LOAN AND SECURITY AGREEMENT
by and among:
RIVIERA HOLDINGS CORPORATION,
RIVIERA OPERATING CORPORATION, and
RIVIERA BLACK HAWK, INC.
as Borrowers;
THE OTHER RESTRICTED SUBSIDIARIES OF BORROWER
THAT ARE SIGNATORIES HERETO
as Guarantors;
THE LENDERS THAT ARE SIGNATORIES HERETO
as the Lenders;
and
FOOTHILL CAPITAL CORPORATION
as the Arranger and Administrative Agent
Dated as of July __, 2002
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of July __, 2002, between and among, on the one hand, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), FOOTHILL CAPITAL
CORPORATION, a California corporation, as the arranger and administrative agent
for the Lenders ("Agent"), and, on the other hand, RIVIERA HOLDINGS CORPORATION,
a Nevada corporation ("Parent"), and each of the Restricted Subsidiaries
identified as a "Borrower" on the signature pages hereof or of a joinder hereto
(such Restricted Subsidiaries, together with Parent, are referred to hereinafter
individually and collectively, and jointly and severally, as the "Borrower"),
and each of the other Restricted Subsidiaries identified as a "Guarantor" on the
signature pages hereof or of a joinder hereto (such other Restricted
Subsidiaries are referred to hereinafter individually and collectively, and
jointly and severally, as a "Guarantor").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. As used in this Agreement, the following terms shall have
the following definitions:
"Account Debtor" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account, chattel paper,
or a General Intangible.
"Accounts" means, with respect to each Borrower and each
Guarantor, all of such Person's now owned or hereafter acquired right, title,
and interest with respect to "accounts" (as that term is defined in the Code),
and any and all supporting obligations in respect thereof.
"ACH Transactions" means any cash management or related
services (including the Automated Clearing House processing of electronic funds
transfers through the direct Federal Reserve Fedline system) provided by ▇▇▇▇▇
Fargo or its Affiliates for the account of Administrative Borrower or its
Subsidiaries.
"Additional Documents" has the meaning set forth in Section
4.4.
"Administrative Borrower" has the meaning set forth in Section
17.9.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, or is under common
1
control with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, for purposes of Section 7.14 hereof: (a) any
Person which owns directly or indirectly 25% or more of the securities having
ordinary voting power for the election of directors or other members of the
governing body of a Person or 25% or more of the partnership or other ownership
interests of a Person (other than as a limited partner of such Person) shall be
deemed to control such Person; (b) each director (or comparable manager) of a
Person shall be deemed to be an Affiliate of such Person; and (c) each
partnership or joint venture in which a Person is a partner or joint venturer
shall be deemed to be an Affiliate of such Person.
"Agent" means Foothill, solely in its capacity as the arranger
and administrative agent for the Lenders hereunder, and any successor thereto.
"Agent's Account" means the account identified on Schedule
A-1.
"Agent Advances" has the meaning set forth in Section
2.3(e)(i).
"Agent's Liens" means the Liens granted by Borrowers and
Guarantors to Agent for the benefit of the Lender Group under this Agreement or
the other Loan Documents.
"Agent-Related Persons" means Agent together with its
Affiliates, officers, directors, employees, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"Applicable EBITDA Trigger Margin" means, as of any date of
determination: (a) zero (-0-), so long as the EBITDA Trigger Date has not
occurred; and (b) 0.75 percentage points, from and after the occurrence (if
ever) of the EBITDA Trigger Date.
"Applicable Gaming Laws" means the applicable mandatory
provisions of (i) the Nevada Gaming Control Act and the regulations promulgated
thereunder, (ii) the Colorado Limited Gaming Control Act and the regulations
promulgated thereunder, and (iii) any other applicable gaming laws, rules, and
regulations enacted or promulgated by the applicable Gaming Authority, in each
case, as the same may be amended from time to time.
"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to (a) during the period of time commencing on
the date of the execution and delivery of this Agreement and ending on the first
anniversary of the Closing Date, 5% of the result of (i) $30,000,000 minus (ii)
any reserves established under Section 2.1(b) hereof, (b) during the period of
time commencing on the date immediately following the first anniversary of the
Closing Date and ending on the second anniversary of the Closing Date, 4% of the
result of (i) $30,000,000 minus (ii) any reserves established under Section
2.1(b) hereof, (c) during the period of time commencing on the date immediately
following the second anniversary of the Closing Date and ending on third
anniversary of the Closing Date, 3% of the result of (i) $30,000,000 minus (ii)
2
any reserves established under Section 2.1(b) hereof, (d) during the period of
time commencing on the date immediately following the third anniversary of the
Closing Date and ending on the fourth anniversary of the Closing Date, 2% of the
result of (i) $30,000,000 minus (ii) any reserves established under Section
2.1(b) hereof, and (e) during the period of time commencing on the date
immediately following the fourth anniversary of the Closing Date and ending on
the date immediately prior to the Maturity Date, 1% of the result of (i)
$30,000,000 minus (ii) any reserves established under Section 2.1(b) hereof.
Anything herein to the contrary notwithstanding, solely with respect to any of
the periods described in the clauses (b), (c), (d), or (e) of the immediately
preceding sentence, the Applicable Prepayment Premium shall equal 50% of the
amount otherwise applicable under such clause if and only if the termination of
this Agreement pursuant to the first and second sentences of Section 3.6 occurs
during such period proximately in connection with and substantially
contemporaneously with the consummation of, and the repayment of the Obligations
pursuant to the first and second sentences of Section 3.6 is made from the
proceeds of, either (1) a Prepayment Corporate Event (as defined below), or (2)
a refinancing of the Obligations and the Commitments by a commercial banking
unit of ▇▇▇▇▇ Fargo Bank. As used herein, the term "Prepayment Corporate Event"
means: (a) an acquisition of all or substantially all of the capital stock of
Borrower; or (b) the acquisition of all or substantially all of the Borrowers'
assets; or (c) the issuance and sale by Parent of subordinated debt securities
or equity securities.
"Asset Sale" has the meaning set forth in Section 7.4.
"Assignee" has the meaning set forth in Section 14.1.
"Assignment and Acceptance" means an Assignment and Acceptance
in form and substance satisfactory to Agent.
"Authorized Person" means any officer or other employee of
Administrative Borrower.
"Availability" means, as of any date of determination, if such
date is a Business Day, and determined at the close of business on the
immediately preceding Business Day, if such date of determination is not a
Business Day, the amount that Borrowers are entitled to borrow as Advances under
Section 2.1 (after giving effect to all then outstanding Obligations and all
sublimits and reserves applicable hereunder).
"Bankruptcy Code" means the United States Bankruptcy Code, as
in effect from time to time.
"Base LIBOR Rate" means the rate per annum, determined by
Agent in accordance with its customary procedures, and utilizing such electronic
or other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/16%), on the basis of the rates at which Dollar
deposits are offered to major banks in the London interbank market on or about
11:00 a.m. (California time) 2 Business Days prior to the commencement of the
applicable Interest Period, for a term and in amounts comparable to the Interest
Period and amount of the LIBOR Rate Loan requested by Administrative Borrower in
3
accordance with this Agreement, which determination shall be conclusive in the
absence of manifest error.
"Base Rate" means, the rate of interest announced within ▇▇▇▇▇
Fargo at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of ▇▇▇▇▇ Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as ▇▇▇▇▇ Fargo may designate.
"Base Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the Base Rate.
"Base Rate Margin" means the sum of 0.75 percentage points
plus the Applicable EBITDA Trigger Margin.
"Board of Directors" means the board of directors (or
comparable managers) of Parent or any committee thereof duly authorized to act
on behalf thereof.
"Books" means, with respect to each Borrower and each
Guarantor, all of such Person's and its Subsidiaries' now owned or hereafter
acquired books and records (including all of its Records indicating,
summarizing, or evidencing its assets (including the Collateral) or liabilities,
all of such Person's or its Subsidiaries' Records relating to its or their
business operations or financial condition, and all of its or their goods or
General Intangibles related to such information).
"Borrower" has the meaning set forth in the preamble to this
Agreement. Without limiting the generality of the foregoing, Borrower means and
includes, individually and collectively, and jointly and severally, the
following: Parent; ROC; and RBH.
"Borrowing" means a borrowing hereunder consisting of Advances
made on the same day by the Lenders (or Agent on behalf thereof), or by Swing
Lender in the case of a Swing Loan, or by Agent in the case of an Agent Advance,
in each case, to Administrative Borrower.
"Borrowing Base" has the meaning set forth in Section 2.1.
"Business Day" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term "Business Day" also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market.
"Capital Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
4
"Capitalized Lease Obligation" means any Indebtedness
represented by obligations under a Capital Lease.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or ▇▇▇▇▇'▇,
(c) commercial paper maturing no more than 270 days from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or ▇▇▇▇▇'▇, money market funds investing primarily in any of
the foregoing, and (e) certificates of deposit or bankers' acceptances maturing
within 1 year from the date of acquisition thereof either (i) issued by any bank
organized under the laws of the United States or any state thereof which bank
has a rating of A or A2, or better, from S&P or ▇▇▇▇▇'▇, or (ii) certificates of
deposit less than or equal to $100,000 in the aggregate issued by any other bank
insured by the Federal Deposit Insurance Corporation.
"Casino" means a gaming establishment owned, directly or
indirectly, by Borrower or any of its Restricted Subsidiaries and any hotel,
building, restaurant, theater, amusement park, other entertainment facility,
sport facility, parking facilities, retail shops, convention or meeting
facilities, land, equipment, and other property asset directly ancillary thereto
and used or to be used in connection therewith.
"Casino License" means any material license, franchise, or
other approval or authorization required to own, lease, or operate a Casino, or
otherwise conduct gaming in any jurisdiction in which Borrower or any of its
Restricted Subsidiaries conducts or proposes in good faith to conduct gaming
business, including any applicable liquor license.
"Change of Control" means (a) any "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act) becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 35%, or more, of the Stock of Parent having the right to vote for
the election of members of the Board of Directors, or (b) a majority of the
members of the Board of Directors do not constitute Continuing Directors, or (c)
any Borrower ceases to directly own and control 100% of the outstanding capital
Stock of each of its Restricted Subsidiaries extant as of the Closing Date, or
(d) a "Change of Control" (as that term is defined in the Indenture) has
occurred.
"Closing Date" means the date of the making of the initial
Advance (or other extension of credit) hereunder or the date on which Agent
sends Borrower a written notice that each of the conditions precedent set forth
in Section 3.1 either have been satisfied or have been waived.
"Closing Date Business Plan" means the set of Projections of
Borrowers for the 3 year period following the Closing Date (on a year by year
basis, and for the 1 year period following the Closing Date, on a month by month
basis), in form and substance (including as to scope and underlying assumptions)
satisfactory to Agent.
5
"Code" means the California Uniform Commercial Code, as in
effect from time to time.
"Collateral" means, with respect to each Borrower and each
Guarantor, all of such Person's now owned or hereafter acquired right, title,
and interest in and to each of the following:
(a) Accounts,
(b) Books,
(c) Equipment,
(d) General Intangibles,
(e) Inventory,
(f) Investment Property,
(g) Negotiable Collateral,
(h) Real Property Collateral,
(i) money or other assets of each such Person that now or hereafter come
into the possession, custody, or control of any member of the Lender
Group,
(j) to the extent not otherwise included in the foregoing, all other assets of
such Person encumbered in favor of the Indenture Trustee under or in connection
with the Senior Note Documents, and
(k) the proceeds and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance covering any or all of the foregoing,
and any and all Accounts, Books, Equipment, General Intangibles, Inventory,
Investment Property, Negotiable Collateral, Real Property, money, deposit
accounts, or other tangible or intangible property resulting from the sale,
exchange, collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds thereof.
Anything in the Loan Documents to the contrary notwithstanding, the Collateral
shall not include the Excluded Assets.
"Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment or Inventory, in each case, in form and
substance satisfactory to Agent.
6
"Collections" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds) of Borrowers and Guarantors.
"Commitment" means, with respect to each Lender, its Revolver
Commitment or its Total Commitment, as the context requires, and, with respect
to all Lenders, their Revolver Commitments or their Total Commitments, as the
context requires, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 delivered by the chief financial officer of Parent to
Agent.
"Continuing Director" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Parent on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Parent (as such terms are used in Rule 14a-11 under the
Exchange Act) and whose initial assumption of office resulted from such contest
or the settlement thereof.
"Control Agreement" means a control agreement, in form and
substance satisfactory to Agent, executed and delivered by the applicable
Borrower or Guarantor, Agent, and the applicable securities intermediary with
respect to the Securities Accounts maintained with such securities intermediary.
"Daily Balance" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand deposit account
maintained by any Borrower or Guarantor.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"Defaulting Lender Rate" means (a) the Base Rate for the first
3 days from and after the date the relevant payment is due, and (b) thereafter,
at the interest rate then applicable to Advances that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto.
7
"Defined Benefit Plan" means a "defined benefit plan" (as
defined in Section 3(35) of ERISA) for which any Borrower or any Subsidiary or
ERISA Affiliate of any Borrower has been an "employer" (as defined in Section
3(5) of ERISA) within the past six years.
"Designated Account" means that certain DDA of Administrative
Borrower identified on Schedule D-1.
"Designated EBITDA Condition" means, as of any date of
determination, that both of the following shall be true: (a) Borrower's EBITDA
of the prior 12 months solely in respect of the Riviera Las Vegas Facility is at
least $25,000,000, and (b) Borrower's EBITDA of the prior 12 months solely in
respect of the Riviera Black Hawk Facility is at least $16,000,000.
"Dollars" or "$" means United States dollars.
"EBITDA" means, with respect to any fiscal period, Parent's
and its Subsidiaries' actual, unadjusted, consolidated net earnings (or loss),
minus extraordinary gains, plus interest expense, income taxes, and depreciation
and amortization for such period, as determined in accordance with GAAP.
"EBITDA Trigger Date" means the first date (if ever),
following the date of consummation of the first Permitted San Remo Time-Share
Transaction (if ever), that the Designated EBITDA Condition is not satisfied.
"Eligible Transferee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of
a Lender that was party hereto as of the Closing Date, (e) so long as no Event
of Default has occurred and is continuing, any other Person approved by Agent
and Administrative Borrower, and (f) during the continuation of an Event of
Default, any other Person approved by Agent.
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Borrower or any predecessor in interest, (b) from adjoining
properties or businesses, or (c) from or onto any facilities which received
Hazardous Materials generated by any Borrower or any predecessor in interest.
8
"Environmental Indemnity" means, individually and
collectively, (a) that certain Environmental Indemnity by Parent and RBH in
favor of Agent for the benefit of the Lender Group relative to the Riviera Black
Hawk Facility, and (b) that certain Environmental Indemnity by Parent in favor
of Agent for the benefit of the Lender Group relative to the Riviera Las Vegas
Facility.
"Environmental Law" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy or rule of common
law now or hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on Borrowers, relating
to the environment, employee health and safety, or Hazardous Materials,
including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USCss.1251
et seq; the Toxic Substances Control Act, 15 USC,ss. 2601 et seq; the Clean Air
Act, 42 USCss.7401 et seq.; the Safe Drinking Water Act, 42 USC.ss.3803 et seq.;
the Oil Pollution Act of 1990, 33 ▇▇▇.▇▇. 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 ▇▇▇.▇▇. 11001 et seq.; the
Hazardous Material Transportation Act, 49 USCss. 1801 et seq.; and the
Occupational Safety and Health Act, 29 USC.ss.651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants,
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"Equipment" means, with respect to each Borrower and each
Guarantor, all of such Person's now owned or hereafter acquired right, title,
and interest with respect to equipment, machinery, machine tools, motors,
furniture, furnishings, fixtures, vehicles (including motor vehicles), tools,
parts, goods (other than consumer goods, farm products, or Inventory), wherever
located, including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
a Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which a Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
9
412 of the IRC, any Person subject to ERISA that is a party to an arrangement
with a Borrower and whose employees are aggregated with the employees of a
Borrower under IRC Section 414(o).
"Event of Default" has the meaning set forth in Section 8.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to Availability minus the aggregate
amount, if any, of all trade payables of Borrowers aged in excess of their
historical levels with respect thereto and all book overdrafts in excess of
their historical practices with respect thereto, in each case as determined by
Agent in its Permitted Discretion.
"Exchange Act" means the Securities Exchange Act of 1934, as
in effect from time to time.
"Excluded Assets" means:
(a) cash and Cash Equivalents (in each case, unless
deposited with or held by Agent as cash security for the Obligations or the
Guarantor Obligations or otherwise pursuant to the Loan Documents);
(b) items of Equipment that are the subject of
clause (e) of the definition of "Permitted Liens" in favor of any Person
(other than the Lender Group, Borrower, any affiliate of Borrower, or the
Indenture Trustee) in securing Purchase Money Indebtedness or Capitalized Lease
Obligations permitted to be incurred under both the Indenture and Section
7.1 hereof;
(c) any General Intangible consisting of contract
rights, permits, or licenses (including Casino Licenses) that is now or
hereafter held by any Borrower or any Guarantor as licensee or otherwise,
solely in the event and to the extent that: (i) such General
Intangible cannot be subjected to a consensual security interest in favor of
Agent without the consent of the licensor or other party to such contract,
permit, or license; (ii) any such restriction shall be effective and enforceable
under all applicable law, including Sections 9407 and 9408 of the Code; and
(iii) such consent is not obtainable by any Borrower or Guarantor (and Borrower
or Guarantor, as the case may be, shall use its reasonable best efforts to
obtain such consent);
(d) any and all assets of any Person designated (in
accordance with both the Indenture and this Agreement), by Administrative
Borrower in writing to Agent, as constituting an Unrestricted Subsidiary; and
(e) the Six Acre Tract and any improvements
thereon to the extent the same is contributed to an Unrestricted
Subsidiary of Parent as permitted by both the Indenture and this Agreement;
10
provided, however, that Excluded Assets does not include (and, accordingly, the
Collateral shall include) any and all proceeds of the assets described in
clauses (b) and (c) above; provided further that any General Intangible
qualifying as an Excluded Asset under clause (c) above no longer shall
constitute an Excluded Asset (and instead shall constitute Collateral) from and
after such licensor or other applicable party's consent with respect to the
grant of a consensual security interest in such General Intangible; provided
further that, upon the repayment, satisfaction or termination of the Purchase
Money Indebtedness or Capital Lease Obligation with respect to any such item of
Equipment described in clause (b) above, such item of Equipment financed thereby
shall no longer be deemed an Excluded Asset and shall constitute Collateral that
is subject to Agent's Lien; and provided further that, anything to the contrary
notwithstanding, any property or asset acquired by a Borrower or Guarantor in
consideration for cash or Cash Equivalents of Borrower or Guarantor, or
otherwise received by Borrower or Guarantor in exchange for cash or Cash
Equivalents of Borrower or Guarantor, shall not constitute Excluded Assets so
long as such acquired or received property or asset is not an asset described in
clauses (a), (b), (c), or (d) above.
"Facility" means one or more of (a) the Riviera Las Vegas
Facility, and (b) the Riviera Black Hawk Facility.
"Fee Letter" means that certain fee letter, dated as of even
date herewith, between Borrowers and Agent, in form and substance satisfactory
to Agent.
"FEIN" means Federal Employer Identification Number.
"FF&E Agreements" means: (1) the Master Lease Agreement, dated
December 13, 1999, by and between PDS Financial Corporation--Colorado and RBH;
(2) the Master Lease Agreement, dated January 14, 1999, between Matrix Funding
Corporation and Parent; (3) the Master Security Agreement, dated as of July 13,
1999, between General Electric Capital Corporation and Parent; and (4) the IBM
Credit Corporation Conditional Sales Contract, dated September 1, 1998, between
IBM and ROC.
"Foothill" means Foothill Capital Corporation, a California corporation.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section
2.13(b)(ii).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office, or instrumentality of any nature whatsoever of
the United States of America or foreign government (including Native American
governments), any state, province, city, or other political subdivision thereof,
whether now or hereafter existing, or any officer or official thereof, including
the Nevada Gaming Commission, the Nevada State Gaming Control Board, the
Colorado Limited Gaming Control Commission, the Colorado Division of Gaming, and
any other agency with authority to regulate any gaming operation (or proposed
gaming operation) owned, managed, or operated by Borrower or any of its
Subsidiaries.
11
"General Intangibles" means, with respect to each Borrower and
each Guarantor, all of such Person's now owned or hereafter acquired right,
title, and interest with respect to general intangibles (including markers,
payment intangibles, contract rights, rights to payment, rights arising under
common law, statutes, or regulations, choses or things in action, goodwill,
patents, trade names, trademarks, servicemarks, copyrights, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, rights to payment and other rights under any royalty
or licensing agreements, infringement claims, computer programs, information
contained on computer disks or tapes, software, literature, reports, catalogs,
insurance premium rebates, tax refunds, and tax refund claims), and any and all
supporting obligations in respect thereof, all deposit accounts and money, and
any other personal property (other than goods, Accounts, Investment Property,
and Negotiable Collateral).
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or
other governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Guarantor" means, individually and collectively: (a) each
Borrower in respect of each other Borrower; and (b) any other guarantor of the
Obligations, including, without limitation, each of the Restricted Subsidiaries
(other than a Borrower) identified as a "Guarantor" on the signature pages
hereof or of a joinder hereto. Without limiting the generality of the foregoing
clause (b), Guarantor means and includes, individually and collectively, and
jointly and severally, the following: RGM; and RGMC.
"Guarantor Obligations" means all debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy Code,
would have accrued), premiums, liabilities, obligations, fees, charges, costs,
Lender Group Expenses (including any fees or expenses that, but for the
provisions of the Bankruptcy Code, would have accrued), guaranties, covenants,
and duties of any kind and description owing by Guarantors to the Lender Group
pursuant to or evidenced by the Loan Documents and irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including all interest not
paid when due and all Lender Group Expenses that Guarantors are required to pay
or reimburse by the Loan Documents, by law, or otherwise. Any reference in this
Agreement or in the Loan Documents to the Guarantor Obligations shall include
all amendments, changes, extensions, modifications, renewals replacements,
substitutions, and supplements, thereto and thereof, as applicable, both prior
and subsequent to any Insolvency Proceeding.
12
"Guaranty" means, individually and collectively, one or more
general continuing guaranties executed and delivered by each Guarantor in favor
of Agent, for the benefit of the Lender Group, in form and substance
satisfactory to Agent.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hedge Agreement" means any and all transactions, agreements,
or documents now existing or hereafter entered into between Administrative
Borrower or its Subsidiaries and ▇▇▇▇▇ Fargo or its Affiliates, which provide
for an interest rate, credit, commodity or equity swap, cap, floor, collar,
forward foreign exchange transaction, currency swap, cross currency rate swap,
currency option, or any combination of, or option with respect to, these or
similar transactions, for the purpose of hedging Administrative Borrower's or
its Subsidiaries' exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.
"Indebtedness" means (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all obligations under Capital Leases, (d) all obligations or liabilities of
others secured by a Lien on any asset of Administrative Borrower or its
Subsidiaries, irrespective of whether such obligation or liability is assumed,
(e) all obligations for the deferred purchase price of assets (other than trade
debt incurred in the ordinary course of business and repayable in accordance
with customary trade practices), and (f) any obligation guaranteeing or intended
to guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse) any obligation of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section
11.3.
"Indemnified Person" has the meaning set forth in Section
11.3.
"Indenture" means that certain Indenture, dated as of June 26,
2002, among Parent, the other Borrowers, and the Indenture Trustee.
"Indenture Trustee" means (a) The Bank of New York, a New York
banking corporation, in its capacity as trustee under the Indenture, or (b) any
successor trustee under the Indenture from time to time, or (c) any one or more
co-trustees or separate trustees appointed from time to time by the Persons
identified in clauses (a) or (b) above pursuant to the Indenture.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Intangible Assets" means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be treated
as intangibles under GAAP.
"Intercompany Subordination Agreement" means a subordination
agreement executed and delivered by Borrowers, Guarantors, and Agent, the form
and substance of which is satisfactory to Agent.
"Intercreditor Agreement" means that certain Intercreditor
Agreement between Agent and the Indenture Trustee, in the form of Exhibit I-1
attached hereto.
"Interest Period" means, with respect to each LIBOR Rate Loan,
a period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, or 3 months thereafter; provided, however, that (a) if any Interest Period
would end on a day that is not a Business Day, such Interest Period shall be
extended (subject to clauses (c)-(e) below) to the next succeeding Business Day,
(b) interest shall accrue at the applicable rate based upon the LIBOR Rate from
and including the first day of each Interest Period to, but excluding, the day
on which any Interest Period expires, (c) any Interest Period that would end on
a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, or 3 months
after the date on which the Interest Period began, as applicable, and (e)
Borrowers (or Administrative Borrower on behalf thereof) may not elect an
Interest Period which will end after the Maturity Date.
"Inventory" means, with respect to each Borrower and each
Guarantor, all of such Person's now owned or hereafter acquired right, title,
and interest with respect to inventory, including goods held for sale or lease
or to be furnished under a contract of service, goods that are leased by
Borrower or Guarantor as lessor, goods that are furnished by Borrower or
Guarantor under a contract of service, and raw materials, work in process, or
materials used or consumed in the business of Borrower or Guarantor.
"Investment" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness or Stock, and any other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Investment Property" means, with respect to each Borrower and
each Guarantor, all of such Person's now owned or hereafter acquired right,
title, and interest with respect to "investment property" as that term is
defined in the Code, and any and all supporting obligations in respect thereof.
"IP Security Agreement" means an intellectual property
security agreement executed and delivered by Borrower, Guarantor, and Agent, the
form and substance of which is satisfactory to Agent.
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
"Issuing Lender" means Foothill or any other Lender that, at
the request of Administrative Borrower and with the consent of Agent agrees, in
such Lender's sole discretion, to become an Issuing Lender for the purpose of
issuing L/Cs or L/C Undertakings pursuant to Section 2.12.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section
2.12(a).
"Lender" and "Lenders" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by a Borrower or a
Guarantor under any of the Loan Documents that are paid or incurred by the
Lender Group, (b) fees or charges paid or incurred by Agent in connection with
the Lender Group's transactions with Borrower or Guarantor, including, fees or
charges for photocopying, notarization, couriers and messengers,
telecommunication, public record searches (including tax lien, litigation, and
UCC searches and including searches with the patent and trademark office, the
copyright office, or the department of motor vehicles), filing, recording,
publication, appraisal (including periodic Collateral appraisals or business
valuations to the extent of the fees and charges (and up to the amount of any
limitation) contained in this Agreement, real estate surveys, real estate title
policies and endorsements, and environmental audits, (c) costs and expenses
incurred by Agent in the disbursement of funds to or for the account of
Borrowers (by wire transfer or otherwise), (d) charges paid or incurred by Agent
resulting from the dishonor of checks, (e) reasonable costs and expenses paid or
incurred by the Lender Group to correct any default or enforce any provision of
the Loan Documents, or in gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, preparing for sale, or advertising to
sell the Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of Agent related to audit examinations
of the Books to the extent of the fees and charges (and up to the amount of any
limitation) contained in this Agreement, (g) reasonable costs and expenses of
third party claims or any other suit paid or incurred by the Lender Group in
enforcing or defending the Loan Documents or in connection with the transactions
contemplated by the Loan Documents or the Lender Group's relationship with any
Borrower or any guarantor of the Obligations, (h) Agent's and each Lender's
reasonable fees and expenses (including attorneys fees) incurred in advising,
structuring, drafting, reviewing, administering, or amending the Loan Documents,
and (i) Agent's and each Lender's reasonable fees and expenses (including
attorneys fees) incurred in terminating, enforcing (including attorneys fees and
expenses incurred in connection with a "workout," a "restructuring," or an
Insolvency Proceeding concerning any Borrower or any Guarantor or in exercising
rights or remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action
concerning the Collateral. The foregoing to the contrary notwithstanding, Lender
Group Expenses shall not include: (1) any costs or expenses incurred by a
Participant; and (2) any costs or expenses incurred by an Assignee prior to such
Assignee becoming a Lender under this Agreement.
"Lender-Related Person" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, and the officers,
directors, employees, and agents of such Lender.
"Letter of Credit" means an L/C or an L/C Undertaking, as the
context requires.
