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES................................. 18
Section 4.01 Existence.............................................. 18
Section 4.02 Power and Authorization................................ 18
Section 4.03 Binding Obligations.................................... 18
Section 4.04 No Legal Bar or Resultant Lien......................... 19
Section 4.05 No Consent............................................. 19
Section 4.06 Financial Condition.................................... 19
Section 4.07 Litigation............................................. 19
Section 4.08 Solvency............................................... 19
Section 4.09 Taxes and Governmental Charges......................... 20
Section 4.10 Defaults............................................... 20
Section 4.11 Casualties and Condemnation............................ 20
Section 4.12 Use of Proceeds; Margin Stock.......................... 20
Section 4.13 Compliance with the Law................................ 20
Section 4.14 ERISA.................................................. 20
Section 4.15 No Material Misstatements.............................. 20
Section 4.16 Utility or Investment Company.......................... 21
Section 4.17 Title to Collateral.................................... 21
Section 4.18 Environmental Matters.................................. 21
Section 4.19 Governmental Requirements.............................. 21
Section 4.20 Continuing Accuracy.................................... 22
Section 4.21 Construction........................................... 22
ARTICLE 5 AFFIRMATIVE COVENANTS.......................................... 22
Section 5.01 Financial Statements and Reports....................... 22
Section 5.02 Taxes and Other Liens.................................. 23
Section 5.03 Maintenance of Existence............................... 23
Section 5.04 Further Assurances..................................... 24
Section 5.05 Performance of Obligations............................. 24
Section 5.06 Reimbursement of Expenses.............................. 24
Section 5.07 Insurance.............................................. 24
Section 5.08 Accounts and Records................................... 27
Section 5.09 Right of Inspection.................................... 27
Section 5.10 Notice of Certain Events............................... 27
Section 5.11 ERISA Information and Compliance....................... 27
Section 5.12 Maintenance of Bank Accounts.......................... 27
Section 5.13 Indemnification........................................ 27
Section 5.14 Compliance with Laws and Covenants..................... 28
Section 5.15 Environmental Indemnity................................ 28
Section 5.16 Financial Covenants.................................... 28
Section 5.17 Construction Covenants................................. 29
Section 5.18 Appraisal.............................................. 31
Section 5.19 Escrow Account......................................... 31
Section 5.20 Signage................................................ 31
Section 5.22 Subordination of Management Fees....................... 31
ARTICLE 6 NEGATIVE COVENANTS............................................. 31
Section 6.01 Liens on the Collateral................................ 32
Section 6.02 Sale of the Collateral................................. 32
Section 6.03 Nature of the Business................................. 32
Section 6.04 Loans.................................................. 33
Section 6.05 Acquisitions or Bulk Sales............................. 33
Section 6.06 Change of Office....................................... 33
Section 6.07 Fiscal Year; Accounting Methods........................ 33
Section 6.08 Debts.................................................. 33
Section 6.09 Acquisition of Real Estate............................. 33
ARTICLE 7 CONDITIONS OF LENDING.......................................... 33
Section 7.01 Conditions to Making the Initial Advance (Construction) 33
Section 7.02 Additional Conditions Precedent to Initial Advances.... 37
Section 7.03 Each Additional Advance................................ 37
ARTICLE 8 DEFAULT........................................................ 37
Section 8.01 Events of Default...................................... 37
Section 8.02 Remedies............................................... 39
Section 8.03 Set-Off................................................ 40
ARTICLE 9 MISCELLANEOUS.................................................. 40
Section 9.01 Notices................................................ 40
Section 9.02 Invalidity............................................. 41
Section 9.03 Survival of Agreements................................. 41
Section 9.04 Successors and Assigns................................. 41
Section 9.05 Renewal, Extension or Rearrangement.................... 41
Section 9.06 Waivers................................................ 42
Section 9.07 Cumulative Rights...................................... 42
Section 9.08 Singular and Plural.................................... 42
Section 9.09 Construction........................................... 42
Section 9.10 Titles of Articles, Sections and Subsections........... 42
Section 9.11 Limitation of Bank's Liability......................... 42
Section 9.12 Relationship Between the Parties....................... 42
Section 9.13 Amendment.............................................. 42
Section 9.14 Entire Agreement....................................... 42
Section 9.15 Time of the Essence.................................... 42
Section 9.16 Purposes of Inspections................................ 43
Section 9.17 Third-Party Beneficiaries.............................. 43
Section 9.18 Submission to Jurisdiction, Jury Trial Waiver.......... 43
Section 9.19 Preparation............................................ 44
Section 9.20 Form of Documents...................................... 44
Section 9.21 Counterparts........................................... 45
EXHIBITS
Exhibit A - Description of Property
Exhibit B - Borrower's Request for Advance
Exhibit C - Compliance Certificate
LOAN AGREEMENT
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THIS LOAN AGREEMENT ("Agreement"), dated effective as of December 9,
1997 (the "Effective Date"), is made between ISLE OF CAPRI HOTELS - BOSSIER
CITY, L.L.C. ("Borrower"), a Louisiana limited liability company, and HIBERNIA
NATIONAL BANK, a national banking association (the "Bank"), who agree as
follows:
ARTICLE 1
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GENERAL TERMS
-------------
Section 1.01 TERMS DEFINED ABOVE. As used in this Agreement, the terms
"Agreement," "Effective Date," "Borrower," and "Bank" shall have the meanings
indicated above.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Advance" shall mean a disbursement of the loan proceeds under a Loan
and all or any portion of such disbursement so long as same remains
outstanding and unpaid.
"Affiliate" shall mean Person with respect to which (i) Casino
America, either directly or indirectly, owns 20% or more of the outstanding
shares or other equity, or (ii) Casino America has the power to control the
management decisions.
"Anticipated Appraised Value" shall mean the appraisal of the Property
and Improvements as set forth in that certain appraisal issued by PFK
Consultants, Inc., to the Bank, regarding the proposed Improvements, as the
same may be amended or supplemented from time to time.
"Appraised Value" shall mean the fair market value of the Property,
including the Improvements once completed, as determined by an appraiser
selected and approved by the Bank.
"Architect" shall mean the architectural or engineering firm
designated by the Borrower to prepare the Plans and inspect and monitor the
progress of construction of the Improvements on behalf of the Borrower.
"Bank Inspector" shall mean the inspector designated by Bank
(including an officer or employee of Bank) to inspect and monitor the
progress of construction of the Improvements on behalf of the Bank.
"Bank's Office" shall mean the Bank's office located at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or such other office as the Bank may
designate from time to time.
Loan Agreement--Page 1
"Borrower's Account" means the demand deposit account to be
established pursuant hereto, or any successor account, with the Bank.
"Business Day" shall mean a day other than a Saturday, Sunday or legal
holiday for commercial banks in Shreveport, Louisiana.
"Borrower's Equity" shall mean the sum of $18,000,000 to be paid by
the Borrower for the Construction Costs which payments are approved by the
Bank pursuant to Requests for Payments and Request for Advances and which
payments are made with funds other than Advances under a Loan.
"Cash Collateral Account" shall mean an interest-bearing account
maintained at the Bank, the funds in which shall be invested as agreed
between the Borrower and the Bank and into which a Deficiency [as defined
in Section 2.05(b)] shall be deposited and on which the Bank shall have the
sole right to draw.
"Casino" shall mean the gaming casino known as the "Isle of Capri"
located in Bossier City, Louisiana, which is owned by LRGP.
"Casino America" means Casino America, Inc., a Delaware corporation.
"Casino America Agreements" means the Room Guaranty Agreement referred
to in Section 2.17(b)(xv), the Registration Rights Agreement and the Casino
America Guaranty referred to in Section 2.17(b)(xvii) and "Casino America
Agreement" means any one of the Casino America Agreements.
"Closing Date" shall mean the date on which all of the documents and
conditions specified in Section 2.17 are duly executed, delivered and
satisfied by the Borrower; provided, however, in no event shall the Closing
Date be later than December 9, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean the properties described in the Collateral
Documents as security for the Obligations.
"Collateral Documents" shall mean collectively the documents required
by the Bank to obtain the security interests in the Collateral, as
described in Section 3.01.
"Commercial Guaranty Agreement" shall mean the guaranty agreement to
be executed by Casino America and delivered to the Bank.
"Commitment Letter" means that certain commitment letter dated October
16, 1997, signed by the Bank and the Borrower regarding the Loans.
Loan Agreement--Page 2
"Companies" shall mean collectively the Borrower, Casino America and
LRGP and "Company" shall mean any one of the Companies.
"Completion of the Improvements" shall have the meaning ascribed to it
in Section 5.17(a).
"Contractor" shall mean ▇▇▇▇▇▇▇ Building Corporation, a Pennsylvania
corporation, or such other contractor that may be designated by the
Borrower to construct the Improvements which Contractor is acceptable to
the Bank.
"Construction Contract" shall mean the agreement to be executed by
the Borrower and Contractor providing for the construction of the
Improvements contemplated by the Plans, the terms of which agreement shall
be acceptable to the Bank.
"Construction Costs" shall mean costs and expenses set forth in the
Development Expense Schedule which are paid pursuant to Requests for
Payments or Requests for Advances as approved by the Bank.
"Construction Loan" shall mean the construction loan to be made by the
Bank to the Borrower as specified in Section 2.01(a).
"Construction Note" shall mean the promissory note of the Borrower
evidencing the Construction Loan as specified in Section 2.01(a).
"Construction Completion Schedule" shall have the meaning ascribed to
it in Section 7.01(f).
"Debt" shall mean any and all amounts and/or liabilities owing from
time to time by any Company to any Person, including the Bank, direct or
indirect, liquidated or contingent, now existing or hereafter arising,
which are classified under GAAP as liabilities on a balance sheet,
including without limitation (i) indebtedness for money borrowed; (ii)
unfunded portions of commitments for money to be borrowed; (iii) the
amounts of all standby and commercial letters of credit and bankers
acceptances, matured or unmatured, issued on behalf of such Company; (iv)
guaranties of the obligations of any other Person, whether direct or
indirect, whether by agreement to purchase the indebtedness of any other
Person or by agreement for the furnishing of funds to any other Person
through the purchase or lease of goods, supplies or services (or by way of
stock purchase, capital contribution, advance or loan) for the purpose of
paying or discharging the indebtedness of any other Person, or otherwise;
and (v) the present value of all obligations for the payment of rent or
hire of property of any kind (real or personal) under leases or lease
agreements required to be capitalized under GAAP; provided that in no event
shall the term "Debt" include trade indebtedness incurred in the ordinary
course of business which such trade indebtedness has a maturity of less
than one year, nor any guaranty under the Indenture.
Loan Agreement--Page 3
"Default" shall mean the occurrence of any of the events specified in
Article 8, whether or not any requirement for notice or lapse of time or
other condition precedent has been satisfied.
"Development Expense Schedule" shall mean the detailed line item cost
breakdown of land costs, Construction Costs (hard costs), costs of the
Equipment and all other related indirect development costs (soft costs)
submitted to and approved by Bank.
"Deficiency" shall mean the amount, as determined by the Bank from
time to time, by which the (i) the costs to complete the Improvements
pursuant to the Plans exceed (ii) the sum of the (x) the Construction Loan
and (y) the Borrower's Equity.
"Drawdown Termination Date" shall mean the earlier of (a) the date on
which the Retainage Advance is funded; or (b) eighteen (18) months
following the Closing Date.
"Equipment" means any equipment, furniture, machinery or any other
movable property, including, without limitation, the furniture, furnishings
and equipment to be used in connection with the operation of the
Improvements.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" shall mean the occurrence of any of the events
specified in Article 8, provided that any requirement for notice or lapse
of time or any other condition precedent has been satisfied.
"GAAP" shall mean generally accepted accounting principles in the
United States as in effect from time to time.
"Improvements" shall mean the 305-room hotel and other structures to
be constructed on the Property (including offsite and onsite constructions)
adjacent to the Casino in accordance with the Plans, the cost of which are
to be paid for, in part, with the Advances on the Construction Loan.
"Index" shall mean the rate of interest established from time to time
by The Chase Manhattan Bank, N.A., New York, New York, as its index or
prime lending rate. The Index is not necessarily the lowest rate charged by
The Chase Manhattan Bank, N.A., or by the Bank on their loans. If the Index
becomes unavailable during the term of a Loan, the Bank may designate as a
substitute a reasonably comparable index after notice to Borrower. The Bank
will inform the Borrower of the current Index rate upon the Borrower's
request. The Borrower understands that Bank may make loans based on other
rates as well. The interest rate change will not occur more often than each
day. The Index currently is 8.5% per annum.
"Indenture" shall mean that certain Indenture dated as of August 1,
1996, between Casino America et. al and Fleet Bank National Association, as
trustee, regarding the 12%
Loan Agreement--Page 4
Senior Secured Notes due in the year 2003 issued by Casino America in the
aggregate sum of $315,000,000.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether
such interest is based on jurisprudence, statute or contract, and including
but not limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes. The term "Lien"
shall include reservations, exceptions, encroachments, easements,
servitudes, usufructs, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting property. For
the purposes of this Agreement, a Company shall be deemed to be the owner
of any property which it has accrued or holds subject to a conditional sale
agreement, financing lease or other arrangement pursuant to which title to
the property has been retained by or vested in some other Person for
security purposes.
"Loans" shall mean collectively the Construction Loan or the Term Loan
and "Loan" shall mean any one of the Loans.
"Loan Documents" shall mean this Agreement, the Notes, the Collateral
Documents and the documents to be executed by LRGP and Casino America
pursuant to the terms of this Agreement.
"LRGP" means Louisiana Riverboat Gaming Partnership, a Louisiana
general partnership.
"Management Agreement" shall mean an agreement between Borrower and
any third party to manage the Improvements, which agreement shall be in a
form and substance and with a third party acceptable to the Bank or an
Affiliate.
"Mortgage" shall mean the mortgage described in Section 3.01 hereof.
"Net Income" shall mean the gross revenues for the applicable
accounting period less all expenses and income taxes generally deducted
under GAAP in calculating net income.
"Net Operating Income" shall mean, for the applicable accounting
period, Net Income to which are added: (i) Pre-opening Expenses incurred
during that accounting period; (ii) Non-cash Charges incurred during that
accounting period; (iii) interest expenses; and (iv) income taxes generally
deducted under GAAP in calculating Net Income; provided however no more than
$500,000 of aggregate Pre-opening Expenses may be added to the calculation of
Net Operating Income.
"Non-cash Charges" shall mean, for any period, the aggregate
depreciation, amortization and other non-cash charges for such period, as
determined in accordance with GAAP (excluding any non-cash charge which
required an accrual or reserve for cash charges for any future period).
Loan Agreement--Page 5
"Notes" shall mean collectively the Construction Note and the Term
Note and "Note" shall mean any one of the Notes.
"Obligations" shall mean any and all amounts and/or liabilities owing
from time to time by any of the Companies to the Bank and whether such
amounts or liabilities be liquidated or unliquidated, now existing or
hereafter arising.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof, or any other form of entity.
"Plan" shall mean any plan subject to Title IV of ERISA and maintained
by any Company or any such plan to which any Company is required to
contribute on behalf of its employees.
"Plans" shall mean the final architectural and engineering drawings
and specifications, including any revisions, amendments and addenda
required to complete the construction of the Improvements, including
offsite and onsite work.
"Post-Default Rate" means, in respect of the principal amount of the
Note or any other amount payable under any other Loan Document which is not
paid when due (whether at the stated maturity, by acceleration or
otherwise), an interest rate on such principal amount per annum during the
period commencing on the due date until such amount is paid in full equal
to three percentage points over the interest rate specified in the Note
which rate was in effect immediately prior to default.
"Pre-opening Expenses" mean those expenses incurred by the Borrower in
connection with the opening of the Improvements which are classified as
pre-opening expenses under GAAP.
