AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT by and among PENINSULA GAMING, LLC, DIAMOND JO, LLC, THE OLD EVANGELINE DOWNS, L.L.C., BELLE OF ORLEANS, L.L.C. AND DIAMOND JO WORTH, LLC, as Borrowers, THE LENDERS THAT ARE SIGNATORIES HERETO, as the...
EXHIBIT 10.5
AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT
by
and among
▇▇▇▇▇▇▇
▇▇, LLC,
THE
OLD ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C.,
BELLE
OF ORLEANS, L.L.C.
AND
▇▇▇▇▇▇▇
▇▇ WORTH, LLC,
as
Borrowers,
THE
LENDERS THAT ARE SIGNATORIES HERETO,
as
the Lenders,
and
▇▇▇▇▇
FARGO FOOTHILL, INC.
as
the Arranger and Agent
Dated
as of October 29, 2009
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AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this “Agreement”), is
entered into as of October 29, 2009, by and among, on the one hand, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and permitted assigns, are referred to hereinafter
each individually as a “Lender” and
collectively as the “Lenders”), ▇▇▇▇▇ FARGO FOOTHILL, INC., a
California corporation (“WFF”), as the
arranger and agent for the Lenders (“Agent”), and, on the
other hand, PENINSULA GAMING,
LLC, a Delaware limited liability company (“Parent”), ▇▇▇▇▇▇▇ ▇▇, LLC, a Delaware
limited liability company (“DJL”), THE OLD ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
L.L.C., a Louisiana limited liability company (“OED”), ▇▇▇▇▇▇▇ ▇▇ WORTH, LLC, a
Delaware limited liability company (“DJW” together with
Parent, DJL and OED, referred to hereinafter each individually as an “Existing Borrower”,
and individually and collectively, jointly and severally, as “Existing Borrowers”)
and BELLE OF ORLEANS,
L.L.C., a Louisiana limited liability company (“Amelia Belle”;
together with the Existing Borrowers, referred to hereinafter each individually
as a “Borrower”, and
individually and collectively, jointly and severally, as “Borrowers”).
W
I T N E S S E T H:
WHEREAS,
Existing Borrowers, the Lenders (as defined in the Existing Loan Agreement) and
Agent are parties to that certain Loan and Security Agreement dated as of
June 16, 2004 (as amended, restated, supplemented or otherwise modified
prior to the date hereof, the “Existing Loan
Agreement”);
WHEREAS,
Existing Borrowers have requested that the Lenders (as defined in the Existing
Loan Agreement)and Agent amend and restate the Existing Loan Agreement in its
entirety as set forth herein to, among other things, make certain substantive
changes to the Existing Loan Agreement and join ▇▇▇▇▇▇ Belle as a
Borrower;
WHEREAS,
each Existing Borrower acknowledges and agrees that the security interests
granted to Agent pursuant to the Loan Documents (as defined in the Existing Loan
Agreement), shall remain outstanding and in full force and effect in accordance
with the Existing Loan Agreement and the other Loan Documents (as defined in the
Existing Loan Agreement), as modified herein and in the other Loan Documents,
and shall continue to secure the Obligations;
WHEREAS,
Existing Borrowers and the Lenders acknowledge and confirm that (i) the
Obligations represent, among other things, the amendment, restatement, renewal,
extension, consolidation and modification of the Obligations (as defined in the
Existing Loan Agreement) arising in connection with the Existing Loan Agreement
and the other Loan Documents (as defined in the Existing Loan Agreement);
(ii) the Existing Loan Agreement and the other Loan Documents (as defined
in the Existing Loan Agreement) and the collateral pledged thereunder shall
secure, without interruption or impairment of any kind, all existing Obligations
(as defined in the Existing Loan Agreement) under the Existing Loan Agreement
and the other Loan Documents (as defined in the Existing Loan Agreement) as
amended, restated, renewed, extended, consolidated or modified hereunder and
under the other Loan Documents, together with all other Obligations hereunder;
(iii) all Liens evidenced by the Loan Documents (as defined in the Existing
Loan Agreement) are hereby ratified, confirmed and continued as
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modified, amended or restated under the Loan Documents; and (iv)
this Agreement is intended to restate, renew, extend, consolidate, amend and
modify the Existing Loan Agreement in its entirety; and
WHEREAS,
Existing Borrowers and the Lenders intend that (i) the provisions of the
Existing Loan Agreement and the other Loan Documents (as defined in the Existing
Loan Agreement), to the extent restated, renewed, extended, consolidated,
amended or modified hereby and by the other Loan Documents, be hereby superseded
and replaced by the provisions hereof and of the other Loan Documents; and
(ii) by entering into and performing their respective obligations
hereunder, this transaction shall not constitute a novation and shall in no way
adversely affect or impair the priority of Liens granted by the Loan Documents
(as defined in the Existing Loan Agreement);
NOW,
THEREFORE, in consideration of the mutual conditions and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree
that the Existing Loan Agreement is amended and restated in its entirety by this
Agreement, and further agree as follows:
1. DEFINITIONS AND
CONSTRUCTION.