"Letter of Credit Usage" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of Credit
plus 100% of the amount of outstanding time drafts accepted by an Underlying
Issuer as a result of drawings under Underlying Letters of Credit.
"LIBOR Deadline" has the meaning set forth in Section
2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit
L-1.
"LIBOR Rate" means, for each Interest Period for each LIBOR
Rate Loan, the rate per annum determined by Agent (rounded upwards, if
necessary, to the next 1/16%) by dividing (a) the Base LIBOR Rate for such
Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage.
"LIBOR Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means the sum of 3.00 percentage points
plus the Applicable EBITDA Trigger Margin.
"Lien" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the Control Agreements
(if any), the Environmental Indemnities, the Fee Letter, the Guaranty, the IP
Security Agreement, the Letters of Credit, the Mortgages, the Representations &
Warranties Certificate, all Officer's Certificates, the Stock Pledge Agreement,
the Intercreditor Agreement, the Intercompany Subordination Agreement, any note
or notes executed by a Borrower in connection with this Agreement and payable to
a member of the Lender Group (or to Agent for the benefit thereof), and any
other agreement entered into, now or in the future, by any Borrower or Guarantor
in favor of or for the benefit of the Lender Group in connection with this
Agreement or any other Loan Document.
"Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrowers and Guarantors
taken as a whole, (b) a material impairment of a Borrower's (or a Guarantor's)
ability to perform its obligations under the Loan Documents to which it is a
party or of the Lender Group's ability to enforce the Obligations or the
Guarantor Obligations or realize upon the Collateral, or (c) a material
impairment of the enforceability or priority of the Agent's Liens with respect
to the Collateral as a result of an action or failure to act on the part of a
Borrower or a Guarantor.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means $30,000,000, as the same may
from time to time be reduced (if ever) solely if, when, and to the extent
required pursuant to Section 4.10(b)(1) of the Indenture.
"Mortgages" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a
Borrower or a Guarantor in favor of Agent, for the benefit of the Lender Group,
in form and substance satisfactory to Agent, that encumber the Real Property
Collateral and the related improvements thereto.
"Negotiable Collateral" means, with respect to each Borrower
and each Guarantor, all of such Person's now owned and hereafter acquired right,
title, and interest with respect to letters of credit, letter of credit rights,
instruments, promissory notes, drafts, documents, and chattel paper (including
electronic chattel paper and tangible chattel paper), and any and all supporting
obligations in respect thereof.
"Net Proceeds" means the aggregate cash proceeds received by
Borrower or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
any reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness: (a) as to which
neither Borrower nor any of its Restricted Subsidiaries (i) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (ii) is directly or indirectly liable as a
guarantor or otherwise, or (iii) constitutes the lender; (b) no default with
respect to which (including any rights that the holders of such Indebtedness may
have to take enforcement action against an Unrestricted Subsidiary) would
permit, upon notice, lapse of time or both, any holder of any other Indebtedness
of Borrower or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment of such Indebtedness to be accelerated
or payable prior to its stated maturity; and (c) as to which the lenders in
respect of such Indebtedness have been notified in writing that they shall not
have any recourse to the Stock or assets of Borrower or any of its Restricted
Subsidiaries.
"Obligations" means all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), contingent reimbursement obligations with respect to
outstanding Letters of Credit, premiums, liabilities (including all amounts
charged to Borrowers' Loan Account pursuant hereto), obligations, fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that, but for the provisions of
the Bankruptcy Code, would have accrued), lease payments, guaranties, covenants,
and duties of any kind and description owing by Borrowers to the Lender Group
pursuant to or evidenced by the Loan Documents and irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including all interest not
paid when due and all Lender Group Expenses that Borrowers are required to pay
or reimburse by the Loan Documents, by law, or otherwise. Any reference in this
Agreement or in the Loan Documents to the Obligations shall include all
amendments, changes, extensions, modifications, renewals replacements,
substitutions, and supplements, thereto and thereof, as applicable, both prior
and subsequent to any Insolvency Proceeding.
"Officer's Certificate" means a certificate signed by one or
more applicable officers of Administrative Borrower (in their capacities as
officers and not in their individual capacity), in form and substance
satisfactory to Agent.
"Originating Lender" has the meaning set forth in Section
14.1(e).
"Overadvance" has the meaning set forth in Section 2.5.
"Parent" has the meaning set forth in the preamble to this
Agreement.
"Participant" has the meaning set forth in Section 14.1(e).
"Permitted Asset Sales" means one or more Asset Sales of
tangible personal property of Borrower or Guarantor (not otherwise qualifying as
a Permitted Disposition under clauses (a) through (e) of the definition of
"Permitted Dispositions"), in an aggregate amount not to exceed $500,000 in any
consecutive 12 month period (following the date of this Agreement), identified
in an Officer's Certificate by Administrative Borrower to Agent as a "Permitted
Asset Sale", which Officer's Certificate shall be accompanied by evidence,
satisfactory to Agent in its Permitted Discretion, that (a) such Asset Sale,
together with all other such Asset Sales in the relevant 12 month period, do not
exceed $500,000, and (b) such Asset Sale is permitted under the Indenture.
"Permitted Business" means the lines of business engaged in by
Borrower and its Restricted Subsidiaries as of the date of this Agreement, and
all business related, complementary, or incidental thereto, including but not
limited to gaming, lodging, entertainment and food and beverage service, retail
store leasing and concessions, licensing products, services and trade names, and
consulting with and managing third parties who are engaged in the foregoing and
similar lines of businesses.
"Permitted Discretion" means a determination made in good
faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment.
"Permitted Dispositions" means (a) sales or other dispositions
by Borrower or Guarantor of Equipment that is substantially worn, damaged, or
obsolete in the ordinary course of business, (b) any transfer of slot machines
or other gaming equipment in connection with the acquisition of similar gaming
equipment in the ordinary course of business, (c) the use or transfer of money
or Cash Equivalents by Borrower or Guarantor in a manner that is not prohibited
by the terms of this Agreement or the other Loan Documents, (d) the licensing by
Borrower or Guarantor, on a non-exclusive basis, of patents, trademarks,
copyrights, and other intellectual property rights in the ordinary course of
business, (e) Permitted Unrestricted Subsidiary Contributions, (f) Permitted
Asset Sales, (g) space leases by Borrower, as landlord, to tenants, at market
rents, of portions of the Real Property Collateral designated by Borrower for
retail, entertainment, or other non-hotel, non-gaming uses, and (h) granting
licenses to use (but not transfers of any property rights in respect of) hotel
rooms in the ordinary course of business or as part of the Permitted San Remo
Time-Share Transactions.
"Permitted Distributions" means: (a) distributions or
dividends by a Borrower (other than Parent) or Guarantor (other than Parent) to
another Borrower or Guarantor (including any Permitted Subsidiary Spin-Off); and
(b) Restricted Payments by Parent in accordance with Schedule P-2 ("Permitted
Parent Distributions").
"Permitted Investments" means: (a) investments in Cash
Equivalents; (b) investments in negotiable instruments for collection; (c)
advances made in connection with purchases of goods or services in the ordinary
course of business; (d) investments by any Borrower or Guarantor in any other
Borrower or Guarantor provided that if any such investment is in the form of
Indebtedness, such Indebtedness investment shall be subject to the terms and
conditions of the Intercompany Subordination Agreement; and (e) Permitted
Unrestricted Subsidiary Contributions.
"Permitted Liens" means (a) Liens held by Agent for the
benefit of Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are
not yet delinquent, or (ii) do not constitute an Event of Default hereunder and
are the subject of Permitted Protests, (c) Liens set forth on Schedule P-1, (d)
the interests of lessors under operating leases, (e) purchase money Liens or the
interests of lessors under Capital Leases to the extent that such Liens or
interests secure Permitted Purchase Money Indebtedness (or Indebtedness
outstanding under the FF&E Agreements on the date of this Agreement, until such
amounts are repaid) and so long as such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, (f) Liens arising by operation
of law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of business and not in
connection with the borrowing of money, and which Liens either (i) are for sums
not yet delinquent, or (ii) are the subject of Permitted Protests, (g) Liens
arising from deposits made in connection with obtaining worker's compensation or
other unemployment insurance, (h) Liens or deposits to secure performance of
bids, tenders, or leases incurred in the ordinary course of business and not in
connection with the borrowing of money, (i) Liens granted as security for surety
or appeal bonds in connection with obtaining such bonds in the ordinary course
of business, (j) Liens resulting from any judgment or award that is not an Event
of Default hereunder, (k) Liens with respect to the Real Property Collateral
that are exceptions to the commitments for title insurance issued in connection
with the Mortgages, as accepted by Agent, (l) Liens with respect to any Real
Property that is not part of the Real Property Collateral, so long as such Liens
do not materially interfere with or impair the use or operation of the Real
Property Collateral, (m) upon full execution of the Intercreditor Agreement,
Liens held by the Indenture Trustee under the Senior Note Documents, (n) with
respect to any leasehold interest in Real Property Collateral granted by
Borrower as lessor as permitted by this Agreement, Liens granted by the lessee
thereof, if and to the extent such Liens do not encumber the fee interest of
Borrower in such Real Property Collateral, are subordinate to the Agent's Liens,
and do not otherwise impair the Collateral, and (o) Liens (if any) in favor of
▇▇▇▇▇ Fargo Bank on cash deposits maintained at ▇▇▇▇▇ Fargo Bank to secure the
letter of credit reimbursement obligations permitted in Section 7.1(j).
"Permitted Protest" means the right of Administrative Borrower
or any of its Subsidiaries, as applicable) to protest any Lien (other than any
such Lien that secures the Obligations or the Guarantor Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on the Books in such amount as is required
under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by Administrative Borrower or any of its Subsidiaries, as applicable,
in good faith, and (c) Agent is satisfied that, while any such protest is
pending, there will be no impairment of the enforceability, validity, or
priority of any of the Agent's Liens.
"Permitted Purchase Money Indebtedness" means, as of any date
of determination, Purchase Money Indebtedness incurred from and after the
Closing Date; provided, however, that all such Purchase Money Indebtedness shall
not exceed $7,500,000 in the aggregate at any one time outstanding.
"Permitted San Remo Time-Share Transactions" means one or more
transactions consisting of the granting of licenses to use (but not transfers of
any property rights in respect of) one or more hotel rooms (but no more than 260
hotel rooms in the aggregate for all such transactions) solely in the "San Remo
Tower" of the Riviera Hotel & Casino of Las Vegas, Nevada on a so-called
"right-to-use time-share" basis (as opposed to a so-called "deeded time-share"
basis that involves a transfer of a property right); provided, however, that:
(a) Agent receives evidence, satisfactory to Agent in its Permitted Discretion
(which evidence may include a legal opinion, in form and substance, and by
Borrower's counsel, reasonably acceptable to Agent), that such transactions: (i)
are permitted under the Indenture; (ii) do not effect the transfer, under
applicable law, of any property interest in respect of any portion of the Real
Property Collateral consisting of the Riviera Las Vegas Facility; and (iii) do
not adversely affect the Riviera Las Vegas Facility's status as a so-called
"resort hotel" (for purposes of Applicable Gaming Laws) and do not adversely
affect Borrower's Casino Licenses; and (b) the Designated EBITDA Condition shall
be satisfied both immediately prior to and immediately after giving effect to
the consummation of the first such transaction.
"Permitted Subsidiary Spin-Off" means a distribution, in one
transaction or a series of related transactions, by any Borrower (other than
Parent) or Guarantor (other than Parent) of the Stock of any wholly-owned
Subsidiary of such Borrower or Guarantor resulting (after giving effect to such
transaction or series of transactions) in such Subsidiary becoming a
wholly-owned direct Subsidiary of Parent; provided, however, that Agent shall
receive, in connection with any such distribution, each of the following: (a) if
such Subsidiary is a Restricted Subsidiary, a Stock Pledge Agreement duly
executed by Parent in respect of such Subsidiary (and acknowledgment thereto
duly executed by such Subsidiary), together with either (1) all certificates (or
replacement certificates) issued in the name of Parent and representing the
shares of Stock pledged thereunder, as well as Stock powers with respect thereto
endorsed in blank, or (2) the written acknowledgment, in form and substance
satisfactory to Agent, of a bailee reasonably acceptable to Agent that such
bailee is in possession or control of the items described in clause (1) above
and holds, or is causing to be held, same for the benefit of Agent; (b)
evidence, satisfactory to Agent in its Permitted Discretion, that (1) Parent has
received all approvals of the applicable Gaming Authorities required under
Applicable Gaming Laws in respect of such distribution and the pledge by Parent
of such Stock to Agent pursuant to such Stock Pledge Agreement, or (2) that no
such approvals are required under Applicable Gaming Laws; and (c) evidence,
satisfactory to Agent in its Permitted Discretion, that such distribution is
permitted under the Indenture.
"Permitted Unrestricted Subsidiary Contributions" means (a)
the contribution of all or any portion of the Six Acre Tract to a direct
Unrestricted Subsidiary of Parent; and (b) any contribution of cash and Cash
Equivalents (in each case, constituting Excluded Assets) of a Borrower to that
Borrower's direct Unrestricted Subsidiary, if and so long as: (i) Agent receives
evidence, satisfactory to Agent, that such contribution is permitted under the
Indenture and other Senior Note Documents; (ii) no Event of Default or Default
exists either immediately before or immediately after giving effect to such
contribution; (iii) after giving effect to such contribution, Borrower shall
have Excess Availability and unrestricted cash and Cash Equivalents in an amount
of not less than $2,500,000.
"Person" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"Personal Property Collateral" means all Collateral other than
Real Property.
"PP&E" means, with respect to a Person, assets that, in
accordance with GAAP consistently applied, properly are included in the
property, plant, and equipment of such Person.
"Projections" means Parent's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with Parent's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to make Advances and receive
payments of principal, interest, fees, costs, and expenses with respect
thereto, the percentage obtained by dividing (i) such Lender's Revolver
Commitment, by (ii) the aggregate Revolver Commitments of all Lenders,
(b) with respect to a Lender's obligation to
participate in Letters of Credit, to reimburse the Issuing Lender, and to
receive payments of fees with respect thereto, the percentage obtained by
dividing (i) such Lender's Revolver Commitment, by (ii) the aggregate Revolver
Commitments of all Lenders,
(c) [intentionally omitted], and
(d) with respect to all other matters (including
the indemnification obligations arising under Section 16.7), the percentage
obtained by dividing (i) such Lender's Total Commitment, by (ii) the aggregate
amount of Total Commitments of all Lenders; provided, however, that, in
each case, in the event all Commitments have been terminated, Pro Rata Share
shall be determined according to the Commitments in effect immediately
prior to such termination.
"Purchase Money Indebtedness" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 20 days after, the acquisition of any fixed assets (including
Real Property) for the purpose of financing all or any part of the acquisition
cost thereof.
"RBH" means Riviera Black Hawk, Inc., a Colorado corporation.
"Real Property" means any estates or interests in real
property now owned or hereafter acquired by any Borrower and the improvements
thereto.
"Real Property Collateral" means the parcel or parcels of Real
Property identified on Schedule R-1 and any Real Property hereafter acquired by
a Borrower or a Guarantor, but in each case except for any Real Property
constituting Excluded Assets; provided, however, that, with respect to any such
after-acquired Real Property the acquisition of which is financed by Permitted
Purchase Money Indebtedness, Agent's Lien on such Real Property shall be subject
to and subordinate in Lien priority to the purchase money Lien securing the
Permitted Purchase Money Indebtedness that financed the acquisition of such
after-acquired Real Property, if Agent receives evidence, satisfactory to Agent
in its Permitted Discretion, that the Indenture Trustee's Lien thereon is
similarly subject to and subordinate in Lien priority to that purchase money
Lien.
"Record" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Remedial Action" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC ss. 9601.
"Report" has the meaning set forth in Section 16.17.
"Representations & Warranties Certificate" means the
representations and warranties of officers form submitted by Agent to
Administrative Borrower, together with Borrowers' completed responses to the
inquiries set forth therein, the form and substance of such responses to be
satisfactory to Agent.
"Required Availability" means Excess Availability and
unrestricted cash and Cash Equivalents in an amount of not less than
$40,000,000.
"Required Lenders" means, at any time, (a) Agent, and (b)
Lenders whose Pro Rata Shares aggregate 66.67% of the Total Commitments, or if
the Commitments have been terminated irrevocably, 66.67% of the Obligations then
outstanding.
"Reserve Percentage" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Restricted Payment" has the meaning set forth in Section
7.11.
"Restricted Subsidiary" means any Subsidiary of a Borrower
other than an Unrestricted Subsidiary. Without limiting the generality of the
foregoing, each Borrower (other than Parent) constitutes a Restricted
Subsidiary, and each Person that constitutes a "Restricted Subsidiary" of Parent
under the Senior Note Documents constitutes a Restricted Subsidiary.
"Revolver Commitment" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Revolver Usage" means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, plus (b) the then
extant amount of the Letter of Credit Usage.
"RGM" means Riviera Gaming Management, Inc., a Nevada corporation.
"RGMC" means Riviera Gaming Management of Colorado, Inc., a Colorado
corporation.
"RGME" means Riviera Gaming Management-Elsinore, Inc., a Nevada
corporation.
"RGMM" means Riviera Gaming Management of Missouri, Inc., a Missouri
corporation.
"RGMNM" means Riviera Gaming Management of New Mexico, Inc., a New Mexico
corporation.
"Riviera Black Hawk Facility" means the Riviera Black Hawk
Casino of Black Hawk, Colorado, the Real Property related thereto, and the
Equipment and other personal property related thereto.
"Riviera Las Vegas Facility" means the Riviera Hotel & Casino
of Las Vegas, Nevada, the Real Property related thereto, and the Equipment and
other personal property related thereto.
"Risk Participation Liability" means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
by Borrowers, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
"ROC" means Riviera Operating Corporation, a Nevada
corporation.
"RRN" means Riviera-Reston-Newton LLC, a New Mexico limited
liability company.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"Section 3.2(b) Reserve" has the meaning set forth in Section
3.2(b).
"Securities Account" means a "securities account" as that term
is defined in the Code.
"Senior Note Documents" means, collectively, the Indenture,
the Notes (as such term is defined in the Indenture), the Subsidiary Guarantee
(as such term is defined in the Indenture), and the Collateral Documents (as
such term is defined in the Indenture).
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section
2.3(f)(i).
"Six Acre Tract" shall have the meaning specified in the
Mortgage in respect of the Riviera Las Vegas Facility.
"Solvent" means, with respect to any Person on a particular
date, that such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"Stock Pledge Agreement" means, individually and collectively,
one or more stock pledge agreements, each in form and substance satisfactory to
Agent, executed and delivered by each Borrower or Guarantor that owns Stock of a
Subsidiary of Parent, in respect of such Subsidiary (but not with respect to any
Unrestricted Subsidiary).
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
"Swing Lender" means Foothill or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent, agrees, in
such Lender's sole discretion, to become the Swing Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Tangible Net Worth" means, as of any date of determination,
the result of (a) the total stockholder's equity of Parent and its Subsidiaries,
minus (b) the sum of (i) all Intangible Assets of Parent and its Subsidiaries,
(ii) all of Parent's prepaid expenses, and (iii) all amounts due to Parent and
its Subsidiaries from Affiliates.
"Taxes" has the meaning set forth in Section 2.2.
"Total Commitment" means, with respect to each Lender, its
Total Commitment, and, with respect to all Lenders, their Total Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-1 attached hereto or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"Underlying Issuer" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the account of Borrowers.
"Underlying Letter of Credit" means a letter of credit that
has been issued by an Underlying Issuer.
"Unrestricted Subsidiary" means: (1) RGMM, RGMNM, and RRN,
each of which, on or before the Closing Date, shall have been designated by the
Board of Directors (by written notice to Agent as provided below) as an
Unrestricted Subsidiary (collectively, the "Existing Unrestricted
Subsidiaries"); and (2) any other direct Subsidiary of a Borrower that, at or
prior to the time of determination, shall have been designated by the Board of
Directors (by written notice to Agent as provided below) as an Unrestricted
Subsidiary; provided that no Unrestricted Subsidiary: (a) has any Indebtedness
other than Non-Recourse Debt; (b) is party to any agreement, contract,
arrangement or understanding with Borrower or any Restricted Subsidiary unless
the terms of any such agreement, contract, arrangement or understanding are no
less favorable to Borrower or such Restricted Subsidiary than those that might
be obtained at the time from Persons who are not Affiliates of Borrower; (c) is
a Person with respect to which Borrower or any of its Restricted Subsidiaries
has any direct or indirect obligation (y) to subscribe for additional Stock or
(z) to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; (d) has guaranteed
or otherwise directly or indirectly provided credit support for any Indebtedness
of Borrower or any of its Restricted Subsidiaries; (e) does not have at least
one director on its board of directors (or equivalent governing body) that is
not a director or executive officer of Borrower or any of its Restricted
Subsidiaries and does not have at least one executive officer that is not a
director or executive officer of Borrower or any of its Restricted Subsidiaries
(except that this clause (e) shall not apply to any Existing Unrestricted
Subsidiary; (f) holds any Indebtedness or Stock of, or any Lien on any assets
of, Borrower or any Restricted Subsidiary; and (g) owns or operates, or
possesses any material asset, license, franchise or right used in connection
with the ownership or operation of, any material portion of the Riviera Las
Vegas Facility or the Riviera Blackhawk Facility. The Borrowers shall be deemed
to make an Investment in each Subsidiary designated as an Unrestricted
Subsidiary immediately following such designation in an amount equal to the
Investment in such Subsidiary and its Subsidiaries immediately prior to such
designation; provided, that if such Subsidiary subsequently is redesignated as a
Restricted Subsidiary, the amount of such Investment shall be deemed to be
reduced (but not below zero) by the fair market value of the net consolidated
assets of such Subsidiary on the date of such redesignation. Any designation by
the Board of Directors of Borrower permitted by this definition shall be
evidenced to Agent by filing with Agent of a certified copy of the Board of
Directors' resolution giving effect to such designation and an Officer's
Certificate of Administrative Borrower certifying that such designation complies
with the foregoing conditions and is permitted by Section 7.11 hereof. If, at
any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements hereof as an Unrestricted Subsidiary, it shall thereafter cease to
be an Unrestricted Subsidiary for purposes of this Agreement and the other Loan
Documents, and any Indebtedness of such Subsidiary shall be deemed to be
incurred by a Restricted Subsidiary of Borrower as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section 7.1
hereof, Borrower shall be in default of such covenant. The Board of Directors
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of Borrower of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if the provisions of Section 6.19 hereof have been satisfied with
respect to such Subsidiary; it being understood and agreed that all provisions
of this Agreement and the other Loan Documents applicable to Borrower or any
Restricted Subsidiaries of Borrower shall, upon such designation of an
Unrestricted Subsidiary to be a Restricted Subsidiary and compliance with
Section 6.19 hereof, apply to such newly designated Subsidiary and
non-compliance with such applicable provisions of this Agreement and the other
Loan Documents shall constitute an Event of Default in accordance with the
provisions hereof and thereof.
"Voidable Transfer" has the meaning set forth in Section 17.7.
"▇▇▇▇▇ Fargo" means ▇▇▇▇▇ Fargo Bank, National Association, a
national banking association.
1.2 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. When used herein, the term "financial
statements" shall include the notes and schedules thereto. Whenever the term
"Borrowers" or the term "Parent" is used in respect of a financial covenant or a
related definition, it shall be understood to mean Parent and its Subsidiaries
on a consolidated basis unless the context clearly requires otherwise.
1.3 Code. Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein.
1.4 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to
include such Person's successors and assigns. Any requirement of a writing
contained herein or in the other Loan Documents shall be satisfied by the
transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
1.5 Schedules and Exhibits. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
1.6 Joinder. By its execution and delivery of a Guaranty or any joinder hereto,
any New Restricted Subsidiary that becomes a Borrower (or a Guarantor) pursuant
to Section 6.19 hereof shall be deemed to have agreed to be bound by each
provision herein and in the other Loan Documents relating to the Borrowers (or
their assets), the Guarantors (or their assets), or the Restricted Subsidiaries
(or their assets), as the case may be, with the same force and effect as though
such Person were party hereto or thereto, mutatis mutandis.
2. LOAN AND TERMS OF PAYMENT.
2.1 Revolver Advances.
(a) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Lender with a Revolver Commitment agrees (severally, not
jointly or jointly and severally) to make advances ("Advances") to Borrowers in
an amount at any one time outstanding not to exceed such Lender's Pro Rata Share
of an amount equal to the lesser of (i) the Maximum Revolver Amount less the
Letter of Credit Usage, or (ii) the Borrowing Base less the Letter of Credit
Usage. For purposes of this Agreement, "Borrowing Base," as of any date of
determination, shall mean the result of:
(y) the lesser of
(1) the product of (A) 1.20
ultiplied by (B) Borrower's EBITDA
of the prior 12 months,
and
(2) the product of (A) 1.20
multiplied by (B) 4 multiplied by (C)
Borrower's EBITDA of the prior 3 months,
minus
(z) the aggregate amount of reserves, if
any, established by Agent under Section
2.1(b).
(b) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right to establish reserves in such amounts, and with respect to such
matters, as Agent in its Permitted Discretion shall deem necessary or
appropriate, against the credit availability under Section 2.1(a), including
reserves with respect to (i) sums that Borrowers are required to pay (such as
taxes, assessments, insurance premiums, or, in the case of leased or licensed
assets, rents, license payments, or other amounts payable under such leases or
licenses, or otherwise) and has failed to pay under any Section of this
Agreement or any other Loan Document, (ii) amounts owing by Borrowers to any
Person to the extent secured by a Lien on, or trust over, any of the Collateral
(other than any existing Permitted Lien set forth on Schedule P-1 which is
specifically identified thereon as entitled to have priority over the Agent's
Liens), which Lien or trust, in the Permitted Discretion of Agent likely would
have a priority superior to the Agent's Liens (such as Liens or trusts in favor
of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral, and (iii) the time-share transactions (if any) described in the
definition of Permitted San Remo Time-Share Transactions.
(c) The Lenders with Revolver Commitments shall have no obligation to make
additional Advances hereunder to the extent such additional Advances would cause
the Revolver Usage to exceed the lesser of the Maximum Revolver Amount and the
Borrowing Base.
(d) Amounts borrowed pursuant to this Section may be repaid and, subject to the
terms and conditions of this Agreement, reborrowed at any time during the term
of this Agreement.
(e) Subject to the limits set forth above in this Section 2.1(a) and in
accordance with the terms and conditions of this Agreement, the Advances made
directly to, and the Letters of Credit issued directly for the account, of ROC
by the Lender Group hereunder will be in an aggregate principal amount
outstanding at any time not greater than $1,000,000; provided, however, that
this Section 2.1(e) shall not in any way affect (i) the joint and several
liability of all Borrowers for all Obligations, (ii) the Guaranty by each
Guarantor of the Obligations of each Borrower, or (iii) Permitted Investments,
described in clause (d) of the definition of Permitted Investments, made or to
be made in or to ROC from time to time.
2.2 [Intentionally Omitted].
2.3 Borrowing Procedures and Settlements.
(a) Procedure for Borrowing. Each Borrowing shall be made by an irrevocable
written request by an Authorized Person delivered to Agent (which notice must be
received by Agent no later than 10:00 a.m. (California time) on the Business Day
prior to the date that is the requested Funding Date in the case of a request
for an Advance specifying (i) the amount of such Borrowing, and (ii) the
requested Funding Date, which shall be a Business Day; provided, however, that
in the case of a request for a Swing Loan in an amount of $1,000,000, or less,
such notice will be timely received if it is received by Agent no later than
10:00 a.m. (California time) on the Business Day that is the requested Funding
Date) specifying (i) the amount of such Borrowing, and (ii) the requested
Funding Date, which shall be a Business Day. At Agent's election, in lieu of
delivering the above-described written request, any Authorized Person may give
Agent telephonic notice of such request by the required time, with such
telephonic notice to be confirmed in writing within 24 hours of the giving of
such notice.