"Prohibited Transaction" shall mean any transaction set forth in
Section 406 of ERISA or Section 4979 of the Code.
"Property" shall mean the immovable property covered by the Collateral
Documents on which the Improvements are or shall be located, which property
is more fully described on Exhibit A attached hereto, together with the
Improvements to be constructed thereon.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement dated December 9, 1997, between Casino America and the Bank.
"Reportable Event" shall have the meaning set forth in Title IV of
ERISA.
"Request for Advance" shall mean the Borrower's written request for an
Advance in the form of Exhibit B attached hereto.
Loan Agreement--Page 6
"Request to Make Payment" shall have the meaning ascribed to it in
Section 2.03 of this Agreement.
"Retainage Advance" shall mean the final Advance for construction of
the Improvements and the payment of the retainages, if any, due under the
Construction Contract.
"SEC" shall mean the Securities and Exchange Commission.
"Shares" shall have the meaning ascribed to it in Section 7.01(gg).
"Tax Distributions" shall mean the dividends or distribution of
capital by the Borrower to its members, in the amount equal to such
members' federal and state income tax liability arising from their
respective allocable share of the Borrower's taxable income so long as the
Borrower has made an election to be treated as an "S" corporation or
otherwise is taxed as a partnership under the Code (such distributions
being the "Tax Distributions"); provided, however, that: (i) each Person's
federal and state income tax liability shall be computed on the basis of
the actual marginal combined tax rate possible under the Code and Louisiana
law; (ii) Tax Distributions shall be paid in estimated quarterly
installments contemporaneously with such Persons' obligations to pay
estimated income taxes based upon the Borrower's taxable income through the
end of its fiscal quarter immediately preceding such tax installment's due
date and also contemporaneously with any such persons' filing of its
federal and state income tax returns if the estimated Tax Distributions
paid for any of the Borrower's fiscal years are not sufficient to pay such
persons' actual income tax liability arising from such persons' share of
the Borrower's actual taxable income for such fiscal year as disclosed by
copies of the Borrower's tax returns and related Schedules K-1 for such
fiscal year delivered to the Bank pursuant to this Agreement; and (iii) if
the Tax Distributions actually paid with respect to any of the Borrower's
fiscal years exceed the Tax Distributions permitted by this Section based
upon the Borrower's actual taxable net income as disclosed by copies of
such tax returns and schedules described above, then the Borrower shall
immediately recover the excess amount from the recipient and shall not pay
any further Tax Distribution to any person until such excess amount is
recovered.
"Term Loan" shall mean the term loan to be made by the Bank to the
Borrower as specified in Section 2.01(b).
"Term Note" shall mean the term note of the Borrower evidencing the
Term Loan as specified in Section 2.01(b).
"Termination Event" shall mean (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation under such regulations), or (ii) the
withdrawal of any Company from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (iii)
the filing of a notice of intent to terminate a Plan or the treatment of a
Plan amendment as a termination under
Loan Agreement--Page 7
Section 4041 of ERISA, or (iv) the institution of proceedings to terminate
a Plan by the Pension Benefit Guaranty Corporation under Section 4042 of
ERISA, and in each case in clauses (i) through (iv) above, such event or
condition, together with all other events or conditions, is likely to
constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan.
SECTION 1.03 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP on
a basis consistent (except for changes approved by independent public
accountants for a Company) with the most recent audited consolidated financial
statements of such Company.
ARTICLE 2
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THE CREDIT
----------
Section 2.01 COMMITMENT TO LEND.
(a) Construction Loan Commitment. Subject to and upon the terms and
conditions contained in this Agreement, and relying on the representations and
warranties contained in this Agreement, the Bank agrees to make a loan available
to the Borrower to construct the Improvements and acquire Equipment in the
maximum aggregate principal amount of the lesser of (i) $19,000,000, or (ii) a
sum equal to sixty percent (60%) of the Anticipated Appraised Value of the
Property and Improvements; provided however, of the aggregate amount of this
Construction Loan, the Bank will advance up to $5,000,000 thereof for the
acquisition of Equipment and the Bank will advance the balance of such a Loan
for the Construction Costs. This Construction Loan shall be represented by a
promissory note in the principal amount of $19,000,000, payable to the order of
the Bank on which interest shall accrue at the rate set forth in Section 2.02.
Such interest shall be payable monthly on the first day of each month beginning
on the first day of the calendar month following the date on which the initial
Advance is made hereunder by the Bank. All principal and the balance of all
accrued but unpaid interest on the Construction Note shall mature and be payable
in full on the Drawdown Termination Date. The Bank shall not be required to
make any Advance under the Construction Loan until such time as Borrower has
paid $5,000,000 of the Construction Costs pursuant to Section 2.03. After the
requirements of Section 2.03 have been satisfied, and subject to the terms and
conditions hereof, the Bank will advance only one-third (1/3) of each subsequent
Request for Advance for Construction Costs or Equipment until such time as
Borrower has paid the aggregate of $18,000,000 for the Construction Costs in
accordance with the Development Expense Schedule. Thereafter, subject to the
terms and conditions hereof, the Bank will make Advances equal to 100% of the
Requests for Advances until such time as the Bank has made Advances in the full
amount of the Construction Loan.
(b) Term Loan. Subject to and upon the terms and conditions contained in
this Agreement and relying on the representations and warranties contained in
this Agreement, the Bank agrees to make a Term Loan available to the Borrower in
the maximum aggregate principal amount not to exceed the
Loan Agreement--Page 8
lesser of (i) $19,000,000, or (ii) the outstanding principal balance on the
Construction Note immediately following the funding of the Retainage Advance.
The Term Loan shall be represented by a promissory note in the principal amount
of the Term Loan, payable to the order of the Bank on which interest shall
accrue at the rates set forth in Section 2.02. Principal on the Term Loan shall
be payable in monthly installments equal to l/12th of the principal that would
be payable each loan year if the total principal balance was fully amortized in
level payments of principal and interest over fifteen (15) years at the interest
rate on the Term Loan as selected by Borrower pursuant to Section 2.02; provided
however, if the Borrower elects a variable rate pursuant to Section 2.02(b), the
monthly installment due hereunder will be recalculated with each change in
Index. Monthly installments of principal and interest shall be payable on the
first day of each month beginning with the first calendar month following the
funding of the Retainage Advance and continuing on the first day of each
succeeding month, with the balance of all outstanding and unpaid principal and
accrued interest of the Term Loan being due and payable May 15, 2003. The
regular installments of principal and interest shall be applied first to accrued
unpaid interest on the Term Loan and then to principal.
(c) Concurrently with the delivery of the certificate to be delivered to
the Bank pursuant to Section 5.01(h), but in no event later than forty five (45)
days after the end of each quarter of the Term Loan commencing with the last day
of the first quarter of the Term Loan, the Borrower shall pay to the Bank a sum
equal to 100% of the Net Operating Income of Borrower determined with respect to
the quarter ending less and except: (i) sums paid or accrued under the Term Note
during such quarter; (ii) Tax Distributions made to the members of the Borrower
during such quarter or direct payments of income taxes; (iii) escrow deposits
made pursuant to Section 5.19 during such quarter; and (iv) any capital
expenditures (as defined under GAAP) which the Bank, in its sole discretion,
authorizes the Borrower to deduct from the sums otherwise payable pursuant to
this Section 2.01 (c). Each such payment shall be in addition to all monthly
installment payments made in, or accrued for that, quarter with respect to the
Term Note. Any payments made pursuant to this Section 2.01(c) will not relieve
the Borrower of the Borrower's obligation to continue to make regularly
scheduled payments pursuant to the Term Note. Any such payments will instead
reduce the principal balance due under the Note, and Borrower may be required to
make fewer payments under the Term Note.
(d) If the Borrower is in default of the provisions of both Section
5.16(a)(i) and (ii), the Bank, at its sole election, may, as to each such
default, require the Borrower within sixty (60) days notice to pay to the Bank
an amount sufficient to reduce the outstanding principal balance of the Loan to
an amount that is less than or equal to seventy percent (70%) of the Appraised
Value of the Property.
SECTION 2.02 INTEREST RATES.
(a) The Construction Loan shall bear interest at an annual rate equal to
one and one-half percentage points in excess of the Index as it may change
from time to time.
(b) Borrower shall have the option, exercisable once prior to the execution
of the Term Note, to have the principal balance of the Term Note bear interest
at either: (i) a variable rate adjusted daily equal to one and one-half of
percentage points in excess of the Index as it may change from time to time;
or (ii) a fixed rate equal to 375 basis points in excess of the corresponding
5-year Treasury Rate
Loan Agreement--Page 9
(ask price) quoted by the Wall Street Journal thirty (30) days prior to the date
of the Term Note. The Borrower shall notify the Bank of the Borrower's election
under this Subsection 2.02(b) not less than five (5) Business Days prior to the
funding of the Term Note. If the variable rate specified in Subsection
2.02(b)(i) is selected hereunder, the Bank may require the Borrower to obtain
interest rate protection satisfactory to the Bank.
(c) All payments of interest shall be computed on the per annum basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day) elapsed.
(d) If the Borrower fails to pay any payment under a Note within ten (10)
days of when due, the Borrower shall pay to Bank a late payment fee in an
amount equal to ten percent (10%) of the delinquent interest due.
(e) Notwithstanding the foregoing, the Borrower shall pay to Bank interest
on a Loan at the Post-Default Rate on any principal amount, and (to the fullest
extent permitted by law) on any other amount payable by the Borrower under any
Loan Document to or for account of Bank, which was not paid in full when due
(whether at the stated maturity, by acceleration or otherwise), for the period
commencing on the date Bank declares that a Loan is accelerated until the same
is paid in full. Accrued interest payable at the Post-Default Rate shall be
payable from time to time on demand. The Post-Default Rate shall not be
applicable unless and until the Bank declares that the Loan is accelerated as a
result of an Event of Default.
SECTION 2.03 BORROWER'S EQUITY CONTRIBUTION. The Bank shall have no
obligation to make any Advance until such time as the Borrower has paid the
first $5,000,000 of the Construction Costs in accordance with the terms hereof.
Before making any payment for the Construction Costs, whether to the Contractor
or otherwise, the Borrower shall submit to Bank a request to make such a
payment (herein referred to as a "Request to Make Payment") which request shall
be in the same form as and shall contain all of the same materials as a Request
for Advance, or shall be in such other form and contain such information as the
Bank may require. Without limiting the foregoing, the provisions of Sections
2.04, 2.05 and 2.06 shall apply to Requests to Make Payment. Bank shall review
the request in the same manner as a Request for Advance. As to that portion of
the Request to Make Payment which is approved by the Bank, the Borrower shall
deliver to the Bank for deposit into Borrower's Account an amount equal to the
approved Request to Make Payment and the Borrower shall only use the funds so
deposited to pay the approved Request to Make Payments. Only those Requests to
Make Payments which have been approved by the Bank shall be applied in
calculating whether the Borrower has paid the first $5,000,000 of the
Construction Costs.
SECTION 2.04 CONSTRUCTION ADVANCES. The Bank agrees to make Advances
to the Borrower for Construction Costs from time to time on any Business Day in
accordance with the provisions of Section 2.05 hereof up to the maximum amount
of the Construction Loan less any Advances made to purchase Equipment. The
Bank shall make such Advances by check payable jointly to the Borrower and the
Contractor to the extent such an Advance is due and payable to the Contractor
under the Construction Contract. The credit advice resulting from the deposit
of the proceeds of any disbursement into the Borrower's Account or the Bank's
copy of any check representing all or any part of the proceeds or a
Loan Agreement--Page 10
disbursement shall be deemed prima facie evidence of the indebtedness of the
Borrower to the Bank on the Construction Loan.
SECTION 2.05 BORROWING PROCEDURE FOR CONSTRUCTION COSTS. (a) The
proceeds of the Construction Loan for the Construction Costs shall be advanced
by the Bank not more than once per month (or more frequently at the sole option
of the Bank) as construction of the Improvements progresses pursuant to the
following procedures:
(i) the Borrower shall submit a Request for Advance to the Bank at least
ten (10) Business Days prior to the proposed funding date specifying the
total amount of the proposed Advance and the proposed date on which said
Advance is to be made;
(ii) each Request for Advance shall be in substantially the form prescribed
by the Bank;
(iii) within ten (10) Business Days of its receipt of a Request for
Advance, the Bank will notify the Borrower by telephone as to whether the
Bank will advance funds with respect to all or a portion of such a Request
and the Bank will, within that same period, make an Advance as to that
portion of the Request approved by the Bank;
(iv) each Advance shall be funded at the Bank's Office in strict accordance
with the Development Expense Schedule and shall be credited to the
Borrower's Account with the Bank; and
(iv) upon the occurrence of a Deficiency, the Borrower shall not be
entitled to request or receive any Advances until such time as the
Deficiency has been cured to the satisfaction of the Bank.
Notwithstanding the foregoing, the Bank shall be authorized to debit the
Borrower's Account to pay interest on the Loan when due or to fund an Advance to
pay interest on a Loan when due, in either case without the requirement of a
Request for Advance.
(b) If at any time during the term of the Construction Loan the Bank
determines that a Deficiency exists, then the Bank shall have the right, in its
sole option, to require the Borrower to deposit all or a portion of the amount
of such Deficiency into the Cash Collateral Account upon 10 days notice by the
Bank to the Borrower. No additional Advances on the Loan shall be made until
either the Deficiency is cured to the satisfaction of the Bank or until the full
or partial amount of such Deficiency shall be deposited as aforesaid. Any funds
in the Cash Collateral Account shall be disbursed by the Bank in the same manner
as Advances, and those funds shall be disbursed prior to funding of additional
Advances.
(c) Advances for Construction Costs shall be made only to the extent that
the work is actually completed in accordance with the Plans and in place and
approved by the Bank, including materials actually incorporated in the
Improvements or stored on site, but excluding materials stored elsewhere.
Loan Agreement--Page 11
(d) The Bank shall have no obligation to disburse any funds in excess of
the budgeted line item amount provided in the Development Expense Schedule, and
funds may not be transferred among line items in the Development Expense
Schedule without prior approval by the Bank.
(e) The amount of each Advance shall be computed so that a portion of the
Construction Costs included in the Request for Advance equal to the retainage
provided in the Construction Contract (as approved by the Bank) will be retained
by the Bank until the release of the Retainage Advance.
SECTION 2.06 REQUESTS FOR ADVANCES. (a) Each Request for Advance for
Construction Costs shall be submitted to the Bank in duplicate and shall be
accompanied by the following:
(i) AIA Documents. Application and Certificate for Payment (AIA
Documents G-702 and G-703) signed by the Architect and Contractor and properly
notarized;
(ii) Development Expense Schedule. An updated copy of the Development
Expense Schedule in a form prescribed by the Bank showing all changes since the
date of the last Advance, accompanied by supporting invoices for costs other
than interest and construction costs;
(iii) Title Endorsements. If required by the Bank, a certificate
from the title insurance company (a) stating that since the date of the most
recent construction Advance, there have been no intervening mortgages, liens,
privileges, encumbrances or conveyances recorded against the Property; (b) if
necessary, increasing the aggregate amount of insurance by an amount equal to
the proposed construction Advance; (c) insuring that the lien of the Collateral
Documents as to such construction Advance will continue to be superior to all
laborers, materialmen and other mechanics liens affecting the Property; and (d)
describing any matters affecting the Property which appear in the public records
since the date of the title policy;
(iv) Insurance. If required by the Bank, evidence satisfactory to the
Bank that the required insurance remains in full force and effect;
(v) Lien Waivers. Waivers of liens and receipts for payment by the
Contractor, sub-contractors and suppliers; and
(vi) Other Documents. Such other instruments, documents, certificates,
endorsements, invoices and opinions as the Bank or the title insurance company
may reasonably require.