1.1 Definitions. As
used in this Agreement, the following terms shall have the following
definitions:
“Account” means an
“account” (as that term is defined in the Code), and any and all supporting
obligations in respect thereof.
“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.
“Acquired Debt” means
Indebtedness of a Person or any of its Subsidiaries existing at the time such
Person is merged with or into either Borrower or a Restricted Subsidiary,
becomes a Restricted Subsidiary or Indebtedness assumed in connection with the
acquisition of assets from such Person other than Indebtedness incurred in
connection with, or in contemplation of, such Person merging with or into either
Borrower or a Restricted Subsidiary or becoming a Restricted Subsidiary or such
acquisition of assets.
“Additional Documents”
has the meaning set forth in Section 4.4(b)(i).
“Advances” has the
meaning set forth in Section 2.1(a).
“Affiliate” means, as
applied to any Person, any other Person who, directly or indirectly, controls,
is controlled by, or is under common 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 Capital Stock, by contract, or
otherwise. Notwithstanding the foregoing and for the avoidance of
doubt, ▇▇▇▇▇▇▇▇▇ & Company, Inc. shall not be deemed to be an Affiliate
of any Borrower or any Restricted Subsidiary.
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“Affiliate
Transaction” has the meaning set forth in Section 7.14.
“Agent” means ▇▇▇▇▇
Fargo Foothill, solely in its capacity as 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 or 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.
“▇▇▇▇▇▇ Belle” has the
meaning set forth in the preamble hereto.
“▇▇▇▇▇▇ Belle Casino”
means the riverboat casino located in Amelia, Louisiana known as the “▇▇▇▇▇▇
Belle” and owned by Amelia Belle.
“Annualized Quarterly
Consolidated EBITDA” means, as of any date of determination (which date
of determination shall be as of the last day of any month and need not be the
end of a fiscal quarter), the product of Parent’s Consolidated EBITDA for the
period of 3 months then ending times 4.
“Applicable Capital Gain Tax
Rate” means a rate equal to the sum of:
(a) the
highest marginal Federal income tax rate applicable to net capital gain of an
individual who is a citizen of the United States, plus
(b) to the
extent the relevant entity is subject to treatment on a basis under applicable
state or local income tax law substantially similar to a Federal Flow Through
Entity, (i) the greatest of (x) an amount equal to the sum of the
highest marginal state and local income tax rates applicable to net capital gain
of an individual who is a resident of the State of California, (y) an
amount equal to the sum of the highest marginal state and local income tax rates
applicable to net capital gain of an individual who is a resident of the State
of Louisiana, and (z) an amount equal to the sum of the highest marginal
state and local income tax rates applicable to net capital gain of an individual
who is a resident of the State of Iowa, multiplied by (ii) a factor equal
to 1 minus the highest marginal Federal income tax rate described in clause (a)
above.
“Applicable Gaming
Laws” has the meaning set forth in Section 9.1.
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“Applicable Income Tax
Rate” means a rate equal to the sum of:
(a) the
highest marginal Federal ordinary income tax rate applicable to an individual
who is a citizen of the United States, plus
(b) to the
extent the relevant entity is subject to treatment on a basis under applicable
state or local income tax law substantially similar to a Federal Flow Through
Entity, (i) the greatest of (x) an amount equal to the sum of the
highest marginal state and local ordinary income tax rates applicable to an
individual who is a resident of the State of California, (y) an amount
equal to the sum of the highest marginal state and local ordinary income tax
rates applicable to an individual who is a resident of the State of Louisiana,
and (z) an amount equal to the sum of the highest marginal state and local
ordinary income tax rates applicable to an individual who is a resident of the
State of Iowa, multiplied by (ii) a factor equal to 1 minus the highest
marginal Federal income tax rate described in clause (a)
above.