(b) Agent's Election. Promptly after receipt of a request for a Borrowing
pursuant to Section 2.3(a), Agent shall elect, in its discretion, (i) to have
the terms of Section 2.3(c) apply to such requested Borrowing, or (ii) if the
Borrowing is for an Advance, to request Swing Lender to make a Swing Loan
pursuant to the terms of Section 2.3(d) in the amount of the requested
Borrowing; provided, however, that if Swing Lender declines in its sole
discretion to make a Swing Loan pursuant to Section 2.3(d), Agent shall elect to
have the terms of Section 2.3(c) apply to such requested Borrowing.
(c) Making of Advances.
(i) In the event that Agent shall elect to have the terms of this Section
2.3(c) apply to a requested Borrowing as described in Section 2.3(b), then
promptly after receipt of a request for a Borrowing pursuant to Section
2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m.
(California time) on the Business Day immediately preceding the Funding
Date applicable thereto, by telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount
of such Lender's Pro Rata Share of the requested Borrowing available to
Agent in immediately available funds, to Agent's Account, not later than
10:00 a.m. (California time) on the Funding Date applicable thereto. After
Agent's receipt of the proceeds of such Advances, upon satisfaction of the
applicable conditions precedent set forth in Section 3 hereof, Agent shall
make the proceeds thereof available to Administrative Borrower on the
applicable Funding Date by transferring immediately available funds equal
to such proceeds received by Agent to Administrative Borrower's Designated
Account; provided, however, that, subject to the provisions of Section
2.3(i), Agent shall not request any Lender to make, and no Lender shall
have the obligation to make, any Advance if Agent shall have actual
knowledge that (1) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for
the applicable Borrowing unless such condition has been waived, or (2) the
requested Borrowing would exceed the Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender on or prior to the Closing Date
or, with respect to any Borrowing after the Closing Date, at least 1
Business Day prior to the date of such Borrowing, that such Lender will not
make available as and when required hereunder to Agent for the account of
Borrowers the amount of that Lender's Pro Rata Share of the Borrowing,
Agent may assume that each Lender has made or will make such amount
available to Agent in immediately available funds on the Funding Date and
Agent may (but shall not be so required), in reliance upon such assumption,
make available to Borrowers on such date a corresponding amount. If and to
the extent any Lender shall not have made its full amount available to
Agent in immediately available funds and Agent in such circumstances has
made available to Borrowers such amount, that Lender shall on the Business
Day following such Funding Date make such amount available to Agent,
together with interest at the Defaulting Lender Rate for each day during
such period. A notice submitted by Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive, absent manifest
error. If such amount is so made available, such payment to Agent shall
constitute such Lender's Advance on the date of Borrowing for all purposes
of this Agreement. If such amount is not made available to Agent on the
Business Day following the Funding Date, Agent will notify Administrative
Borrower of such failure to fund and, upon demand by Agent, Borrowers shall
pay such amount to Agent for Agent's account, together with interest
thereon for each day elapsed since the date of such Borrowing, at a rate
per annum equal to the interest rate applicable at the time to the Advances
composing such Borrowing. The failure of any Lender to make any Advance on
any Funding Date shall not relieve any other Lender of any obligation
hereunder to make an Advance on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on any Funding Date.
(iii)Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by Borrowers to Agent for the Defaulting Lender's benefit,
and, in the absence of such transfer to the Defaulting Lender, Agent shall
transfer any such payments to each other non-Defaulting Lender member of
the Lender Group ratably in accordance with their Commitments (but only to
the extent that such Defaulting Lender's Advance was funded by the other
members of the Lender Group) or, if so directed by Administrative Borrower
and if no Default or Event of Default had occurred and is continuing (and
to the extent such Defaulting Lender's Advance was not funded by the Lender
Group), retain same to be re-advanced to Borrowers as if such Defaulting
Lender had made Advances to Borrowers. Subject to the foregoing, Agent may
hold and, in its Permitted Discretion, re-lend to Borrowers for the account
of such Defaulting Lender the amount of all such payments received and
retained by it for the account of such Defaulting Lender. Solely for the
purposes of voting or consenting to matters with respect to the Loan
Documents, such Defaulting Lender shall be deemed not to be a "Lender" and
such Lender's Commitment shall be deemed to be zero. This Section shall
remain effective with respect to such Lender until (x) the Obligations
under this Agreement shall have been declared or shall have become
immediately due and payable, (y) the non-Defaulting Lenders, Agent, and
Administrative Borrower shall have waived such Defaulting Lender's default
in writing, or (z) the Defaulting Lender makes its Pro Rata Share of the
applicable Advance and pays to Agent all amounts owing by Defaulting Lender
in respect thereof. The operation of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender, to relieve or
excuse the performance by such Defaulting Lender or any other Lender of its
duties and obligations hereunder, or to relieve or excuse the performance
by Borrowers of their duties and obligations hereunder to Agent or to the
Lenders other than such Defaulting Lender. Any such failure to fund by any
Defaulting Lender shall constitute a material breach by such Defaulting
Lender of this Agreement and shall entitle Administrative Borrower at its
option, upon written notice to Agent, to arrange for a substitute Lender to
assume the Commitment of such Defaulting Lender, such substitute Lender to
be acceptable to Agent. In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to
be replaced hereunder, and agrees to execute and deliver a completed form
of Assignment and Acceptance Agreement in favor of the substitute Lender
(and agrees that it shall be deemed to have executed and delivered such
document if it fails to do so) subject only to being repaid its share of
the outstanding Obligations (including an assumption of its Pro Rata Share
of the Risk Participation Liability) without any premium or penalty of any
kind whatsoever; provided further, however, that any such assumption of the
Commitment of such Defaulting Lender shall not be deemed to constitute a
waiver of any of the Lender Groups' or Borrowers' rights or remedies
against any such Defaulting Lender arising out of or in relation to such
failure to fund.
(d) Making of Swing Loans.
(i) In the event Agent shall elect, with the consent of Swing Lender, as a
Lender, to have the terms of this Section 2.3(d) apply to a requested
Borrowing as described in Section 2.3(b), Swing Lender as a Lender shall
make such Advance in the amount of such Borrowing (any such Advance made
solely by Swing Lender as a Lender pursuant to this Section 2.3(d) being
referred to as a "Swing Loan" and such Advances being referred to
collectively as "Swing Loans") available to Borrowers on the Funding Date
applicable thereto by transferring immediately available funds to
Administrative Borrower's Designated Account. Each Swing Loan is an Advance
hereunder and shall be subject to all the terms and conditions applicable
to other Advances, except that no such Swing Loan shall be eligible for the
LIBOR Option and all payments on any Swing Loan shall be payable to Swing
Lender as a Lender solely for its own account (and for the account of the
holder of any participation interest with respect to such Swing Loan).
Subject to the provisions of Section 2.3(i), Agent shall not request Swing
Lender as a Lender to make, and Swing Lender as a Lender shall not make,
any Swing Loan if Agent has actual knowledge that (i) one or more of the
applicable conditions precedent set forth in Section 3 will not be
satisfied on the requested Funding Date for the applicable Borrowing unless
such condition has been waived, or (ii) the requested Borrowing would
exceed the Availability on such Funding Date. Swing Lender as a Lender
shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Section 3 have been satisfied on the
Funding Date applicable thereto prior to making, in its sole discretion,
any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's Liens, shall constitute
Advances and Obligations hereunder, and shall bear interest at the rate
applicable from time to time to Advances that are Base Rate Loans.
(e) Agent Advances.
(i) Agent hereby is authorized by Borrowers and the Lenders, from time to time
in Agent's sole discretion, (1) after the occurrence and during the
continuance of a Default or an Event of Default, or (2) at any time that
any of the other applicable conditions precedent set forth in Section 3
have not been satisfied, to make Advances to Borrowers on behalf of the
Lenders that Agent, in its Permitted Discretion deems necessary or
desirable (A) to preserve or protect the Collateral, or any portion
thereof, (B) to enhance the likelihood of repayment of the Obligations or
the Guarantor Obligations, or (C) to pay any other amount chargeable to
Borrowers pursuant to the terms of this Agreement, including Lender Group
Expenses and the costs, fees, and expenses described in Section 10 (any of
the Advances described in this Section 2.3(e) shall be referred to as
"Agent Advances"). Each Agent Advance is an Advance hereunder and shall be
subject to all the terms and conditions applicable to other Advances,
except that no such Agent Advance shall be eligible for the LIBOR Option
and all payments thereon shall be payable to Agent solely for its own
account (and for the account of the holder of any participation interest
with respect to such Agent Advance).
(ii) The Agent Advances shall be repayable on demand and secured by the Agent's
Liens granted to Agent under the Loan Documents, shall constitute Advances
and Obligations hereunder, and shall bear interest at the rate applicable
from time to time to Advances that are Base Rate Loans.
(f) Settlement. It is agreed that each Lender's funded portion of the Advances
is intended by the Lenders to equal, at all times, such Lender's Pro Rata Share
of the outstanding Advances. Such agreement notwithstanding, Agent, Swing
Lender, and the other Lenders agree (which agreement shall not be for the
benefit of or enforceable by Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Swing Loans, and the Agent Advances shall take
place on a periodic basis in accordance with the following provisions:
(i) Agent shall request settlement ("Settlement") with the Lenders on a weekly
basis, or on a more frequent basis if so determined by Agent, (1) on behalf
of Swing Lender, with respect to each outstanding Swing Loan, (2) for
itself, with respect to each Agent Advance, and (3) with respect to
Collections received, as to each by notifying the Lenders by telecopy,
telephone, or other similar form of transmission, of such requested
Settlement, no later than 2:00 p.m. (California time) on the Business Day
immediately prior to the date of such requested Settlement (the date of
such requested Settlement being the "Settlement Date"). Such notice of a
Settlement Date shall include a summary statement of the amount of
outstanding Advances, Swing Loans, and Agent Advances for the period since
the prior Settlement Date. Subject to the terms and conditions contained
herein (including Section 2.3(c)(iii)): (y) if a Lender's balance of the
Advances, Swing Loans, and Agent Advances exceeds such Lender's Pro Rata
Share of the Advances, Swing Loans, and Agent Advances as of a Settlement
Date, then Agent shall, by no later than 12:00 p.m. (California time) on
the Settlement Date, transfer in immediately available funds to the account
of such Lender as such Lender may designate, an amount such that each such
Lender shall, upon receipt of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances, Swing Loans, and Agent Advances, and
(z) if a Lender's balance of the Advances, Swing Loans, and Agent Advances
is less than such Lender's Pro Rata Share of the Advances, Swing Loans, and
Agent Advances as of a Settlement Date, such Lender shall no later than
12:00 p.m. (California time) on the Settlement Date transfer in immediately
available funds to the Agent's Account, an amount such that each such
Lender shall, upon transfer of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances, Swing Loans, and Agent Advances. Such
amounts made available to Agent under clause (z) of the immediately
preceding sentence shall be applied against the amounts of the applicable
Swing Loan or Agent Advance and, together with the portion of such Swing
Loan or Agent Advance representing Swing Lender's Pro Rata Share thereof,
shall constitute Advances of such Lenders. If any such amount is not made
available to Agent by any Lender on the Settlement Date applicable thereto
to the extent required by the terms hereof, Agent shall be entitled to
recover for its account such amount on demand from such Lender together
with interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the Advances,
Swing Loans, and Agent Advances is less than, equal to, or
greater than such Lender's Pro Rata Share of the Advances,
Swing Loans, and Agent Advances as of a Settlement Date, Agent
shall, as part of the relevant Settlement, apply to such
balance the portion of payments actually received in good
funds by Agent with respect to principal, interest, fees
payable by Borrowers and allocable to the Lenders hereunder,
and proceeds of Collateral. To the extent that a net amount is
owed to any such Lender after such application, such net
amount shall be distributed by Agent to that Lender as part of
such next Settlement.
(iii)Between Settlement Dates, Agent, to the extent no Agent Advances or Swing
Loans are outstanding, may pay over to Swing Lender any payments received
by Agent, that in accordance with the terms of this Agreement would be
applied to the reduction of the Advances, for application to Swing Lender's
Pro Rata Share of the Advances. If, as of any Settlement Date, Collections
received since the then immediately preceding Settlement Date have been
applied to Swing Lender's Pro Rata Share of the Advances other than to
Swing Loans, as provided for in the previous sentence, Swing Lender shall
pay to Agent for the accounts of the Lenders, and Agent shall pay to the
Lenders, to be applied to the outstanding Advances of such Lenders, an
amount such that each Lender shall, upon receipt of such amount, have, as
of such Settlement Date, its Pro Rata Share of the Advances. During the
period between Settlement Dates, Swing Lender with respect to Swing Loans,
Agent with respect to Agent Advances, and each Lender (subject to the
effect of letter agreements between Agent and individual Lenders) with
respect to the Advances other than Swing Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent, or
the Lenders, as applicable.
(g) Notation. Agent shall record on its books the principal amount of the
Advances owing to each Lender, including the Swing Loans owing to Swing Lender,
and Agent Advances owing to Agent, and the interests therein of each Lender,
from time to time. In addition, each Lender is authorized, at such Lender's
option, to note the date and amount of each payment or prepayment of principal
of such Lender's Advances in its books and records, including computer records,
such books and records constituting conclusive evidence, absent manifest error,
of the accuracy of the information contained therein.
(h) Lenders' Failure to Perform. All Advances (other than Swing Loans and Agent
Advances) shall be made by the Lenders contemporaneously and in accordance with
their Pro Rata Shares. It is understood that (i) no Lender shall be responsible
for any failure by any other Lender to perform its obligation to make any
Advance (or other extension of credit) hereunder, nor shall any Commitment of
any Lender be increased or decreased as a result of any failure by any other
Lender to perform its obligations hereunder, and (ii) no failure by any Lender
to perform its obligations hereunder shall excuse any other Lender from its
obligations hereunder.
(i) Optional Overadvances. Any contrary provision of this Agreement
notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as
applicable, and Agent or Swing Lender, as applicable, may, but is not obligated
to, knowingly and intentionally, continue to make Advances (including Swing
Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would
be created, so long as (i) after giving effect to such Advances (including a
Swing Loan), the Revolver Usage does not exceed the Borrowing Base by more than
$3,000,000, (ii) after giving effect to such Advances (including a Swing Loan)
the outstanding Revolver Usage (except for and excluding amounts charged to the
Loan Account for interest, fees, or Lender Group Expenses) does not exceed the
Maximum Revolver Amount, and (iii) at the time of the making of any such Advance
(including a Swing Loan), Agent does not believe, in good faith, that the
Overadvance created by such Advance will be outstanding for more than 90 days.
The foregoing provisions are for the exclusive benefit of Agent, Swing Lender,
and the Lenders and are not intended to benefit Borrowers in any way. The
Advances and Swing Loans, as applicable, that are made pursuant to this Section
2.3(i) shall be subject to the same terms and conditions as any other Advance or
Swing Loan, as applicable, except that they shall not be eligible for the LIBOR
Option and the rate of interest applicable thereto shall be the rate applicable
to Advances that are Base Rate Loans under Section 2.6(c) hereof without regard
to the presence or absence of a Default or Event of Default.
(i) In the event Agent obtains actual knowledge that the Revolver Usage exceeds
the amounts permitted by the preceding paragraph, regardless of the amount
of, or reason for, such excess, Agent shall notify Lenders as soon as
practicable (and prior to making any (or any additional) intentional
Overadvances (except for and excluding amounts charged to the Loan Account
for interest, fees, or Lender Group Expenses) unless Agent determines that
prior notice would result in imminent harm to the Collateral or its value),
and the Lenders with Revolver Commitments thereupon shall, together with
Agent, jointly determine the terms of arrangements that shall be
implemented with Borrowers and intended to reduce, within a reasonable
time, the outstanding principal amount of the Advances to Borrowers to an
amount permitted by the preceding paragraph. In the event Agent or any
Lender disagrees over the terms of reduction or repayment of any
Overadvance, the terms of reduction or repayment thereof shall be
implemented according to the determination of the Required Lenders.
(ii) Each Lender with a Revolver Commitment shall be obligated to settle with
Agent as provided in Section 2.3(f) for the amount of such Lender's Pro
Rata Share of any unintentional Overadvances by Agent reported to such
Lender, any intentional Overadvances made as permitted under this Section
2.3(i), and any Overadvances resulting from the charging to the Loan
Account of interest, fees, or Lender Group Expenses.
2.4 Payments.
(a) Payments by Borrowers.
(i) Except as otherwise expressly provided herein, all payments by
Borrowers shall be made to Agent's Account for the account of
the Lender Group and shall be made in immediately available
funds, no later than 11:00 a.m. (California time) on the date
specified herein. Any payment received by Agent later than
11:00 a.m. (California time), shall be deemed to have been
received on the following Business Day and any applicable
interest or fee shall continue to accrue until such following
Business Day.
(ii) Unless Agent receives notice from Administrative Borrower prior to the date
on which any payment is due to the Lenders that Borrowers will not make
such payment in full as and when required, Agent may assume that Borrowers
have made (or will make) such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so required),
in reliance upon such assumption, distribute to each Lender on such due
date an amount equal to the amount then due such Lender. If and to the
extent Borrowers do not make such payment in full to Agent on the date when
due, each Lender severally shall repay to Agent on demand such amount
distributed to such Lender, together with interest thereon at the
Defaulting Lender Rate for each day from the date such amount is
distributed to such Lender until the date repaid.
(b) Apportionment and Application.
(i) Except as otherwise provided with respect to Defaulting Lenders and except
as otherwise provided in the Loan Documents (including letter agreements
between Agent and individual Lenders), aggregate principal and interest
payments shall be apportioned ratably among the Lenders (according to the
unpaid principal balance of the Obligations to which such payments relate
held by each Lender) and payments of fees and expenses (other than fees or
expenses that are for Agent's separate account, after giving effect to any
letter agreements between Agent and individual Lenders) shall be
apportioned ratably among the Lenders having a Pro Rata Share of the type
of Commitment or Obligation to which a particular fee relates. All payments
shall be remitted to Agent and all such payments (other than payments
received while no Default or Event of Default has occurred and is
continuing and which relate to the payment of principal or interest of
specific Obligations or which relate to the payment of specific fees), and
all proceeds of Accounts or other Collateral received by Agent, shall be
applied as follows:
A. first, to pay any Lender Group Expenses then due to Agent under the
Loan Documents, until paid in full,
B. second, to pay any Lender Group Expenses then due to the Lenders under
the Loan Documents, on a ratable basis, until paid in full,
C. third, to pay any fees then due to Agent (for its separate accounts,
after giving effect to any letter agreements between Agent and the individual
Lenders) under the Loan Documents until paid in full,
D. fourth, to pay any fees then due to any or all of the Lenders (after
giving effect to any letter agreements between Agent and individual Lenders)
under the Loan Documents, on a ratable basis, until paid in full,
E. fifth, to pay interest due in respect of all Agent Advances, until paid
in full,
F. sixth, ratably to pay interest due in respect of the Advances (other
than Agent Advances), and the Swing Loans, until paid in full,
G. seventh, to pay the principal of all Agent Advances until paid in full,
H. eighth, [intentionally omitted],
I. ninth, to pay the principal of all Swing Loans until paid in full,
J. tenth, [intentionally omitted],
K. eleventh, so long as no Event of Default has occurred and is continuing,
to pay the principal of all Advances until paid in full,
L. twelfth, if an Event of Default has occurred and is continuing,
ratably to pay the principal of all Advances until paid in full,
M. thirteenth, [intentionally omitted],
N. fourteenth, if an Event of Default has occurred and is continuing, to
Agent, to be held by Agent, for the ratable benefit of Issuing Lender and
those Lenders having a Revolver Commitment, as cash collateral in an amount
up to 105% of the then extant Letter of Credit Usage until paid in full,
O. fifteenth, to pay any other Obligations until paid in full, and
P. sixteenth, to Borrowers (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law.
(ii) Agent promptly shall distribute to each Lender, pursuant to
the applicable wire instructions received from each Lender in
writing, such funds as it may be entitled to receive, subject
to a Settlement delay as provided in Section 2.3(h).
(iii) In each instance, so long as no Event of Default has occurred
and is continuing, Section 2.4(b) shall not be deemed to apply
to any payment by Borrowers specified by Administrative
Borrower to be for the payment of specific Obligations then
due and payable (or prepayable) under any provision of this
Agreement.
(iv) For purposes of the foregoing, "paid in full" means payment of
all amounts owing under the Loan Documents according to the
terms thereof, including loan fees, service fees, professional
fees, interest (and specifically including interest accrued
after the commencement of any Insolvency Proceeding), default
interest, interest on interest, and expense reimbursements,
whether or not the same would be or is allowed or disallowed
in whole or in part in any Insolvency Proceeding.
(v) In the event of a direct conflict between the priority
provisions of this Section 2.4 and other provisions contained
in any other Loan Document, it is the intention of the parties
hereto that such priority provisions in such documents shall
be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of
any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.4 shall
control and govern.
2.5 Overadvances. If, at any time or for any reason, the amount of Obligations
owed by Borrowers to the Lender Group pursuant to Sections 2.1 and 2.12 is
greater than either the Dollar or percentage limitations set forth in Sections
2.1 or 2.12, (an "Overadvance"), Borrowers immediately shall pay to Agent, in
cash, the amount of such excess, which amount shall be used by Agent to reduce
the Obligations in accordance with the priorities set forth in Section 2.4(b).
In addition, Borrowers hereby promise to pay the Obligations (including
principal, interest, fees, costs, and expenses) in Dollars in full to the Lender
Group as and when due and payable under the terms of this Agreement and the
other Loan Documents.
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.
(a) Interest Rates. Except as provided in clause (c) below, all Obligations
(except for undrawn Letters of Credit) that have been charged to the Loan
Account pursuant to the terms hereof shall bear interest on the Daily Balance
thereof as follows (i) if the relevant Obligation is an Advance that is a LIBOR
Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate
Margin, and (ii) otherwise, at a per annum rate equal to the Base Rate plus the
Base Rate Margin.
The foregoing notwithstanding, at no time shall any portion of
the Obligations bear interest on the Daily Balance thereof at a per annum rate
less than 4.50%. To the extent that interest accrued hereunder at the rate set
forth herein would be less than the foregoing minimum daily rate, the interest
rate chargeable hereunder for such day automatically shall be deemed increased
to the minimum rate.
(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of
the Lenders with a Revolver Commitment, subject to any letter agreement between
Agent and individual Lenders), a Letter of Credit fee (in addition to the
charges, commissions, fees, and costs set forth in Section 2.12(e)) which shall
accrue at a rate equal to the product of (i) the sum of (y) 2.50% per annum plus
(z) Applicable EBITDA Trigger Margin, times (ii) the Daily Balance of the
undrawn amount of all outstanding Letters of Credit.
(c) Default Rate. Upon the occurrence and during the continuation of
an Event of Default (and at the election of Agent or the Required Lenders),
(i) all Obligations (except for undrawn Letters of
Credit) that have been charged to the Loan Account
pursuant to the terms hereof shall bear interest on
the Daily Balance thereof at a per annum rate equal
to 2 percentage points above the per annum rate
otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for above shall be
calculated by using an increased per annum rate of 2
percentage points above the per annum rate otherwise
applicable hereunder.
(d) Payment. Interest, Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
at any time that Obligations or Commitments are outstanding. Borrowers hereby
authorize Agent, from time to time, without prior notice to Borrowers, to charge
such interest and fees, all Lender Group Expenses (as and when incurred), the
charges, commissions, fees, and costs provided for in Section 2.12(e) (as and
when accrued or incurred), the fees and costs provided for in Section 2.11 (as
and when accrued or incurred), and all other payments as and when due and
payable under any Loan Document to Borrowers' Loan Account, which amounts
thereafter shall constitute Advances hereunder and shall accrue interest at the
rate then applicable to Advances hereunder. Any interest not paid when due shall
be compounded by being charged to Borrowers' Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Base Rate Loans hereunder.
(e) Computation. All interest and fees chargeable under the Loan Documents shall
be computed on the basis of a 360 day year for the actual number of days
elapsed. In the event the Base Rate is changed from time to time hereafter, the
rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.
(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrowers
in excess of such legal maximum, whenever received, shall be applied to reduce
the principal balance of the Obligations to the extent of such excess.
2.7 [Intentionally Omitted].
2.8 Crediting Payments. The receipt of any payment item by Agent shall not be
considered a payment on account unless such payment item is a wire transfer of
immediately available federal funds made to the Agent's Account or unless and
until such payment item is honored when presented for payment. Should any
payment item not be honored when presented for payment, then Borrowers shall be
deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the contrary contained herein notwithstanding, any
payment item shall be deemed received by Agent only if it is received into the
Agent's Account on a Business Day on or before 11:00 a.m. (California time). If
any payment item is received into the Agent's Account on a non-Business Day or
after 11:00 a.m. (California time) on a Business Day, it shall be deemed to have
been received by Agent as of the opening of business on the immediately
following Business Day.
2.9 Designated Account. Agent is authorized to make the Advances, and Issuing
Lender is authorized to issue the Letters of Credit, under this Agreement based
upon telephonic or other instructions received from anyone purporting to be an
Authorized Person, or without instructions if pursuant to Section 2.6(d).
Administrative Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the proceeds of
the Advances requested by Borrowers and made by Agent or the Lenders hereunder.
Unless otherwise agreed by Agent and Administrative Borrower, any Advance, Agent
Advance, or Swing Loan requested by Borrowers and made by Agent or the Lenders
hereunder shall be made to the Designated Account.
2.10 Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Borrowers (the "Loan Account")
on which Borrowers will be charged with all Advances (including Agent Advances
and Swing Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for
Borrowers' account, the Letters of Credit issued by Issuing Lender for
Borrowers' account, and with all other payment Obligations hereunder or under
the other Loan Documents, including, accrued interest, fees and expenses, and
Lender Group Expenses. In accordance with Section 2.8, the Loan Account will be
credited with all payments received by Agent from Borrowers or for Borrowers'
account. Agent shall render statements regarding the Loan Account to
Administrative Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrowers and the Lender Group
unless, within 30 days after receipt thereof by Administrative Borrower,
Administrative Borrower shall deliver to Agent written objection thereto
describing the error or errors contained in any such statements.
2.11 Fees. Borrowers shall pay to Agent the following fees and charges, which
fees and charges shall be non-refundable when paid (irrespective of whether this
Agreement is terminated thereafter) and shall be apportioned among the Lenders
in accordance with the terms of letter agreements between Agent and individual
Lenders:
(a) Fee Letter Fees. As and when due and payable under the terms of the
Fee Letter, Borrowers shall pay to Agent (for its sole and separate account
and not for the account of any Lender) the fees set forth in the Fee Letter, and
(b) Audit, Appraisal, and Valuation Charges. For the separate account of Agent,
audit, appraisal, and valuation fees and charges as follows, (i) a fee of $850
per day, per auditor, plus out-of-pocket expenses for each financial audit of a
Borrower performed by personnel employed by Agent, (ii) [intentionally omitted],
(iii) a fee of $1,500 per day per appraiser, plus out-of-pocket expenses, for
each appraisal of the Collateral performed by personnel employed by Agent, and
(iv) the actual charges paid or incurred by Agent if it elects to employ the
services of one or more third Persons to perform financial audits of Borrowers,
to appraise the Collateral, or any portion thereof, or to assess a Borrower's
business valuation.
2.12 Letters of Credit
(a) Subject to the terms and conditions of this Agreement, the Issuing Lender
agrees to issue letters of credit for the account of Borrowers (each, an "L/C")
or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an "L/C Undertaking") with respect to
letters of credit issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be ▇▇▇▇▇ Fargo) for the account of
Borrowers. To request the issuance of an L/C or an L/C Undertaking (or the
amendment, renewal, or extension of an outstanding L/C or L/C Undertaking),
Administrative Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Lender) to the Issuing Lender and Agent (reasonably in advance of the
requested date of issuance, amendment, renewal, or extension) a notice
requesting the issuance of an L/C or L/C Undertaking, or identifying the L/C or
L/C Undertaking to be amended, renewed, or extended, the date of issuance,
amendment, renewal, or extension, the date on which such L/C or L/C Undertaking
is to expire, the amount of such L/C or L/C Undertaking, the name and address of
the beneficiary thereof (or of the Underlying Letter of Credit, as applicable),
and such other information as shall be necessary to prepare, amend, renew, or
extend such L/C or L/C Undertaking. If requested by the Issuing Lender,
Borrowers also shall be an applicant under the application with respect to any
Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The
Issuing Lender shall have no obligation to issue a Letter of Credit if any of
the following would result after giving effect to the requested Letter of
Credit:
(i) the Letter of Credit Usage would exceed the Borrowing Base less the
amount of outstanding Advances, or
(ii) the Letter of Credit Usage would exceed $5,000,000, or
(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less
the then extant amount of outstanding Advances.