(b) Prior to funding a Request for Advance, the Bank must obtain the report
of the Bank's Inspector, which report shall be in force and substance
satisfactory to the Bank and shall state (i) that the work completed under the
Construction Contract as of the date of the inspection has been performed and
constructed in accordance with the Plans, (ii) that the work is progressing such
that the Improvements will be completed on or before the Drawdown Termination
Date, and (iii) that the disbursements to date (including the current Request
for Advance) plus retainage correspond with the percentage of work completed
and/or in place as of the Request for Advance. If the Bank's Inspector does not
approve an item of work, the Bank, in the exercise of its reasonable judgment,
may withhold from the amount
Loan Agreement--Page 12
requested an amount which in the Bank's opinion shall be sufficient to remedy
the item of work until the non-complying item of work is remedied.
(c) If the full amount of the Construction Loan (other than the retainages
and any funds in the Cash Collateral Account) has been disbursed by the Bank,
the Borrower shall be obligated to pay all of the remaining costs to construct
and complete of the Improvements in accordance with the Plans, the Construction
Completion Schedule and the Development Expense Schedule delivered by the
Borrower to the Bank pursuant to Article 7; provided, however, that before the
Borrower makes such payment of any Construction Costs to the Contractor or
otherwise, the payment must be approved by the Bank following receipt of all of
the documents described in this Section 2.06.
SECTION 2.07 RETAINAGE ADVANCE. In the case of the Retainage Advance,
and in addition to the requirements for each Advance as set forth above, the
final Request for Advance shall be submitted to the Bank in duplicate and shall
be accompanied by the following:
(a) Certificate of Occupancy. If required under applicable law, a
certificate of occupancy issued by the appropriate governmental authority
consenting to the use and occupancy of the Improvements;
(b) Certificate of Substantial Completion. A Certificate Of Substantial
Completion (AIA Form G-704) signed by the Borrower, the Contractor and the
Architect;
(c) As-Built Survey. A survey of the Property and all Improvements,
including completed buildings, and pertinent grade and floor elevations;
(d) Lien and Privilege Certificate. A lien and privilege certificate issued
by the appropriate clerk of court or recorder of mortgages which lists no Liens
against the Property other than the Mortgage;
(e) Inspection. A final report of the Bank's Inspector in form and
substance satisfactory to the Bank stating that the Improvements have been
completed under the Construction Contract in accordance with the Plans; and
(f) Affidavit of Cancellation. Affidavit of cancellation and lien waiver
executed by the Contractor.
SECTION 2.08 MODIFIED ADVANCE PROCEDURE. The Bank reserves the right to
modify the foregoing procedures and to disburse Advances for Construction Costs
as follows:
(a) Advances to the Contractor. At its option, the Bank may make any and
all Advances when due under the Construction Contract directly to the Contractor
or to subcontractors and suppliers through the Contractor, in the reasonable
judgment of the Bank, to prevent a default under the Construction Contract. For
these purposes, the Borrower hereby irrevocably makes, nominates, constitutes,
and appoints the Bank, in its place and stead acting through any of its
directors, officers, or other agents, as Borrower's true and lawful agent and
attorney in fact with full power of substitution, to
Loan Agreement--Page 13
make such Advances directly to the Contractor, subcontractor and suppliers. The
foregoing mandate or agency shall be an irrevocable power of attorney, that is,
a power coupled with an interest which cannot be revoked by the Borrower, with
the Bank having direction and authorization to so make such Advances, and no
further direction or authorization from the Borrower shall be necessary to
warrant such direct construction Advances, and all such Advances shall satisfy
pro tanto the obligations of the Bank and shall constitute Advances hereunder
and shall be secured by the Collateral Documents as fully as if made to the
Borrower, regardless of the disposition thereof by the Contractor,
subcontractors, or suppliers.
(b) Advances to the Title Company. The Bank, at its option, may also
disburse Advances to the Contractor through a title insurance company or its
authorized agent; provided, however, that the title insurance company shall bear
sole and complete responsibility for the disbursement of such Advances to the
Contractor, and the Borrower shall hold the Bank harmless and indemnify it from
any liability in connection therewith. In addition, each Advance so disbursed to
the title insurance company shall be accompanied by an endorsement to the title
policy in form and content satisfactory to the Bank (i) stating that since the
date of the most recent Advance, there have been no intervening mortgages,
liens, privileges, encumbrances or conveyances recorded against the Property,
(ii) describing any matters affecting the Property which appear in the public
records since the date of the title policy, (iii) insuring the aggregate of all
Advances secured by the Collateral Documents, and (iv) updating the title
insurance policy as of the date of such Advance.
SECTION 2.09 BORROWING PROCEDURE FOR ADVANCES FOR EQUIPMENT.
(a) Subject to and upon the terms and conditions contained in this
Agreement and relying on the representations and warranties contained in this
Agreement, the Bank agrees to make Advances to the Borrower for costs of
purchasing Equipment from time to time on any Business Day in accordance with
the provisions of this Section 2.09 hereof up to the maximum amount of
$5,000,000. The Bank shall make such Advances by check payable jointly to the
Borrower and the vendor of such Equipment to the extent such sums are due to
such a vendor. The credit advice resulting from the deposit of the proceeds of
any disbursement in the Borrower's Account or the Bank's copy of any check
representing all or any part of the proceeds or a disbursement shall be deemed
prima facie evidence of the indebtedness of the Borrower to the Bank on the
Construction Loan.
(b) The Borrower shall have delivered to Bank a Request for Advance for the
payment of the Equipment at least ten (10) Business Days prior to the date of
such an Advance, and the Borrower shall have obtained Bank's approval for such
Advance. The Borrower shall not submit a Request for Advance for Equipment to
the Bank more than once per month (or more frequently at the sole option of the
Bank) which will be submitted concurrently with a Request for Advance submitted
under Section 2.05.
(c) The Borrower shall deliver to Bank with each Request for Advance for
Equipment copies of the invoices for such Equipment which will be purchased or
paid for with the Advance. Before approving such a Request, the Bank may, at
its election, require that the Bank Inspector verify that the Equipment has been
delivered and/or installed on the Property and Improvements.
Loan Agreement--Page 14
(d) If requested by Bank, the Borrower shall deliver to Bank a security
agreement and UCC-1, in a form, substance and content acceptable to Bank, under
the terms of which, the Borrower grants to Bank a first priority security
interest in and to the Equipment to be acquired with the Advance.
SECTION 2.10. [INTENTIONALLY LEFT BLANK]
SECTION 2.11 PREPAYMENTS.
(a) The Borrower shall not have the right to prepay the Loan except
pursuant to the terms of this Section 2.11.
(b) The Borrower may not prepay the Loan at any time prior to the second
anniversary date of the Term Note. Thereafter, the Borrower may, upon at least
sixty (60) days prior written notice to the Bank, prepay the entire unpaid
balance of the Loan if the payments of all principal and accrued interest due
under the Loan are accompanied by a prepayment premium equal to the following
sums: (i) a sum equal to two percent (2%) of the outstanding principal balance
of the Term Loan, if the notice of the prepayment is given after the second
anniversary date of the Term Note, but before the third anniversary date of the
Term Note; and (ii) a sum equal to one percent (1%) of the outstanding
principal balance of the Term Loan, if the notice of the prepayment is given at
any time after the third anniversary date of the Term Note but before the fourth
anniversary date of the Term Note. After such fourth anniversary date, the
Borrower may prepay all or any portion of the Term Loan without penalty or
premium.
(c) The Borrower may without penalty or premium prepay all or any portion
of the Loan with funds obtained from Net Operating Income of the Companies.
SECTION 2.12 COMMITMENT FEES. The Borrower shall pay to the Bank a
commitment fee in the amount of $190,000 (the "Commitment Fee") payable as
follows:
(a) The Borrower paid $95,000.00 to the Bank upon the Borrower's acceptance
of the Commitment Letter. That payment is deemed to be earned and non-
refundable. That portion of the Commitment Fee was paid to the Bank as agreed
upon compensation for work the Bank would do and expenses the Bank would incur
in connection with reviewing and underwriting Borrower's loan request.
(b) The Borrower shall pay to the Bank on the Closing Date the remaining
one-half of the Commitment Fee. If the Construction Loan is not closed, this
remaining one-half of the Commitment Fee shall not be due or payable by
Borrower.
SECTION 2.13 BUSINESS DAYS. If the date for any payment due under the
Agreement falls on a day which is not a Business Day, then for all purposes of
this Agreement the same shall be deemed to have fallen on the next following
Business Day, and such extension of time shall in such case be included in the
computation of payments of interest.
SECTION 2.14 NATURE OF COMMITMENT. With respect to all Advances hereunder,
the Bank's obligation to make such Advances shall be deemed to be a transaction
made pursuant to a contract to
Loan Agreement--Page 15
make a loan or extend debt financing or financial accommodations to the Borrower
within the meaning of Sections 365(c)(2) and 365(e)(2)(B) of the Bankruptcy Code
of the United States.
SECTION 2.15 PAYMENTS. The Borrower shall make each payment hereunder
and under the Note not later than 1:00 P.M. (Shreveport time) on the day when
due in lawful money of the United States of America to the Bank's Office or
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, in same day funds. The Borrower
hereby authorizes the Bank, if and to the extent payment is not made when due
hereunder or under a Note, to charge from time to time against the Borrower's
accounts with the Bank any amount so due.
SECTION 2.16 USE OF PROCEEDS. The Borrower shall use the proceeds of
the Loan to construct the Improvements, the Equipment and for other costs
approved by the Bank in the Development Expense Schedule.
SECTION 2.17 CLOSING OF THE CONSTRUCTION LOAN (a) The Closing of the
Construction Loan shall be held on or before December 9, 1997 (the "Closing
Date") at the offices of the Bank in Shreveport, Louisiana, or at such other
location as the Bank and the Borrower may mutually agree.
(b) At the Closing of the Construction Loan, the Companies shall deliver
to the Bank the following:
(i) Loan Agreement. Duly executed counterparts of this Agreement signed
by all the parties hereto;
(ii) Construction Note. The duly executed Construction Note dated as of
the Closing Date;
(iii) Collateral Documents. Duly executed counterparts of the Collateral
Documents;
(iv) Secretary's Certificate. Certificate of the Secretary of each of the
Companies setting forth (a) resolutions of its board of directors (or
other governing body) in form and substance satisfactory to the Bank
with respect to the authorization of the Loan Documents, as the case
may be, by such Company; (b) the officers or members authorized to
sign such instruments; and (c) copies of the articles of
incorporation and by-laws or other governing document of each Company;
(v) Good Standing Certificate. Certificates of good standing of each of
the Companies issued by the Secretary of State of its state of
incorporation or formation;
(vi) Borrower's Organizational Documents. All instruments regarding the
formation, organization and governance of the Borrower which shall be
in a form and substance acceptable to the Bank and its legal counsel;
(vii) Expenses. Payment of any expenses incurred by the Bank and payable
by the Borrower under Section 5.06;
Loan Agreement--Page 16
(viii) Opinions. Favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.P. and of ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇, counsel for the Companies, in form and substance
satisfactory to the Bank;
(ix) Environmental Engineering Report. A report acceptable to the Bank,
conducted by an environmental engineer, to determine whether
hazardous substances are or could be present on the Property;
(x) [INTENTIONALLY LEFT BLANK]
(xi) Gaming License. Evidence satisfactory to the Bank and its legal
counsel that LRGP is in full compliance with all federal, state and
local laws regarding its gaming operations and has obtained all
governmental permits, licenses and authorizations required to
operate the Casino in the State of Louisiana;
(xii) Gaming Board Approval. Evidence satisfactory to the Bank and its
legal counsel that the Louisiana Gaming Board has issued any
requisite approvals and consents with respect to the construction of
the Improvements and the Loans.
(xiii) Site Inspection Affidavit. If requested by the Bank, a certified
copy of an affidavit from a licensed architect, surveyor or civil
engineer that no work has begun and no materials have been delivered
on the Property as of Closing, which affidavit must be recorded with
Mortgage;
(xiv) Officers' Certification. Certification executed on behalf of each of
the Companies by an officer of each Company to the effect that as of
the Closing, no Default exists under this Agreement or any of the
Collateral Documents and that there has been no material adverse
change in the business operations or financial condition of each
such Company;
Loan Agreement--Page 17
(xv) Room Guaranty Agreement. An agreement between Borrower, Casino
America and the Bank, in a form and substance acceptable to the
Bank and its counsel;
(xvi) Registration Rights Agreement . The Registration Rights Agreement
duly executed by Casino America and the Bank;
(xvii) Casino America Guaranty. A guaranty in a form and substance
acceptable to the Bank under the terms of which Casino America
guarantees the first $5,500,000 of the Construction Loan until such
Completion of the Improvements and the funding of the Retainage
Advance; and
(xviii) Conveyance of the Property. Evidence satisfactory to the Bank
that the Borrower has acquired merchantable title to the Property.
Loan Agreememt--Page 18
(c) Notwithstanding the Closing of the Construction Loan, no Advances will
be made unless and until all of the terms and conditions of this Agreement
regarding the prerequisites for the Bank to make an Advance, including but not
limited to, those specified in Sections 2.05, 2.06, 2.09 and 7.01 are fulfilled
to the satisfaction of the Bank.
(d) If the Companies fail to comply with the provisions of Section 2.17(b)
by December 9, 1997, the Bank may, at its sole discretion, elect to terminate
this Agreement by written notice to the Borrower and Casino America. If the
Bank makes such an election, the Bank may retain all fees previously paid to it
by the Companies or any one of them, and Borrower, upon demand, shall reimburse
the Bank for all sums reimbursable or payable under the provisions Section 5.06.
SECTION 2.18 CLOSING AND FUNDING OF THE TERM LOAN. The Closing of the
Term Loan shall be held immediately following the funding of the Retainage
Advance at the offices of the Bank in Shreveport, Louisiana, or at such other
location as the Bank and the Borrower may mutually agree.
(b) At the Closing of the Term Loan, the Borrower shall deliver to the
Lender the following:
(i) Term Note. The duly executed Term Note in a principal amount
equal to the Term Loan;
(ii) Secretary's Certificate. Certificate of the Secretary of each
of the Companies setting forth (A) resolutions of its board of
directors (or other governing body) in form and substance
satisfactory to the Bank with respect to the authorization of
the Term Note and the Loan Documents, as the case may be, by such
Company; and (B) the officers authorized to sign such
instruments;
(iii) Confirmations. If requested by the Bank, instruments duly
executed by each of the Companies, in a form and substance
acceptable to the Bank and its legal counsel, in which each
confirms that the Loan Documents to which each is a party is
valid and in effect;
(iv) Opinions. Favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.P., counsel
for the Companies, in form and substance satisfactory to the
Bank, regarding the Term Note, the other Loan Documents and other
matters requested by the Bank; and
(v) Escrow Account. All agreements duly executed the Borrower in a
form and substance acceptable to the Bank which the Bank requires
to establish the Escrow Account required under Section 5.19.
Loan Agreement--Page 19
ARTICLE 3
SECURITY FOR THE OBLIGATIONS
Section 3.01 SECURITY. The Obligations shall be secured by the following:
(a) Mortgage by Borrower granting to the Bank a first priority security
interest in and to the Property and Improvements, together with a first priority
assignment of leases and rents thereon;
(b) Subject to the provisions of Sections 3.01(c) and (d), a security
agreement executed by the Borrower granting to the Bank a first priority
security interest in and to all present or future movable property of the
Borrower, including, without limitation, all accounts receivable, inventory,
contract rights, general intangibles, management agreement rights, reserves,
escrows, insurance policies and proceeds, condemnation awards, deposits,
furnishings, fixtures and equipment and all proceeds therefrom, together with
appropriate UCC-1 Financing Statements;
(c) To the extent permitted under applicable law, a security agreement and
collateral assignment executed by the Borrower granting to the Bank a first
priority security interest in and to all present and future contracts, licenses,
and warranties issued with respect to the operation of the Improvements,
including, but not limited to, any Management Agreements and all food, liquor
and beverage licenses; and
(d) To the extent permitted under the Indenture, a security agreement
executed by the Borrower granting to the Bank a first priority security interest
in all present or future trademarks, tradenames and franchise rights of
Borrower.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement, the Borrower
represents and warrants to the Bank that:
SECTION 4.01 EXISTENCE. (a) The Borrower is a limited liability company,
duly organized, legally existing and in good standing under the laws of
Louisiana. Borrower has obtained all permits, licenses and other governmental
permits necessary to conduct the business it transacts.