“Applicable Margin”
means, as of any date of determination, (a) in the case of Base Rate Loans,
2.50%, (b) in the case of LIBOR Rate Loans, 4.00% and (c) in the case
of Letter of Credit fees, 4.00%.
“Asset Sale”
means:
(a) any
direct or indirect sale, assignment, transfer, lease, conveyance, or other
disposition (including, without limitation, by way of merger or consolidation)
(collectively, a “transfer”) of any
assets of Borrowers or any Restricted Subsidiary; or
(b) any
direct or indirect issuance or sale of any Equity Interests of any Borrower or
any Restricted Subsidiary (other than directors’ qualifying shares), in each
case to any Person (other than Borrowers or a Restricted
Subsidiary).
“Assignee” has the
meaning set forth in Section 14.1(a).
“Assignment and
Acceptance” means an Assignment and Acceptance in the form of Exhibit A-1.
“Authorized Person”
means any officer or other employee of any 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 title 11 of the United States 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 1/100%), to be
the
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rate at which Dollar
deposits (for delivery on the first day of the requested Interest Period) are
offered to major banks in the London interbank market 2 Business Days prior
to the commencement of the requested Interest Period, for a term and in an
amount comparable to the Interest Period and the amount of the LIBOR Rate Loan
requested (whether as an initial LIBOR Rate Loan or as a continuation of an
extant LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate
Loan) by Borrowers in 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
the portion of the Advances that bears interest at a rate determined by
reference to the Base Rate.
“Beneficial Owner” or
“beneficial
owner” has the meaning attributed to it in Rules 13d-3 and 13d-5
under the Exchange Act (as in effect on the Closing Date) whether or not
otherwise applicable.
“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 6
years.
“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 all of
Borrowers’ and their respective Subsidiaries’ now owned or hereafter acquired
books and records (including all of their Records indicating, summarizing, or
evidencing their assets (including the Collateral) or liabilities, all of
Borrowers’ and their respective Subsidiaries’ Records relating to their business
operations or financial condition, and all of their goods or General Intangibles
related to such information).
“Borrower” and “Borrowers” means,
individually, each of Parent, OED, DJL, DJW and ▇▇▇▇▇▇ Belle, and individually
and collectively, jointly and severally, Parent, OED, DJL, DJW and ▇▇▇▇▇▇
Belle.
“Borrower Collateral”
means all of each Borrower’s now owned or hereafter acquired right, title, and
interest in and to each of the following:
(a) all of
its Accounts,
(b) all of
its Books,
(c) all of
its commercial tort claims described on Schedule 5.7,
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(d) all of
its Deposit Accounts;
(e) all of
its Equipment,
(f) all of
its General Intangibles,
(g) all of
its Inventory,
(h) all of
its Investment Property,
(i) all of
its judgments,
(j) all of
its Negotiable Collateral,
(k) all of
its Real Property Collateral,
(l) all money
or other assets of each such Borrower that now or hereafter come into the
possession, custody, or control of Agent, and
(m) 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.
Notwithstanding
the foregoing, “Borrower Collateral”
shall not include any of the Excluded Assets.
“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 a
Borrower.
“Borrowing Base” has
the meaning set forth in Section 2.1(a).
“Borrowing Base
Certificate” means a certificate in the form of Exhibit B-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 in New York, New York or Los Angeles,
California, 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.
“Capitalized Lease
Obligation” means that portion of the obligations under a Capital Lease
that is required to be capitalized in accordance with GAAP.
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“Capital Stock” means,
(a) with respect to any Person that is a corporation, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (b) with respect to a limited liability company, any and
all membership interests, and (c) with respect to any other Person, any and
all partnership or other equity interests of such Person.
“Cash Equivalents”
means (a) securities issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof), (b) time deposits and certificates of deposit and commercial
paper issued by the parent corporation of any domestic commercial bank of
recognized standing having capital and surplus in excess of $250,000,000 and
commercial paper issued by others rated at least A-2 or the equivalent thereof
by S&P or at least P-2 or the equivalent thereof by ▇▇▇▇▇’▇ and in each case
maturing within one year after the date of acquisition, (c) investments in
money market funds substantially all of whose assets comprise securities of the
type described in clauses (a) and
(b) above and
(d) repurchase obligations for underlying securities of the types and with
the maturities described above.