Borrowers and the Lender Group acknowledge and agree that
certain Underlying Letters of Credit may be issued to support letters of credit
that already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing
Lender by paying to Agent an amount equal to such L/C Disbursement not later
than 11:00 a.m., California time, on the date that such L/C Disbursement is
made, if Administrative Borrower shall have received written or telephonic
notice of such L/C Disbursement prior to 10:00 a.m., California time, on such
date, or, if such notice has not been received by Administrative Borrower prior
to such time on such date, then not later than 11:00 a.m., California time, on
(i) the Business Day that Administrative Borrower receives such notice, if such
notice is received prior to 10:00 a.m., California time, on the date of receipt,
and, in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans
under Section 2.6. To the extent an L/C Disbursement is deemed to be an Advance
hereunder, Borrowers' obligation to reimburse such L/C Disbursement shall be
discharged and replaced by the resulting Advance. Promptly following receipt by
Agent of any payment from Borrowers pursuant to this paragraph, Agent shall
distribute such payment to the Issuing Lender or, to the extent that Lenders
have made payments pursuant to Section 2.12(c) to reimburse the Issuing Lender,
then to such Lenders and the Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement pursuant to
Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro
Rata Share of any Advance deemed made pursuant to the foregoing subsection on
the same terms and conditions as if Borrowers had requested such Advance and
Agent shall promptly pay to Issuing Lender the amounts so received by it from
the Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitment, the Issuing
Lender shall be deemed to have granted to each Lender with a Revolver
Commitment, and each Lender with a Revolver Commitment shall be deemed to have
purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and
each such Lender agrees to pay to Agent, for the account of the Issuing Lender,
such Lender's Pro Rata Share of any payments made by the Issuing Lender under
such Letter of Credit. In consideration and in furtherance of the foregoing,
each Lender with a Revolver Commitment hereby absolutely and unconditionally
agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro
Rata Share of each L/C Disbursement made by the Issuing Lender and not
reimbursed by Borrowers on the date due as provided in clause (a) of this
Section, or of any reimbursement payment required to be refunded to Borrowers
for any reason. Each Lender with a Revolver Commitment acknowledges and agrees
that its obligation to deliver to Agent, for the account of the Issuing Lender,
an amount equal to its respective Pro Rata Share pursuant to this Section
2.12(b) shall be absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of Default or Default
or the failure to satisfy any condition set forth in Section 3 hereof. If any
such Lender fails to make available to Agent the amount of such Lender's Pro
Rata Share of any payments made by the Issuing Lender in respect of such Letter
of Credit as provided in this Section, Agent (for the account of the Issuing
Lender) shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate until paid in full.
(c) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit; provided, however, that no Borrower shall be obligated
hereunder to indemnify for any loss, cost, expense, or liability that is caused
by the gross negligence or willful misconduct of the Issuing Lender or any other
member of the Lender Group. Each Borrower agrees to be bound by the Underlying
Issuer's regulations and interpretations of any Underlying Letter of Credit or
by Issuing Lender's interpretations of any L/C issued by Issuing Lender to or
for such Borrower's account, even though this interpretation may be different
from such Borrower's own, and each Borrower understands and agrees that the
Lender Group shall not be liable for any error, negligence, or mistake, whether
of omission or commission, in following Borrowers' instructions or those
contained in the Letter of Credit or any modifications, amendments, or
supplements thereto. Each Borrower understands that the L/C Undertakings may
require Issuing Lender to indemnify the Underlying Issuer for certain costs or
liabilities arising out of claims by Borrowers against such Underlying Issuer.
Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless with respect to any loss, cost, expense (including reasonable
attorneys fees), or liability incurred by the Lender Group under any L/C
Undertaking as a result of the Lender Group's indemnification of any Underlying
Issuer; provided, however, that no Borrower shall be obligated hereunder to
indemnify for any loss, cost, expense, or liability that is caused by the gross
negligence or willful misconduct of the Issuing Lender or any other member of
the Lender Group.
(d) Each Borrower hereby authorizes and directs any Underlying Issuer to deliver
to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender's instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred by the Issuing
Lender relating to Underlying Letters of Credit shall be Lender Group Expenses
for purposes of this Agreement and immediately shall be reimbursable by
Borrowers to Agent for the account of the Issuing Lender; provided, however,
that the issuance charge imposed by the prospective Underlying Issuer in respect
of the original issuance of any Underlying Letter of Credit shall not be a
Lender Group Expense and shall be included in the fee payable under Section
2.6(b) above.
(f) If by reason of (i) any change in any applicable law, treaty, rule, or
regulation or any change in the interpretation or application thereof by any
Governmental Authority, or (ii) compliance by the Underlying Issuer or the
Lender Group with any direction, request, or requirement (irrespective of
whether having the force of law) of any Governmental Authority or monetary
authority including, Regulation D of the Federal Reserve Board as from time to
time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is or shall be imposed
or modified in respect of any Letter of Credit issued hereunder, or
(ii) there shall be imposed on the Underlying Issuer or the Lender
Group any other condition regarding any Underlying Letter of
Credit or any Letter of Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
2.13 LIBOR Option.
(a) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option (the "LIBOR
Option") to have interest on all or a portion of the Advances be charged at a
rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall
be payable on the earliest of (i) the last day of the Interest Period applicable
thereto, (ii) the occurrence of an Event of Default in consequence of which the
Required Lenders or Agent on behalf thereof elect to accelerate the maturity of
all or any portion of the Obligations, or (iii) termination of this Agreement
pursuant to the terms hereof. On the last day of each applicable Interest
Period, unless Administrative Borrower properly has exercised the LIBOR Option
with respect thereto, the interest rate applicable to such LIBOR Rate Loan
automatically shall convert to the rate of interest then applicable to Base Rate
Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to request
that Advances bear interest at the LIBOR Rate and Agent shall have the right to
convert the interest rate on all outstanding LIBOR Rate Loans to the rate then
applicable to Base Rate Loans hereunder.
(b) LIBOR Election.
(i) Administrative Borrower may, at any time and from time to time, so long as
no Event of Default has occurred and is continuing, elect to exercise the
LIBOR Option by notifying Agent prior to 11:00 a.m. (California time) at
least 3 Business Days prior to the commencement of the proposed Interest
Period (the "LIBOR Deadline"). Notice of Administrative Borrower's election
of the LIBOR Option for a permitted portion of the Advances and an Interest
Period pursuant to this Section shall be made by delivery to Agent of a
LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic
notice received by Agent before the LIBOR Deadline (to be confirmed by
delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m.
(California time) on the same day. Promptly upon its receipt of each such
LIBOR Notice, Agent shall provide a copy thereof to each of the Lenders
having a Revolver Commitment.
(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In
connection with each LIBOR Rate Loan, each Borrower shall indemnify,
defend, and hold Agent and the Lenders harmless against any loss, cost, or
expense incurred by Agent or any Lender as a result of (a) the payment of
any principal of any LIBOR Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any LIBOR Rate Loan other than on the last
day of the Interest Period applicable thereto, or (c) the failure to
borrow, convert, continue or prepay any LIBOR Rate Loan on the date
specified in any LIBOR Notice delivered pursuant hereto (such losses,
costs, and expenses, collectively, "Funding Losses"). Funding Losses shall,
with respect to Agent or any Lender, be deemed to equal the amount
determined by Agent or such Lender to be the excess, if any, of (i) the
amount of interest that would have accrued on the principal amount of such
LIBOR Rate Loan had such event not occurred, at the LIBOR Rate that would
have been applicable thereto, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case
of a failure to borrow, convert or continue, for the period that would have
been the Interest Period therefor), minus (ii) the amount of interest that
would accrue on such principal amount for such period at the interest rate
which Agent or such Lender would be offered were it to be offered, at the
commencement of such period, Dollar deposits of a comparable amount and
period in the London interbank market. A certificate of Agent or a Lender
delivered to Administrative Borrower setting forth any amount or amounts
that Agent or such Lender is entitled to receive pursuant to this Section
shall be conclusive absent manifest error.
(iii)Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any
given time. Borrowers only may exercise the LIBOR Option for LIBOR Rate
Loans of at least $1,000,000 and integral multiples of $500,000 in excess
thereof.
(c) Prepayments. Borrowers may prepay LIBOR Rate Loans at any time; provided,
however, that in the event that LIBOR Rate Loans are prepaid on any date that is
not the last day of the Interest Period applicable thereto, including as a
result of any automatic prepayment through the required application by Agent of
proceeds of Collections in accordance with Section 2.4(b) or for any other
reason, including early termination of the term of this Agreement or
acceleration of all or any portion of the Obligations pursuant to the terms
hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders
and their Participants harmless against any and all Funding Losses in accordance
with clause (b) above.
(d) Special Provisions Applicable to LIBOR Rate.
(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to
such Lender of maintaining or obtaining any eurodollar deposits or
increased costs due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period, including changes
in tax laws (except changes of general applicability in corporate income
tax laws) and changes in the reserve requirements imposed by the Board of
Governors of the Federal Reserve System (or any successor), excluding the
Reserve Percentage, which additional or increased costs would increase the
cost of funding loans bearing interest at the LIBOR Rate. In any such
event, the affected Lender shall give Administrative Borrower and Agent
notice of such a determination and adjustment and Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the
notice from the affected Lender, Administrative Borrower may, by notice to
such affected Lender (y) require such Lender to furnish to Administrative
Borrower a statement setting forth the basis for adjusting such LIBOR Rate
and the method for determining the amount of such adjustment, or (z) repay
the LIBOR Rate Loans with respect to which such adjustment is made
(together with any amounts due under clause (b)(ii) above).
(ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Advances or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate,
such Lender shall give notice of such changed circumstances to Agent and
Administrative Borrower and Agent promptly shall transmit the notice to
each other Lender and (y) in the case of any LIBOR Rate Loans of such
Lender that are outstanding, the date specified in such Lender's notice
shall be deemed to be the last day of the Interest Period of such LIBOR
Rate Loans, and interest upon the LIBOR Rate Loans of such Lender
thereafter shall accrue interest at the rate then applicable to Base Rate
Loans, and (z) Borrowers shall not be entitled to elect the LIBOR Option
until such Lender determines that it would no longer be unlawful or
impractical to do so.
(e) No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither Agent, nor any Lender, nor any of their Participants,
is required actually to acquire eurodollar deposits to fund or otherwise match
fund any Obligation as to which interest accrues at the LIBOR Rate. The
provisions of this Section shall apply as if each Lender or its Participants had
match funded any Obligation as to which interest is accruing at the LIBOR Rate
by acquiring eurodollar deposits for each Interest Period in the amount of the
LIBOR Rate Loans.
2.14 Capital Requirements. If, after the date hereof, any Lender determines, in
its Permitted Discretion, that (i) the adoption of or change in any law, rule,
regulation or guideline regarding capital requirements for banks or bank holding
companies in connection with LIBOR Rate Loans, or any change in the
interpretation or application thereof by any Governmental Authority charged with
the administration thereof, or (ii) compliance by such Lender or its parent bank
holding company with any guideline, request or directive of any such entity
regarding capital adequacy in connection with LIBOR Rate Loans (whether or not
having the force of law), the effect of reducing the return on such Lender's or
such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof. Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
2.15 Joint and Several Liability of Borrowers.
(a) Each of Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agent and the Lenders under this Agreement,
for the mutual benefit, directly and indirectly, of each of Borrowers and in
consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.
(b) Each of Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.15), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each Person composing Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Persons composing Borrowers will make such payment
with respect to, or perform, such Obligation.
(d) The Obligations of each Person composing Borrowers under
the provisions of this Section 2.15 constitute the absolute and unconditional,
full recourse Obligations of each Person composing Borrowers enforceable against
each such Borrower to the full extent of its properties and assets, irrespective
of the validity, regularity or enforceability of this Agreement or any other
circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement,
each Person composing Borrowers hereby waives notice of acceptance of its joint
and several liability, notice of any Advances or Letters of Credit issued under
or pursuant to this Agreement, notice of the occurrence of any Default, Event of
Default, or of any demand for any payment under this Agreement, notice of any
action at any time taken or omitted by Agent or Lenders under or in respect of
any of the Obligations, any requirement of diligence or to mitigate damages and,
generally, to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). Each Person composing Borrowers hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any payment of any of
the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Agent or Lenders at any time or times
in respect of any default by any Person composing Borrowers in the performance
or satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or Lenders in respect of any
of the Obligations, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any Person
composing Borrowers. Without limiting the generality of the foregoing, each of
the Persons composing Borrowers assents to any other action or delay in acting
or failure to act on the part of any Agent or Lender with respect to the failure
by any Person composing Borrowers to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 2.15 afford grounds for terminating, discharging or relieving any Person
composing Borrowers, in whole or in part, from any of its Obligations under this
Section 2.15, it being the intention of each Person composing Borrowers that, so
long as any of the Obligations hereunder remain unsatisfied, the Obligations of
such Person composing Borrowers under this Section 2.15 shall not be discharged
except by performance and then only to the extent of such performance. The
Obligations of each Person composing Borrowers under this Section 2.15 shall not
be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
any Person composing Borrowers or any Agent or Lender. The joint and several
liability of the Persons composing Borrowers hereunder shall continue in full
force and effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, constitution or place of formation of any
of the Persons composing Borrowers or any Agent or Lender.
(f) Each Person composing Borrowers represents and warrants to
Agent and Lenders that such Borrower is currently informed of the financial
condition of Borrowers and of all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Obligations. Each
Person composing Borrowers further represents and warrants to Agent and Lenders
that such Borrower has read and understands the terms and conditions of the Loan
Documents. Each Person composing Borrowers hereby covenants that such Borrower
will continue to keep informed of Borrowers' financial condition, the financial
condition of other guarantors, if any, and of all other circumstances which bear
upon the risk of nonpayment or nonperformance of the Obligations.
(g) Each of the Persons composing Borrowers waives all rights
and defenses arising out of an election of remedies by the Agent or any Lender,
even though that election of remedies, such as a nonjudicial foreclosure with
respect to security for a guaranteed obligation, has destroyed or may destroy a
Borrower's rights of subrogation and reimbursement against any other Borrower by
the operation of Section 580(d) of the California Code of Civil Procedure or
otherwise. To the fullest extent permitted by applicable law, each of the
Persons composing Borrowers expressly waives any defenses or benefits that may
be derived from California Code of Civil Procedure Sections 580a, 580b, 580d or
726, or comparable provisions of the laws of any other jurisdiction, and all
other suretyship defenses it otherwise might or would have under California law
or other applicable law.
(h) To the maximum extent permitted by applicable law, each of
the Persons composing Borrowers waives all rights and defenses that such
Borrower may have because the Obligations are secured by Real Property. This
means, among other things:
(i) Agent and Lenders may collect from such Borrower without first
foreclosing on any Real or Personal Property Collateral
pledged by Borrowers.
(ii) If Agent or any Lender forecloses on any Real Property Collateral
pledged by Borrowers:
A. The amount of the Obligations may be reduced only by the price for
which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price.
B. Agent and Lenders may collect from such Borrower even
if Agent or Lenders, by foreclosing on the Real
Property Collateral, has destroyed any right such
Borrower may have to collect from the other
Borrowers.
This is an unconditional and irrevocable waiver of any rights and defenses such
Borrower may have because the Obligations are secured by Real Property. These
rights and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d or 726 of the California Code of Civil
Procedure.
(i) The provisions of this Section 2.15 are made for the
benefit of the Agent, the Lenders, and their respective successors and assigns,
and may be enforced by it or them from time to time against any or all of the
Persons composing Borrowers as often as occasion therefor may arise and without
requirement on the part of any such Agent, Lender, successor or assign first to
marshal any of its or their claims or to exercise any of its or their rights
against any of the other Persons composing Borrowers or to exhaust any remedies
available to it or them against any of the other Persons composing Borrowers or
to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
Section 2.15 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Agent or Lender upon the insolvency,
bankruptcy or reorganization of any of the Persons composing Borrowers, or
otherwise, the provisions of this Section 2.15 will forthwith be reinstated in
effect, as though such payment had not been made.
(j) Each of the Persons composing Borrowers hereby agrees that
it will not enforce any of its rights of contribution or subrogation against the
other Persons composing Borrowers with respect to any liability incurred by it
hereunder or under any of the other Loan Documents, any payments made by it to
the Agent or the Lenders with respect to any of the Obligations or any
collateral security therefor until such time as all of the Obligations have been
paid in full in cash. Any claim which any Borrower may have against any other
Borrower with respect to any payments to any Agent or Lender hereunder or under
any other Loan Documents are hereby expressly made subordinate and junior in
right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Borrower, its debts or its assets, whether
voluntary or involuntary, all such Obligations shall be paid in full in cash
before any payment or distribution of any character, whether in cash, securities
or other property, shall be made to any other Borrower therefor.
(k) Each of the Persons composing Borrowers hereby agrees
that, after the occurrence and during the continuance of any Default or Event of
Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Borrower hereby agrees that
after the occurrence and during the continuance of any Default or Event of
Default, such Borrower will not demand, ▇▇▇ for or otherwise attempt to collect
any indebtedness of any other Borrower owing to such Borrower until the
Obligations shall have been paid in full in cash. If, notwithstanding the
foregoing sentence, such Borrower shall collect, enforce or receive any amounts
in respect of such indebtedness, such amounts shall be collected, enforced and
received by such Borrower as trustee for the Agent, and the Agent shall deliver
any such amounts to the Administrative Agent for application to the Obligations
in accordance with Section 2.4(b).
3. CONDITIONS; TERM OF AGREEMENT.
3.1 Conditions Precedent to the Initial Extension of Credit. The obligation of
the Lender Group (or any member thereof) to make the initial Advance (or
otherwise to extend any credit provided for hereunder), is subject to the
fulfillment, to the satisfaction of Agent, of each of the conditions precedent
set forth below:
(a) the Closing Date shall occur on or before July 31, 2002;
(b) Agent shall have lien searches (i) reflecting effective financing statements
perfecting Agent's Liens (which shall be first priority, subject only to the
Permitted Liens (if any) that are specifically entitled pursuant to applicable
law, or specifically acknowledged in writing by Agent, to have priority over
Agent's Liens), and (ii) listing all other effective financing statements which
name any Borrower or any of its Restricted Subsidiaries (or any predecessor
corporation or any tradename thereof or any seller of assets acquired by
Borrower or any such Restricted Subsidiary outside of the ordinary course of
business) as debtor that are filed in the applicable filing offices with respect
to such Borrower or any such Restricted Subsidiary, none of which financing
statements shall cover any of the Collateral or property of such Restricted
Subsidiary, except (x) financing statements evidencing or perfecting Permitted
Liens, (y) financing statements as to which Agent has received duly executed
authorizations by the applicable secured party to file executed termination
statements or partial release statements in form and substance satisfactory to
Agent, or (z) as otherwise agreed in writing by Agent;
(c) Agent shall have received each of the following documents, in form and
substance satisfactory to Agent, duly executed, and each such document shall be
in full force and effect:
(i) the Control Agreements, if any, required as of the Closing Date under
Sections 4.7 and 7.19 hereof to be executed and delivered to Agent,
(ii) a promissory note (in the form attached hereto as Exhibit N-1) made by
Borrower to the order of Agent (for the benefit of the Lender Group) in the
original principal amount of the Maximum Revolver Amount,
(iii)the Fee Letter,
(iv) the Guaranty,
(v) the Intercompany Subordination Agreement;
(vi) the Intercreditor Agreement,
(vii) the IP Security Agreement,
(viii) the Mortgages and the Environmental Indemnities,
(ix) the Representations & Warranties Certificate,
(x) (A) each Stock Pledge Agreement, and (B) except as otherwise provided with
respect to shares of Stock of the respective Restricted Subsidiaries under
Section 3.3(b), either (1) all certificates representing the shares of
Stock pledged thereunder, as well as Stock powers with respect thereto
endorsed in blank, or (2) the written acknowledgment, in form and substance
satisfactory to Agent, of a bailee reasonably acceptable to Agent that such
bailee is in possession or control of the items described in clause (1)
above and holds, or is causing to be held, same for the benefit of Agent;
(d) Agent shall have received a certificate from the Secretary of each Borrower
attesting to the resolutions of such Borrower's Board of Directors authorizing
its execution, delivery, and performance of this Agreement and the other Loan
Documents to which such Borrower is a party and authorizing specific officers of
such Borrower to execute the same;
(e) Agent shall have received copies of each Borrower's Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary of such Borrower;
(f) Agent shall have received a certificate of status with respect to each
Borrower, dated within 10 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of such
Borrower, which certificate shall indicate that such Borrower is in good
standing in such jurisdiction;
(g) Agent shall have received certificates of status with respect to each
Borrower, each dated within 30 days of the Closing Date, such certificates to be
issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of such Borrower) in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Borrower is in good standing in such
jurisdictions;
(h) Agent shall have received a certificate from the Secretary of each Guarantor
attesting to the resolutions of such Guarantor's Board of Directors authorizing
its execution, delivery, and performance of the Loan Documents to which such
Guarantor is a party and authorizing specific officers of such Guarantor to
execute the same;
(i) Agent shall have received copies of each Guarantor's Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary of such Guarantor;
(j) Agent shall have received a certificate of status with respect to each
Guarantor, dated within 10 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of such
Guarantor, which certificate shall indicate that such Guarantor is in good
standing in such jurisdiction;
(k) Agent shall have received certificates of status with respect to each
Guarantor, each dated within 30 days of the Closing Date, such certificates to
be issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of such Guarantor) in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Guarantor is in good standing in such
jurisdictions;
(l) Agent shall have received a certificate of insurance, together with the
endorsements thereto, as are required by Section 6.8, the form and substance
(including amounts) of which shall be satisfactory to Agent;
(m) [intentionally omitted]
(n) Agent shall have received opinions of Borrowers' and Guarantors' counsel in
form and substance satisfactory to Agent, which opinions shall include opinions
as to the due issuance and valid existence of the Borrower's and Guarantors'
Casino Licenses;
(o) Agent shall have received satisfactory evidence (including a certificate of
the chief financial officer of Parent) that all tax returns required to be filed
by Borrowers have been timely filed and all taxes upon Borrowers or their
properties, assets, income, and franchises (including Real Property taxes,
gaming taxes, and payroll taxes) have been paid prior to delinquency, except
such taxes that are the subject of a Permitted Protest;
(p) Borrowers shall have the Required Availability after giving effect to
the initial extensions of credit hereunder;
(q) Agent shall have completed its business and legal due diligence, including
(i) a collateral audit and review of Borrowers' books and records and
verification of Borrowers' representations and warranties to the Lender Group,
the results of which shall be satisfactory to Agent, and (ii) an inspection of
each of the Facilities, the results of which shall be satisfactory to Agent;
(r) Agent shall have received completed reference checks with respect to
Borrowers' senior management, the results of which are satisfactory to Agent in
its sole discretion;
(s) Agent shall have received evidence, satisfactory to Agent and its counsel,
that, except as contemplated by Section 3.3(b) hereof, the Borrowers and
Guarantors have made all necessary registrations with, obtained all necessary
consents or approvals of, given all necessary notices to, and taken all other
necessary actions required by, each applicable Gaming Authority relative to the
execution, delivery, and performance of the Loan Documents by the Borrowers and
the Guarantors;
(t) Agent shall have received Borrowers' Closing Date Business Plan;
(u) Borrowers shall pay all Lender Group Expenses incurred in connection
with the transactions evidenced by this Agreement;
(v) Agent shall have received (i) appraisals of the Real Property Collateral
satisfactory to Agent, and (ii) mortgagee title insurance policies (or marked
commitments to issue the same) for the Real Property Collateral issued by a
title insurance company satisfactory to Agent (each a "Mortgage Policy" and,
collectively, the "Mortgage Policies") in amounts satisfactory to Agent assuring
Agent that the Mortgages on such Real Property Collateral are valid and
enforceable first priority mortgage Liens on such Real Property Collateral free
and clear of all defects and encumbrances except Permitted Liens, and the
Mortgage Policies otherwise shall be in form and substance satisfactory to
Agent; it being understood that, in the event each Mortgage Policy is for the
full amount of the Total Commitment, Agent shall use commercially reasonable
efforts to obtain a tie-in endorsement in order to lessen the cost of such
Mortgage Policies payable by Borrower without affecting the rights and benefits
of the Lender Group in any material respect;
(w) Agent shall have received evidence, satisfactory to Agent, that each of (i)
the 10% First Mortgage Notes due 2004 of Borrower and (ii) the 13% First
Mortgage Notes due 2002 of Borrower, have been repaid, or satisfactorily
"legally-defeased", in full from the proceeds of the Notes (as such term is
defined in the Indenture) and that all liens in respect thereof have been
released;
(x) Agent shall have received copies of each of the material Senior Note
Documents, together with a Officer's Certificate by the Secretary of the
Borrower certifying each such document as being a true, correct, and complete
copy thereof, and the same shall be in form and substance reasonably
satisfactory to the Lender Group;
(y) Agent shall have received copies of each of the FF&E Agreements, together
with a Officer's Certificate by the Secretary of the Borrower certifying each
such document as being a true, correct, and complete copy thereof, and the same
shall be in form and substance reasonably satisfactory to the Lender Group;
(z) Agent shall have received the Board of Directors' designation of each of
RGMM, RGMNM, and RRN as "Unrestricted Subsidiaries" in accordance with the
provisions set forth in the definition of "Unrestricted Subsidiary" herein;
(aa) Agent shall have received copies of the most recent Gaming Authority gaming
audit reports of each Facility's operations, and the results of such audit
reports shall be satisfactory to Agent;
(bb) Borrowers and Guarantors shall have received all licenses, approvals or
evidence of other actions required by any Governmental Authority in connection
with the execution and delivery by Borrowers and Guarantors, as the case may be,
of this Agreement or any other Loan Document or with the consummation of the
transactions contemplated hereby and thereby; and
(cc) all other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to Agent.
3.2 Conditions Subsequent to the Initial Extension of Credit. The obligation of
the Lender Group (or any member thereof) to continue to make Advances (or
otherwise extend credit hereunder) is subject to the fulfillment, on or before
the date applicable thereto, of each of the conditions subsequent set forth
below (the failure by Borrowers to so perform or cause to be performed
constituting an Event of Default unless otherwise expressly stated below):
(a) within 30 days of the Closing Date, deliver to Agent certified copies of the
policies of insurance, together with the endorsements thereto, as are required
by Section 6.8, the form and substance of which shall be satisfactory to Agent
and its counsel;
(b) within 120 days of the Closing Date, (i) the Borrowers shall have obtained
the consent of the applicable Gaming Authorities to the grant of the Agent's
Lien in and to the Stock of the respective Restricted Subsidiaries, the form and
substance of which shall be satisfactory to Agent and its counsel, and (ii) (y)
Agent shall have received possession of the shares of Stock of the respective
Restricted Subsidiaries, as well as stock powers with respect thereto endorsed
in blank, or (z) Agent shall have received the written acknowledgment, in form
and substance satisfactory to Agent, of a bailee reasonably acceptable to Agent
that such bailee is in possession or control of the items described in clause
(z) above and holds, or is causing to be held, same for the benefit of Agent;
provided, however, that if Borrower fails to timely satisfy this Section 3.2(b)
because the Borrowers have not obtained such consent of the applicable Gaming
Authorities on or before such 120th day, then such failure shall not constitute
an Event of Default but Agent shall thereupon establish and thereafter maintain
a separate reserve (in addition to all other reserves) under Section 2.1(b)
against the credit availability under Section 2.1(a), in an amount determined by
Agent (in its Permitted Discretion) or the Required Lenders (in its Permitted
Discretion) of up to $15,000,000 (the "Section 3.2(b) Reserve") until such time
(if ever) that clauses (i) and (ii) of this Section 3.2(b) are satisfied or all
Lenders agree in writing to eliminate the Section 3.2(b) Reserve requirement;
and
(c) within 30 days of the Closing Date, deliver to Agent a phase-I environmental
report with respect to each parcel composing the Real Property Collateral, and
the environmental consultants retained for such reports, the scope of the
reports, and the results thereof shall be acceptable to Agent.