(b) The chief executive office of Borrower is located at ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 4.02 POWER AND AUTHORIZATION. The Companies are duly authorized
and empowered to execute, deliver and perform the Loan Documents executed by
them, as the case may be. All action on the part of the Companies requisite for
the due creation and execution of the Loan Documents, as the case may be, has
been duly and effectively taken.
SECTION 4.03 BINDING OBLIGATIONS. The Loan Documents constitute valid
and binding obligations of the Companies, as the case may be, enforceable in
accordance with their terms (except that
Loan Agreement--Page 20
enforcement may be subject to any applicable bankruptcy, insolvency or similar
laws generally affecting the enforcement of creditors' rights).
SECTION 4.04 NO LEGAL BAR OR RESULTANT LIEN. The Loan Documents do not
and will not violate any provisions of the Companies' articles of incorporation
or bylaws or other governance documents, will not violate any contract,
agreement, debenture, law, regulation, order, injunction, judgment, decree or
writ to which any of the Companies is subject, and will not result in the
creation or imposition of any Lien upon any property of the Companies, as the
case may be, other than as contemplated by this Agreement.
SECTION 4.05 NO CONSENT. The Companies' execution, delivery and
performance of the Loan Documents executed by them, as the case may be, either
(i) do not require the consent or approval of any other Person, including
without limitation any regulatory authority or governmental body of the United
States or any state thereof or any political subdivision of the United States or
any state thereof, or (ii) if any such consent is required, it has been
obtained.
SECTION 4.06 FINANCIAL CONDITION. The financial statements of the
Companies for their fiscal years most recently ended which have been delivered
to the Bank, are complete and correct, have been prepared in accordance with
GAAP, consistently applied, and fully and accurately reflect in all material
respects the financial condition and results of the operations of the Companies
as of the date or dates and for the period or periods stated. The Companies have
not made investments in, advances to or guaranties of the obligations of any
Person, except for an investment in Isle of Capri Black Hawk, L. L. C. and as
otherwise reflected in said financial statements or as permitted by this
Agreement. The Companies do not have any material (individually or in the
aggregate) liabilities, direct or contingent, except as disclosed or referred to
in said financial statements. To the best of the Borrower's knowledge, no
material adverse change has since occurred in the condition, financial or
otherwise, of the Companies, except as disclosed to the Bank in writing. All of
the materials which the Companies have submitted to the Bank constitute a
complete and accurate presentation of all facts material to the Bank's agreement
to execute this Agreement. None of the Companies has ever been the debtor in any
insolvency proceedings.
SECTION 4.07 LITIGATION. Except as referred to in the financial
statements described in Section 4.06, there is no litigation, legal or
administrative proceeding, investigation or other action of any nature pending
or, to the knowledge of the Borrower threatened against or affecting the
Companies which involves the possibility of any judgment or liability not fully
covered by insurance, and which may materially and adversely affect the business
or the property of the Companies or their ability to carry on business as now
conducted.
SECTION 4.08 SOLVENCY. Each of the Companies will receive a reasonably
equivalent value in exchange for the obligations of all of the Companies under
the Loan Documents. The execution and performance of the Loan Documents by all
of the Companies: (i) are not being made with any intent to hinder, delay or
defraud any entity to which any of the Companies is indebted; (ii) will not
result in any of the Companies becoming insolvent or having an unreasonably
small capital for the business in which such entities are engaged; and (iii)
will not cause the Borrower to incur debts that would be beyond the ability of
the Companies to pay as such debts mature.
Loan Agreement--Page 21
SECTION 4.09 TAXES AND GOVERNMENTAL CHARGES. The Companies have filed
all tax returns and reports required to be filed and have paid all taxes,
assessments, fees and other governmental charges levied upon them or upon their
respective property or income which are due and payable, including interest and
penalties, or have provided adequate reserves for the payment thereof.
SECTION 4.10 DEFAULTS. None of the Companies is in default (in any
respect which materially and adversely affects its business, property,
operations or condition, financial or otherwise) under any indenture, mortgage,
deed of trust, agreement or other instrument to which any of the Companies is a
party or by which it is bound, except as disclosed to the Bank in writing on or
prior to the Closing Date.
SECTION 4.11 CASUALTIES AND CONDEMNATION. Since the date of the most
recent financial statements furnished to the Bank prior to the Closing Date,
neither the business nor the property of the Companies has been materially and
adversely affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property or cancellation of contracts, permits or
concessions by any domestic or foreign government or any agency thereof, riot,
activities of armed forces or acts of God or of any public enemy, except as
disclosed in writing to the Bank on or prior to the Closing Date.
SECTION 4.12 USE OF PROCEEDS; MARGIN STOCK. The proceeds of the Loan
will be used by the Borrower for the purposes listed in Article 2 hereof. None
of such proceeds will be used for the purpose of, and the Borrower is not
engaged in the business of extending credit for the purpose of, purchasing or
carrying any "margin stock" as defined in Regulation U of the Board of Governors
of the Federal Reserve System (12 C.F.R. Part 221), or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry a margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of said Regulation U. Neither
the Borrower nor any Person acting on behalf of the Borrower has taken or will
take any action which might cause this Agreement to violate Regulation U or any
other regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect.
SECTION 4.13 COMPLIANCE WITH THE LAW. To the best of Borrower's
knowledge, the Companies: (i) are not in violation of any law, judgment, decree,
order, ordinance, or governmental rule or regulation to which the Companies or
any of their property are subject; and (ii) have not failed to obtain any
license, permit, franchise or other governmental authorization necessary to the
ownership of any of their property or the conduct of their business.
SECTION 4.14 ERISA. The Companies are in compliance in all material
respects with the applicable provisions of ERISA, and no "reportable event," as
such term is defined in Section 4043 of ERISA, has occurred with respect to any
Plan of any of the Companies.
SECTION 4.15 NO MATERIAL MISSTATEMENTS. No information, exhibit or
report furnished by the Companies to the Bank in connection with this Agreement
or in the negotiation of this Agreement contained any material misstatement of
fact or omitted to state a material fact necessary to make the statement
contained therein not misleading.
Loan Agreement--Page 22
SECTION 4.16 UTILITY OR INVESTMENT COMPANY. None of the Companies is
engaged in the generation, transmission, or distribution and sale of electric
power; transportation, distribution and sale through a local distribution system
of natural or other gas for domestic, commercial, industrial, or other use;
ownership or operation of a pipeline for the transmission or sale of natural or
other gas, crude oil or petroleum products to other pipeline companies,
refineries, local distribution systems, municipalities, or industrial consumers;
provision of telephone or telegraph service to others; production, transmission,
or distribution and sale of steam or water; operation of a railroad; or
provision of sewer service to others. None of the Companies is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.17 TITLE TO COLLATERAL. Borrower has good and merchantable
title to the Property, free of all liens and encumbrances except (i) those
created in favor of the Bank, (ii) liens for taxes, assessments, or other
governmental charges not yet due or which are being contested in good faith by
appropriate action promptly initiated and diligently conducted, if such reserve
as shall be required by GAAP shall have been made therefore, and (iii) any
exceptions shown on the title policy referred to Section 7.01 and agreed to by
the Bank.
SECTION 4.18 ENVIRONMENTAL MATTERS. To the best of Borrower's knowledge,
no asbestos, or any substance containing asbestos deemed hazardous by federal or
state regulations on the date of this Agreement, has been installed in or on the
Property. Such Property is not in violation of or subject to any existing,
pending, or, to the best of Borrower's knowledge, threatened investigation or
inquiry by any governmental authority or to any remedial obligations under any
applicable laws pertaining to health or the environment (hereinafter sometimes
collectively called "Applicable Environmental Laws"), including without
limitation the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 (as amended, hereinafter called "CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980 the Solid
Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste
Amendments of 1984 (as amended, hereinafter called "RCRA"), except as disclosed
in writing to the Bank on or prior to the Closing Date, and this representation
and warranty would continue to be true and correct following disclosure to the
applicable governmental authorities of all relevant facts, conditions and
circumstances, if any, pertaining to the Property and known to the owners
thereof. The Borrower has not obtained and, to the best of the Borrower's
knowledge, is not required to obtain any permits, licenses or similar
authorizations to construct, occupy, operate or use any buildings, improvements,
fixtures and equipment forming a part of the Property by reason of any
Applicable Environmental Laws. To the best of the Borrower's knowledge, no
hazardous substances or solid wastes have been disposed of or otherwise released
on or to the Property. The use which the Borrower makes and intends to make of
the Property will not result in the disposal or other release of any hazardous
substance or solid waste on or to the Property. The terms "hazardous substance"
and "release" as used in this Agreement shall have the meanings specified in
CERCLA, and the terms "solid waste" and "disposal" (or "disposed") shall have
the meanings specified in RCRA; provided, in the event that the laws of the
State of Louisiana establish a meaning for "hazardous substance," "release,"
"solid waste" or "disposal" which is broader than that specified in either
CERCLA or RCRA, such broader meaning shall apply.
Loan Agreement--Page 23
SECTION 4.19 GOVERNMENTAL REQUIREMENTS. The Property is in compliance
with all current governmental requirements affecting the Property, including,
without limitation, all current zoning and land use regulations, building codes
and all restrictions and requirements imposed by applicable governmental
authorities with respect to the construction of any improvements on the Property
and the contemplated use of the Property.
SECTION 4.20 CONTINUING ACCURACY. All of the representations and
warranties contained in this Article or elsewhere in this Agreement shall be
true through and until the later of the date on which all obligations of
Borrower under this Agreement and the other Loan Documents are fully satisfied,
or Borrower shall promptly notify Bank of any event which would render any of
said representations and warranties untrue or misleading. Each Request for
Advance which Borrower delivers to Bank shall be deemed to be Borrower's
restatement and reaffirmation of the representations and warranties contained in
this Article 4 and elsewhere in this Agreement.
SECTION 4.21 CONSTRUCTION. The Borrower hereby represents and warrants
to the Bank: (i) the Plans, together with the anticipated use of the Property,
will not violate any restrictive covenant applicable to the Property; (ii) the
Borrower will obtain all permits and approvals necessary to construct the
Improvements from all applicable governmental authorities; and (iii) the
Development Expense Schedule will contain a true and accurate estimate of the
cost of the Improvements and the Equipment.
ARTICLE 5
AFFIRMATIVE COVENANTS
Unless the Bank's prior written consent to the contrary is obtained,
the Borrower will at all times comply with, and will cause the other Companies
to comply with, the covenants contained in this Article 5, from the date hereof
and for so long as any part of the Obligations are outstanding.
SECTION 5.01 FINANCIAL STATEMENTS AND REPORTS. Borrower will promptly
furnish to the Bank such information regarding the business and affairs and
financial condition of the Companies as the Bank may reasonably request, and
Borrower will furnish to the Bank:
(a) Annual Audited Statements of Casino America. As soon as available and
in any event within one hundred five (105) days after the close of each fiscal
year (commencing with the fiscal year ending on April 26, 1998) the
consolidated balance sheet and income statement of Casino America and its
subsidiaries for the year end setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year accompanied by the
unqualified opinion of an independent certified public accountant acceptable to
the Bank;
(b) Monthly Occupancy Reports. As soon as available and in any event
within forty-five (45) days after the last day of each calendar month,
occupancy reports (including the average daily rate) of the Property and the
Improvements in a form satisfactory to the Bank;
Loan Agreement--Page 24
(c) Monthly Reports. As soon as available and in any event within forty-
five (45) days after the last day of each calendar month, the balance sheets and
income statements of the Borrower for such month, setting forth the income and
expenses from the operations of the Borrower for such month and for the calendar
year through the last day of such month;
(d) Form 10K Report. As soon as available and in any event within one
hundred and twenty days (120) after the end of each fiscal year, the Form 10K
filed by Casino America with the SEC;
(e) Form 10Q Report. As soon as available and in any event within sixty
(60) days after the end of each fiscal quarter in each fiscal year, the Form 10Q
filed by Casino America with the SEC;
(f) Compliance Certificates Simultaneously with the furnishing of the
financial statements required by Item (c) hereof, the certificate of the chief
financial officer of the Borrower (in the form of Exhibit C hereto), (i)
certifying that to the best of his knowledge no Default has occurred, or if a
Default has occurred, specifying the nature and extent thereof and the steps
that the Borrower or Casino America proposes to take to cure such Default, and
(ii) providing a calculation of the financial covenants set forth in Section
5.16;
(g) [INTENTIONAL LEFT BLANK]; and
(h) Quarterly Certificate of Net Operating Income. As soon as available,
but in no event later than forty five (45) days after the end of each three
month period of the Term Loan commencing with the last day of the third month of
the Term Loan, a certificate with respect to the quarter ending which certifies
as to the Net Operating Income due and payable hereunder to the Bank [Such a
certificate shall be certified as correct by the chief financial officer of the
Borrower or other officer acceptable to the Bank, setting forth information as
may be required by the Bank].
All such financial statements, reports and certificates referred to above and in
Section 5.16 shall be in such detail as the Bank may reasonably request and
shall conform to GAAP applied on a basis consistent with those of the financial
statements described in Section 4.06.
SECTION 5.02 TAXES AND OTHER LIENS. The Borrower will file all tax
returns required by law before the due date thereof (as validly extended) and
pay and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or upon any of its property
as well as all claims of any kind (including claims for labor, materials,
supplies and rent) which, if unpaid, might become a Lien upon any of the
Collateral; provided, however, Borrower shall not be required to pay any such
tax, assessment, charge, levy or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings
diligently conducted and if the contesting party shall have set up reserves
therefor adequate under GAAP. The Borrower shall furnish the Bank with proof of
payment of all taxes, assessments, charges, levies or claims against the
Property not later than the date on which penalties might attach thereto, or in
the event that the Borrower contests any such taxes, assessments, charged,
levies or claims in accordance with this Section, the Borrower shall furnish
Bank with a description of the contested matter and all actions taken by the
Borrower in connection with such contest.
Loan Agreement--Page 25
SECTION 5.03 MAINTENANCE OF EXISTENCE. Each Company will: (i) maintain
its corporate, partnership or limited liability company existence; (ii) observe
and comply (to the extent necessary so that any failure will not materially and
adversely affect its business) with all valid laws, statutes, codes, acts,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
certificates, franchises, permits, licenses, authorizations, directions and
requirements (including without limitation applicable statutes, regulations/
orders and restrictions relating to gambling) of all federal, state, county,
municipal and other governments, departments, commissions, boards, courts,
authorities, officials and officers, domestic or foreign; (iii) maintain its
properties (and any property leased by or consigned to it or held under title
retention or conditional sales contracts) in generally good and workable
condition at all times and make all repairs, replacements, additions,
betterments and improvements to their properties to the extent necessary so that
any failure will not materially and adversely affect the business of the
Borrower; and (iv) continue to conduct its business in the manner currently
conducted.