“Change of Control”
means the occurrence of any of the following: (a) during any
period of 2 consecutive calendar years, individuals who at the beginning of such
period constituted the Managers of Parent (together with any new Managers whose
election as a Manager or whose nominations for election by Parent’s members or
stockholders, was approved by a majority of Managers then still in office who
were either Managers at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of such Managers then in office; provided, however, that there shall be no
Change of Control pursuant to this clause (a) if
during such 2-year period any of the Excluded Persons continue to (i) own,
directly or indirectly, a majority of the Voting Stock of Parent or
(ii) control or manage, directly or indirectly, the day-to-day operations
of Parent; (b) any Person (other than an Excluded Person) is or becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the aggregate
voting power of the Voting Stock of Parent, or conversely, any Person that
beneficially owns, directly or indirectly, a majority of the aggregate voting
power of the Voting Stock of Parent on the Note Issuance Date becomes the
Beneficial Owner, directly or indirectly, of less than a majority of the voting
power of the Voting Stock of Parent; (c) any Borrower adopts a plan of
liquidation; (d) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of any Borrower and its Restricted Subsidiaries, in each case, taken as a whole,
to any Person other than a Borrower or a Restricted Subsidiary; (e) the
first day on which Parent fails to own 100% of the issued and outstanding
Capital Stock of Borrowers (other than Parent); or (f) the occurrence of
any event that constitutes a “Change of Control”
under and as defined in the Secured Notes Indenture or the Unsecured Notes
Indenture. As used in this definition, “Person” (including
any group that is deemed to be a “Person”) has the
meaning given by Section 13(d) of the Exchange Act, whether or not
applicable.
“Closing Date” means
October 29, 2009.
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“Closing Date Business
Plan” means the set of Projections of Borrowers for the period from the
Closing Date to December 31, 2012 (on a month by month basis), in form and
substance (including as to scope and underlying assumptions) satisfactory to
Agent.
“Code” means the New
York Uniform Commercial Code, as in effect from time to time.
“Collateral” means,
collectively, (a) all assets and interests in assets and proceeds thereof,
including, without limitation, the Borrower Collateral, now owned or hereafter
acquired by each Borrower, its Restricted Subsidiaries or each Guarantor in or
upon which a Lien is granted under any of the Loan Documents and (b) the
Equity Interests of Parent now owned or hereafter acquired by PGP in or upon
which a Lien is granted under the PGP Pledge
Agreement. Notwithstanding the foregoing, “Collateral” shall not
include any of 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 Books,
Equipment or Inventory, in each case, in form and substance satisfactory to
Agent.
“Collections” means
all cash, checks,
notes, instruments, and other items of payment (including insurance proceeds and
proceeds of cash sales, rent and tax refunds).
“Commercial Tort
Claim/Judgment Assignment” has the meaning set forth in Section 4.4(e).
“Commitment” means,
with respect to each Lender, its Commitment, and, with respect to all Lenders,
their 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
in 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.
“Consent Fee Letter”
means that certain fee letter, dated as of August 6, 2009, by and among Agent,
OED, DJL, CIT Lending Services Corporation and American Trust and Savings
Bank.
“Consolidated EBITDA”
means, with respect to Parent for any fiscal period, the sum of Consolidated Net
Income for such period, without duplication;
plus
(a) consolidated income tax expense of
Parent and its Restricted Subsidiaries paid or accrued in accordance with GAAP
for such period and the amount of Permitted Tax Distributions subtracted from
Net Income in the determination of the Consolidated Net Income of such Person
for such period;
plus
(b) Consolidated Interest Expense, to the extent deducted in computing such
Consolidated Net Income;
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plus
(c) Consolidated Non-Cash Charges, to the extent deducted in computing such
Consolidated Net Income and without duplication of any amounts added back to
Consolidated Net Income;
plus
(d) Pre-Opening Expenses, to the extent deducted in computing such
Consolidated Net Income;
plus (e)
Restricted Payments to Excluded Persons, to the extent deducted in computing
such Consolidated Net Income;
minus
(f) (i) extraordinary non-cash gains increasing such Consolidated Net
Income and (ii) the amount of all cash payments made by Borrowers or any of
the Restricted Subsidiaries during such period to the extent such payments
relate to non-cash charges that were added back in determining Consolidated
EBITDA for such period or any prior period.