3.3 Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make all Advances (or to extend any
other credit hereunder) shall be subject to the following conditions precedent:
(a) the representations and warranties contained in this Agreement and the other
Loan Documents shall be true and correct in all material respects on and as of
the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to
an earlier date);
(b) no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof;
(c) no injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the extending of such credit shall have
been issued and remain in force by any Governmental Authority against any
Borrower (or any Restricted Subsidiary thereof), Agent, any Lender, or any of
their Affiliates; and
(d) no Material Adverse Change shall have occurred.
3.4 Term. This Agreement shall become effective upon the execution and delivery
hereof by Borrowers, Agent, and the Lenders and shall continue in full force and
effect for a term ending on the fifth (5th) anniversary of the Closing Date (the
"Maturity Date"). The foregoing notwithstanding, the Lender Group, upon the
election of the Required Lenders, shall have the right to terminate its
obligations under this Agreement immediately and without notice upon the
occurrence and during the continuation of an Event of Default.
3.5 Effect of Termination. On the date of termination of this Agreement, all
Obligations (including contingent reimbursement obligations of Borrowers with
respect to any outstanding Letters of Credit) immediately shall become due and
payable without notice or demand (including either (i) providing cash collateral
to be held by Agent for the benefit of those Lenders with a Revolver Commitment
in an amount equal to 105% of the then extant Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to the Issuing Lender). No
termination of this Agreement, however, shall relieve or discharge Borrowers and
Guarantors of their duties, Obligations or Guarantor Obligations (as the case
may be), or covenants hereunder and the Agent's Liens in the Collateral shall
remain in effect until all Obligations have been fully and finally discharged
and the Lender Group's obligations to provide additional credit hereunder have
been terminated. When this Agreement has been terminated and all of the
Obligations have been fully and finally discharged and the Lender Group's
obligations to provide additional credit under the Loan Documents have been
terminated irrevocably, Agent will, at Borrowers' sole expense, execute and
deliver any UCC termination statements, lien releases, mortgage releases,
re-assignments of trademarks, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable form)
as are reasonably necessary to release, as of record, the Agent's Liens and all
notices of security interests and liens previously filed by Agent with respect
to the Obligations and Guarantor Obligations.
3.6 Early Termination by Borrowers. Borrowers have the option, at any time upon
90 days prior written notice by Administrative Borrower to Agent, to terminate
this Agreement by paying to Agent, for the benefit of the Lender Group, in cash,
the Obligations (including either (i) providing cash collateral to be held by
Agent for the benefit of those Lenders with a Revolver Commitment in an amount
equal to 105% of the then extant Letter of Credit Usage, or (ii) causing the
original Letters of Credit to be returned to the Issuing Lender), in full,
together with the Applicable Prepayment Premium (to be allocated based upon
letter agreements between Agent and individual Lenders). If Administrative
Borrower has sent a notice of termination pursuant to the provisions of this
Section, then the Commitments shall terminate and Borrowers shall be obligated
to repay the Obligations (including either (i) providing cash collateral to be
held by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing
the original Letters of Credit to be returned to the Issuing Lender), in full,
together with the Applicable Prepayment Premium, on the date set forth as the
date of termination of this Agreement in such notice. In the event of the
termination of this Agreement and repayment of the Obligations at any time prior
to the Maturity Date, for any other reason, including (a) termination upon the
election of the Required Lenders to terminate after the occurrence of an Event
of Default, (b) foreclosure and sale of Collateral, (c) sale of the Collateral
in any Insolvency Proceeding, or (iv) restructure, reorganization or compromise
of the Obligations by the confirmation of a plan of reorganization, or any other
plan of compromise, restructure, or arrangement in any Insolvency Proceeding,
then, in view of the impracticability and extreme difficulty of ascertaining the
actual amount of damages to the Lender Group or profits lost by the Lender Group
as a result of such early termination, and by mutual agreement of the parties as
to a reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrowers shall pay the Applicable Prepayment Premium to Agent (to
be allocated based upon letter agreements between Agent and individual Lenders),
measured as of the date of such termination.
4. CREATION OF SECURITY INTEREST.
4.1 Grant of Security Interest. Each Borrower hereby grants to Agent, for the
benefit of the Lender Group, a continuing security interest in all of its right,
title, and interest in all currently existing and hereafter acquired or arising
Personal Property Collateral in order to secure prompt repayment of any and all
of the Obligations in accordance with the terms and conditions of the Loan
Documents and in order to secure prompt performance by Borrowers of each of
their covenants and duties under the Loan Documents. By its execution and
delivery of this Agreement or the Guaranty or any joinder hereto or thereto,
each Guarantor that is not a Borrower hereby grants to Agent, for the benefit of
the Lender Group, a continuing security interest in all of its right, title, and
interest in all currently existing and hereafter acquired or arising Personal
Property Collateral in order to secure prompt repayment of any and all of the
Guarantor Obligations in accordance with the terms and conditions of the Loan
Documents and in order to secure prompt performance by such Guarantor of each of
such Guarantor's covenants and duties under the Loan Documents. The Agent's
Liens in and to the Personal Property Collateral shall attach to all Personal
Property Collateral without further act on the part of Agent or Borrowers or
such Guarantor. Anything contained in this Agreement or any other Loan Document
to the contrary notwithstanding, except for Permitted Dispositions, Borrowers
and Guarantors have no authority, express or implied, to dispose of any item or
portion of the Collateral.
4.2 Negotiable Collateral. In the event that any Collateral, including proceeds,
is evidenced by or consists of Negotiable Collateral, and if and to the extent
that perfection or priority of Agent's security interest is dependent on or
enhanced by possession, the applicable Borrower or Guarantor, immediately upon
the request of Agent, shall endorse and deliver physical possession of such
Negotiable Collateral to Agent.
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral. At
any time after the occurrence and during the continuation of an Event of
Default, Agent or Agent's designee may (a) notify Account Debtors of Borrowers
and Guarantors that the Accounts, chattel paper, or General Intangibles have
been assigned to Agent or that Agent has a security interest therein, or (b)
collect the Accounts, chattel paper, or General Intangibles directly and charge
the collection costs and expenses to the Loan Account. Each Borrower and
Guarantor agrees that it will hold in trust for the Lender Group, as the Lender
Group's trustee, any Collections that it receives and immediately will deliver
said Collections to Agent in their original form as received by the applicable
Borrower or Guarantor.
4.4 Delivery of Additional Documentation Required. At any time upon the request
of Agent, Borrowers and Guarantors shall execute and deliver to Agent, any and
all financing statements, original financing statements in lieu of continuation
statements, fixture filings, security agreements, pledges, assignments,
endorsements of certificates of title, and all other documents (the "Additional
Documents") that Agent may request in its Permitted Discretion, in form and
substance satisfactory to Agent, to perfect and continue perfected or better
perfect the Agent's Liens in the Collateral (whether now owned or hereafter
arising or acquired), to create and perfect Liens in favor of Agent in any Real
Property acquired after the Closing Date, and in order to fully consummate all
of the transactions contemplated hereby and under the other Loan Documents. To
the maximum extent permitted by applicable law, each Borrower and each Guarantor
authorizes Agent to execute any such Additional Documents in the applicable
Borrower's or Guarantor's name and authorize Agent to file such executed
Additional Documents in any appropriate filing office. In addition, on such
periodic basis as Agent shall require, Borrowers and Guarantors shall (a)
provide Agent with a report of all new patentable, copyrightable, or
trademarkable materials acquired or generated by Borrower or Guarantor during
the prior period, (b) cause all patents, copyrights, and trademarks acquired or
generated by Borrower or Guarantor that are not already the subject of a
registration with the appropriate filing office (or an application therefor
diligently prosecuted) to be registered with such appropriate filing office in a
manner sufficient to impart constructive notice of Borrower's or Guarantor's
ownership thereof, and (c) cause to be prepared, executed, and delivered to
Agent supplemental schedules to the applicable Loan Documents to identify such
patents, copyrights, and trademarks as being subject to the security interests
created thereunder.
4.5 Power of Attorney. Each Borrower and each Guarantor hereby irrevocably
makes, constitutes, and appoints Agent (and any of Agent's officers, employees,
or agents designated by Agent) as such Borrower's or such Guarantor's (as the
case may be) true and lawful attorney, with power to (a) if such Borrower or
Guarantor (as the case may be) refuses to, or fails timely to execute and
deliver any of the documents described in Section 4.4, sign the name of such
Borrower or Guarantor (as the case may be) on any of the documents described in
Section 4.4, (b) at any time that an Event of Default has occurred and is
continuing, sign such Borrower's or Guarantor's (as the case may be) name on any
invoice or ▇▇▇▇ of lading relating to the Collateral, drafts against Account
Debtors, or notices to Account Debtors, (c) send requests for verification of
Accounts, (d) endorse such Borrower's or Guarantor's (as the case may be) name
on any Collection item that may come into the Lender Group's possession, (e) at
any time that an Event of Default has occurred and is continuing, make, settle,
and adjust all claims under such Borrower's or Guarantor's (as the case may be)
policies of insurance and make all determinations and decisions with respect to
such policies of insurance, and (f) at any time that an Event of Default has
occurred and is continuing, settle and adjust disputes and claims respecting the
Accounts, chattel paper, or General Intangibles directly with Account Debtors,
for amounts and upon terms that Agent determines to be reasonable, and Agent may
cause to be executed and delivered any documents and releases that Agent
determines to be necessary. The appointment of Agent as each Borrower's and each
Guarantor's attorney, and each and every one of its rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have been
fully and finally repaid and performed and the Lender Group's obligations to
extend credit hereunder are terminated.
4.6 Right to Inspect. Agent (at Borrower's expense) and each Lender (at its own
expense) (through any of their respective officers, employees, or agents) shall
have the right, from time to time hereafter to inspect the Books and to check,
test, and appraise the Collateral in order to verify Borrowers' and Guarantors'
financial condition or the amount, quality, value, condition of, or any other
matter relating to, the Collateral. Agent shall have the right to have the Real
Property Collateral appraised by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Associates, or by a
similarly qualified appraisal company selected by Agent, from time to time after
the Closing Date. In the absence of the occurrence and continuation of an Event
of Default, such Real Property Collateral appraisals shall occur not more
frequently than annually.
4.7 Control Agreements. Each Borrower and each Guarantor agrees that it will not
transfer assets out of any Securities Accounts other than as permitted under
Section 7.19 and, if to another securities intermediary, unless each of the
applicable Borrower, Guarantor, Agent, and the substitute securities
intermediary have entered into a Control Agreement to the extent required under
Section 7.19. No arrangement contemplated hereby or by any Control Agreement in
respect of any Securities Accounts or other Investment Property shall be
modified by Borrower or Guarantor without the prior written consent of Agent.
Upon the occurrence and during the continuance of a Default or Event of Default,
Agent may notify any securities intermediary to liquidate the applicable
Securities Account or any related Investment Property maintained or held thereby
and remit the proceeds thereof to the Agent's Account. Anything to the contrary
notwithstanding, each Borrower and each Guarantor further agrees that it will
cause a Control Agreement to be executed and delivered by the applicable
securities intermediary and the applicable Borrower or Guarantor in respect of
any Investment Property or Securities Account as to which, in connection with
the Senior Note Documents, the Indenture Trustee or its designee is the
beneficiary of a control agreement with such securities intermediary.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, each Borrower and each Guarantor makes the following representations
and warranties to the Lender Group which shall be true, correct, and complete,
in all material respects, as of the date hereof, and shall be true, correct, and
complete, in all material respects, as of the Closing Date, and at and as of the
date of the making of each Advance (or other extension of credit) made
thereafter, as though made on and as of the date of such Advance (or other
extension of credit) (except to the extent that such representations and
warranties relate solely to an earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement:
5.1 No Encumbrances. Each Borrower and each Guarantor has good and
indefeasible title to its Collateral and the Real Property, free and clear of
Liens except for Permitted Liens.
5.2 [Intentionally Omitted]
5.3 [Intentionally Omitted]
5.4 PP&E. All of the PP&E (including the Equipment) is used or held for
use in Borrowers' and Guarantors' business and is fit for such purposes.
5.5 Location of Inventory and Equipment. The Inventory and Equipment are not
stored with a bailee, warehouseman, or similar party and are located only at the
locations identified on Schedule 5.5.
5.6 [Intentionally Omitted]
5.7 Location of Chief Executive Office; FEIN. The chief executive office of each
Borrower and Guarantor is located at the address indicated in Schedule 5.7 and
each Borrower's and each Guarantor's FEIN is identified in Schedule 5.7.
5.8 Due Organization and Qualification; Subsidiaries
(a) Each Borrower and each Guarantor is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization and qualified to
do business in any state where the failure to be so qualified reasonably could
be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.8(b), is a complete and accurate description of the
authorized capital Stock of each Borrower, by class, and, as of the Closing
Date, a description of the number of shares of each such class that are issued
and outstanding. Other than as described on Schedule 5.8(b), there are no
subscriptions, options, warrants, or calls relating to any shares of each
Borrower's capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. No Borrower is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on Schedule 5.8(c), is a complete and accurate list of each
Borrower's direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their organization; (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries; and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by the applicable Borrower. All of the outstanding capital Stock
of each such Subsidiary has been validly issued and is fully paid and
non-assessable. Without limiting the generality of the foregoing, prior to the
Closing Date, RGME was wound-up and dissolved in accordance with applicable law.
(d) Except as set forth on Schedule 5.8(c), there are no subscriptions, options,
warrants, or calls relating to any shares of any Borrower's Subsidiaries'
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. No Borrower or any of its respective
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of any Borrower's
Subsidiaries' capital Stock or any security convertible into or exchangeable for
any such capital Stock.
(e) As of the Closing Date, Borrower has no Unrestricted Subsidiaries other
than RGMM, RGMNM, and RRN.
5.9 Due Authorization; No Conflict.
(a) As to each Borrower and each Guarantor, the execution, delivery, and
performance by such Borrower or such Guarantor (as the case may be) of this
Agreement and the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Borrower or such
Guarantor (as the case may be).
(b) As to each Borrower and each Guarantor, the execution, delivery, and
performance by such Borrower or such Guarantor (as the case may be) of this
Agreement and the Loan Documents to which it is a party do not and will not (i)
violate any provision of federal, state, or local law or regulation applicable
to any Borrower or Guarantor, the Governing Documents of any Borrower or
Guarantor, or any order, judgment, or decree of any court or other Governmental
Authority binding on any Borrower or Guarantor, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation of any Borrower or Guarantor, (iii)
result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of Borrower or Guarantor, other than
Permitted Liens, or (iv) require any approval of any Borrower's or any
Guarantor's interestholders or any approval or consent of any Person under any
material contractual obligation of any Borrower or any Guarantor.
(c) The execution, delivery, and performance by each Borrower of this Agreement
and the Loan Documents to which such Borrower or such Guarantor is a party do
not and will not require any registration with, consent, or approval of, or
notice to, or other action with or by, any Governmental Authority or other
Person, other than: (i) the filing of financing statements, fixture filings, and
Mortgages; and (ii) the approval of the applicable Gaming Authorities of (y) the
pledge of Stock of certain Restricted Subsidiaries, and (z) restrictions on the
transfer or encumbrance of such Stock, which approval is the subject of
applications therefor that have been made as of the Closing Date and are being
diligently prosecuted by or on behalf of Borrower or Guarantor.
(d) As to each Borrower and each Guarantor, this Agreement and the other Loan
Documents to which such Borrower or such Guarantor (as the case may be) is a
party, and all other documents contemplated hereby and thereby, when executed
and delivered by such Borrower or such Guarantor (as the case may be) will be
the legally valid and binding obligations of such Borrower or such Guarantor (as
the case may be), enforceable against such Borrower or such Guarantor (as the
case may be) in accordance with their respective terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.
(e) The Agent's Liens are validly created, perfected, and upon full execution of
the Intercreditor Agreement will be first priority Liens, subject only to the
Permitted Liens (if any) that are specifically entitled pursuant to applicable
law, or specifically acknowledged in writing by Agent, to have priority over
Agent's Liens.
5.10 Litigation. Other than those matters disclosed on Schedule 5.10, there are
no actions, suits, or proceedings pending or, to the best knowledge of
Borrowers, threatened against Borrowers, or any of their Subsidiaries, as
applicable, except for (a) matters that are fully covered by insurance (subject
to customary deductibles), and (b) matters arising after the Closing Date that,
if decided adversely to Borrowers, or any of their Subsidiaries, as applicable,
reasonably could not be expected to result in a Material Adverse Change.
5.11 No Material Adverse Change. All financial statements relating to Borrowers
that have been delivered by Borrowers to the Lender Group have been prepared in
accordance with GAAP (except, in the case of unaudited financial statements, for
the lack of footnotes and being subject to year-end audit adjustments) and
present fairly in all material respects, Borrowers' financial condition as of
the date thereof and results of operations for the period then ended. There has
not been a Material Adverse Change with respect to Borrowers since the date of
the latest financial statements submitted to the Lender Group on or before the
Closing Date.
5.12 Fraudulent Transfer.
(a) each Borrower is Solvent.
(b) No transfer of property is being made by any Borrower and no obligation is
being incurred by any Borrower in connection with the transactions contemplated
by this Agreement or the other Loan Documents with the intent to hinder, delay,
or defraud either present or future creditors of Borrowers.
5.13 Employee Benefits. None of Borrowers, any of their Subsidiaries, or
any of their ERISA Affiliates maintains or contributes to any Defined Benefit
Plan.
5.14 Environmental Condition. Except as set forth on Schedule 5.14, (a) to
Borrowers' and Guarantors' knowledge, none of Borrowers' or Guarantors'
properties or assets has ever been used by any Borrower or Guarantor or by
previous owners or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials, where such production,
storage, handling, treatment, release or transport was in violation, in any
material respect, of applicable Environmental Law, (b) to Borrowers' and
Guarantors' knowledge, none of the properties or assets of any Borrower or any
Guarantor has ever been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials disposal site, (c)
none of the Borrowers and none of the Guarantors have received notice that a
Lien arising under any Environmental Law has attached to any revenues or to any
Real Property owned or operated by any Borrower or Guarantor, and (d) none of
the Borrowers and none of the Guarantors have received a summons, citation,
notice, or directive from the Environmental Protection Agency or any other
federal or state governmental agency concerning any action or omission by any
Borrower or any Guarantor resulting in the releasing or disposing of Hazardous
Materials into the environment.
5.15 Brokerage Fees. Except for an arrangement with ▇▇▇▇▇▇▇▇▇ and Company,
Borrowers and Guarantors have not utilized the services of any broker or finder
in connection with Borrowers' obtaining financing from the Lender Group under
this Agreement and no brokerage commission or finders fee is payable by
Borrowers in connection herewith.
5.16 Intellectual Property. Each Borrower and each Guarantor owns, or holds
licenses in, all trademarks, trade names, copyrights, patents, patent rights,
and licenses that are necessary to the conduct of its business as currently
conducted. Attached hereto as Schedule 5.16 is a true, correct, and complete
listing of all material patents, patent applications, trademarks, trademark
applications, copyrights, and copyright registrations as to which each Borrower
or Guarantor is the owner or is an exclusive licensee.
5.17 Leases. Borrowers enjoy peaceful and undisturbed possession under all
leases material to the business of Borrowers and to which Borrowers are a party
or under which Borrowers are operating. All of such leases are valid and
subsisting and no material default by Borrowers exists under any of them.
5.18 DDAs. Set forth on Schedule 5.18 are all of the DDAs of each Borrower and
each Guarantor, including, with respect to each depository (i) the name and
address of that depository, and (ii) the account numbers of the accounts
maintained with such depository.
5.19 Complete Disclosure. All factual information (taken as a whole) furnished
by or on behalf of Borrower or Guarantor in writing to Agent or any Lender
(including all information contained in the Schedules hereto or in the other
Loan Documents) for purposes of or in connection with this Agreement, the other
Loan Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of Borrower or Guarantor in writing to the Agent or any Lender will be,
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided. On the Closing Date, the Closing Date Projections
represent, and as of the date on which any other Projections are delivered to
Agent, such additional Projections represent Borrowers' good faith best estimate
of its future performance for the periods covered thereby.
5.20 Indebtedness. Set forth on Schedule 5.20 is a true and complete list of all
Indebtedness of each Borrower and Guarantor outstanding immediately prior to the
Closing Date that is to remain outstanding after the Closing Date and such
Schedule accurately reflects the aggregate principal amount of such Indebtedness
and the principal terms thereof.
5.21 Governmental Authority. Except as set forth on Schedule 5.21, no consent,
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other Person is required (a)
for the grant by any Borrower or Guarantor of the security interest in the
Collateral granted hereby or for the execution, delivery or performance of this
Agreement and the other Loan Documents by Borrower and Guarantor, (b) for the
perfection of such security interest or the exercise by Foothill of the rights
and remedies provided for in this Agreement or the other Loan Documents, or (c)
except for the consents, authorizations, approvals, actions, notices and filings
with the Gaming Authorities, all of which either (i) are the subject of
applications, for or in respect of such consents, authorizations, approvals,
actions, notices and filings, that have been made as of the Closing Date and are
being diligently prosecuted by or on behalf of Borrower or Guarantor, or (ii)
have been duly obtained, taken, given or made and are in full force and effect
and are not subject to any conditions (other than those conditions generally
applicable to entities holding licenses, permits, consents or authorizations
granted or issued by the Gaming Authorities).
5.22 Licenses and Permits.
(a) (i) All material licenses, permits, and consents and
similar rights required from any federal, state, or local governmental body
(including the Gaming Authorities) for the ownership, use, or operation of the
businesses or properties now owned or operated by Borrower or Guarantor,
including all necessary Casino Licenses, have been validly issued and are in
full force and effect; (ii) to the best of Borrower's and Guarantor's knowledge
and belief, each Borrower and each Guarantor is in compliance, in all material
respects, with all of the provisions thereof applicable to it; and (iii) none of
such licenses, permits, or consents is the subject of any pending or, to the
best of Borrower's and Guarantor's knowledge and belief, threatened proceeding
for the revocation, cancellation, suspension, or non-renewal thereof. As of the
Closing Date or of each subsequent date on which Borrower delivers to Foothill
an updated schedule pursuant to Section 6.17, set forth on Schedule 5.22 is a
complete and accurate list of all such licenses, permits, and consents, and such
schedule identifies the date by which an application for the renewal of such
license, permit, or consent must be filed and describes the status of each such
pending application.
(b) Each Borrower and each Guarantor has obtained (i) all
material licenses, permits, and consents necessary or appropriate to conduct the
business and operations located at each of the Facilities, and (ii) as of the
Closing Date, all required approvals from the Gaming Authorities of the
transactions contemplated hereby and by the other Loan Documents (except for the
approval of the applicable Gaming Authorities of (y) the pledge of Stock of
certain Restricted Subsidiaries, and (z) restrictions on the transfer or
encumbrance of such Stock, which approval has not been received as of the
Closing Date, but applications, for or in respect of such approval, have been
made as of the Closing Date and are being diligently prosecuted by or on behalf
of Borrower or Guarantor).
6. AFFIRMATIVE COVENANTS.
Each Borrower and Guarantor covenants and agrees that, so long
as any credit hereunder shall be available and until full and final payment of
the Obligations, Borrowers and Guarantors shall and shall cause each of their
respective Restricted Subsidiaries to do all of the following:
6.1 Accounting System. Maintain a system of accounting that enables Borrowers to
produce financial statements in accordance with GAAP and maintain records
pertaining to the Collateral that contain information as from time to time
reasonably may be requested by Agent. Borrowers also shall keep an inventory
reporting system that shows all additions, sales, claims, returns, and
allowances with respect to the Inventory.
6.2 Reporting. Provide Agent (and if so requested by Agent, with copies for each
Lender) with the following documents at the following times in form satisfactory
to Agent:
========================== ====================================================
Monthly (not later than (a) a detailed calculation of the Borrowing Base; and
the 20th day of each
month) (b) a detailed report, as to each Facility, of: (i)
the number of gaming devices of Borrower and
Guarantor of each type in operation; (ii) the average
net win per gaming device unit per day of each type
of gaming device of Borrower and Guarantor in
operation; (iii) comparisons of such results for the
period covered in such report with the corresponding
results for such prior periods as Agent may
reasonably request; and (iv) such other information
relative to gaming operations as Agent may reasonably
request;
(c) an Officer's Certificate certifying that Borrower
and Guarantor have timely filed all tax returns
required to be filed by Borrower and Guarantor, and
have timely paid all taxes on Borrower and Guarantor
and their respective properties, assets, income, and
franchises (including Real Property taxes, gaming
taxes, and payroll taxes), other than any such taxes
that are the subject of a Permitted Protest;
--------------------------------------------------------------------------------
Within 15 days of their (d) Copies of each report (other than such reports that
individually and in the aggregate respective issuance or are immaterial) in
respect of any Borrower's or Guarantor's business issued by a Gaming filing date
Authority or made by a Borrower or a Guarantor to a Gaming Authority;
Promptly upon the (e) copies of all operating and capital budgets, summaries of
sources and uses of funds, preparation and delivery projections, and related
financial information prepared by or on behalf of any Borrower to or by the
chief or Guarantor (including in respect of any Casino or Facility); financial
officer of any Borrower
Promptly (and in any (f) notice of the occurrence and continuation of any "Event
of Default" or "Default" (as event within 2 Business such terms are defined in
the Senior Note Documents); Days) upon Borrower's awareness
Promptly (and in any (g) copies of all material notices and other written
event within 2 Business communications, in respect of the Senior Note
Days) upon Borrower's or Documents, received by Browworer or any of its
any Restricted Restricted Subsidaries from
Subsidiary's receipt or Indenture Trustee or any such holder;
delivery (as the case
may be)
Upon request by Agent (h) such other reports as to the
Collateral, or the financial condition of Borrower or
Guarantor, as Agent in its Permitted Discretion may
request.
6.3 Financial Statements, Reports, Certificates. Deliver to Agent, with
copies to each Lender:
(a) within 30 days (45 days in the case of a month that is the end of one of the
first 3 fiscal quarters in a fiscal year) after the end of each month during
each of Parent's fiscal years,
(i) an internal company prepared consolidated balance sheet,
income statement, and statement of cash flow covering Parent's
and its Subsidiaries' operations during such period,
(ii) a certificate signed by the chief financial officer of Parent to the
effect that:
A. the financial statements delivered hereunder have
been prepared in accordance with GAAP (except for the
lack of footnotes, adjustments for promotional
allowances and cash rebates and being subject to
year-end audit adjustments) and fairly present in all
material respects the financial condition of Parent
and its Subsidiaries,
B. the representations and warranties of Borrowers and
Guarantors contained in this Agreement and the other
Loan Documents are true and correct in all material
respects on and as of the date of such certificate,
as though made on and as of such date (except to the
extent that such representations and warranties
relate solely to an earlier date), and
C. there does not exist any condition or event that
constitutes a Default or Event of Default (or, to the
extent of any non-compliance, describing such
non-compliance as to which he or she may have
knowledge and what action Borrowers and Guarantors
have taken, are taking, or propose to take with
respect thereto), and
(iii) for each month that is the date on which a financial covenant
in Section 7.20 is to be tested, a Compliance Certificate
demonstrating, in reasonable detail, compliance at the end of
such period with the applicable financial covenants contained
in Section 7.20, and
(b) within 90 days after the end of each of Parent's fiscal years,
(i) financial statements of Parent and its Subsidiaries for each
such fiscal year, audited by independent certified public
accountants reasonably acceptable to Agent and certified,
without any qualifications, by such accountants to have been
prepared in accordance with GAAP (such audited financial
statements to include a balance sheet, income statement, and
statement of cash flow and, if prepared, such accountants'
letter to management),
(ii) a certificate of such accountants addressed to Agent and the
Lenders stating that such accountants do not have knowledge of
the existence of any Default or Event of Default under Section
7.20,
(c) within 30 days prior to the start of each of Parent's fiscal years,
(i) copies of Borrowers' Projections, in form and substance
(including as to scope and underlying assumptions)
satisfactory to Agent, in its Permitted Discretion, for the
forthcoming 3 years, year by year, and for the forthcoming
fiscal year, month by month, together with an Officer's
Certificate of the chief financial officer of Parent that such
Projections are such officer's good faith best estimate of the
financial performance of Parent and its Subsidiaries during
the period covered thereby,
(d) if and when filed by any Borrower or any Guarantor,
(i) 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current
reports,
(ii) any other filings made by any Borrower with the SEC,
(iii) copies of Borrowers' federal income tax returns, and any amendments
thereto, filed with the Internal Revenue Service, and
(iv) any other information that is provided by Parent to its shareholders
generally,
(e) if and when filed by any Borrower or Guarantor and as requested by Agent in
its Permitted Discretion, satisfactory evidence of payment of applicable excise
taxes in each jurisdictions in which (i) any Borrower or Guarantor conducts
business or is required to pay any such excise tax, (ii) where any Borrower's or
Guarantor's failure to pay any such applicable excise tax would result in a Lien
on the properties or assets of any Borrower or Guarantor, or (iii) where any
Borrower's or Guarantor's failure to pay any such applicable excise tax
reasonably could be expected to result in a Material Adverse Change,
(f) as soon as a Borrower or a Guarantor has knowledge of any event or condition
that constitutes a Default or an Event of Default, notice thereof and a
statement of the curative action that Borrowers and Guarantors propose to take
with respect thereto, and
(g) upon the request of Agent, any other report, relating to the financial
condition of Borrowers and Guarantors, requested by Agent in its Permitted
Discretion.