SECTION 5.04 FURTHER ASSURANCES. The Borrower will promptly (and in no
event later than 30 days after written notice from the Bank is received) cure
any defects in the creation, execution and delivery of this Agreement, the Notes
or the Loan Documents. The Borrower will promptly execute and/or deliver to the
Bank upon request all such other and further documents, agreements and
instruments in compliance with or accomplishment of the covenants and agreements
of the Companies in this Agreement, the Notes or in the Loan Documents or to
further evidence and more fully describe the Collateral, or to correct any
omissions in the Loan Documents, or more fully state the security obligations
set out herein or in any of the Loan Documents, or to perfect, protect or
preserve any Liens created pursuant to any of the Loan Documents, or to make any
recordings, to file any notices, or obtain any consents as may be necessary or
appropriate in connection with the transactions contemplated by this Agreement.
SECTION 5.05 PERFORMANCE OF OBLIGATIONS. The Borrower will repay the
Loans according to the reading, tenor and effect of the Notes and this
Agreement. The Borrower will do and perform every act required of it by this
Agreement, the Notes or in the Collateral Documents at the time or times and in
the manner specified.
SECTION 5.06 REIMBURSEMENT OF EXPENSES. (a) The Borrower shall pay all
reasonable legal fees, title insurance premiums, brokerage fees, appraisal fees,
inspection fees, travel and other expenses incurred by the Bank in connection
with the preparation, execution and filing of the Loan Documents (including any
amendments); provided however, the attorneys fees incurred by the Bank in
negotiating and closing the Loan, the fees related to the filing of the mortgage
and financing statements and the cost of a policy of title insurance to be
obtained by Bank (mortgagee's policy) with respect to the Property shall not
exceed the sum of $110,000. The foregoing limit on closing costs does not apply
to: (i) lien searches or any other third party costs incurred by the Bank in
connection with the Loan; (ii) any legal fees incurred by the Bank in connection
with the Loan after the Closing Date; (iii) any legal fees resulting from
opinions of the Borrower's legal counsel which are required by the Bank in
connection with the closing of the Loan; (iv) any fees and costs referred to
above in other sections of this Agreement; or (v) any legal fees incurred by
the Bank in connection with unreasonable or inordinate negotiations by the
Borrower and/or its legal counsel in connection with the Loan Documents.
Loan Agreement--Page 26
(b) Following five (5) days notice to the Borrower (unless the Bank
reasonably deems such payment must be paid more promptly), the Borrower shall
reimburse the Bank for all payments expended, advanced or incurred by the Bank
to satisfy any obligation of the Borrower under this Agreement, or to protect
the property or business of the Borrower or to collect the Obligations, or to
enforce the rights of the Bank under the Loan Documents, which amounts will
include all court costs, attorneys' fees, fees of auditors and accountants, and
investigation expenses reasonably incurred by the Bank in connection with any
such matters, together with interest at 12% per annum on each such amount from
the date that the same is expended, advanced or incurred by the Bank until the
date of reimbursement to the Bank.
SECTION 5.07 INSURANCE. (a) The Borrower shall procure and maintain for
the benefit of the Bank original paid up insurance policies from insurance
companies acceptable to the Bank, in amounts, in form and substance, and with
expiration dates acceptable to the Bank and containing a non-contributory
standard mortgagee clause or its equivalent in a form satisfactory to the Bank,
or the statutory mortgagee clause, if any, required in the state where the
Property is located, or a mortgagee's loss payable endorsement, in favor of the
Bank, providing the following types of insurance on the Property and
Improvements:
(i) Builders All-Risk and Multi-Peril Hazard Insurance. For the
Property during the construction of the Improvements thereon,
builders all-risk insurance, and upon substantial completion of
the Improvements, multi-peril hazard insurance, in each case
affording insurance against loss or damage by fire, lightning,
explosion, collapse, theft, sprinkler leakage, vandalism and
malicious mischief and such other perils as are included in so-
called "all-risks" or "extended coverage" and against such other
insurable perils as, under good insurance practices, from time to
time are insured against for properties of similar character and
location; such insurance to be not less than 100% of the full
replacement cost of the Improvements without deduction for
depreciation;
(ii) Flood Insurance. If the Property is located in a flood zone A or
B, flood insurance in an amount not less than 100% of the full
replacement cost of the Improvements or the maximum amount
available, whichever is lesser;
(iii) Comprehensive General Liability Insurance. Comprehensive public
liability insurance with respect to the Property and the
operations related thereto, whether conducted on or off the
Property, against liability for personal injury (including bodily
injury and death) and property damage, of not less than
$40,000,000 combined single limit bodily injury and property
damage; such comprehensive public liability insurance to be on a
per occurrence basis and to specifically include but not be
limited to water damage liability, products liability, motor
vehicle liability for all owned and non-owned vehicles, including
rented and leased vehicles, and contractual indemnification;
Loan Agreement--Page 27
(iv) Worker's Compensation and General Liability. Workers compensation
and general liability insurance against loss, damage or injury to
employees, agents or representatives of any contractor, or
insurance against loss, damage or injury caused by any employees,
agents or representatives of any contractor;
(v) Business Interruption Insurance. Upon substantial completion of
the Improvements, business interruption insurance in an amount up
to maximum coverage of $6,000,000; and
(vi) Other Insurance. Such other insurance, including, without
limitation, architect's errors and omissions insurance, on the
Property or any replacements or substitutions therefor and in
such amounts as may from time to time be reasonably required by
Bank against other insurable casualties which at the time are
commonly insured against in the case of premises similarly
situated, due regard being given to the height and type of the
Improvements on the Property, its construction, location, use and
occupancy, or any replacements or substitutions therefor.
(b) All of the foregoing policies shall contain an agreement by the insurer
not to cancel or amend the policies without giving the Bank at least 30 days'
prior written notice of its intention to do so.
(c) The Borrower shall deliver original or certified policies to the Bank,
and the Borrower shall deliver original or certified renewal policies with
satisfactory evidence of payment not less than 15 days in advance of the
expiration date of the existing policy or policies. In the event the Borrower
should, for any reason whatsoever, fail to keep the Property or any part thereof
so insured, or to keep said policies so payable, or fail to deliver to the Bank
the original or certified policies of insurance and the renewals thereof upon
demand, then the Bank, if it so elects, may itself have such insurance effected
in such amounts and in such companies as it may deem proper and may pay the
premiums therefor. The Borrower shall reimburse the Bank upon demand for the
amount of premium paid, together with interest thereon at 12% percent per annum
from date until paid.
(d) The Borrower agrees to notify the Bank immediately in writing of any
material fire or other casualty to or accident involving the Property, whether
or not such fire, casualty or accident is covered by insurance. The Borrower
further agrees to notify promptly the Borrower's insurance company and to submit
an appropriate claim and proof of claim to the insurance company if the Property
is damaged or destroyed by fire or other casualty.
(e) The Bank is hereby authorized and empowered, at its option, to collect
and receive the proceeds from any policy or policies of insurance, and each
insurance company is hereby authorized and directed to make payment of all such
losses directly to the Bank instead of to the Borrower and the Bank jointly. The
Bank shall apply the net proceeds thereof, in accordance with subsections (f)
and/or (g) of this Section 5.07.
Loan Agreement--Page 28
(f) If there is a fire or casualty loss which damages all or a portion of
the Improvements on the Property, then the proceeds of the insurance shall be
deposited into the Cash Collateral Account and such proceeds will be applied to
the payment of the cost of restoration of the Improvements upon such terms and
conditions as the Bank may deem necessary or appropriate in its reasonable
discretion; provided, however, that (i) such insurance proceeds must be adequate
to cover the cost of restoration of the Improvements, or if the proceeds are
insufficient, then the Borrower shall give the Bank such adequate protection and
assurance as the Bank may, in its reasonable discretion require, that additional
funds will be provided by the Borrower in order to complete the restoration of
the Improvements and the furnishings thereof, (ii) the Borrower shall have
provided the Bank with such adequate protection and assurance as the Bank may,
in its reasonable discretion require, that the Borrower has sufficient funds on
hand to pay interest and principal on the Loan during the restoration period,
(iii) no Default has occurred, and (iv) the first priority of the Collateral
Documents in the Collateral is not impaired. If all of the conditions set forth
in the preceding sentence are not satisfied, then the insurance proceeds shall
be applied to the payment of the Obligations. In connection with any
restoration of the Improvements, the Borrower shall provide the Bank with a
detailed cost breakdown showing by line item all costs projected for such
restoration and a revised and updated cost breakdown shall be furnished by the
Borrower to the Bank on a monthly basis.
(g) If there is a fire or casualty loss which causes the proceeds of any
business interruption insurance to be payable, such proceeds shall be paid to
the Bank and (i) so long as no Event of Default exists, applied to the payment
of the installments of principal and interest on the Loan, ad valorem real
estate taxes and special assessments and operating expenses of the Property as
they respectively become due, or (ii) if an Event of Default exists, applied to
the payment of the Obligations as the Bank may in its sole discretion elect.
SECTION 5.08 ACCOUNTS AND RECORDS. The Borrower will keep books of
record and accounts in which true and correct entries will be made as to all
material matters of all dealings or transactions in relation to its business and
activities, in accordance with GAAP.
SECTION 5.09 RIGHT OF INSPECTION. The Borrower will permit any officer,
employee or agent of the Bank to visit and inspect any of the Borrower's
property, examine its books of record and accounts, take copies and extracts
therefrom, and discuss its affairs, finances and accounts with its officers,
accountants and auditors, all at such reasonable times and on reasonable notice
and as often as the Bank may reasonably desire.
SECTION 5.10 NOTICE OF CERTAIN EVENTS. The Borrower shall promptly
notify the Bank if the Borrower learns of the occurrence of any event which
constitutes a Default, together with a detailed statement by a responsible
officer of Borrower of the steps being taken to cure the effect of such Default.
SECTION 5.11 ERISA INFORMATION AND COMPLIANCE. The Borrower will
promptly furnish to the Bank (i) promptly after the filing thereof with the
United States Secretary of Labor or the Pension Benefit Guaranty Corporation,
copies of each annual and other report with respect to each Plan or any trust
created by the Companies, and (ii) immediately upon becoming aware of the
occurrence of any "reportable event," as such term is defined in Section 4043 of
ERISA, or of any "prohibited transaction,"
Loan Agreement--Page 29
as such term is defined in Section 4975 of the Internal Revenue Code of 1986, as
amended, in connection with any Plan or any trust created by any of the
Companies, a written notice signed by the president or the principal financial
officer of such Company specifying the nature thereof, what action the Companies
are taking or proposes to take with respect thereto, and, when known, any action
taken by the Internal Revenue Service with respect thereto. The Companies will
comply with all of the applicable funding and other requirements of ERISA as
such requirements relate to the Plan of any of the Companies.
SECTION 5.12 MAINTENANCE OF BANK ACCOUNTS. The Borrower shall maintain
all of its accounts with the Bank, including without limitation, its
construction, escrow, reserve and operating accounts.
SECTION 5.13 INDEMNIFICATION. (a) The Borrower will indemnify the Bank
and hold the Bank harmless from claims of brokers with whom the Borrower has
dealt in the execution hereof or the consummation of the transactions
contemplated hereby.
(b) The Borrower will indemnify the Bank and hold the Bank harmless from
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, suits, costs and expenses (including, without limitation, costs of
suit, reasonable attorneys' fees and fees of expert witnesses) of whatever kind
or nature which may be imposed on, incurred by or asserted at any time against
the Bank in any way relating to, or arising in connection with, the use or
occupancy of any of the Collateral.
(c) The Borrower shall indemnify and fully protect the Bank from any
allegation or charge whatsoever of negligence, misfeasance, or nonfeasance of
the Bank in whole or in part, pertaining to any defect in the Property, and
particularly, any failure of the Bank or the Bank's Inspector, or any agent,
officer, employee or representative of the Bank, to note any defect in materials
or workmanship or of physical conditions or failure to comply with any Plans,
specifications, drawings, ordinances, statutes or other governmental
requirements, or to call to the attention of any person whatsoever, or take any
action, or to demand that any action be taken, with regard to any such defect or
failure or lack of compliance.
SECTION 5.14 COMPLIANCE WITH LAWS AND COVENANTS. The Borrower shall
observe and comply with all laws, statutes, codes, acts, ordinances, orders,
judgments, decrees, injunctions, rules, regulations, certificates, franchises,
permits, licenses, authorizations, directions and requirements of all federal,
state, county, municipal and other governments, departments, commissions,
boards, courts, authorities, officials and officers domestic or foreign,
applicable to the Borrower, the Property or the Improvements.
SECTION 5.15 ENVIRONMENTAL INDEMNITY. (a) The Borrower shall defend,
indemnify and hold Bank and its directors, officers, agents and employees
harmless from and against all claims, demands, causes of action, liabilities,
losses, costs and expenses (including, without limitation, costs of suit,
reasonable attorneys' fees and fees of expert witnesses) arising from or in
connection with (i) the presence on or under the Property of any hazardous
substances or solid wastes (as defined elsewhere in this Agreement), or any
releases or discharges of any hazardous substances or solid wastes on, under or
from the Property, (ii) any activity carried on or undertaken on or off the
Property, whether prior to or during the term of this Agreement and whether by
Borrower or any predecessor in title or any officers,
Loan Agreement--Page 30
employees, agents, contractors or subcontractors of Borrower or any predecessor
in title, or any third persons at any time occupying or present on the Property,
in connection with the handling, use, generation, manufacture, treatment,
removal, storage, decontamination, clean-up, transport or disposal of any
hazardous substances or solid wastes at any time located or present on or under
the Property, or (iii) any breach of any representation, warranty or covenant
under Section 4.18 of this Agreement. The foregoing indemnity shall further
apply to any residual contamination on or under the 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 substances or solid wastes, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable laws, regulations, codes and ordinances. Without prejudice to the
survival of any other agreements of the Borrower hereunder, the provisions of
this Section 5.15 shall survive the final payment of all Obligations and the
termination of this Agreement and shall continue thereafter in full force and
effect.
(b) The Borrower shall observe and comply with all laws, ordinances,
orders, decrees, rules and regulations of all federal and state governments
relating to environmental matters, including without limitation the removal from
or under all Collateral constituting immovable property of any hazardous
substances or solid wastes (as defined elsewhere in this Agreement).
SECTION 5.16 FINANCIAL COVENANTS. (a) From the date hereof and for so
long as any part of the Obligations are outstanding, the Borrower shall maintain
the following:
(i) Debt Service Coverage Ratio - During the term of the Term Note,
Borrower shall maintain a ratio of Net Operating Income to Debt
Service of not less than 1.3 to 1.0 ["Debt Service" for purpose of
this Subsection 5.16(a) shall mean the sum of principal and interest
payments contractually due under the Notes. Debt Service Coverage
Ratio shall be tested as follows for the periods indicated: (A) this
ratio will be tested at the end of the first fiscal year of Borrower
that begins following the date of the Term Note; and (B) thereafter,
Debt Service Coverage Ratio will be tested at the end of each fiscal
year of Borrower.] and
(ii) Loan to Value - The aggregate outstanding principal amount of a Loan
shall not exceed throughout the term of such Loan seventy percent
(70%) of the Appraised Value as most recently determined.
(b) From the date hereof and for so long as any part of the Obligations
are outstanding, Casino America must maintain the following:
(i) Debt to EBITDA - Casino America shall maintain a ratio of (x) Debt
(as defined by GAAP, but excluding Nonrecourse Debt [as defined
below]) to (y) Restricted EBITDA (as defined below) of not greater
than 4.75:1.00, calculated quarterly on a rolling 12 months basis;
Loan Agreement--Page 31
(ii) Debt Service Coverage Ratio - Casino America shall maintain a ratio
of EBITDA to Debt Service (as defined below) of not less than
1.50:1.00, calculated quarterly on a rolling 12 months basis; and
(iii) For purposes of this Subsection 15.16 (b): "Nonrecourse Debt" means
the Loan and any Debt (as defined by GAAP) of a subsidiary of Casino
America for which there is no recourse against Casino America;
"EBITDA" shall mean gross earnings less all expenses generally
deducted under GAAP in calculating net earnings except interest
expense, income taxes and Non-cash Charges, provided however, Pre-
opening Expenses and extraordinary non-recurring gains and losses
shall be excluded from this calculation of EBITDA; "Restricted EBITDA"
means the EBITDA of Casino America, calculated on a consolidated
basis, less 100% of the EBITDA of any subsidiary of Casino America for
which there is Nonrecourse Debt; and "Debt Service" means the sum of
interest and principal payments made on all Debt, excluding
Nonrecourse Debt, payable during the applicable period.