“Consolidated Interest
Expense” means, with respect to Parent and its Restricted Subsidiaries
for any period, the result of (a)(i) the consolidated interest expense of
Parent and its Restricted Subsidiaries for such period net of interest income,
whether paid or accrued (including amortization of original issue discount,
noncash interest payment, and the interest component of Capitalized Lease
Obligations and all commissions, discounts and other fees and charges owed with
respect to bankers’ acceptances and letters of credit financings) plus (ii) to the
extent not already included in such consolidated interest expense, all
dividends, whether paid or accrued and whether or not in cash, on any series of
Disqualified Capital Stock of any Borrower or any Disqualified Capital Stock of
any of its Restricted Subsidiaries, other than dividends on Equity Interests
payable solely in Equity Interests (other than Disqualified Capital Stock) of
such Borrower or such Restricted Subsidiary, as the case may be, or to Parent or
a Restricted Subsidiary, in the case of each of clauses (i) and
(ii), to the extent such expense was deducted in computing Consolidated
Net Income for such period, minus (b) amortization expense, write-off of
deferred financing costs and any charge related to any premium or penalty paid,
in each case, accrued during such period in connection with any transaction or
proposed transaction to redeem, refinance, repurchase, exchange or retire any
Indebtedness before its stated maturity, as determined in accordance with GAAP,
to the extent such expense, cost, or charge was included in the calculation made
pursuant to clause (a)
above; minus
(c) any premiums, fees and expenses (including the amortization thereof)
payable in connection with the Gaming Acquisition, the offering of the Notes and
the application of the net proceeds therefrom or any other refinancing or
repayment of Indebtedness to the extent such premium, fee or expense was
included in the calculation made pursuant to clause (a)
above.
73. “Consolidated Net
Income” means, with respect to Parent for any period, the sum of
(a) the Net Income of Parent and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP excluding (to
the extent included in calculating such net income) (i) any gain or loss,
together with any related taxes paid or accrued on such gain or loss, realized
in connection with any asset sale or abandonment, including pursuant to
sale-leaseback transactions and (ii) any extraordinary gain or loss,
together with any taxes paid or accrued on such gain or loss; provided, that
(A) the Net Income of any other Person (other than a Restricted Subsidiary
of Parent) shall be included only to the extent of the amount of dividends or
distributions paid to a Borrower or a Wholly Owned Subsidiary of a Borrower, and
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(B) the
Net Income of any Restricted Subsidiary shall not be included to the extent that
declarations of dividends or similar distributions by such Restricted Subsidiary
are not at the time permitted, directly or indirectly, by operation of the terms
of its organizational documents or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such Restricted
Subsidiary or its owners; (b) without duplication, Consolidated Non-Cash
Charges described in clauses (b)(i)-(iv) of the definition thereof to the extent
deducted in computing such Consolidated Net Income; and (c) without duplication,
the write-off of deferred financing costs, discounts and any charges related to
any premium or penalty paid, in each case accrued during such period in
connection with the redemption or retirement of Indebtedness in connection with
the Transactions, as determined in accordance with GAAP, to the extent such
expense, cost, discount or charge was deducted in computing such Consolidated
Net Income.
“Consolidated Non-Cash
Charges” means, with respect to Parent for any period, (a) the
aggregate depreciation and amortization expense for Parent and its Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP and (b) all other non-cash charges of Parent and its Restricted
Subsidiaries for such period, in each case, determined on a consolidated basis
in accordance with GAAP, including, without limitation, non-cash charges related
to (i) any non-cash expense realized or resulting from the Management
Agreements, including the pricing or repricing or issuances of Equity Interests
of Borrowers or PGP to employees of Borrowers (whether accruing at or subsequent
to the time of such repricing or issuance), (ii) impairment of goodwill,
intangibles or fixed assets, (iii) purchase accounting adjustments, and
(iv) restructuring charges, non-capitalized transaction costs and other
non-cash charges incurred in connection with actual or proposed Investments,
financings, refinancings, amendments or modifications to the Notes Documents or
other Indebtedness, acquisitions or divestitures (including, without limitation,
the Gaming Acquisition, borrowings hereunder, the issuance of the Notes or any
refinancings of any of the foregoing) of Parent and its Restricted Subsidiaries
for such period; but, in each case, excluding (x) any such charges
constituting an extraordinary item or loss, and (y) any such charge which
requires an accrual of or a reserve for cash charges for any future
period.