In addition to the financial statements referred to above,
Borrowers and Guarantors agree to deliver financial statements prepared on both
a consolidated and consolidating basis (consolidating as to entity and as to
geographic gaming market segment (i.e., each Facility plus, for this purpose,
the management division)) and that no Borrower, or any Restricted Subsidiary of
a Borrower, will have a fiscal year different from that of Parent. Borrowers and
Guarantors agree that their independent certified public accountants are
authorized to communicate with Agent and to release to Agent whatever financial
information concerning Borrower or Guarantor that Agent reasonably may request.
Each of the Borrowers and Guarantors waives the right to assert a confidential
relationship, if any, it may have with any accounting firm or service bureau in
connection with any information requested by Agent pursuant to or in accordance
with this Agreement, and agree that Agent may contact directly any such
accounting firm or service bureau in order to obtain such information.
6.4 [Intentionally Omitted].
6.5 [Intentionally Omitted].
6.6 Maintenance of Properties. Maintain and preserve all of its properties
(including each Facility) which are necessary or useful in the proper conduct to
its business in good working order and condition, ordinary wear and tear
excepted, and comply at all times with the provisions of all leases to which it
is a party as lessee, so as to prevent any loss or forfeiture thereof or
thereunder.
6.7 Taxes. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrowers
or Guarantors or any of their assets to be paid in full, before delinquency or
before the expiration of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted Protest.
Borrowers and Guarantors will make timely payment or deposit of all tax payments
and withholding taxes required of it by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Agent with proof satisfactory to
Agent indicating that the applicable Borrower has made such payments or
deposits. Borrowers and Guarantors shall deliver satisfactory evidence of
payment of applicable excise taxes in each jurisdictions in which any Borrower
or Guarantor is required to pay any such excise tax.
6.8 Insurance.
(a) At Borrowers' expense: (i) maintain insurance respecting the Collateral
wherever located, covering loss or damage by fire, theft, explosion, and all
other hazards and risks as ordinarily are insured against by other Persons
engaged in the same or similar businesses; and (ii) maintain business
interruption, public liability, and product liability insurance, as well as
insurance against larceny, embezzlement, and criminal misappropriation.
(b) [intentionally omitted]
(c) All such policies of insurance shall be with such insurance companies as are
reasonably satisfactory to Agent and shall be in individual and aggregate
amounts not less than the respective individual and aggregate amounts of such
policies in effect as of the date of this Agreement. Borrowers shall deliver
copies of all such policies to Agent with a satisfactory lender's loss payable
endorsement naming Agent as lender's loss payee, loss payee, and additional
insured, as appropriate, together with an Officer's Certificate that such copies
are true, correct, and complete and in effect. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to give not less than
30 days prior written notice to Agent in the event of cancellation of the policy
for any reason whatsoever. Borrower shall deliver to Agent evidence of the
payment of all premiums therefor.
(d) Administrative Borrower shall give Agent prompt notice of any loss covered
by such insurance. Agent shall have the exclusive right to adjust any losses
payable under any such insurance policies in excess of $2,000,000 (or, during
the existence of an Event of Default, all losses payable under any such
insurance policies, regardless of amount), without any liability to Borrowers or
Guarantors whatsoever in respect of such adjustments. So long as no Event of
Default has occurred and is continuing: (i) any monies, up to a maximum
aggregate amount of $2,000,000, received as payment for any loss under any
insurance policy mentioned above (other than liability insurance policies) or as
payment of any award or compensation for condemnation or taking by eminent
domain (collectively, the "Permitted Loss Event Payments"), shall be paid over
to Administrative Borrower for application (and Borrower hereby covenants and
agrees to apply such amounts) solely to the cost of repairs, replacements, or
restorations; and (ii) any monies (other than Permitted Loss Event Payments)
received as payment for any loss under any insurance policy mentioned above
(other than liability insurance policies) or as payment of any award or
compensation for condemnation or taking by eminent domain, shall be paid over to
Agent to be applied, at the sole option of the Required Lenders, either to the
prepayment of the Obligations or shall be disbursed to Administrative Borrower
under staged payment terms reasonably satisfactory to the Required Lenders for
application to the cost of repairs, replacements, or restorations. Upon the
occurrence and during the continuation of any Event of Default, all monies
(whether Permitted Loss Event Payments or otherwise) received as payment for any
loss under any insurance policy mentioned above (other than liability insurance
policies) or as payment of any award or compensation for condemnation or taking
by eminent domain, shall be paid over to Agent to be applied, at the sole option
of the Required Lenders, either to the prepayment of the Obligations or shall be
disbursed to Administrative Borrower under staged payment terms reasonably
satisfactory to the Required Lenders for application to the cost of repairs,
replacements, or restorations. Any such repairs, replacements, or restorations
shall be effected with reasonable promptness and shall be of a value at least
equal to the value of the items or property destroyed prior to such damage or
destruction.
(e) Borrowers and Guarantors shall not take out separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
under this Section 6.8, unless Agent is included thereon as named insured with
the loss payable to Agent under a lender's loss payable endorsement or its
equivalent. Administrative Borrower immediately shall notify Agent whenever such
separate insurance is taken out, specifying the insurer thereunder and full
particulars as to the policies evidencing the same, and copies of such policies
promptly shall be provided to Agent.
6.9 Location of Inventory and Equipment. Keep the Inventory and Equipment only
at the locations identified on Schedule 5.5; provided, however, that
Administrative Borrower may amend Schedule 5.5 so long as such amendment occurs
by written notice to Agent not less than 30 days prior to the date on which the
Inventory or Equipment is moved to such new location, so long as such new
location is within the continental United States, and so long as, at the time of
such written notification, the applicable Borrower or Guarantor provides any
financing statements or fixture filings necessary to perfect and continue
perfected the Agent's Liens on such assets and also provides to Agent a
Collateral Access Agreement.
6.10 Compliance with Laws. Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, including the Fair
Labor Standards Act and the Americans With Disabilities Act, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, would not result in and reasonably could not be expected to
result in a Material Adverse Change.
6.11 Leases. Pay when due all rents and other amounts payable under any leases
to which any Borrower or Guarantor is a party or by which any Borrower's or any
Guarantor's properties and assets are bound, unless such payments are the
subject of a Permitted Protest.
6.12 Brokerage Commissions. Pay any and all brokerage commission or finders fees
incurred in connection with or as a result of Borrowers' obtaining financing
from the Lender Group under this Agreement. Borrowers and Guarantors agree and
acknowledge that payment of all such brokerage commissions or finders fees shall
be the sole responsibility of Borrowers, and each Borrower agrees to indemnify,
defend, and hold Agent and the Lender Group harmless from and against any claim
of any broker or finder arising out of Borrowers' obtaining financing from the
Lender Group under this Agreement.
6.13 Existence. At all times preserve and keep in full force and effect each
Borrower's and each Guarantor's valid existence and good standing and any rights
and franchises material to Borrowers' and Guarantors' businesses.
6.14 Environmental.
(a) Keep any property either owned or operated by any Borrower or any Guarantor
free of any Environmental Liens or post bonds or other financial assurances
sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply, in all material respects, with Environmental
Laws and provide to Agent documentation of such compliance which Agent
reasonably requests, (c) promptly notify Agent of any release of a Hazardous
Material of any reportable quantity from or onto property owned or operated by
any Borrower and take any Remedial Actions required to ▇▇▇▇▇ said release or
otherwise to come into compliance with applicable Environmental Law, and (d)
promptly provide Agent with written notice within 10 days of the receipt of any
of the following: (i) notice that an Environmental Lien has been filed against
any of the real or personal property of any Borrower or any Guarantor, (ii)
commencement of any Environmental Action or notice that an Environmental Action
will be filed against any Borrower or any Guarantor, and (iii) notice of a
violation, citation, or other administrative order which reasonably could be
expected to result in a Material Adverse Change.
6.15 Disclosure Updates. Promptly and in no event later than 5 Business Days
after obtaining knowledge thereof, (a) notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained any untrue statement
of a material fact or omitted to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which made, and (b) correct any defect or error that may be discovered therein
or in any Loan Document or in the execution, acknowledgement, filing, or
recordation thereof.
6.16 Governmental Authorizations. Borrower shall deliver to Agent, as soon as
practicable, and in any event within ten (10) days after the receipt by any
Borrower or any Guarantor from any Gaming Authority or other governmental
authority having jurisdiction over the operations of any Borrower or any
Guarantor or filing or receipt thereof by any Borrower or any Guarantor, (i)
copies of any order or notice of such Gaming Authority or such other
governmental authority or court of competent jurisdiction which designates any
material Casino License or other material franchise, permit, or other
governmental operating authorization of any Borrower or any Guarantor, or any
application therefor, for a hearing or which refuses renewal or extension of, or
revokes or suspends the authority of any Borrower or any Guarantor to construct,
own, manage, or operate a Casino (or portion thereof), and (ii) a copy of any
citation, notice of violation, or order to show cause issued by any Gaming
Authority or other governmental authority or any complaint filed by any Gaming
Authority or other governmental authority which is available to any Borrower or
Guarantor.
6.17 License Renewals. Commencing on the date six months following the Closing
Date and continuing every six months thereafter, Borrower shall deliver to
Foothill an updated Schedule 5.22 reflecting thereon, as of the date of such
delivery, the information described in Section 5.22.
6.18 Licenses and Permits. (a) Ensure that all material licenses, permits, and
consents and similar rights required from any federal, state, or local
governmental body (including the Gaming Authorities) for the ownership, use, or
operation of the businesses or properties now owned or operated by any Borrower
or any Guarantor, including all necessary Casino Licenses, have been validly
issued and are in full force and effect, and (b) comply, in all material
respects, with all of the provisions thereof applicable to it.
6.19 Additional Restricted Subsidiaries. With respect to each Restricted
Subsidiary of Borrower that is formed or acquired after the date hereof (or each
Unrestricted Subsidiary that hereafter becomes a Restricted Subsidiary) (in each
case, a "New Restricted Subsidiary"), Borrower shall, concurrently with the
formation or acquisition of such New Restricted Subsidiary (or such Unrestricted
Subsidiary becoming a Restricted Subsidiary): (a) cause such New Restricted
Subsidiary to become a Borrower (or, at the election of Agent or the Required
Lenders, a guarantor of all of the Obligations) hereunder and deliver such Loan
Documents, or joinders thereto, as Agent may require to evidence or effectuate
(i) such New Restricted Subsidiary becoming a Borrower (or, in the case of such
New Restricted Subsidiary becoming a guarantor, the unconditional guarantee of)
all Obligations, (ii) the grant of first priority perfected Agent's Liens on all
right, title, and interest of such New Restricted Subsidiary in the Collateral,
and (iii) such New Restricted Subsidiary becoming bound by all of the provisions
of the Loan Documents applicable to Borrowers (or Guarantors, as the case may
be) or the Restricted Subsidiaries or the Collateral, mutatis mutandis; (b)
cause the Stock of such New Restricted Subsidiary to become pledged to Agent in
substantially the same manner (and substantially the same timeframe) as the
Stock of other Restricted Subsidiaries have been pledged to Agent; and (c) cause
to be delivered to Agent opinions of counsel, in form and substance satisfactory
to Agent, in respect of such New Restricted Subsidiary.
7. NEGATIVE COVENANTS.
Each Borrower and each Guarantor covenants and agrees that, so
long as any credit hereunder shall be available and until full and final payment
of the Obligations, Borrowers and Guarantors will not and will not permit any of
their respective Restricted Subsidiaries to do any of the following:
7.1 Indebtedness. Create, incur, assume, permit, guarantee, or otherwise become
or remain, directly or indirectly, liable with respect to any Indebtedness,
except:
(a) Indebtedness evidenced by this Agreement and the other Loan Documents,
together with Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit;
(b) Indebtedness set forth on Schedule 5.20 that is outstanding on the
date of this Agreement;
(c) (i) Indebtedness outstanding under the FF&E Agreements on the date of this
Agreement, until such amounts are repaid; and (ii) Permitted Purchase Money
Indebtedness;
(d) refinancings, renewals, or extensions of Indebtedness permitted under
clauses (b) and (c) of this Section 7.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms and conditions
of such refinancings, renewals, or extensions do not, in Agent's judgment,
materially impair the prospects of repayment of the Obligations by Borrowers,
the payment of the Guarantor Obligations by Guarantors, or materially impair
Borrowers' (or Guarantors') creditworthiness, (ii) such refinancings, renewals,
or extensions do not result in an increase in the principal amount of, or
interest rate with respect to, the Indebtedness so refinanced, renewed, or
extended, (iii) such refinancings, renewals, or extensions do not result in a
shortening of the average weighted maturity of the Indebtedness so refinanced,
renewed, or extended, nor are they on terms or conditions, that, taken as a
whole, are materially more burdensome or restrictive to the applicable Borrower
or Guarantor, and (iv) if the Indebtedness that is refinanced, renewed, or
extended was subordinated in right of payment to the Obligations or the
Guarantor Obligations, then the terms and conditions of the refinancing,
renewal, or extension Indebtedness must be include subordination terms and
conditions that are at least as favorable to the Lender Group as those that were
applicable to the refinanced, renewed, or extended Indebtedness;
(e) Indebtedness outstanding under the Notes (as such term is defined in
the Indenture);
(f) Indebtedness owing by any Borrower or Guarantor to any other
Borrower or Guarantor, so long as such Indebtedness is the
subject of the Intercompany Subordination Agreement;
(g) unsecured Indebtedness evidenced by Hedge Agreements entered into by
Borrower or Guarantor in the ordinary course of its business consistent with
past practices and entered into in connection with the operational needs of
Borrower's business and not for speculative purposes;
(h) additional unsecured Indebtedness permitted under Section 4.09(a) of the
Indenture (as that Section is written and in effect on the date of this
Agreement) that is identified as such in an Officer's Certificate of
Administrative Borrower (in form and substance satisfactory to Agent) duly
executed and delivered to Agent;
(i) performance bonds, appeal bonds, surety bonds, insurance
obligations or bonds and other similar bonds incurred in the
ordinary course of business;
(j) reimbursement obligations with respect to letters of credit issued by ▇▇▇▇▇
Fargo Bank for the account of Borrower, in an aggregate face amount not to
exceed $200,000 at any one time outstanding, which reimbursement obligations may
not be secured by Liens on any asset of any Borrower or Guarantor other than
cash on deposit maintained at ▇▇▇▇▇ Fargo Bank.
Without limiting the generality of the foregoing, Borrower hereby agrees that no
Indebtedness, other than the Obligations and the Guarantor Obligations,
"incurred" (within the meaning of Section 4.09 of the Indenture) by Borrower and
Guarantor shall constitute or qualify as "Permitted Debt" under Section
4.09(b)(1) of the Indenture and that no debt facilities or commercial paper
facilities other than the credit facilities under this Agreement and the other
Loan Documents shall constitute or qualify as a "Revolving Credit Facility" for
purposes of the Indenture and other Senior Note Documents.
7.2 Liens. Create, incur, assume, or permit to exist, directly or indirectly,
any Lien on or with respect to any of its assets, of any kind, whether now owned
or hereafter acquired, or any income or profits therefrom, except for Permitted
Liens (including Liens that are replacements of Permitted Liens to the extent
that the original Indebtedness is refinanced, renewed, or extended under Section
7.1(d) and so long as the replacement Liens only encumber those assets that
secured the refinanced, renewed, or extended Indebtedness).
7.3 Restrictions on Fundamental Changes.
(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock.
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).
(c) Make an Asset Sale, in one transaction or a series of transactions, of
all or any substantial part of its assets.
7.4 Disposal of Assets; Asset Sale Offer. Other than Permitted Dispositions,
convey, sell, lease, license, assign, transfer, or otherwise dispose of
(collectively, to "make an Asset Sale" of) any of the assets of any Borrower;
provided, however, that in no event shall Borrower and the Restricted
Subsidiaries cause, suffer, or permit the Net Proceeds of any Asset Sale to
qualify as "Excess Proceeds" (within the meaning of Section 4.10 of the
Indenture) or be applied to make an "Asset Sale Offer" pursuant to Section 4.10
of the Indenture.
7.5 Change Name, Etc. Change any Borrower's or any Guarantor's name, FEIN,
jurisdiction of organization, corporate structure or identity, or add any new
fictitious name; provided, however, that a Borrower or Guarantor may change its
name upon at least 30 days prior written notice by Administrative Borrower to
Agent of such change and so long as, at the time of such written notification,
such Borrower or Guarantor (as the case may be) provides any financing
statements or fixture filings necessary to perfect and continue perfected
Agent's Liens, subject only to the Permitted Liens (if any) that are
specifically entitled pursuant to applicable law, or specifically acknowledged
in writing by Agent, to have priority over Agent's Liens.
7.6 Guarantee. Guarantee or otherwise become in any way liable with respect to
the obligations of any third Person except: (a) by endorsement of instruments or
items of payment for deposit to the account of Borrower or Guarantor or which
are transmitted or turned over to Agent; (b) the Subsidiary Guaranty (as such
term is defined in the Indenture); and (c) the Guaranty in favor of the Lender
Group.
7.7 Nature of Business. Make any change in the principal nature of Borrower's
and Guarantor's business.
7.8 Prepayments and Amendments.
(a) Prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of
any Borrower or any Guarantor under the Senior Note Documents, except mandatory
redemptions of the Notes (as such term is defined in the Indenture) pursuant to
Section 3.08 of the Indenture, solely if and to the extent necessary to comply
with mandatory provisions of Applicable Gaming Laws; and
(b) Prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of
any Borrower or any Guarantor (other than the Obligations and the Guarantor
Obligations in accordance with this Agreement and the other Loan Documents, and
other than Indebtedness of any Borrower or any Guarantor under the Senior Note
Documents), except: (i) in connection with a refinancing permitted by Section
7.1(d); or (ii) so long as (A) after giving effect to such prepayment,
redemption, defeasance, purchase, or other acquisition of such Indebtedness,
Borrower shall have Availability and unrestricted cash and Cash Equivalents in
an amount of not less than $20,000,000, and (B) no Event of Default has occurred
and is continuing or would result therefrom (including under Section 8.10
hereof), up to $10,000,000 in the aggregate of such Indebtedness if and to the
extent identified in an Officer's Certificate by Administrative Borrower to
Agent as permitted under this clause (ii) of Section 7.8(b), which Officer's
Certificate shall be accompanied by evidence, satisfactory to Agent in its
Permitted Discretion, that (y) the prepayment, redemption, defeasance, purchase,
or other acquisition of such Indebtedness, together with all other prior and
concurrent prepayments, redemptions, defeasances, purchases, and other
acquisitions of such Indebtedness under this clause (ii), do not exceed
$10,000,000, and (z) the prepayment, redemption, defeasance, purchase, or other
acquisition of such Indebtedness is permitted under the Indenture; and
(c) Except in connection with a refinancing permitted by Section 7.1(d),
directly or indirectly, amend, modify, alter, increase, or change any of the
terms or conditions of (i) any Senior Note Document, or (ii) any agreement,
instrument, document, indenture, or other writing evidencing or concerning
Indebtedness permitted under Sections 7.1(b) or (c).
7.9 Change of Control. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
7.10 Consignments. Consign any Inventory or sell any Inventory on ▇▇▇▇ and hold,
sale or return, sale on approval, or other conditional terms of sale, except for
obsolete or discontinued merchandise.
7.11 Distributions. Make any distribution or declare or pay any dividends (in
cash or other property, other than common Stock) on, or purchase, acquire,
redeem, or retire any Stock of any Borrower or Guarantor, of any class, whether
now or hereafter outstanding (collectively, "Restricted Payment), except
Permitted Distributions.
7.12 Accounting Methods. Modify or change its method of accounting (other than
as may be required to conform to GAAP) or enter into, modify, or terminate any
agreement currently existing, or at any time hereafter entered into with any
third party accounting firm or service bureau for the preparation or storage of
Borrowers' and Guarantors' accounting records without said accounting firm or
service bureau agreeing to provide Agent information regarding the Collateral or
the financial condition of Borrower or Guarantor.
7.13 Investments. Except for Permitted Investments, directly or indirectly, make
or acquire any Investment, or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
Borrower and Guarantor shall not have Permitted Investments in deposit accounts
or Securities Accounts in excess of $15,000,000 in the aggregate outstanding at
any one time.
7.14 Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any transaction with any Affiliate of any Borrower or of any Guarantor
except for transactions that are in the ordinary course of Borrowers' and
Guarantors; business, upon fair and reasonable terms, that are fully disclosed
to Agent, and that are no less favorable to Borrowers and Guarantors than would
be obtained in an arm's length transaction with a non-Affiliate.
7.15 Suspension. Suspend or go out of a substantial portion of its
business.
7.16 [Intentionally Omitted].
7.17 Use of Proceeds. Use the proceeds of the Advances for any purpose other
than (a) on the Closing Date, to pay transactional fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for its lawful and permitted purposes.
7.18 Change in Location of Chief Executive Office; Inventory and Equipment with
Bailees. Relocate its chief executive office to a new location without
Administrative Borrower providing 30 days prior written notification thereof to
Agent and so long as, at the time of such written notification, the applicable
Borrower or Guarantor provides any financing statements or fixture filings
necessary to perfect and continue perfected the Agent's Liens and also provides
to Agent a Collateral Access Agreement with respect to such new location. The
Inventory and Equipment shall not at any time now or hereafter be stored with a
bailee, warehouseman, or similar party without Agent's prior written consent
(which Agent may withhold in its Permitted Discretion).
7.19 Securities Accounts. Subject to the proviso set forth in Section 7.13,
establish or maintain any Securities Account unless Agent shall have received a
Control Agreement in respect of such Securities Account, to the extent permitted
under Applicable Gaming Laws. Borrowers and Guarantors agree to not transfer
assets out of any Securities Account; provided, however, that, so long as no
Event of Default has occurred and is continuing or would result therefrom,
Borrower and Guarantor may use such assets (and the proceeds thereof) to the
extent not prohibited by this Agreement.
7.20 Financial Covenants.
(a) Minimum EBITDA. Fail to maintain EBITDA, measured on a fiscal quarter-end
basis, of not less than the required amount set forth in the following table for
the applicable period set forth opposite thereto:
--------------------------------------- -------------------------------------------------------------------
Applicable Amount Applicable Period
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$28,500,000 For the 12 month period
ending September 30, 2002
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$28,500,000 For the 12 month period
ending December 31, 2002
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending March 31, 2003
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending June 30, 2003
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending September 30, 2003
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending December 31, 2003
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending March 31, 2004
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending June 30, 2004
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending September 30, 2004
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending December 31, 2004
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending March 31, 2005
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending June 30, 2005
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending September 30, 2005
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending December 31, 2005
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending March 31, 2006
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending June 30, 2006
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending September 30, 2006
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending December 31, 2006
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending March 31, 2007
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$30,000,000 For the 12 month period
ending June 30, 2007
--------------------------------------- -------------------------------------------------------------------
(b) Capital Expenditures. Make capital expenditures (other than in
respect of the acquisition of gaming devices) in any period described below in
excess of the amount set forth in the following table for the applicable period:
--------------------------------------- -------------------------------------------------------------------
Applicable Amount Applicable Period
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$4,000,000 For the period commencing on
the date of this Agreement and
ending December 31, 2002
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$4,000,000 (except that all such For the fiscal quarter
capital expenditures during the ending March 31, 2003
fiscal year ending December 31, 2003
may not exceed $8,000,000 in the
aggregate)
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$4,000,000 (except that all such For the fiscal quarter
capital expenditures during the ending June 30, 2003
fiscal year ending December 31, 2003
may not exceed $8,000,000 in the
aggregate)
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$4,000,000 (except that all such For the fiscal quarter
capital expenditures during the ending September 30, 2003
fiscal year ending December 31, 2003
may not exceed $8,000,000 in the
aggregate)
--------------------------------------- -------------------------------------------------------------------
--------------------------------------- -------------------------------------------------------------------
$4,000,000 (except that all such For the fiscal quarter
capital expenditures during the ending December 31, 2003
fiscal year ending December 31, 2003
may not exceed $8,000,000 in the
aggregate)
--------------------------------------- -------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
With respect to each fiscal year following the fiscal year ending
December 31, 2003, Administrative Borrower and Agent agree to negotiate
in good faith, during the 30 day period prior to the start of such
fiscal year, to establish appropriate limits on capital expenditures
(other than in respect of the acquisition of gaming devices) in each
fiscal quarter during such fiscal year, based on the Projections in
respect of such fiscal year timely delivered pursuant to Section
6.3(c)(i) hereof; provided, however, that, in the event that Borrower
fails to timely deliver the Projections in respect of such fiscal year
or Administrative Borrower and Agent fail to agree (during such 30 day
period notwithstanding their good faith negotiations) on such limits
for each fiscal quarter during such fiscal year, then Agent in its
Permitted Discretion shall have the right to establish such limits for
each fiscal quarter during such fiscal year (which limits shall in no
event be higher than the corresponding limits in effect for each fiscal
quarter during the immediately prior fiscal year). Anything herein to
the contrary notwithstanding, this Section 7.20(b) shall not apply to
capital expenditures to be made by Borrower, of up to $5,000,000 in the
aggregate, solely during the fiscal year ending December 31, 2005 in
respect of construction of the monorail project described in Schedule
M-1 attached hereto.