Notwithstanding the fact that Casino America is not a party to this Agreement,
the failure of Casino America to comply with the provisions of this Subsection
5.16(b) shall constitute a Default.
SECTION 5.17 CONSTRUCTION COVENANTS. In addition to the covenants of the
Borrower otherwise set forth in this Agreement, the Borrower hereby agrees that,
so long as any part of the Obligations are outstanding, unless compliance shall
have been waived in writing by the Bank, the Borrower shall at all times comply
with the following covenants:
(a) Commencement and Completion of Improvements. The Borrower (i) will
cause the construction of the Improvements to be prosecuted with diligence and
continuity in accordance with the Plans and the Construction Completion
Schedule, (ii) will promptly correct or cause to be corrected any defect in the
Improvements, any material departure in the construction of the Improvements
from the Plans, governmental requirements, or any encroachment by any part of
the Improvements or any other structure located on the Property on any building
line, easement, property line, or restricted area, (iii) will guarantee to the
Bank that the Improvements will be completed in good and workmanlike manner in
accordance with the Plans, (iv) will promptly notify the Bank of any Lien filed
by the Contractor, any subcontractor, supplier or laborer or of the Borrower's
knowledge that the Contractor or any sub-contractor, has failed to pay amounts
due following the funding of any Advance for the payment of same, and (v) will
complete the construction of the Improvements in accordance with the Plans on or
before the eighteenth-month following the Closing Date, provided that such date
may be extended to the extent necessary to complete the Improvements (but in no
event later than twenty one months after the Closing Date) if the completion of
the Improvements cannot be accomplished by the eighteen-month anniversary of the
Closing Date as a result of factors beyond the reasonable control of the
Borrower. Notwithstanding anything to the contrary in this Agreement, the
Improvements shall not be deemed to have been completed (the "Completion of the
Improvements") until (1) the Improvements contain all Equipment required for the
use and operation of the Improvements as a hotel and/or which may be required by
governmental authorities and/or by any law, regulation or rule of any
governmental authority, (2) permanent certificates of occupancy and all other
necessary certificates, licenses, consents and other
Loan Agreement--Page 32
approvals of governmental authorities have been issued or made with respect to
the Improvements, and (3) the Bank has funded the Retainage Advance.
(b) Survey. In addition to any survey required by this Agreement, the
Borrower will furnish the Bank with three copies of each of the following
surveys:
(i) Foundation Survey. Within 10 days after completion of the
foundation of the Improvements, the Borrower shall furnish the
Bank with a survey showing all existing on-site Improvements,
plus the location and dimensions of perimeter foundations and
high point relative elevation of adjacent streets to insure
compliance with final working drawings and set-back lines of each
building and first floor elevations.
(ii) As-Built Survey. Prior to the disbursement of the Retainage
Advance, the Borrower shall furnish the Bank with a survey
delineating all completed Improvements on the Property and
pertinent grade and floor elevations.
(c) Change Orders. The Borrower will not cause or permit any changes in
the Construction Contract except pursuant to a change order approved in writing
by the Bank, the Borrower and the Contractor; provided, however, that the
Borrower shall have the right to enter into and authorize the execution and
implementation of change orders without the prior written consent of the Bank,
subject to the following conditions: (i) no such change order shall affect the
structural integrity of the Improvements or make substantial changes in the
Construction Contract; (ii) no such change orders shall extend the completion
date beyond eighteen months following the Closing Date; (iii) no such change
order shall result in an increase in costs under the Construction Contract of
more than $50,000 as to that one change order and of no more than the lesser of
the (x) the contingency expense as provided in the Development Expense Schedule
or (y) $1,500,000 when such change order is aggregated with any prior change
orders; (iv) the Borrower shall promptly deliver to the Bank and the Bank's
Inspector copies of such change orders not later than three (3) Business Days
after the execution thereof; (v) if required by the Contractor's payment and
performance bonds or the documents executed in connection therewith, such change
orders must be approved in writing by the surety issuing such payment and
performance bonds; and (vi) evidence of builders risk insurance for any
increased amount.
(d) Subcontractor Verifications. Within 10 days after request by the
Bank, the Borrower shall furnish the Bank with copies of all subcontracts then
in existence, and/or a certificate, in form prescribed by the Bank, signed by
all existing subcontractors and material suppliers as to the existence, amount
and retainage of any subcontracts and materials supplies agreements.
(e) Inspection Fees and Expenses of Bank's Inspector. The Borrower shall
reimburse the Bank for all reasonable fees and expenses of the Bank's Inspector.
On the first day of each calendar month commencing with the month in which the
first Request to Make Payment is submitted to the Bank and continuing until the
funding of the Retainage Advance, the Borrower shall pay to the Bank a monthly
review fee of $500.00. In addition, commencing upon the date of the Term Note
and on each
Loan Agreement--Page 33
anniversary thereof until the Term Loan is paid in full, Borrower shall to the
Bank on each such date, in advance, an annual inspection fee of $350.00. These
fees are in addition to any other fees referred to in this Agreement which may
be due from Borrower to Bank.
SECTION 5.18 APPRAISAL. The Bank shall have the right to reappraise the
Appraised Value of the Property at any time and from time to time during the
term of the Loan, but only once prior to an Event of Default at the expense of
Borrower.
SECTION 5.19 ESCROW ACCOUNT. Concurrently with the delivery of the Term
Note the Borrower shall establish and thereafter maintain with the Bank a
replacement reserve account into which the Borrower shall deposit an amount
equal to 3% of Borrower's prior quarter's gross revenues, commencing with the
revenues received by the Borrower during the first quarter of the Term Loan.
Each deposit will be made within 60 days after each quarter-end. Borrower shall
make written requests for withdrawals from the escrow account and the Borrower
shall follow procedures which are standard in loan documentation for similar
escrow accounts maintained with the Bank or which in the Bank's sole discretion
are advisable or required for purposes of the Loan.
SECTION 5.20 SIGNAGE. During the construction of the Improvements, the
Borrower shall permit the Bank to erect a sign on the Property, in a location
acceptable to the Bank, reflecting the Bank having furnished the financing for
the construction of the Improvements. Such a sign shall not be larger than four
feet by four feet, not including its elevation off of the ground level to a
height satisfactory to the Bank.
SECTION 5.22 SUBORDINATION OF MANAGEMENT FEES. All management fees paid
by the Borrower to any Affiliate under any Management Agreement or otherwise
shall be subordinated to the Obligations pursuant to documentation in a form and
substance satisfactory to the Bank.
SECTION 5.23 IDENTITY OF THE MANAGER. If the Improvements are not
operated under a franchise agreement (i.e. does not have a "hotel flag"), the
Borrower will enter into a Management Agreement with a management company
approved in advance by the Bank or an Affiliate.
ARTICLE 6
NEGATIVE COVENANTS
Unless the Bank's prior written consent to the contrary is obtained
(which consent will not be unreasonably withheld or delayed), the Borrower will
at all times comply with the covenants contained in this Article 6, from the
date hereof and for so long as any part of the Obligations are outstanding.
SECTION 6.01 LIENS ON THE COLLATERAL. The Borrower will not create,
incur, assume or permit to exist any Lien on any of the Collateral, except for:
(a) Liens in favor of the Bank to secure the Obligations;
Loan Agreement--Page 34
(b) Liens for taxes, assessments or other governmental charges; not yet
due or which are being contested in good faith by appropriate action promptly
initiated and diligently conducted if such reserve as shall be required by
generally accepted accounting principles shall have been made therefor;
(c) Liens of landlords, vendors, carriers, warehousemen, mechanics,
laborers and materialmen arising by law in the ordinary course of business for
claims either not yet due or being contested in good faith by appropriate action
promptly initiated and diligently conducted if such reserve as shall be required
by generally accepted accounting principles shall have been made therefor;
(d) Inchoate liens arising under ERISA to secure the contingent liability
of the Borrower; and
(e) Any exceptions shown on the title policy referred to in Section 7.01
hereof to which the Bank consents in writing.
SECTION 6.02 SALE OF THE COLLATERAL. The Borrower will not sell,
exchange, lease (except for leases acceptable to the Bank), assign, transfer,
convey or otherwise dispose of any of the Collateral or any part thereof, except
for the sale or other disposition of equipment in the ordinary course of
business.
SECTION 6.03 NATURE OF THE BUSINESS.
(a) The Borrower will be a single-purpose entity such that it will not
conduct any business of any type whatsoever other than the ownership and
operation of the Property as a hotel. The Borrower shall not acquire any assets
other than property which is related to or arises from the Property and the
Improvements or the operations thereof as a hotel.
(b) The Bank further acknowledges the Borrower's intention to have the
Loans operated effectively on a non-recourse basis with respect to the Borrower
by the Borrower agreeing not to acquire any assets other than property which is
related to or arises from the Property and the Improvements, and the Borrower's
operations thereon; provided, however, that the Bank shall not have any
responsibility or obligations to any third parties in connection therewith.
(c) The Bank acknowledges that the Bank does not intend to have any
recourse against the property or assets of Casino America, Inc. or its
subsidiaries (other than the Borrower), except (i) recourse arising under any
of the Casino America Agreements, and/or (ii) recourse arising in connection
with any legal claim or proceeding based in whole or in part upon, or related
to, the Casino America Agreements or any judgment obtained against Casino
America, its subsidiaries or its property or assets in connection with such a
proceeding or claim.
SECTION 6.04 LOANS. The Borrower shall not make any loans which in the
aggregate exceed the sum of $50,000 in any one fiscal year.
Loan Agreement--Page 35
SECTION 6.05 ACQUISITIONS OR BULK SALES. The Borrower shall not enter into
a merger or consolidation or acquire all or a substantial part of the assets of
any person or entity, or sell, lease or otherwise dispose of all, or any
substantial part, of its assets.
SECTION 6.06 CHANGE OF OFFICE. The Borrower shall not change its federal
taxpayer identification number or the address of its chief executive office,
without providing ten (10) days prior notice to the Bank.
SECTION 6.07 FISCAL YEAR; ACCOUNTING METHODS. The Borrower shall not change
its fiscal year or its accounting methods or procedures currently employed by
it.
SECTION 6.08 DEBTS. The Borrower shall not create, incur or assume any Debt
other than the Loan and intercompany debt.
SECTION 6.09 ACQUISITION OF REAL ESTATE. The Borrower will not acquire
any interests in real estate other than the Property without giving the Bank at
least fifteen (15) days prior notice of the Borrower's intent to acquire such
interests.
ARTICLE 7
CONDITIONS OF LENDING
The obligation of the Bank to make extensions of credit under this
Agreement is subject to the accuracy of each and every representation and
warranty of the Borrower made or referred to in this Agreement, or in any
certificate delivered to the Bank pursuant to or in connection with this
Agreement, to the performance by the companies of their respective obligations
to be performed under the Loan Documents on or before the date of such
extensions of credit, and to the satisfaction of the following conditions:
SECTION 7.01 CONDITIONS TO MAKING THE INITIAL ADVANCE (CONSTRUCTION).
The Bank shall have received on or before January 31, 1998, the following, all
of which shall be reviewed by the Bank and be in a form and substance acceptable
to the Bank, its legal counsel and the title insurance company:
(a) No Material Adverse Charge. There shall have occurred, in the opinion
of the Bank, no material adverse changes, either individually or in the
aggregate, in the assets, liabilities, financial conditions, business
operations, affairs or circumstances of any of the Companies from those
reflected in the most recent financial statements furnished to the Bank prior to
the Closing Date, except to the extent that such changes are permitted by this
Agreement; furthermore, no Default shall, in the opinion of the Bank, have
occurred and be continuing;
(b) Architect' s Contract. If requested by the Bank, an agreement between
Architect and Borrower outlining specific duties Architect will perform;
Loan Agreement--Page 36
(c) Building Permit. Appropriate building permit and such other licenses
and permits prerequisite to authorize construction of the Improvements in
accordance with the Plans;
(d) Construction Contract. The Construction Contract between Contractor
and Borrower stating the specific duties the Contractor will perform according
to Plans and terms of payment, completion of the Improvements, change orders and
retainage;
(e) Contractor's Financial Statements. Financial statements of the
Contractor;
(f) Construction Completion Schedule. Schedule of all construction and
delivery of materials from beginning of construction of the Improvements through
completion (the "Construction Completion Schedule");
(g) Development Expense Schedule. The detailed line item cost breakdown of
land costs, Construction Costs (hard costs), the Equipment, and all other
related indirect development costs (soft costs) of the Improvements;
(h) Disbursement Schedule. Schedule of the Borrower's anticipated
Advances;
(i) Payment and Performance Bond(s). Statutory form of bond from surety
company approved by the Bank and naming the Bank and the title insurance company
as a co-obligee, guaranteeing that the Improvements will be completed according
to the terms and conditions of the Construction Contract and that subcontractors
and suppliers will be paid;
(j) Plans. Final architectural and engineering drawings and
specifications, including any revisions, amendments and addenda, required to
complete the construction of the Improvements;
(k) Schedules of Values (AIA Form G702-G703). Line item hard costs
breakdowns;
(l) Soil Test Report. Report by a firm acceptable to the Bank, reflecting
conditions of the soil at the Property, in form and substance satisfactory to
the Bank;
(m) Subcontracts. If required by the Bank, copies of all subcontracts and
material supply agreements in existence, in form and substance satisfactory to
the Bank;
(n) Utility Letters. Letter from all applicable utility companies that all
of the necessary utilities (water, sewer, gas, electricity and telephone) for
the operation of the Property are or will be available at completion;
(o) Zoning Certificate. Proof satisfactory to the Bank that the Property
is zoned to permit construction of the Improvements in accordance with the Plans
and use of the Property and Improvements for their intended purpose;
Loan Agreement--Page 37
(p) Assignment of Construction Contract. Agreement by the Borrower in
favor of the Bank, assigning the Borrower's right in Construction Contract and
authorizing the Bank to assume the Borrower's contractual position and complete
development under existing Construction Contract, upon an Event of Default under
this Agreement;
(q) Contractor's Consent and Certification. Agreement from the Contractor
to the Bank consenting to the Assignment of Construction Contract and providing
that disbursement procedures in this Agreement shall govern if they conflict
with Construction Contract, no change orders may be made without the Bank's
prior written consent, no termination of Construction Contract without notice to
the Bank and opportunity to cure, and agreeing to continue Construction Contract
for benefit of the Bank, upon an Event of Default under this Agreement;
(r) Assignment of Architect's Contract and Plans. Agreement by the
Borrower in favor of the Bank assigning the Borrower's right in the
Architect's contract and Plans and authorizing the Bank to take over and
complete project under existing Architect's agreement, and to use all Plans,
together with any and all modifications thereof, upon an Event of Default under
this Agreement;
(s) Architect's Consent and Certification. Agreement from the Architect to
the Bank consenting to the assignment of Architect's contract and Plans, and
certifying that Plans conform to all codes, ordinances and adequate utilities
are available, and agreeing to continue the Architect's Contract for Bank's
benefit and to make Plans available to the Bank, upon an Event of Default under
this Agreement;
(t) Corp. of Engineer's Approval. All authorizations, approvals and
permits, if any, which are required by the Corp. of Engineers in connection with
the construction of the Improvements on the Property;
(u) [INTENTIONALLY LEFT BLANK];
(v) [INTENTIONALLY LEFT BLANK];
(w) Material Contracts. All contracts and agreements which are material to
the operation of the Improvements including without limitation, all management
contracts, all leases and all operating contracts;
(x) [INTENTIONALLY LEFT BLANK];
(y) Title Insurance Policy. Policy (on ALTA Loan Policy Form - 1970)
issued pursuant to the title insurance commitment insuring the Mortgage in the
full amount of the Construction Loan as first lien on the Property in the full
amount of the Construction Loan, subject only to liens, encumbrances and
exceptions approved by the Lender. (The policy must provide affirmative lien
protection and must include such other special endorsements as the Bank may
require.);
Loan Agreement--Page 38
(z) Subordination Agreements. Subordination Agreements executed by Casino
America and, an if requested by the Bank, by all of its subsidiaries, including
without limitation, LRGP, by which each subordinates all amounts or liabilities
owing from time to time by the Borrower to Casino America and LRGP, as the case
may be, to all sums owed by the Borrower to the Bank;
(aa) ATM Agreement. A mutually agreeable agreement with a term of not
less than five years under the terms of which the Bank has the exclusive right
to maintain all automated teller machines located at the Casino and at the
Property;
(bb) Opinion of Companies' Counsel. Favorable opinion of Phelps, Dunbar,
L.L.P., counsel for the Companies, in a form and substance satisfactory to the
Bank;
(cc) Environmental Letter. Letter from ▇▇▇▇▇ Environmental stating that
the Bank may rely on the Phase I Environmental Site Assessment dated July 26,
1996, issued to LRGP;
(dd) Reciprocal Servitudes. If requested by the Bank, reciprocal servitudes
or similar agreements between the Borrower and LRGP regarding the joint use of
property owned by LRGP which may be necessary to the operation of the
Improvements;
(ee) Survey. Three (3) copies of a survey performed by a surveyor
acceptable to the Bank, in form and substance satisfactory to the Bank;
(ff) Insurance Policies. The insurance policies or certificates otherwise
required by this Agreement or the Bank;
(gg) Delivery of Shares. Casino America shall grant and deliver to the
Bank 174,337 shares of common stock of Casino America (the "Shares") [The
Shares will be (a) issued to the Bank on or before December 29, 1997 (although
the certificate representing those Shares may not be delivered until on or
before January 31, 1998, (b) fully paid, (c) non-assessable and (d) not subject
to any limitations, restrictions or requirements on the right of the holder to
sell such Shares except as set forth in the Registration Rights Agreement and
except as reflected in any legend required under law to be placed upon stock
certificates in connection with companies engaged in gaming operations.];
(hh) Tax Identification Number. The Tax Identification Number of the
Borrower; and
(ii) Title Insurance Commitment. Commitment from a title insurance company
approved by Bank to insure the mortgage on the Property in the full amount of
the Construction Loan, subject only to liens, encumbrances and title exceptions
approved by Bank (copies of which must be attached).