“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 a Securities Account or the applicable
bank with respect to a Deposit Account, including any such agreement delivered
in connection with the Existing Loan Agreement.
“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.
“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 (a) 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 or (b) is deemed insolvent by, or is under the receivership or
conservatorship of,
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any Governmental Authority or the subject of any bankruptcy,
insolvency or similar action or proceeding in any applicable jurisdiction.
“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, the interest rate
then applicable to Advances (inclusive of the Base Rate Applicable Margin
applicable thereto).
“Deposit Account”
means any deposit account (as that term is defined in the Code).
“Designated Account”
means, with respect to each Borrower, that certain Deposit Account of such
Borrower identified on Schedule D-1.
“Designated Account
Bank” means American Trust and Savings Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ and/or any other bank that becomes a Designated Account Bank in
accordance with Section
2.9.
“▇▇▇▇▇▇▇ ▇▇ Casino”
means the land-based casino located in Dubuque County, Iowa, known as the
“▇▇▇▇▇▇▇ ▇▇ Casino” and owned by DJL.
“▇▇▇▇▇▇▇ ▇▇ Worth
Casino” means the land-based casino located in Worth County, Iowa, known
as the “▇▇▇▇▇▇▇ ▇▇ Casino” and owned by DJW.
“Disbursement Letter”
means an instructional letter executed and delivered by Borrowers to Agent
regarding the extensions of credit to be made on the Closing Date, the form and
substance of which is satisfactory to Agent.
“Disqualified Capital
Stock” means any Equity interest that (a) either by its terms (or
the terms of any security into which it is convertible or for which it is
exchangeable) is or upon the happening of any event would be required to be
redeemed or repurchased prior to the Maturity Date or is redeemable at the
option of the holder thereof at any time prior to the Maturity Date, or
(b) is convertible or exchangeable at the option of the issuer thereof or
any other Person for debt securities that are pari passu or subordinate in
respect of payment to the Obligations. Notwithstanding the foregoing,
any Equity Interests that would constitute Disqualified Capital Stock solely
because such Equity Interests mature or become mandatorily redeemable, or give
the holders thereof the right to require Borrowers to repurchase such Equity
Interests, in each case, upon the occurrence of a Change of Control or an Asset
Sale shall not constitute Disqualified Capital Stock if the terms of such Equity
Interests provide that the applicable Borrower may not repurchase or redeem any
such Equity Interests pursuant to the provisions of this Agreement.
“DJL” has the meaning
set forth in the preamble to this Agreement.
“DJW” has the meaning
set forth in the preamble to this Agreement.
“Dollars” or “$” means United
States dollars.
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“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 Parent, 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,
any Subsidiary of a Borrower or any of their predecessors in interest,
(b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by any Borrower, any
Subsidiary of a Borrower or any of their predecessors in interest.
“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 any Borrower or any Subsidiary of a Borrower,
relating to the environment, employee health and safety, or Hazardous Materials,
including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC
§ 1251 et
seq.; the Toxic
Substances Control Act, 15 USC § 2601 et seq.; the Clean Air
Act, 42 USC § 7401 et seq.; the Safe
Drinking Water Act, 42 USC § 3803 et seq.; the Oil
Pollution Act of 1990, 33 USC § 2701 et seq.; the Emergency
Planning and the Community Right-to-Know Act of 1986, 42 USC § 11001 et seq.; the Hazardous
Material Transportation Act, 49 USC § 1801 et seq.; and the
Occupational Safety and Health Act, 29 USC § 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.
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“Equipment” means
equipment (as that term is defined in the Code), machinery, machine tools,
motors, furniture, furnishings, fixtures, vehicles (including motor vehicles),
computer hardware, tools, parts and 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.