----------------------------------------------------------
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 (a) If Borrowers fail to pay when due and payable or when declared due and
payable, all or any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy Code,
would have accrued on such amounts), fees and charges due the Lender Group,
reimbursement of Lender Group Expenses, or other amounts constituting
Obligations); or (b) If Guarantors fail to pay when due and payable or when
declared due and payable, all or any portion of the Guarantor Obligations
(including any interest which, but for the provisions of the Bankruptcy Code,
would have accrued on such amounts);
8.2 (a) If any Borrower or Guarantor fails to perform, keep, or observe any
term, provision, condition, covenant, or agreement contained in Sections 6.7
(Taxes), 6.9 (Location of Inventory and Equipment), 6.11 (Leases), or 6.12
(Brokerage Commissions) of this Agreement and such failure continues for a
period of 5 Business Days; or
(b) If any Borrower or Guarantor fails to perform, keep, or
observe any term, provision, condition, covenant, or agreement contained in
Sections 6.1 (Accounting System) or 6.6 (Maintenance of Properties) of this
Agreement and such failure continues for a period of 15 Business Days; or
(c) If any Borrower or Guarantor fails to perform, keep, or
observe any term, provision, condition, covenant, or agreement contained in this
Agreement, or in any of the other Loan Documents (giving effect to any grace
periods, cure periods, or required notices, if any, expressly provided for in
such Loan Documents) (in each case, other than any such term, provision,
condition, covenant, or agreement that is the subject of another provision of
this Section 8, in which event such other provision of this Section 8 shall
govern);
provided that, during any period of time that any such failure of any Borrower
or Guarantor referred to in this Section 8.2 exists, even if such failure or
neglect is not yet an Event of Default by virtue of the existence of a grace or
cure period or the pre-condition of the giving of a notice, Agent (including any
successor agent) and each other member of the Lender Group shall be relieved of
their obligation to extend credit hereunder;
8.3 If any material portion of any Borrower's or any of its Restricted
Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;
8.4 If an Insolvency Proceeding is commenced by any Borrower or any of its
Restricted Subsidiaries;
8.5 If an Insolvency Proceeding is commenced against any Borrower, or any of its
Restricted Subsidiaries, and any of the following events occur: (a) the
applicable Borrower or the Restricted Subsidiary consents to the institution of
the Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 60 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Agent (including any successor agent) and each other member of the Lender Group
shall be relieved of their obligation to extend credit hereunder, (d) an interim
trustee is appointed to take possession of all or any substantial portion of the
properties or assets of, or to operate all or any substantial portion of the
business of, any Borrower or any of its Restricted Subsidiaries, or (e) an order
for relief shall have been entered therein;
8.6 If any Borrower or any of its Restricted Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs, and the same is not discharged
within 5 Business Days;
8.7 (a) If a notice of Lien, levy, or assessment is filed of record with respect
to any Borrower's or any of its Restricted Subsidiaries' assets by the United
States, or any department, agency, or instrumentality thereof, or if any taxes
or debts owing at any time hereafter to any one or more of such entities becomes
a Lien, whether ▇▇▇▇▇▇ or otherwise, upon any Borrower's or any of its
Restricted Subsidiaries' assets and the same is not paid on the payment date
thereof; or
(b) If a notice of Lien, levy, or assessment is filed of record
with respect to any Borrower's or any of its Restricted Subsidiaries' assets by
any state, county, municipal, or governmental agency, or if any taxes or debts
owing at any time hereafter to any one or more of such entities becomes a Lien,
whether ▇▇▇▇▇▇ or otherwise, upon any Borrower's or any of its Restricted
Subsidiaries' assets and the Lien, levy, or assessment is not (i) released,
discharged, or bonded against before the earlier of 30 days of the date it first
arises or 5 days of the date when such property or asset is subject to being
forfeited, or (ii) the subject of a Permitted Protest; or
8.8 If one or more judgments involving an aggregate amount of $2,000,000 or
more, and not fully covered by insurance, becomes a Lien or encumbrance upon any
material portion of any Borrower's or any of its Restricted Subsidiaries'
properties or assets, and the Lien or encumbrance is not released, discharged,
or bonded against before the earlier of 30 days of the date it first arises or 5
days of the date when such property or asset is subject to being forfeited;
provided, however, that during such period Agent shall be entitled to create and
maintain a separate reserve (in addition to all other reserves) under Section
2.1(b) against the credit availability under Section 2.1(a) in an amount
sufficient to discharge such Lien or encumbrance and any and all penalties or
interest payable in connection therewith;
8.9 (a) If there is a default in any material Senior Note Document and such
default (i) occurs at the final maturity of the obligations thereunder, or (ii)
results in a right by the Indenture Trustee or any holder of any of the
Indebtedness under the Senior Note Documents, irrespective of whether such right
is exercised or whether any "standstill period" in respect thereof is in effect,
to accelerate the maturity of the applicable Borrower's or its Restricted
Subsidiaries' obligations thereunder or to terminate such agreement or to
exercise any other remedy thereunder; or
(b) If there is a default in any one or more material agreements
involving Indebtedness exceeding $5,000,000 in the aggregate, or in any one or
more material agreements not involving Indebtedness, to which any Borrower or
any of its Restricted Subsidiaries is a party and such default (i) occurs at the
final maturity of the obligations thereunder, or (ii) results in a right by the
other party thereto, irrespective of whether exercised, to accelerate the
maturity of the applicable Borrower's or its Restricted Subsidiaries'
obligations thereunder, to terminate such agreement, or to refuse to renew such
agreement pursuant to an automatic renewal right therein; provided, however,
that until such time as Agent is satisfied that any such default has been
satisfied, remedied, cured or waived, Agent shall be entitled to create and
maintain a separate reserve (in addition to all other reserves) under Section
2.1(b) against the credit availability under Section 2.1(a) in an amount
sufficient to reinstate the agreement which is the subject of the default or
otherwise cure the default
8.10 If any Borrower or any of its Restricted Subsidiaries makes any payment on
account of Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations or the Guarantor Obligations (as the
case may be), except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.11 If any material misstatement or misrepresentation exists now or hereafter
in any warranty, representation, statement, or Record made to the Lender Group
by any Borrower, its Restricted Subsidiaries, or any officer, employee, agent,
or director of any Borrower or any of its Restricted Subsidiaries;
8.12 If an event of default has occurred and is continuing under any other
Loan Document;
8.13 If this Agreement or any other Loan Document that purports to create a Lien
in favor of Agent or the Lender Group, shall, for any reason, fail or cease to
create a valid and perfected Lien on or security interest in the Collateral
covered hereby or thereby, or if such Lien or security interest, except to the
extent permitted by the terms hereof or thereof, shall fail to be of first Lien
priority following the full execution of the Intercreditor Agreement;
8.14 Any material provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Borrower or any Guarantor, or a proceeding
shall be commenced by any Borrower or any Guarantor, or by any Governmental
Authority having jurisdiction over any Borrower or any Guarantor, seeking to
establish the invalidity or unenforceability thereof, or any Borrower or any
Guarantor shall deny that any Borrower has any material liability or obligation
purported to be created under any Loan Document;
8.15 If the obligation of any guarantor of the Obligations or the Indenture
Trustee under any Loan Document to which it is a party is limited or terminated
by operation of law or by such guarantor or the Indenture Trustee thereunder; or
8.16 If Borrower or any Restricted Subsidiary fails to keep in full force and
effect, suffers the termination, revocation, or suspension of, terminates,
forfeits, or suffers a materially adverse amendment to, any Casino License at
any time held by Borrower (or such Restricted Subsidiary) that is necessary to
the operation of any Casino owned by Borrower (or such Restricted Subsidiary).
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 Rights and Remedies. Upon the occurrence, and during the continuation, of an
Event of Default, the Required Lenders (at their election but without notice of
their election and without demand) may authorize and instruct Agent to do any
one or more of the following on behalf of the Lender Group (and Agent, acting
upon the instructions of the Required Lenders, shall do the same on behalf of
the Lender Group), all of which are authorized by Borrowers and Guarantors:
(a) Declare all Obligations, whether evidenced by this Agreement, by any
of the other Loan Documents, or otherwise, immediately
due and payable;
(b) Cease advancing money or extending credit to or for the benefit of Borrowers
under this Agreement, under any of the Loan Documents, or under any other
agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other Loan Documents as to any
future liability or obligation of the Lender Group, but without affecting any of
the Agent's Liens in the Collateral and without affecting the Obligations or the
Guarantor Obligations;
(d) Settle or adjust disputes and claims directly with Account Debtors for
amounts and upon terms which Agent considers advisable, and in such cases, Agent
will credit the Loan Account with only the net amounts received by Agent in
payment of such disputed Accounts after deducting all Lender Group Expenses
incurred or expended in connection therewith;
(e) Each of the Borrowers and Guarantors agrees that, upon the occurrence of and
during the continuance of an Event of Default and at Agent's request, Borrower
and Guarantor will diligently and fully cooperate with (and neither attack or
contest, nor directly or indirectly urge, finance, or support any other Person
in attacking or contesting) any application by the Lender Group or nominee to
any Gaming Authority in connection with the exercise of the rights of the Lender
Group under the Loan Documents;
(f) Subject to any rights of lessors or holders of purchase money security
interests, cause the applicable Borrower and Guarantor to hold all Personal
Property Collateral in trust for the Lender Group, segregate all Personal
Property Collateral from all other property of the Borrowers and Guarantors or
in the Borrowers' or Guarantors' possession and conspicuously label said
Personal Property Collateral as the property of the Lender Group;
(g) Without notice to or demand upon any Borrower or any Guarantor, make such
payments and do such acts as Agent considers necessary or reasonable to protect
its security interests in the Collateral. Each Borrower and each Guarantor agree
to assemble the Personal Property Collateral if Agent so requires, and to make
the Personal Property Collateral available to Agent at a place that Agent may
designate which is reasonably convenient to both parties. Each Borrower and each
Guarantor authorize Agent to enter the premises where the Personal Property
Collateral is located, to take and maintain possession of the Personal Property
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
Lien that in Agent's determination appears to conflict with the Agent's Liens
and to pay all expenses incurred in connection therewith and to charge
Borrowers' Loan Account therefor. With respect to any of Borrowers' or
Guarantors' owned or leased premises, each Borrower and each Guarantor hereby
grant Agent a license to enter into possession of such premises and to occupy
the same, without charge, in order to exercise any of the Lender Group's rights
or remedies provided herein, at law, in equity, or otherwise;
(h) Without notice to any Borrower or any Guarantor (such notice being expressly
waived), and without constituting a retention of any collateral in satisfaction
of an obligation (within the meaning of the Code), set off and apply to the
Obligations (or the Guarantor Obligations) any and all (i) balances and deposits
of any Borrower or any Guarantor held by the Lender Group, or (ii) Indebtedness
at any time owing to or for the credit or the account of any Borrower or any
Guarantor held by the Lender Group;
(i) Hold, as cash collateral, any and all balances and deposits of any Borrower
or any Guarantor held by the Lender Group, to secure the full and final
repayment of all of the Obligations (or the Guarantor Obligations);
(j) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell (in the manner provided for herein) the Personal
Property Collateral. Each Borrower and each Guarantor hereby grants to Agent a
license or other right to use, without charge, such Borrower's and such
Guarantor's labels, patents, copyrights, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any property of a similar nature, as
it pertains to the Personal Property Collateral, in completing production of,
advertising for sale, and selling any Personal Property Collateral and such
Borrower's and such Guarantor's rights under all licenses and all franchise
agreements shall inure to the Lender Group's benefit;
(k) Sell the Personal Property Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including Borrower's or Guarantor's premises) as
Agent determines is commercially reasonable. It is not necessary that the
Personal Property Collateral be present at any such sale;
(l) Agent shall give notice of the disposition of the Personal Property
Collateral as follows:
(i) Agent shall give Administrative Borrower (for the benefit of
the applicable Borrower or Guarantor) a notice in writing of
the time and place of public sale, or, if the sale is a
private sale or some other disposition other than a public
sale is to be made of the Personal Property Collateral, the
time on or after which the private sale or other disposition
is to be made; and
(ii) The notice shall be personally delivered or mailed, postage
prepaid, to Administrative Borrower as provided in Section 12,
at least 10 days before the earliest time of disposition set
forth in the notice; no notice needs to be given prior to the
disposition of any portion of the Personal Property Collateral
that is perishable or threatens to decline speedily in value
or that is of a type customarily sold on a recognized market;
(m) Agent, on behalf of the Lender Group may credit bid and purchase at any
public sale;
(n) Agent may seek the appointment of a receiver or keeper to take possession of
all or any portion of the Collateral or to operate same and, to the maximum
extent permitted by law, may seek the appointment of such a receiver without the
requirement of prior notice or a hearing;
(o) The Lender Group shall have all other rights and remedies available
to it at law or in equity pursuant to any other LoanDocuments; and
(p) Any deficiency that exists after disposition of the Personal Property
Collateral as provided above will be paid immediately by Borrowers. Any excess
will be returned, without interest and subject to the rights of third Persons,
by Agent to Administrative Borrower (for the benefit of the applicable
Borrower).
Any other provision in this Agreement or any other Loan Document to the contrary
notwithstanding, all right, remedies, and powers provided in this Agreement and
the other Loan Documents relative to the Collateral may be exercised only to the
extent that the exercise thereof does not violate any Applicable Gaming Laws and
all provisions of this Agreement and the other Loan Documents relative to the
Collateral are intended to be subject to all applicable mandatory provisions of
the Applicable Gaming Laws and to be limited solely to the extent necessary to
not render the provisions of this Agreement and the other Loan Documents invalid
or unenforceable, in whole or in part. Agent will timely apply for and receive
all required approvals of the applicable Gaming Authority for the sale or other
disposition of gaming Equipment regulated by Applicable Gaming Laws (including
any such sale or disposition of gaming Equipment consisting of slot machines,
gaming tables, cards, dice, gaming chips, player tracking systems, and all other
"gaming devices" (as such term or words of like import referring thereto are
defined in the Applicable Gaming Laws), and "associated equipment" (as such term
or words of like import referring thereto are defined in the Applicable Gaming
Laws).
9.2 Remedies Cumulative. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Borrower or any Guarantor fails to pay any monies
(whether taxes, assessments, insurance premiums, or, in the case of leased
properties or assets, rents or other amounts payable under such leases) due to
third Persons, or fails to make any deposits or furnish any required proof of
payment or deposit, all as required under the terms of this Agreement, then,
Agent, in its sole discretion and without prior notice to any Borrower or any
Guarantor, may do any or all of the following: (a) make payment of the same or
any part thereof, (b) set up such reserves in Borrowers' Loan Account as Agent
deems necessary to protect the Lender Group from the exposure created by such
failure, or (c) in the case of the failure to comply with Section 6.8 hereof,
obtain and maintain insurance policies of the type described in Section 6.8 and
take any action with respect to such policies as Agent deems prudent. Any such
amounts paid by Agent shall constitute Lender Group Expenses and any such
payments shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of Default
under this Agreement. Agent need not inquire as to, or contest the validity of,
any such expense, tax, or Lien and the receipt of the usual official notice for
the payment thereof shall be conclusive evidence that the same was validly due
and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 Demand; Protest; etc. Each Borrower and each Guarantor waives demand,
protest, notice of protest, notice of default or dishonor, notice of payment and
nonpayment, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of documents, instruments, chattel paper, and guarantees at any time
held by the Lender Group on which any such Borrower or Guarantor may in any way
be liable.
11.2 The Lender Group's Liability for Collateral. Each Borrower and each
Guarantor hereby agrees that: (a) so long as the Lender Group complies with its
obligations, if any, under the Code, Agent shall not in any way or manner be
liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Collateral shall be borne by
Borrowers and Guarantors.
11.3 Indemnification. Each Borrower and each Guarantor shall pay, indemnify,
defend, and hold the Agent-Related Persons, the Lender-Related Persons with
respect to each Lender, each Participant, and each of their respective officers,
directors, employees, agents, and attorneys-in-fact (each, an "Indemnified
Person") harmless (to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations, proceedings, and
damages, and all reasonable attorneys fees and disbursements and other costs and
expenses actually incurred in connection therewith (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration of this Agreement, any of the other Loan Documents, or the
transactions contemplated hereby or thereby, and (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities"). The foregoing to the
contrary notwithstanding, Borrowers shall have no obligation to any Indemnified
Person under this Section 11.3 with respect to any Indemnified Liability that a
court of competent jurisdiction finally determines to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART CAUSED BY OR ARISE
OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER
PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrower or Guarantor or Agent to the other relating to this
Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as Administrative
Borrower or Agent, as applicable, may designate to each other in accordance
herewith), or telefacsimile to Borrowers and Guarantors in care of
Administrative Borrower or to Agent, as the case may be, at its address set
forth below:
If to Administrative
Borrower: RIVIERA HOLDINGS CORPORATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Executive Vice President of Finance
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: RIVIERA HOLDINGS CORPORATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
If to Agent: FOOTHILL CAPITAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Structured Finance Group Manager
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: LEVY, SMALL & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
Agent and Borrowers and Guarantors may change the address at
which they are to receive notices hereunder, by notice in writing in the
foregoing manner given to the other party. All notices or demands sent in
accordance with this Section 12, other than notices by Agent in connection with
enforcement rights against the Collateral under the provisions of the Code,
shall be deemed received on the earlier of the date of actual receipt or 3
Business Days after the deposit thereof in the mail. Each Borrower and each
Guarantor acknowledges and agrees that notices sent by the Lender Group in
connection with the exercise of enforcement rights against Collateral under the
provisions of the Code shall be deemed sent when deposited in the mail or
personally delivered, or, where permitted by law, transmitted by telefacsimile
or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS AND TO THE EXTENT EXPRESSLY PROVIDED TO THE CONTRARY IN
ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE
PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS,
GUARANTORS, AND THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 13(b).
BORROWERS, GUARANTORS, AND THE LENDER GROUP HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 Assignments and Participations.
(a) Any Lender may, with the written consent of Agent (provided that no written
consent of Agent shall be required in connection with any assignment and
delegation by a Lender to an Eligible Transferee), assign and delegate to one or
more assignees (each an "Assignee") all, or any ratable part of all, of the
Obligations, the Commitments and the other rights and obligations of such Lender
hereunder and under the other Loan Documents, in a minimum amount of $5,000,000;
provided, however, that Borrowers and Agent may continue to deal solely and
directly with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses, and related information with respect to the Assignee,
have been given to Administrative Borrower and Agent by such Lender and the
Assignee, (ii) such Lender and its Assignee have delivered to Administrative
Borrower and Agent an Assignment and Acceptance in form and substance
satisfactory to Agent, and (iii) the assignor Lender or Assignee has paid to
Agent for Agent's separate account a processing fee in the amount of $5,000.
Anything contained herein to the contrary notwithstanding, the consent of Agent
shall not be required (and payment of any fees shall not be required) if such
assignment is in connection with any merger, consolidation, sale, transfer, or
other disposition of all or any substantial portion of the business or loan
portfolio of such Lender.
(b) From and after the date that Agent notifies the assignor Lender (with a copy
to Administrative Borrower) that it has received an executed Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (except
with respect to Section 11.3 hereof) and be released from its obligations under
this Agreement (and in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement and the other Loan Documents, such Lender shall cease to be a party
hereto and thereto), and such assignment shall affect a novation between
Borrowers (and Guarantors) and the Assignee.
(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (1) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(2) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrowers or
Guarantors or the performance or observance by Borrowers or Guarantors of any of
their obligations under this Agreement or any other Loan Document furnished
pursuant hereto, (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (4) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (5) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon each Assignee's making its processing fee payment under the
Assignment and Acceptance and receipt and acknowledgment by Agent of such fully
executed Assignment and Acceptance, this Agreement shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Lender pro tanto.
(e) Any Lender may at any time, with the written consent of Agent, sell to one
or more commercial banks, financial institutions, or other Persons not
Affiliates of such Lender (a "Participant") participating interests in its
Obligations, the Commitment, and the other rights and interests of that Lender
(the "Originating Lender") hereunder and under the other Loan Documents
(provided that no written consent of Agent shall be required in connection with
any sale of any such participating interests by a Lender to an Eligible
Transferee); provided, however, that (i) the Originating Lender shall remain a
"Lender" for all purposes of this Agreement and the other Loan Documents and the
Participant receiving the participating interest in the Obligations, the
Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a "Lender" hereunder or under the other Loan
Documents and the Originating Lender's obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) Borrowers, Guarantors, Agent, and
the Lenders shall continue to deal solely and directly with the Originating
Lender in connection with the Originating Lender's rights and obligations under
this Agreement and the other Loan Documents, (iv) no Lender shall transfer or
grant any participating interest under which the Participant has the right to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment to, or
consent or waiver with respect to this Agreement or of any other Loan Document
would (A) extend the final maturity date of the Obligations hereunder in which
such Participant is participating, (B) reduce the interest rate applicable to
the Obligations hereunder in which such Participant is participating, (C) (1)
release (or contractually subordinate any of Agent's Liens on) all or a material
portion of the Collateral (except to the extent expressly provided herein or in
any of the Loan Documents) supporting the Obligations hereunder in which such
Participant is participating, or (2) release any of the guaranties (except to
the extent expressly provided herein or in any of the Loan Documents) supporting
the Obligations hereunder in which such Participant is participating (D)
postpone the payment of, or reduce the amount of, the interest or fees payable
to such Participant through such Lender, (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums, or (F) eliminate the
Section 3.2(b) Reserve requirement prior the satisfaction of clauses (i) and
(ii) of Section 3.2(b); and (v) all amounts payable by Borrowers hereunder shall
be determined as if such Lender had not sold such participation; except that, if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement. The rights of any Participant
only shall be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any rights under this
Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Borrowers, Guarantors, the Collections, the Collateral, or
otherwise in respect of the Obligations or the Guarantor Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.
(f) In connection with any such assignment or participation or proposed
assignment or participation, a Lender may disclose all documents and information
which it now or hereafter may have relating to Borrowers or Borrowers' business
or Guarantors or Guarantors' business.
(g) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
14.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that no Borrower or Guarantor may assign this Agreement or any other Loan
Document or any rights or duties hereunder or thereunder without the Lenders'
prior written consent and any prohibited assignment shall be absolutely void ab
initio. No consent to assignment by the Lenders shall release any Borrower from
its Obligations or any Guarantor from its Guarantor Obligations. A Lender may
assign this Agreement and the other Loan Documents and its rights and duties
hereunder and thereunder pursuant to Section 14.1 hereof and, except as
expressly required pursuant to Section 14.1 hereof, no consent or approval by
any Borrower or any Guarantor is required in connection with any such
assignment.
15. AMENDMENTS; WAIVERS.
15.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by Borrowers or Guarantors therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by Agent at the
written request of the Required Lenders) and Administrative Borrower (on behalf
of all Borrowers and Guarantors) and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all of the Lenders affected thereby and
Administrative Borrower (on behalf of all Borrowers and Guarantors) and
acknowledged by Agent, do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is required to take any
action hereunder,
(e) amend this Section or any provision of the Agreement providing for
consent or other action by all Lenders,
(f) release Collateral other than as permitted by Section 16.12,
(g) change the definition of "Required Lenders",
(h) contractually subordinate any of the Agent's Liens,
(i) release any Borrower or any guarantor of any of the Obligations from
any obligation for the payment of money, or
(j) change the definitions of Borrowing Base, EBITDA, Maximum Revolver
Amount, or change Section 2.1(b); or
(k) eliminate the Section 3.2(b) Reserve requirement prior the satisfaction
of clauses (i) and (ii) of Section 3.2(b); or
(l) amend any of the provisions of Section 16.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, affect
the rights or duties of Agent, Issuing Lender, or Swing Lender, as applicable,
under this Agreement or any other Loan Document. The foregoing notwithstanding,
any amendment, modification, waiver, consent, termination, or release of, or
with respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrowers or Guarantors, shall not
require consent by or the agreement of Borrowers or Guarantors (as the case may
be).
15.2 Replacement of Holdout Lender If any action to be taken by the Lender Group
or Agent hereunder requires the unanimous consent, authorization, or agreement
of all Lenders, and a Lender ("Holdout Lender") fails to give its consent,
authorization, or agreement, then Agent, upon at least 5 Business Days prior
irrevocable notice to the Holdout Lender, may permanently replace the Holdout
Lender with one or more substitute Lenders (each, a "Replacement Lender"), and
the Holdout Lender shall have no right to refuse to be replaced hereunder. Such
notice to replace the Holdout Lender shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.
Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance Agreement, subject only to the Holdout Lender being repaid its share
of the outstanding Obligations (including an assumption of its Pro Rata Share of
the Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance Agreement prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance Agreement. The replacement of any Holdout Lender
shall be made in accordance with the terms of Section 14.1. Until such time as
the Replacement Lenders shall have acquired all of the Obligations, the
Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make the Holdout Lender's Pro Rata Share of Advances and to
purchase a participation in each Letter of Credit, in an amount equal to its Pro
Rata Share of the Risk Participation Liability of such Letter of Credit.
15.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or, any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Borrowers or
Guarantors of any provision of this Agreement. Agent's and each Lender's rights
under this Agreement and the other Loan Documents will be cumulative and not
exclusive of any other right or remedy that Agent or any Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 Appointment and Authorization of Agent.
(a) The provisions of this Section 16 (other than Sections
16.11 and 16.17(d)) are solely for the benefit of Agent, and the Lenders, and
Borrowers and Guarantors shall have no rights as a third party beneficiary of
any of the provisions contained herein.
(b) Each Lender hereby designates and appoints Foothill as its
representative under this Agreement and the other Loan Documents and each Lender
hereby irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to Agent by the terms
of this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Agent agrees to act as such on the express
conditions contained in this Section 16. Any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "agent" or "Agent" is for convenience only, that
Foothill is merely the representative of the Lenders, and only has the
contractual duties set forth herein. Except as expressly otherwise provided in
this Agreement, Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions that Agent expressly is entitled to take or
assert under or pursuant to this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, or of any other provision of the Loan
Documents that provides rights or powers to Agent, Lenders agree that Agent
shall have the right to exercise the following powers as long as this Agreement
remains in effect: (1) maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Obligations, the
Collateral, the Collections, and related matters, (2) execute or file any and
all financing or similar statements or notices, amendments, renewals,
supplements, documents, instruments, proofs of claim, notices and other written
agreements with respect to the Loan Documents, (3) make Advances, for itself or
on behalf of Lenders as provided in the Loan Documents, (4) exclusively receive,
apply, and distribute the Collections as provided in the Loan Documents, (5)
open and maintain such bank accounts as Agent deems necessary and appropriate in
accordance with the Loan Documents for the foregoing purposes with respect to
the Collateral and the Collections, (6) perform, exercise, and enforce any and
all other rights and remedies of the Lender Group with respect to Borrowers,
Guarantors, the Obligations, the Guarantor Obligations, the Collateral, the
Collections, or otherwise related to any of same as provided in the Loan
Documents, and (7) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
16.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 Liability of Agent. None of the Agent-Related Persons shall (i) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or Guarantor or any
Subsidiary or Affiliate of any Borrower or Guarantor, or any officer or director
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Borrower or Guarantor or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the Books or properties of
Borrowers or Guarantors or the books or records or properties of any of
Subsidiaries or Affiliates of Borrower or of Guarantor.
16.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrowers
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
16.5 Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a "notice of default." Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
16.6 Credit Decision. Each Lender acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by Agent
hereinafter taken, including any review of the affairs of Borrowers, Guarantors,
and their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own evaluation of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers, Guarantors, and any other Person (other than the
Lender Group) party to a Loan Document, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to Borrowers. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
evaluations and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrowers, Guarantors, and
any other Person (other than the Lender Group) party to a Loan Document. Except
for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Agent, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Borrowers, Guarantors, and any other Person
party to a Loan Document that may come into the possession of any of the
Agent-Related Persons.
16.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the
performance and fulfillment of its functions, powers, and obligations pursuant
to the Loan Documents, including court costs, reasonable attorneys fees and
expenses, costs of collection by outside collection agencies and auctioneer fees
and costs of security guards or insurance premiums paid to maintain the
Collateral, whether or not Borrowers or Guarantors are obligated to reimburse
Agent or Lenders for such expenses pursuant to the Loan Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
Collections received by Agent to reimburse Agent for such out-of-pocket costs
and expenses prior to the distribution of any amounts to Lenders. In the event
Agent is not reimbursed for such costs and expenses from Collections received by
Agent, each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender's Pro Rata Share thereof. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or on behalf of Borrowers or Guarantors and without limiting the obligation of
Borrowers or Guarantors to do so), according to their Pro Rata Shares, from and
against any and all Indemnified Liabilities; provided, however, that no Lender
shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make an Advance or other
extension of credit hereunder. Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for such Lender's ratable share of any costs
or out-of-pocket expenses (including attorneys fees and expenses) incurred by
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Borrowers or Guarantors. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.
16.8 Agent in Individual Capacity. Foothill and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and
Guarantors, their Subsidiaries and Affiliates, and any other Person (other than
the Lender Group) party to any Loan Documents as though Foothill were not Agent
hereunder, and, in each case, without notice to or consent of the other members
of the Lender Group. The other members of the Lender Group acknowledge that,
pursuant to such activities, Foothill or its Affiliates may receive information
regarding Borrowers, Guarantors, or their Affiliates and any other Person (other
than the Lender Group) party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrowers or such other Persons and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall not be under any obligation to provide such
information to them. The terms "Lender" and "Lenders" include Foothill in its
individual capacity.