UNLESS OTHERWISE EXTENDED BY THE MUTUALLY AGREEMENT OF THE BANK AND THE
BORROWER, IF ALL OF THE PROVISIONS OF SECTION 7.01 ARE NOT FULFILLED TO THE
SATISFACTION OF THE BANK BY NO LATER THAN JANUARY 31, 1998, THE BANK MAY
THEREAFTER, AT ITS SOLE DISCRETION, ELECT TO TERMINATE THIS AGREEMENT BY WRITTEN
NOTICE TO THE BORROWER AND CASINO AMERICA. IF THE BANK MAKES SUCH AN ELECTION,
THE BANK MAY
Loan Agreement--Page 39
RETAIN ALL FEES PREVIOUSLY PAID TO IT BY THE COMPANIES, OR ANY ONE OF THEM, AND
BORROWER, UPON DEMAND, SHALL REIMBURSE THE BANK FOR ALL SUMS REIMBURSABLE OR
PAYABLE UNDER THE PROVISION OF SECTION 5.06.
Section 7.02 ADDITIONAL CONDITIONS PRECEDENT TO INITIAL ADVANCES. In
addition to the provisions of Section 7.01, the Bank shall not be obligated to
make the initial Advance under the Construction Loan until the following
conditions are satisfied to the reasonable satisfaction of the Bank:
(a) Proof of Prior Disbursements in the Aggregate Amount of $5,000,000.
Applications and Certificates for Payment (AIA Documents G-702 and G-703) signed
by the Architect and Contractor and properly notarized indicating approval and
payment by the Borrower to the Contractor, plus corresponding retainage, of a
sum in the amount of at least $5,000,000, together with an updated copy of the
Development Expense Schedule in a form prescribed by the Bank, accompanied by
supporting invoices for costs other than interest and construction costs, all in
accordance with the provisions of Section 2.03; and
(b) Bank Inspector's Report. The report of the Bank's Inspector, which
report shall be in force and substance satisfactory to the Bank and shall state
(i) that the work completed under the Construction Contract as of the date of
the inspection has been performed and constructed in accordance with the Plans,
(ii) that the work is progressing on schedule, and (iii) that the disbursements
to date by the Borrower plus retainage are in an amount of not less than
$5,000,000 and correspond with the percentage of work completed and/or in place
as of the date of the initial Request for Advance.
Section 7.03 EACH ADDITIONAL ADVANCE. The obligations of the Bank to
make additional Advances on the Construction Loan, or to make the Term Loan, are
subject to the satisfaction of each of the following conditions:
(a) Each of the representations and warranties of the Borrower contained
in this Agreement shall be true and correct on and as of the date of such
subsequent Advance, except as such representations and warranties relate to
matters that are permitted by this Agreement; and
(b) There shall have occurred, in the opinion of the Bank, no material
adverse changes, either individually or in the aggregate, in the assets,
liabilities, financial conditions, business operations, affairs or circumstances
of the Companies from those reflected in the most recent financial statements
furnished to the Bank prior to the Closing Date, except to the extent that such
changes are permitted by this Agreement; furthermore, no Default shall, in the
opinion of the Bank, have occurred and be continuing.
Loan Agreement--Page 40
ARTICLE 8
DEFAULT
Section 8.01 EVENTS OF DEFAULT. Any of the following events shall be
considered an "Event of Default" as that term is used herein:
(a) Principal and Interest Payments. The Borrower fails to make payment
when due of any principal or interest installment on any Loan, any commitment
fee or any other Obligation owed to the Bank, and such failure continues for a
period of ten (10) days;
(b) Room Guaranty Agreement. Casino America fails to make any payment
when due under the Room Guaranty Agreement referred to in Section 2.17, and such
a failure continues for ten (10) days;
(c) Representations and Warranties. Any representation or warranty made by
the Borrower proves to have been incorrect in any material respect as of the
date thereof; or any representation, statement (including financial statements),
certificate or data furnished or made by the Companies (or any officer,
accountant or attorney of the Companies) under this Agreement, proves to have
been untrue in any material respect, as of the date as of which the facts
therein set forth were stated or certified;
(d) Covenants. Any of the Companies defaults in the observance or
performance of any of the covenants or agreements contained in the Loan
Documents, to be kept or performed by any of the Companies, as the case may be
(other than a default under Sections 8.01(a) or (b) hereof), and such default
continues unremedied for a period of thirty (30) days after the earlier of (i)
notice thereof being given by the Bank to the Companies, or (ii) such default
otherwise becoming known to the president or chief financial officer of such
Company;
(e) Other Debt to Bank. An Event of Default occurs under the terms or any
of the covenants or agreements of any credit agreements, notes, loans or other
obligations owed by any of the Companies to the Bank (other than those set forth
in the Loan Documents), and such an Event of Default continues unremedied for a
period of thirty (30) days after the earlier of (i) notice thereof being given
by the Bank to the Companies, or (ii) such default otherwise becoming known to
the president or chief financial officer of the Companies;
(f) Other Debt to Other Lenders. Any of the Companies defaults in the
payment of any amounts due to any Person or in the observance or performance of
any of the covenants or agreements contained in any credit agreements, notes,
leases, collateral, indenture or other documents relating to any Debt of the
Companies to any Person, including, but not limited to, the Indenture and any
such creditor exercises any of its contractual or legal remedies with respect to
such a Debt;
(g) Involuntary Bankruptcy or Receivership Proceedings. A receiver,
conservator, liquidator or trustee of any of the Companies, or of any of their
property is appointed by order or decree of any court or agency or supervisory
authority having jurisdiction; or an order for relief is entered against any of
the Companies, under the Federal Bankruptcy Code; or any of the Companies is
adjudicated bankrupt or insolvent; or any material portion of the properties of
any of the Companies is sequestered by court order and such order remains in
effect for more than thirty (30) days after such party obtains knowledge
thereof; or a petition is filed against any of the Companies under any state,
reorganization, arrangement,
Loan Agreement--Page 41
insolvency, readjustment of debt, dissolution, liquidation or receivership law
of any jurisdiction, whether now or hereafter in effect, and such petition is
not dismissed within sixty (60) days;
(h) Voluntary Petitions. Any of the Companies files a case under the
Federal Bankruptcy Code or seeks relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, or
consents to the filing of any case or petition against it under any such law;
(i) Assignments for Benefit of Creditors. Any of the Companies makes an
assignment for the benefit of its creditors, or admits in writing its inability
to pay its debts generally as they become due, or consents to the appointment of
a receiver, trustee or liquidator of the any of the Companies or of all or any
part of their respective property;
(j) Undischarged Judgments. Judgment for the payment of money in excess of
$100,000 (which is not covered by insurance) is rendered by any court or other
governmental body against any of the Companies, and such Company does not
discharge the same or provide for its discharge in accordance with its terms, or
procure a stay of execution thereof within thirty (30) days from the date of
entry thereof, and within said period of thirty (30) days from the date of entry
thereof or such longer period during which execution of such judgment shall have
been stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal while providing such reserves therefor as may be required
under generally accepted accounting principles;
(k) Attachment. A writ or warrant of attachment, seizure or any similar
process shall be issued by any court against the Property or all or any material
portion of the remaining property of any of the Companies, and such writ or
warrant of attachment or any similar process is not released or bonded within
twenty (20) days after its entry;
(l) Change of Ownership. Casino America shall cease to own at least 51%
of the Borrower ;
(m) Nature of Business. LRGP, or another entity controlled by Casino
America, ceases to have a valid gaming license granted by the State of Louisiana
which license authorizes it to operate the Casino, or otherwise ceases gaming
operations in the Casino for any reason other than that specified in Section
8.01(n); or
(n) Removal of the Boat. The gaming boat on which the Casino's gaming
operations are conducted is removed from its current location for a period of 90
consecutive days (provided however, if the boat is removed in connection with U.
S. Coast Guard Inspections, the applicable period will be 180 consecutive days.
SECTION 8.02 REMEDIES. (a) Upon the happening of any Event of Default
specified in Section 8.01 (other than Sections 8.01(g) or 8.01(h) hereof), (i)
all obligations, if any, of the Bank to make Advances to the Borrower, shall
immediately cease and terminate; and (ii) the Bank may by written notice to the
Borrower declare the entire principal amount of all Obligations then
outstanding, including
Loan Agreement--Page 42
interest accrued thereon, to be immediately due and payable without presentment,
demand, protest, notice of protest or dishonor or other notice of default of any
kind, all of which are hereby expressly waived by the Borrower.
(b) Upon the happening of any Event of Default specified in Sections
8.01(g) or 8.01(h), (i) all obligations, if any, of the Bank to make Advances to
the Borrower, shall immediately cease and terminate; and (ii) the entire
principal amount of all Obligations then outstanding including interest accrued
thereon shall, without notice or action by the Bank, be immediately due and
payable without presentment, demand, protest, notice of protest or dishonor or
other notice of default of any kind, all of which are hereby expressly waived by
the Borrower.
(c) In addition to the foregoing, the Bank may exercise any of the rights
or remedies provided in the Loan Documents or avail itself of any other rights
and remedies provided by applicable law.
SECTION 8.03 SET-OFF. (a) Upon the occurrence of any Event of Default,
the Bank shall have the right to set-off any funds of the Borrower in the
possession of the Bank against any amounts then due by the Borrower to the Bank.
(b) The Borrower agrees that any holder of a participation in a Note may
exercise any and all rights of counter-claim, set-off, banker's lien and other
liens with respect to any and all monies owing to the Borrower by such holder as
fully as if such holder of a participation were a holder of such a Note in the
amount of such participation.
ARTICLE 9
MISCELLANEOUS
Section 9.01 NOTICES. Any notice or demand which, by provision of this
Agreement, is required or permitted to be given or served by the Bank to or on
the Borrower shall be deemed to have been sufficiently given and served for all
purposes (if mailed) seven (7) calendar days after being deposited, postage
prepaid, in the United States Mail, registered or certified mail, or (if
delivered by express courier) one Business Day after being delivered to such
courier, or (if delivered in person) the same day as delivery, in each case
addressed (until another address or addresses is given in writing by Borrower to
Bank) as follows:
To Borrower: Isle of Capri Hotels - Bossier City, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President, Chief
Financial Officer, Treasurer and Assistant Secretary
Loan Agreement--Page 43
With a simultaneous copy to:
Casino America, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇. ▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Executive Vice President, General
Counsel and Secretary
Any notice or demand which, by any provision of this Agreement, is
required or permitted to be given or served by the Borrower to or on Bank shall
be deemed to have been sufficiently given and served for all purposes (if
mailed) three calendar days after being deposited, postage prepaid, in the
United States Mail, registered or certified mail, or (if delivered by express
courier) one Business Day after being delivered to such courier, or (if
delivered in person) the same day as delivery, in each case addressed (until
another address or addresses are given in writing by Bank to Borrower) as
follows:
Hibernia National Bank
333 ▇▇▇▇▇▇ Street
Third Floor
Shreveport, Louisiana 7110
Attention: Corporate Lending
SECTION 9.02 INVALIDITY. In the event that any one or more of the
provisions contained in the Loan Documents shall, for any reason, be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of the Loan Documents.
SECTION 9.03 SURVIVAL OF AGREEMENTS. All representations and warranties
of the Borrower herein, and all covenants and agreements herein not fully
performed before the effective date of this Agreement shall survive such date.
SECTION 9.04 SUCCESSORS AND ASSIGNS. (a) All covenants and agreements
contained by or on behalf of the Borrower in the Loan Documents shall bind their
successors and assigns and shall inure to the benefit of the Bank and its
successors and assigns.
(b) This Agreement is for the benefit of the Bank and for such other
Person or Persons as may from time to time become or be the holders of any of
the Obligations, and this Agreement shall be transferrable and negotiable, with
the same force and effect and to the same extent as the Obligations may be
transferrable, it being understood that, upon the transfer or assignment by the
Bank of any of the Obligations, the legal holder of such Obligations shall have
all of the rights granted to the Bank under this Agreement.
(c) Borrower hereby recognizes and agrees that the Bank may, from time to
time, one or more times, transfer any portion (but not all) of the Obligations
to one or more third parties, provided that the Bank retains a portion of the
Obligations. Such transfers may include, but are not limited to, sales of a
participation interests in such Obligations in favor of one or more third party
lenders, provided that the
Loan Agreement--Page 44
Bank remains the lead bank. The Borrower specifically agrees and consents to all
such transfers and assignments, and the Borrower further waives any subsequent
notice of and right to consent to any such transfers and assignments as may be
provided under applicable Louisiana law. The Borrower additionally agrees that
the purchaser of a participation interest in the Obligations will be considered
as the absolute owner of a percentage interest of such Obligations, and that
such a purchaser will have all of the rights granted to the purchaser under any
participation agreement governing the sale of such a participation interest. The
Borrower further waives any right of offset that the Borrower may have against
the Bank and/or any purchaser of such a participation interest in the
Obligations and the Borrower unconditionally agrees that either the Bank or such
a purchaser may enforce Borrower's Obligations under this Agreement,
irrespective of the failure or insolvency of the Bank or any such purchaser.