16.9 Successor Agent. Agent may resign as Agent upon 45 days notice to the
Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
16.10 Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with Borrowers and
Guarantors, their Subsidiaries and Affiliates, and any other Person (other than
the Lender Group) party to any Loan Documents as though such Lender were not a
Lender hereunder without notice to or consent of the other members of the Lender
Group. The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Borrowers, Guarantors, or their Affiliates and any other Person (other
than the Lender Group) party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrowers or such other Persons and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender not shall be under any obligation to
provide such information to them. With respect to the Swing Loans and Agent
Advances, Swing Lender shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the sub-agent of the Agent.
16.11 Withholding Taxes.
(a) If any Lender is a "foreign corporation, partnership or trust" within the
meaning of the IRC and such Lender claims exemption from, or a reduction of,
U.S. withholding tax under Sections 1441 or 1442 of the IRC, such Lender agrees
with and in favor of Agent and Borrowers, to deliver to Agent and Administrative
Borrower:
(i) if such Lender claims an exemption from withholding tax
pursuant to its portfolio interest exception, (a) a statement
of the Lender, signed under penalty of perjury, that it is not
a (I) a "bank" as described in Section 881(c)(3)(A) of the
IRC, (II) a 10% shareholder (within the meaning of Section
881(c)(3)(B) of the IRC), or (III) a controlled foreign
corporation described in Section 881(c)(3)(C) of the IRC, and
(B) a properly completed IRS Form W-8BEN, before the first
payment of any interest under this Agreement and at any other
time reasonably requested by Agent or Administrative Borrower;
(ii) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly
completed IRS Form W-8BEN before the first payment of any
interest under this Agreement and at any other time reasonably
requested by Agent or Administrative Borrower;
(iii) if such Lender claims that interest paid under this Agreement
is exempt from United States withholding tax because it is
effectively connected with a United States trade or business
of such Lender, two properly completed and executed copies of
IRS Form W-8ECI before the first payment of any interest is
due under this Agreement and at any other time reasonably
requested by Agent or Administrative Borrower;
(iv) such other form or forms as may be required under the IRC or
other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding tax under
a United States tax treaty by providing IRS Form W-8BEN and such Lender sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of Borrowers to such Lender, such Lender agrees to notify Agent of
the percentage amount in which it is no longer the beneficial owner of
Obligations of Borrowers to such Lender. To the extent of such percentage
amount, Agent will treat such Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender is entitled to a reduction in the applicable withholding tax,
Agent may withhold from any interest payment to such Lender an amount equivalent
to the applicable withholding tax after taking into account such reduction. If
the forms or other documentation required by subsection (a) of this Section are
not delivered to Agent, then Agent may withhold from any interest payment to
such Lender not providing such forms or other documentation an amount equivalent
to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered, was not properly executed, or because such Lender failed to
notify Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify and hold Agent harmless for all amounts paid, directly or
indirectly, by Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
under this Section, together with all costs and expenses (including attorneys
fees and expenses). The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement of
Agent.
(e) All payments made by Borrowers hereunder or under any note or other Loan
Document will be made without setoff, counterclaim, or other defense, except as
required by applicable law other than for Taxes (as defined below). All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction
(other than the United States) or by any political subdivision or taxing
authority thereof or therein (other than of the United States) with respect to
such payments (but excluding, any tax imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein (i) measured by or
based on the net income or net profits of a Lender, or (ii) to the extent that
such tax results from a change in the circumstances of the Lender, including a
change in the residence, place of organization, or principal place of business
of the Lender, or a change in the branch or lending office of the Lender
participating in the transactions set forth herein) and all interest, penalties
or similar liabilities with respect thereto (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, each Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any note, including any amount paid pursuant to this Section 16.11(e)
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein; provided, however, that Borrowers shall not
be required to increase any such amounts payable to Agent or any Lender (i) that
is not organized under the laws of the United States, if such Person fails to
comply with the other requirements of this Section 16.11, or (ii) if the
increase in such amount payable results from Agent's or such Lender's own
willful misconduct or gross negligence. Borrowers will furnish to Agent as
promptly as possible after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by
Borrowers.
16.12 Collateral Matters.
(a) The Lenders hereby irrevocably authorize Agent, at its option and in its
sole discretion, to release any Lien on any Collateral (i) upon the termination
of the Commitments and payment and satisfaction in full by Borrowers of all
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Administrative Borrower
certifies to Agent that the sale or disposition is permitted under Section 7.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property
in which no Borrower or Guarantor owned any interest at the time the security
interest was granted or at any time thereafter, or (iv) constituting property
leased to a Borrower or Guarantor under a lease that has expired or is
terminated in a transaction permitted under this Agreement. Except as provided
above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of (y) if the release is of
all or substantially all of the Collateral, all of the Lenders, or (z)
otherwise, the Required Lenders. Upon request by Agent or Administrative
Borrower at any time, the Lenders will confirm in writing Agent's authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 16.12; provided, however, that (1) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or the Guarantor Obligations or any
Liens (other than those expressly being released) upon (or obligations of
Borrowers or Guarantors in respect of) all interests retained by Borrowers or
Guarantors, including, the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders to assure
that the Collateral exists or is owned by Borrowers or Guarantors or is cared
for, protected, or insured or has been encumbered, or that the Agent's Liens
have been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing, except as otherwise provided herein.
16.13 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express consent of
Agent, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of Agent, set off against the Obligations (or the Guarantor
Obligations), any amounts owing by such Lender to Borrowers or Guarantors or any
deposit accounts of Borrowers or Guarantors now or hereafter maintained with
such Lender. Each of the Lenders further agrees that it shall not, unless
specifically requested to do so by Agent, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings, to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral the purpose of which is, or could be, to give such Lender any
preference or priority against the other Lenders with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations (or the Guarantor Obligations) arising under, or
relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from Agent pursuant to the terms of
this Agreement, or (ii) payments from Agent in excess of such Lender's ratable
portion of all such distributions by Agent, such Lender promptly shall (1) turn
the same over to Agent, in kind, and with such endorsements as may be required
to negotiate the same to Agent, or in immediately available funds, as
applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or
(2) purchase, without recourse or warranty, an undivided interest and
participation in the Obligations owed to the other Lenders so that such excess
payment received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Shares; provided, however, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor shall
be returned to such purchasing party, but without interest except to the extent
that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.
16.14 Agency for Perfection. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the UCC can be perfected only by possession. Should any Lender obtain possession
of any such Collateral, such Lender shall notify Agent thereof, and, promptly
upon Agent's request therefor shall deliver such Collateral to Agent or in
accordance with Agent's instructions.
16.15 Payments by Agent to the Lenders. All payments to be made by Agent to the
Lenders shall be made by bank wire transfer or internal transfer of immediately
available funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, or interest of the Obligations.
16.16 Concerning Borrower, Guarantor, the Collateral and Related Loan Documents.
Each member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents relating to Borrower, Guarantor, or the
Collateral, for the benefit of the Lender Group. Each member of the Lender Group
agrees that any action taken by Agent in accordance with the terms of this
Agreement or the other Loan Documents relating to Borrower, Guarantor, or the
Collateral and the exercise by Agent of its powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders.
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By becoming a party to this Agreement,
each Lender:
(a) is deemed to have requested that Agent furnish such Lender, promptly after
it becomes available, a copy of each field audit or examination report (each a
"Report" and collectively, "Reports") prepared by Agent, and Agent shall so
furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any audit or
examination will inspect only specific information regarding Borrowers and
Guarantors and will rely significantly upon the Books, as well as on
representations of Borrowers' or Guarantors' personnel,
(d) , and Agent, agrees to keep all Reports and other material, non-public
information regarding Borrowers and Guarantors, their Subsidiaries, and the
operations, assets, and existing and contemplated business plans thereof in a
confidential manner; it being understood and agreed by Borrowers and Guarantors
that in any event Agent or such Lender may make disclosures (a) to counsel for
and other advisors, accountants, and auditors to Agent or such Lender, (b)
reasonably required by any bona fide potential or actual Assignee or Participant
in connection with any contemplated or actual assignment or transfer by such
Lender of an interest herein or any participation interest in such Lender's
rights hereunder, provided that such potential or actual Assignee or Participant
shall have executed and delivered an agreement to keep such Reports and such
information confidential on terms substantially similar to the terms of this
Section 16.17(d), (c) of information that has become public by disclosures made
by Persons other than Agent or such Lender, its Affiliates, assignees,
transferees, or Participants, (d) in its good faith business judgment in
connection with the enforcement of its rights or remedies after an Event of
Default, or (e) as required or requested by any court, governmental or
administrative agency, pursuant to any subpoena or other legal process, or by
any law, statute, regulation, or court order; provided, however, that, unless
prohibited by applicable law, statute, regulation, or court order, Agent or such
Lender (as the case may be) shall notify Administrative Borrower of any request
by any court, governmental or administrative agency, or pursuant to any subpoena
or other legal process for disclosure of any such non-public material
information concurrent with, or where practicable, prior to the disclosure
thereof, and
(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any such other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying
Lender has made or may make to Borrowers, or the indemnifying Lender's
participation in, or the indemnifying Lender's purchase of, a loan or loans of
Borrowers; and (ii) to pay and protect, and indemnify, defend and hold Agent,
and any such other Lender preparing a Report harmless from and against, the
claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender, (y) to the extent that Agent is
entitled, under any provision of the Loan Documents, to request additional
reports or information from Borrowers, any Lender may, from time to time,
reasonably request Agent to exercise such right as specified in such Lender's
notice to Agent, whereupon Agent promptly shall request of Administrative
Borrower the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Administrative Borrower, Agent promptly
shall provide a copy of same to such Lender, and (z) any time that Agent renders
to Administrative Borrower a statement regarding the Loan Account, Agent shall
send a copy of such statement to each Lender.
16.18 Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 16.7, no member of the Lender Group shall have any
liability for the acts or any other member of the Lender Group. No Lender shall
be responsible to any Borrower, any Guarantor, or any other Person for any
failure by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
16.19 Legal Representation of Agent. In connection with the negotiation,
drafting, and execution of this Agreement and the other Loan Documents, or in
connection with future legal representation relating to loan administration,
amendments, modifications, waivers, or enforcement of remedies in respect of
this Agreement and the other Loan Documents, Levy, Small & ▇▇▇▇▇▇ ("LS&L") has
represented, and shall represent, only Foothill in its capacity as Agent and as
a Lender, and not any other member of the Lender Group nor any Participant
thereof. Each other Lender hereby acknowledges that LS&L does not represent it
in connection with any such matters.
17. GENERAL PROVISIONS.
17.1 Effectiveness. This Agreement shall be binding and deemed effective when
executed by Borrowers, Agent, and each Lender whose signature is provided for on
the signature pages hereof (and, with respect to any Guarantor that is not a
Borrower, when such Guarantor executes and delivers the Guaranty or a joinder
hereto).
17.2 Section Headings. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against the Lender Group or Borrowers or
Guarantors, whether under any rule of construction or otherwise. On the
contrary, this Agreement has been reviewed by all parties and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
17.5 Amendments in Writing. This Agreement only can be amended by a writing
in accordance with Section 15.1.
17.6 Counterparts; Telefacsimile Execution. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
17.7 Revival and Reinstatement of Obligations. If the incurrence or payment of
the Obligations (or the Guarantor Obligations) by any Borrower or any guarantor
of any of the Obligations or the transfer to the Lender Group of any property
should for any reason subsequently be declared to be void or voidable under any
state or federal law relating to creditors' rights, including provisions of the
Bankruptcy Code relating to fraudulent conveyances, preferences, or other
voidable or recoverable payments of money or transfers of property
(collectively, a "Voidable Transfer"), and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys fees
of the Lender Group related thereto, the liability of Borrowers or such
guarantor of any of the Obligations automatically shall be revived, reinstated,
and restored and shall exist as though such Voidable Transfer had never been
made.
17.8 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.9 Parent as Agent for Borrowers and Guarantors. Each Borrower and each
Guarantor hereby irrevocably appoints Parent as the borrowing agent and
attorney-in-fact for all Borrowers and the attorney-in-fact for all Guarantors
(the "Administrative Borrower") which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower and each Guarantor that such appointment has been revoked and that
another Borrower has been appointed Administrative Borrower. Each Borrower
hereby irrevocably appoints and authorizes the Administrative Borrower (i) to
provide Agent with all notices with respect to Advances and Letters of Credit
obtained for the benefit of any Borrower and all other notices and instructions
under this Agreement and (ii) to take such action as the Administrative Borrower
deems appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower or any Guarantor as a result hereof. Each Borrower and
Guarantor expects to derive benefit, directly or indirectly, from the handling
of the Loan Account and the Collateral in a combined fashion since the
successful operation of each Borrower and Guarantor is dependent on the
continued successful performance of the integrated group. To induce the Lender
Group to do so, and in consideration thereof, each Borrower and Guarantor hereby
jointly and severally agrees to indemnify each member of the Lender Group and
hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or any Guarantor or by any third party whosoever, arising from or
incurred by reason of (a) the handling of the Loan Account and Collateral of
Borrowers as herein provided, (b) the Lender Group's relying on any instructions
of the Administrative Borrower, or (c) any other action taken by the Lender
Group hereunder or under the other Loan Documents, except that Borrowers and
Guarantors will have no liability to the relevant Agent-Related Person or
Lender-Related Person under this Section 17.9 with respect to any liability that
has been finally determined by a court of competent jurisdiction to have
resulted solely from the gross negligence or willful misconduct of such
Agent-Related Person or Lender-Related Person, as the case may be.
[Signature pages immediately follow]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
Borrowers:
RIVIERA HOLDINGS CORPORATION, RIVIERA BLACK HAWK, INC., a Colorado
a Nevada corporation corporation
By_______________________________ By_______________________________
Name:____________________________ Name:____________________________
Title: _____________________________ Title: _____________________________
RIVIERA OPERATING CORPORATION, a
Nevada corporation
By_______________________________
Name:____________________________
Title: _____________________________
Guarantors:
RIVIERA GAMING MANAGEMENT, INC., RIVIERA GAMING MANAGEMENT OF
a Nevada corporation. Colorado INC., a Colorado
corporation
By_______________________________ By_______________________________
Name:____________________________ Name:____________________________
Title: _____________________________ Title: _____________________________
Lenders:
FOOTHILL CAPITAL CORPORATION,
a California corporation, as a Lender
By_______________________________
Name:____________________________
Title: _____________________________
Agent:
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent
By_______________________________
Name:____________________________
Title: _____________________________
TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION.............................................................................1
1.1 Definitions.....................................................................................1
1.2 Accounting Terms...............................................................................28
1.3 Code...........................................................................................28
1.4 Construction...................................................................................28
1.5 Schedules and Exhibits.........................................................................28
1.6 Joinder........................................................................................28
2. LOAN AND TERMS OF PAYMENT...............................................................................29
2.1 Revolver Advances..............................................................................29
2.2 [Intentionally Omitted]........................................................................30
2.3 Borrowing Procedures and Settlements...........................................................30
2.4 Payments.......................................................................................37
2.5 Overadvances...................................................................................40
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations....................40
2.7 [Intentionally Omitted]........................................................................41
2.8 Crediting Payments.............................................................................41
2.9 Designated Account.............................................................................42
2.10 Maintenance of Loan Account; Statements of Obligations.........................................42
2.11 Fees...........................................................................................42
2.12 Letters of Credit..............................................................................43
2.13 LIBOR Option...................................................................................46
2.14 Capital Requirements...........................................................................49
2.15 Joint and Several Liability of Borrowers.......................................................49
3. CONDITIONS; TERM OF AGREEMENT...........................................................................53
3.1 Conditions Precedent to the Initial Extension of Credit........................................53
3.2 Conditions Subsequent to the Initial Extension of Credit.......................................57
3.3 Conditions Precedent to all Extensions of Credit...............................................58
3.4 Term...........................................................................................58
3.5 Effect of Termination..........................................................................58
3.6 Early Termination by Borrowers.................................................................59
4. CREATION OF SECURITY INTEREST...........................................................................59
4.1 Grant of Security Interest.....................................................................59
4.2 Negotiable Collateral..........................................................................60
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral.........................60
4.4 Delivery of Additional Documentation Required..................................................60
4.5 Power of Attorney..............................................................................61
4.6 Right to Inspect...............................................................................61
4.7 Control Agreements.............................................................................61
5. REPRESENTATIONS AND WARRANTIES..........................................................................62
5.1 No Encumbrances................................................................................62
5.2 [Intentionally Omitted]........................................................................62
5.3 [Intentionally Omitted]........................................................................62
5.4 PP&E...........................................................................................62
5.5 Location of Inventory and Equipment............................................................62
5.6 [Intentionally Omitted]........................................................................62
5.7 Location of Chief Executive Office; FEIN.......................................................63
5.8 Due Organization and Qualification; Subsidiaries...............................................63
5.9 Due Authorization; No Conflict.................................................................63
5.10 Litigation.....................................................................................64
5.11 No Material Adverse Change.....................................................................65
5.12 Fraudulent Transfer............................................................................65
5.13 Employee Benefits..............................................................................65
5.14 Environmental Condition........................................................................65
5.15 Brokerage Fees.................................................................................65
5.16 Intellectual Property..........................................................................66
5.17 Leases.........................................................................................66
5.18 DDAs...........................................................................................66
5.19 Complete Disclosure............................................................................66
5.20 Indebtedness...................................................................................66
5.21 Governmental Authority.........................................................................66
5.22 Licenses and Permits...........................................................................67
6. AFFIRMATIVE COVENANTS...................................................................................67
6.1 Accounting System..............................................................................67
6.2 Reporting......................................................................................67
6.3 Financial Statements, Reports, Certificates....................................................69
6.4 [Intentionally Omitted]........................................................................71
6.5 [Intentionally Omitted]........................................................................71
6.6 Maintenance of Properties......................................................................71
6.7 Taxes..........................................................................................71
6.8 Insurance......................................................................................71
6.9 Location of Inventory and Equipment............................................................73
6.10 Compliance with Laws...........................................................................73
6.11 Leases.........................................................................................73
6.12 Brokerage Commissions..........................................................................73
6.13 Existence......................................................................................73
6.14 Environmental..................................................................................74
6.15 Disclosure Updates.............................................................................74
6.16 Governmental Authorizations....................................................................74
6.17 License Renewals...............................................................................74
6.18 Licenses and Permits...........................................................................75
6.19 Additional Restricted Subsidiaries.............................................................75
7. NEGATIVE COVENANTS......................................................................................75
7.1 Indebtedness...................................................................................75
7.2 Liens..........................................................................................77
7.3 Restrictions on Fundamental Changes............................................................77
7.4 Disposal of Assets; Asset Sale Offer...........................................................77
7.5 Change Name, Etc...............................................................................77
7.6 Guarantee......................................................................................78
7.7 Nature of Business.............................................................................78
7.8 Prepayments and Amendments.....................................................................78
7.9 Change of Control..............................................................................78
7.10 Consignments...................................................................................79
7.11 Distributions..................................................................................79
7.12 Accounting Methods.............................................................................79
7.13 Investments....................................................................................79
7.14 Transactions with Affiliates...................................................................79
7.15 Suspension.....................................................................................79
7.16 [Intentionally Omitted]........................................................................79
7.17 Use of Proceeds................................................................................79
7.18 Change in Location of Chief Executive Office; Inventory and Equipment with Bailees.............79
7.19 Securities Accounts............................................................................80
7.20 Financial Covenants............................................................................80
8. EVENTS OF DEFAULT.......................................................................................83
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..................................................................86
9.1 Rights and Remedies............................................................................86
9.2 Remedies Cumulative............................................................................89
10. TAXES AND EXPENSES......................................................................................89
11. WAIVERS; INDEMNIFICATION................................................................................90
11.1 Demand; Protest; etc...........................................................................90
11.2 The Lender Group's Liability for Collateral....................................................90
11.3 Indemnification................................................................................90
12. NOTICES. 91
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..............................................................92
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..............................................................93
14.1 Assignments and Participations.................................................................93
14.2 Successors.....................................................................................96
15. AMENDMENTS; WAIVERS.....................................................................................96
15.1 Amendments and Waivers.........................................................................96
15.2 Replacement of Holdout Lender..................................................................97
15.3 No Waivers; Cumulative Remedies................................................................98
16. AGENT; THE LENDER GROUP.................................................................................98
16.1 Appointment and Authorization of Agent.........................................................98
16.2 Delegation of Duties...........................................................................99
16.3 Liability of Agent.............................................................................99
16.4 Reliance by Agent..............................................................................99
16.5 Notice of Default or Event of Default.........................................................100
16.6 Credit Decision...............................................................................100
16.7 Costs and Expenses; Indemnification...........................................................101
16.8 Agent in Individual Capacity..................................................................101
16.9 Successor Agent...............................................................................102
16.10 Lender in Individual Capacity.................................................................102
16.11 Withholding Taxes.............................................................................103
16.12 Collateral Matters............................................................................104
16.13 Restrictions on Actions by Lenders; Sharing of Payments.......................................105
16.14 Agency for Perfection.........................................................................106
16.15 Payments by Agent to the Lenders..............................................................106
16.16 Concerning Borrower, Guarantor, the Collateral and Related Loan Documents.....................106
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information
107
16.18 Several Obligations; No Liability.............................................................108
16.19 Legal Representation of Agent.................................................................109
17. GENERAL PROVISIONS.....................................................................................109
17.1 Effectiveness.................................................................................109
17.2 Section Headings..............................................................................109
17.3 Interpretation................................................................................109
17.4 Severability of Provisions....................................................................109
17.5 Amendments in Writing.........................................................................109
17.6 Counterparts; Telefacsimile Execution.........................................................109
17.7 Revival and Reinstatement of Obligations......................................................110
17.8 Integration...................................................................................110
17.9 Parent as Agent for Borrowers and Guarantors..................................................110
EXHIBITS AND SCHEDULES
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Exhibit N-1 Form of Promissory Note
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule M-1 Description of Monorail Project
Schedule P-1 (Other) Permitted Liens as of the Closing Date
Schedule P-2 Permitted Parent Distributions
Schedule R-1 Real Property Collateral
Schedule 5.5 Locations of Inventory and Equipment
Schedule 5.7 Chief Executive Office; FEIN
Schedule 5.8(b) Capitalization of Borrowers
Schedule 5.8(c) Capitalization of Borrowers' Subsidiaries
Schedule 5.10 Litigation
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.18 Demand Deposit Accounts
Schedule 5.20 Permitted Indebtedness
Schedule 5.22 Material Licenses & Permits
SCHEDULES
Foothill/Riviera/LSA-5
Schedule A-1
Agent's Account
An account at a bank designated by Agent from time to time as
the account into which Borrowers shall make all payments to Agent for the
benefit of the Lender Group and into which the Lender Group shall make all
payments to Agent under this Agreement and the other Loan Documents; unless and
until Agent notifies Administrative Borrower and the Lender Group to the
contrary, Agent's Account shall be that certain deposit account bearing account
number 323-266193 and maintained by Agent with JPMorgan Chase Bank, ▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ABA #▇▇▇▇▇▇▇▇▇.
Schedule C-1
Commitments
==========================================================================================
Lender Revolver Commitment Total Commitment
==========================================================================================
------------------------------------------------------------------------------------------
Foothill Capital $30,000,000 (or, if less, $30,000,000 (or, if less, the then
Corporation the then extant Maximum extant Maximum Revolver Amount)
Revolver Amount)
==========================================================================================
------------------------------------------------------------------------------------------
All Lenders $30,000,000 (or, if less, $30,000,000 (or,
if less, the then the then extant Maximum extant
Maximum Revolver Amount)
Revolver Amount)
==========================================================================================
Schedule P-1
(Other) Permitted Liens as of the Closing Date
None.
Schedule P-2
Permitted Parent Distributions
(a) Parent shall not make any Restricted Payment in respect of its Stock,
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would
occur as a consequence of such Restricted Payment; and
(2) Agent shall have received evidence, satisfactory to Agent in its
Permitted Discretion, that Parent would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.09(a) of the Indenture, mutatis mutandis; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Parent after the date of this
Agreement, is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of Parent for the period
(taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the date hereof to the
end of Parent's most recently ended fiscal quarter for which
internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds received by Parent
since the date hereof as a contribution to its common equity
capital or from the issue or sale of Stock of Parent (other
than Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible
or exchangeable debt securities of Parent that have been
converted into or exchanged for such Stock (other than Stock
(or Disqualified Stock or debt securities) sold to a
Subsidiary of Parent), plus
(C) 50% of any dividends received by Parent, or a wholly-owned
Restricted Subsidiary that is a Borrower or a Guarantor, after
the date of this Agreement from an Unrestricted Subsidiary of
Parent, to the extent that such dividends were not otherwise
included in Consolidated Net Income of Parent for such period.
(b) So long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, the preceding provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with both the provisions of this Agreement
and the Indenture;
(2) any redemption or purchase by Parent of Stock required by a Gaming
Authority in order to preserve a material Casino License; provided,
that so long as such efforts do not jeopardize any material Casino
License, Parent shall have diligently tried to find a third-party
purchaser for such Stock and no third-party purchaser acceptable to the
applicable Gaming Authority was willing to purchase such Stock within a
time period acceptable to such Gaming Authority;
(3) the repurchase, redemption or other acquisition or retirement for value
of any Stock of Parent held by any member of Parent's (or any of its
Restricted Subsidiaries') management pursuant to any management equity
subscription agreement, stock option agreement or similar agreement;
provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Stock may not exceed $1,000,000 in any
calendar year; provided that any portion of such $1,000,000 limit not
used in any year may be carried forward for use in subsequent years;
and
(4) Restricted Payments in an aggregate amount, taken together since the
date of this Agreement, of not more than $10,000,000.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by Parent pursuant to the
Restricted Payment. The fair market value of any assets or securities that are
required to be valued by this Schedule P-2 shall be determined by the Board of
Directors whose resolution with respect thereto shall be delivered to Agent. The
Board of Directors' determination must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the fair market value exceeds $5,000,000. Not later than the date of
making any Restricted Payment, Parent shall deliver to Agent an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Schedule P-2 were
computed, together with a copy of any fairness opinion or appraisal required by
this Agreement or the Indenture.
For the avoidance of doubt and without limiting the generality
of the Agreement, Restricted Payments otherwise permitted under this Schedule
P-2 may not constitute an Asset Sale (other than a Permitted Asset Sale).
Definitions used in this Schedule P-2:
"Consolidated Net Income" means, with respect to any
specified Person for any period, the aggregate of the Net Income of
such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that
is not a Subsidiary or that is accounted for by the equity
method of accounting shall be included only to the extent of
the amount of dividends or distributions paid in cash to the
specified Person or a Wholly Owned Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary shall
be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that
Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been
obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior
to the date of such acquisition shall be excluded;
(4) the cumulative effect of a change in
accounting principles shall be excluded; and
(5) the Net Income (but not loss) of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to
the specified Person or one of its Restricted Subsidiaries.
"Disqualified Stock" means any Stock that, by its
terms (or by the terms of any security into which it is convertible, or
for which it is exchangeable, in each case at the option of the holder
of the Stock), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder of the Stock, in
whole or in part, on or prior to the date that is 91 days after the
Maturity Date. Notwithstanding the preceding sentence, any Stock that
would constitute Disqualified Stock solely because the holders of the
Stock have the right to require Parent to repurchase such Capital Stock
upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Stock provide that
Parent may not repurchase or redeem any such Stock pursuant to such
provisions unless such repurchase or redemption complies with this
Schedule P-2.
"Net Income" means, with respect to any specified
Person, the net income (loss) of such Person, determined in accordance
with GAAP and before any reduction in respect of preferred stock
dividends, excluding, however:
(1) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss),
realized in connection with: (a) any Asset Sale; or
(b) the disposition of any securities by such Person
or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or
any of its Restricted Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
Schedule R-1
Real Property Collateral
==================== =================== ===================== =============== ================ =================
FACILITY BORROWER STREET ADDRESS COUNTY CITY, STATE FOOTHILL LIEN
AND ZIP CODE POSITION
-------------------- ------------------- --------------------- --------------- ---------------- -----------------
Riviera Las Vegas ROC ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ First *
Facility Boulevard South 89109
-------------------- ------------------- --------------------- --------------- ---------------- -----------------
Riviera Black Hawk RBH ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ First *
Facility 80422
-------------------- ------------------- --------------------- --------------- ---------------- -----------------
==================== =================== ===================== =============== ================ =================
* Upon full execution of the Intercreditor Agreement.