SECTION 9.05 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of this
Agreement relating to a Note shall apply with equal force and effect to each and
all promissory notes or security instruments hereinafter executed which in whole
or in part represent a renewal, extension for any period, increase or
rearrangement of any part of such a Note.
SECTION 9.06 WAIVERS. No course of dealing on the part of the Bank its
officers, employees, consultants or agents, nor any failure or delay by the Bank
with respect to exercising any of its rights, powers or privileges under the
Loan Documents shall operate as a waiver thereof.
SECTION 9.07 CUMULATIVE RIGHTS. The rights and remedies of the Bank
under the Loan Documents shall be cumulative, and the exercise or partial
exercise of any such right or remedy shall not preclude the exercise of any
other right or remedy.
SECTION 9.08 SINGULAR AND PLURAL. Words used herein in the singular,
where the context so permits, shall be deemed to include the plural and vice
versa. The definitions of words in the singular herein shall apply to such words
when used in the plural where the context so permits and vice versa.
SECTION 9.09 CONSTRUCTION. This Agreement is, and the other Loan
Documents will be made under and shall be construed in accordance with and
governed by the laws of the United States of America and the State of Louisiana.
SECTION 9.10 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles
or headings to articles, sections, subsections or other divisions of this
Agreement or the exhibits hereto are only for the convenience of the parties and
shall not be construed to have any effect or meaning with respect to the other
content of such articles, sections, subsections or other divisions, such other
content being controlling as to the agreement between the parties hereto.
Unless the context otherwise requires, any reference to an Article, Section or
Subsection, shall be to the corresponding Article, Section or Subsection of this
Agreement.
SECTION 9.11 LIMITATION OF BANK'S LIABILITY. By acceptance of the
Loan, the Borrower agrees that for the payment of any claim or the performance
of any obligations hereunder resulting from any default by the Bank under the
Loan Documents, resort shall be had solely to the assets and property
Loan Agreement--Page 45
of the Bank, its successors and assigns, and no shareholder, officer, employee
or agent of the Bank shall be personally liable therefor.
SECTION 9.12 RELATIONSHIP BETWEEN THE PARTIES. The relationship between
the Bank and the Borrower shall be solely that of lender and borrower, and such
relationship shall not, under any circumstances whatsoever, be construed to be a
joint venture, joint adventure, or partnership.
SECTION 9.13 AMENDMENT. Neither this Agreement nor any provisions
hereof may be changed, waived, discharged or terminated orally or in any manner
other than by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.
SECTION 9.14 ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the Bank and the Borrower with respect to the Loan and supersedes
all prior written or oral understandings with respect thereto; provided,
however, that all written and oral representations, warranties and
certifications made by the Companies to the Bank with respect to the Loan and
the security therefor shall survive the execution of this Agreement.
SECTION 9.15 TIME OF THE ESSENCE. Time shall be deemed of the essence
with respect to the performance of all of the terms, provisions and conditions
on the part of the Borrower and the Bank to be performed hereunder.
SECTION 9.16 PURPOSES OF INSPECTIONS. The sole purpose and function of
the provisions of this Agreement authorizing the Bank, the Bank's Inspector, or
any agent, officer, employee or representative of the Bank to enter upon the
Property to make inspections of the Improvements, materials, Plans, shop
drawings, workmanship and construction of the Improvements or to enter into
possession of the Property upon any default and perform any work necessary or
desirable to complete the Improvements and to take all other action in
connection therewith, is to obtain information and to afford the Bank the
opportunity to:
(a) verify whether any Advances the Bank is obligated to make under this
Agreement are due, and the correct amount of such Advances;
(b) determine whether there has been or may be any default of the
Obligations of Borrower under this Agreement; and
(c) take any necessary or appropriate action to protect and preserve the
Bank's security for the Loan and all Advances made hereunder.
None of the aforesaid actions by the Bank, the Bank's Inspector, or any agent,
officer, employee or representative of the Bank, shall be or may be construed in
such a manner as to impose any duty or obligation whatsoever on the Bank, the
Bank's Inspector, or any agent, officer, employee or representative of the Bank,
to protect or represent any owner, borrower, contractor, surety, or any other
person whatsoever and shall not be considered or construed as having made any
warranty whatsoever, whether express or implied, as to the adequacy, quality of
fitness or purpose of any physical conditions, materials, workmanship, Plans,
specifications, drawings or other requirements pertaining to the
Loan Agreement--Page 46
construction of the Improvements, or whether any such physical conditions,
materials or workmanship comply with any Plans, specifications, drawings,
ordinances statutes, or other governmental requirements pertaining to the
Property. Bank shall have no liability, obligation or responsibility whatsoever
with respect to the construction of the Improvements except to advance the Loan
pursuant to this Agreement. Bank shall not be obligated to inspect the Property
or the construction of the Property, nor be liable for the performance or
default of Borrower, Contractor, any architect, sub-contractor or materialmen,
or any other party, or for any failure to construct, complete, protect, or
insure the Improvements, or for the payment of costs of labor, materials, or
services supplied for the Improvements, or for the performance of any obligation
of Borrower whatsoever. Nothing, including without limitation, any Advance or
acceptance of any document or instrument, shall be construed as a representation
or warranty, express or implied, to any party by Bank.
SECTION 9.17 THIRD-PARTY BENEFICIARIES. All conditions to the
obligation of the Bank to make Advances hereunder are imposed solely and
exclusively for the benefit of the Bank. No other person shall have standing to
require satisfaction of such condition or be entitled to assume that the Bank
will not refuse to make the Advance in the absolute strict compliance with any
or all thereof, and no other person shall, under any circumstances, be deemed to
be a beneficiary of such conditions, any or all of which may be freely waived,
in whole or in part, by the Bank at any time in its sole discretion.
SECTION 9.18 SUBMISSION TO JURISDICTION, JURY TRIAL WAIVER. (a) Any
legal action or proceeding with respect to the Loan Documents shall be brought
in the courts of the State of Louisiana or of the United States of America for
the Western District of Louisiana, and, by execution and delivery of this
Agreement, the Borrower hereby accepts for itself and (to the extent permitted
by law) in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid court. The Borrower hereby irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non coveniens, which it may now or hereafter
have to the bringing of any such action or proceeding in such respective
jurisdictions. This submission to jurisdiction is non-exclusive and does not
preclude the Bank from obtaining jurisdiction over in any court otherwise having
jurisdiction.
(b) BOTH THE BORROWER AND THE BANK HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE NOTE AND
THE COLLATERAL DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
PROVISION. NO OFFICER OF THE BANK HAS THE
Loan Agreement--Page 47
AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION EXCEPT UPON THE EXPRESS
AUTHORITY OF THE BANK'S BOARD OF DIRECTORS.
SECTION 9.19 PREPARATION. No implication or reference shall be drawn
from the fact that any party prepared or proposed portions of or the entirety of
the Loan Documents, and the same shall be construed to have been drafted by and
for the benefit of the Bank and the Borrower equally.
SECTION 9.20 FORM OF DOCUMENTS. Each agreement, document, instrument,
certificate or other writing to be furnished to the Bank under any provision of
this Agreement, including but not limited to the Note or the Collateral
Documents, must be in form and substance satisfactory to the Bank and its
legal counsel.
SECTION 9.21 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, and it shall not be necessary that the signatures of all
parties hereto be contained on any one counterpart hereof;
each counterpart shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
BORROWER: ISLE OF CAPRI HOTELS - BOSSIER CITY, L.L.C.
--------
By:
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Chief Financial
Officer, Treasurer and Assistant
Secretary
Loan Agreement--Page 48
BANK: HIBERNIA NATIONAL BANK
----
By:
------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
Loan Agreement--Page 49
EXHIBIT "A"
DESCRIPTION OF THE PROPERTY
Lots 91-99, inclusive, Riverside Subdivision, a subdivision in the City of
Bossier City, Bossier Parish, Louisiana, as per plat thereof recorded in Map
Book 60, page 157, of the Conveyance Records of Bossier Parish, Louisiana, and a
certain tract of land located in ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 13 West,
Bossier Parish, Louisiana, said tract being more fully described as follows:
From the Northeast corner of said ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 13
West, Bossier Parish, Louisiana,
run thence South a distance of 1,058.85 feet;
run thence West a distance of 437.00 feet;
run thence South 29 degrees 52'00" West a distance of 330.00 feet;
continue thence South 29 degrees 52'00" West a distance of 40.68 feet;
run thence South 76 degrees 00'00" West a distance of 135.40 feet;
run thence South 45 degrees 29'00" West a distance of 69.60 feet;
run thence North 85 degrees 05'00" West a distance of 40.90 feet;
run thence South 52 degrees 51'00" West a distance of 164.35 feet;
run thence South 32 degrees 24'00" West a distance of 105.80 feet;
run thence South 49 degrees 59'00" West a distance of 124.70 feet;
run thence South 68 degrees 34'00" West a distance of 178.27 feet;
run thence South 77 degrees 51'00" West a distance of 273.20 feet;
run thence South 83 degrees 04'00" West a distance of 177.40 feet;
run thence North 11 degrees 48'00" West a distance of 34.35 feet;
run thence Northwesterly along the high bank of Red River a distance of
724.10 feet;
run thence North 27 degrees 47'20" East a distance of 975.00 feet to the
point of beginning of the tract herein described;
run thence North 27 degrees 54'48" East a distance of 99.40 feet to a point
on the South side of Riverside Drive, as dedicated;
run thence South 61 degrees57'22" East a distance of 50.05 feet;
run thence North 62 degrees 06'04" East a distance of 200.30 feet;
run thence North 62 degrees 06'13" East a distance of 120.27 feet;
run thence North 62 degrees 30'52" East a distance of 231.54 feet;
(the preceding four (4) courses being along the South line of Riverside
Drive, as dedicated);
run thence South 04 degrees 27'21" West a distance of 251.53 feet;
run thence South 34 degrees 59'44" West a distance of 76.94 feet;
run thence South 04 degrees 35'37" West a distance of 16.90 feet;
run thence South 52 degrees 40'18" West a distance of 181.87 feet;
run thence South 36 degrees 41'12" East a distance of 165.62 feet along a
line 1" inside of an existing concrete wall;
run thence South 08 degrees 17'08" West a distance of 115.57 feet along a
line 1" inside of an existing concrete wall;
run thence North 82 degrees 06'22" West a distance of 44.20 feet along a
line 1" inside of the pavilion wall;
run thence South 07 degrees 59'31" West a distance of 136.29 feet along a
line 1" inside of the pavilion wall;
run thence North 82 degrees 00'29" West a distance of 126.50 feet;
run thence North 38 degrees 33'09" West a distance of 498.45 feet;
run thence North 27 degrees 47'20" East a distance of 100.00 feet to the
point of beginning;
containing 261,422.00 square feet, or 6.00 acres.
EXHIBIT "B"
BORROWER'S REQUEST FOR ADVANCE
Borrower:___________________________ Date: ________________
Project:_____________________ Request No.: ________________
Loan No.: ____________ Period ______ to ______ Amount: ________
--------------------------------------------------------------------------------
In connection with and in order to induce Hibernia National ("HNB") to
advance the amount requested, Borrower hereby represents, warrants and
stipulates as follows:
1. The work listed in this Request for Advance has been completed in
accordance with the Loan Agreement, all obligations for work submitted and
received on previous Borrower's Request for Advance have now been paid in
full (except for retainage), the funds requested at this time shall be
applied only to the obligations for work set forth in this Request, and all
policies as required by the Loan Agreement and the Mortgage are in full
force and effect.
2. Copies of all required insurance policies, licenses, permits and contracts,
with contractors, subcontractors, suppliers and materialmen responsible for
performing each approved budgeted item in the Development Expense Schedule
have been delivered to HNB if not previously sent.
3. No changes have been made in the approved plans and specifications, except
as have been previously approved in writing by HNB.
4. The amounts and percentages set forth on the attached schedules, along with
supporting documentation for each budgeted item, are true and correct to
the best of the Borrower's knowledge.
5. The undersigned represents, warrants and certifies it is entitled to
receive the subject Advance under the terms and conditions of the Loan
Agreement.
THE FOLLOWING (IF CHECKED) ARE INCLUDED AS PART OF THIS REQUEST FOR ADVANCE:
___ Application and Certificate for Payment (AIA G702 and G703) executed by the
General Contractor and the Architect for Project and notarized.
___ Development Expense Schedule
___ Invoices for stored materials on job site.
___ Lien Waivers Major Subcontractors with insurance, licenses and permits,
Soft Cost Invoices - identified with line item #'s/ Title Endorsement
Update/requested to be forward by Title Co.
___ Survey (Foundation or As Built)
___ Change Orders and required back up documents
___ Increase to Payment & Performance Bond $________
___ Increase to Builders Risk Coverage $______
___ Invoices for Equipment
Retainage Items:
---------------
___ Substantial Completion Certificate (AIA Form G704)
___ Clear L & P Certificate
___ Affidavit of Cancellation
___ Certificate of Occupancy
Other Construction Items (if applicable):
------------------------
___ Building Permit - on each Contract Phase - No. _____
___ Contract(s) on each Contract Phase - No. ___
___ Schedule of Values (G702 & G703)
___ Payment & Performance Bond on Phase No. ___
BY: ________________________________
NAME: ________________________________
TITLE: ________________________________
COMPLETED BY: __________________________
DATE: ________________________________
EXHIBIT "C"
COMPLIANCE CERTIFICATE
The undersigned hereby certifies (i) that he is the chief financial
officer of ISLE OF CAPRI HOTELS - BOSSIER CITY, L.L.C. (the "Borrower"), (ii)
that as such each is authorized to execute this certificate on behalf of the
Borrower and (iii) that a review of the activities of the Borrower has been made
under the supervision of the undersigned with a view to determining whether the
Borrower has fulfilled its obligations under the Loan Agreement (the "Loan
Agreement") dated December 9, 1997, between the Borrower and Hibernia National
Bank ("Bank"). The undersigned further certifies, represents and warrants to the
Bank as follows (each capitalized term used herein having the same meaning given
to it in the Loan Agreement unless otherwise specified):
1. The representations and warranties of the Borrower contained in the Loan
Agreement and otherwise made in writing by or on behalf of the Borrower pursuant
to the Loan Agreement were true and correct when made and are repeated at and as
of the time of delivery hereof and are true and correct at and as of the time of
delivery hereof, except as such representations and warranties relate to matters
that are permitted by the Loan Agreement or by the Bank pursuant to the Loan
Agreement.
2. The Borrower has performed and complied with all agreements and conditions
contained in the Loan Agreement required to be performed or complied with by
them prior to or at the time of delivery hereof.
3. The Borrower has not incurred any material liabilities, direct or
contingent, since the last day of the fiscal year of Borrower for which
financial statements have been furnished to the Bank pursuant to the Loan
Agreement, except those consented to by the Bank or as otherwise permitted by
the Loan Agreement.
4. No material adverse changes have occurred, either in any case or in the
aggregate, in the assets, liabilities, financial condition, business,
operations, affairs or circumstances of the Borrower from those reflected in the
financial statements referred to in Paragraph 3 hereof.
5. There exists no Default under the Loan Agreement.
6. None of the Companies is in default in the payment of any amounts due to
any Person or in the observance or performance of any of the covenants or
agreements contained in any credit agreements, notes, leases, collateral,
indenture or other documents relating to any Debt of the Companies to any Person
as a result of which the respective creditor has exercised any of its
contractual or legal remedies with respect to such Debt.
7. The attached calculations of the financial covenants specified in Section
5.16 of the Loan Agreement are true and correct and have been calculated in
accordance with the Loan Agreement.
DATED: ______________________ ISLE OF CAPRI HOTELS - BOSSIER CITY, L.L.C.
By: ___________________________________
Name: _____________________________
Title:_____________________________