“Equity Holder” means
(a) with respect to a corporation, each holder of Capital Stock of such
corporation, (b) with respect to a limited liability company or similar
entity, each member of such limited liability company or similar entity,
(c) with respect to a partnership, each partner of such partnership,
(d) with respect to any entity described in clause (a)(iv)
of the definition of “Flow Through Entity”,
the owner of such entity, and (e) with respect to a trust described in
clause (a)(v) of
the definition of “Flow Through Entity”,
the persons treated for Federal income tax purposes as the owners of the trust
property.
“Equity Interests”
means Capital Stock or warrants, options or other rights to acquire Capital
Stock (but excluding any debt security that is convertible into, or exchangeable
for, Capital Stock).
“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 or a Subsidiary 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 or a Subsidiary 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 or a Subsidiary of a
Borrower is a member under IRC Section 414(m), or (d) solely for
purposes of Section 302 of ERISA and Section 412 of the IRC, any
Person subject to ERISA that is a party to an arrangement with a Borrower or a
Subsidiary of a Borrower and whose employees are aggregated with the employees
of a Borrower or a Subsidiary of a Borrower under IRC
Section 414(o).
“▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇”
means the casino and racetrack located in Opelousas, St. Landry Parish,
Louisiana and owned by OED.
“Event of Default” has
the meaning set forth in Section 8.
“Event of Loss” means,
with respect to any property or asset, any (a) loss, or destruction of, or
damage to, such property or asset or (b) any condemnation, seizure or
taking, by exercise of the power of eminent domain or otherwise, of such
property or asset, or confiscation or requisition of the use of such property or
asset.
“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 and their
Subsidiaries aged in excess of their historical levels with respect
thereto and
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all book overdrafts of Borrowers and their Subsidiaries in excess
of their historical
practices with respect thereto, in each case as determined by Agent in its
Permitted Discretion.
“Excess Cash Distribution
Amount for Taxes” means the excess of (a) the aggregate actual cash
distributions received by any Borrower or a Restricted Subsidiary from all Flow
Through Entities that are not Restricted Subsidiaries during the period
commencing with the Closing Date and continuing to and including the date on
which a proposed Permitted Tax Distribution is to be made under clause (3) of
Section 7.11
over (b) the aggregate amount of such cash distributions described in the
immediately preceding clause (a) that
have already been taken into account for purposes of making Permitted Tax
Distributions previously made and which were attributable to a Flow Through
Entity that was not a Restricted Subsidiary at the time such Permitted Tax
Distribution was made.
“Exchange Act” means
the Securities Exchange Act of 1934, as in effect from time to
time.
“Excluded Assets”
means (a) the lease for the off track betting parlor operated by Parent in
New Iberia, Louisiana; (b) cash (other than cash deposited in Deposit
Accounts or cash constituting proceeds of Collateral); (c) assets securing
Purchase Money Obligations or Capitalized Lease Obligations permitted to be
incurred under this Agreement to the extent a second Lien would not be permitted
under the documents evidencing such obligations; (d) any agreements,
permits, licenses (including Gaming Licenses), or the like (including any
parcels of the Warner Land that are subject to the mortgage granted by OED to
the seller of such land) solely in the event and to the extent
that: (i) such agreements, permits, licenses, or the like
(including any parcels of the Warner Land that are subject to the mortgage
granted by OED to the seller of such land) cannot be subjected to a consensual
security interest in favor of Agent without the consent of the licensor or other
party to such agreement, permit, license, or the like; (ii) any such
restriction is effective and enforceable under applicable law (including
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial
Code); and (iii) such consent is not obtainable by any Borrower or the
granting of the Lien therein would violate any Gaming License or any law, rule,
order or regulation imposed by any Gaming Authority; provided, that each
Borrower agrees to use all commercially reasonable efforts (which shall not
require the payment of cash to, or the reimbursement of fees and expenses of the
consenting party or the making of any material concessions under any such
agreement, permit, license (including a Gaming License) or the like (including
any parcels of the Warner Land that are subject to the mortgage granted by OED
to the seller of such land) to obtain all requisite consents to enable such
Borrower to provide a security interest in such agreement, permit, license
(including Gaming Licenses) or the like; (e) any lease entered into after
the Closing Date by any Borrower or Restricted Subsidiary for off-track betting
parlors or similar facilities; (f) Deposit Accounts or Securities Accounts
used solely for payroll, employee wage or benefit payments and trust or escrow
purposes so long as no Person has been granted a Lien on such property other
than the purported beneficiary of any such funds in such Securities Accounts and
Deposit Accounts; (g) the facility (including all related real property and
amenities), currently owned by DJW, known as “Pheasant Links” located in Emmons,
Minnesota on which a “member’s only” 9-hole golf course and 9-station sporting
clay course and hunting facility is located; and (h) any other property or
asset of Parent or any Restricted Subsidiary not already contained in this
definition of “Excluded Assets”
(other than any Deposit Account) acquired after the Closing Date in which a
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“Excluded Person”
means (a) PGP; (b) PGP Investors; (c) M. ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and any Affiliate or Manager of PGP, PGP Investors, M.
▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (collectively, the “Existing Holders”),
(d) any trust, corporation, partnership or other entity (i) controlled
by the Existing Holders and members of the immediate family of the Existing
Holders or (ii) 80% of the beneficiaries, stockholders, partners or owners
of which consist solely of the Existing Holders and members of the immediate
family of the Existing Holders or (e) any partnership, the sole general
partners of which consist solely of the Existing Holders and members of the
immediate family of the Existing Holders.
“Existing Borrower”
and “Existing
Borrowers” have the meanings set forth in the preamble to this
Agreement.
“Existing Loan
Agreement” has the meaning specified in the recitals to this
Agreement.
“Fee Letter” means
that certain Fee Letter, dated as of the Closing Date, between Borrowers and the
Lenders signatory thereto.
“FEIN” means Federal
Employer Identification Number.
“Flow Through Entity”
means an entity that for federal income tax purposes constitutes (a) an “S
corporation” (as defined in Section 1361(a) of the IRC), (b) a
“qualified subchapter S subsidiary” (as defined in
Section 1361(b)(3)(B) of the IRC), (c) a “partnership” (within the
meaning of Section 7701(a)(2) of the IRC) other than a “publicly traded
partnership” (as defined in Section 7704 of the IRC), (d) an entity
that is disregarded as an entity separate from its owners under the IRC, the
Treasury regulations, or any published administrative guidance of the Internal
Revenue Service or (e) a trust to the extent its income is includible in
the taxable income of the grantor or another person under Sections 671
through 679 of the IRC (each of the entities described in the preceding clauses (a),
(b), (c), (d) and (e), a “Federal Flow Through
Entity”).
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“Funding Date” means
the date on which a Borrowing occurs.
“Funding Losses” has
the meaning set forth in Section 2.16(b)(ii).
“GAAP” means generally
accepted accounting principles as in effect from time to time in the United
States, consistently applied.
“Gaming Acquisition”
means the acquisition of the ▇▇▇▇▇▇ Belle Casino pursuant to the terms of that
certain Purchase Agreement, dated as of June 18, 2009, by and among
Columbia Properties New Orleans, L.L.C., AB Acquisition LLC and PGP, as such
agreement may be amended and supplemented from time to time with the prior
written consent of Agent.
“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
or city or other political subdivision thereof, whether now or hereafter
existing, or any officer or official thereof, including the Louisiana Regulatory
Authorities and the Iowa Regulatory Authorities, and any other agency with
authority to regulate any gaming or racing operation (or proposed gaming or
racing operation) owned, managed or operated by any Borrower or any of its
Restricted Subsidiaries.
“Gaming Equipment”
means all Equipment composed of slot machines, video poker machines, and all
other gaming equipment and related signage, accessories and peripheral
equipment.
“Gaming License” means
any material license, franchise, registration, qualification, findings of
suitability or other approval or authorization required to own, lease, operate
or otherwise conduct or manage riverboat, dockside or land-based gaming
activities, including racing facilities and activities, in any state or
jurisdiction in which any Borrower or any of its Restricted Subsidiaries conduct
business or propose to conduct business (including, without limitation, all such
licenses granted by the Louisiana Regulatory Authorities and granted by the Iowa
Regulatory Authorities under Chapter 99F of the Iowa Code), and all applicable
liquor and tobacco licenses.
“Gaming Property” or
“Gaming
Properties” means one or more of the
foregoing: (a)(i) the ▇▇▇▇▇▇▇ ▇▇ Casino, (ii) the
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (iii) the ▇▇▇▇▇▇▇ ▇▇ Worth Casino, and (iv) the ▇▇▇▇▇▇
Belle Casino, in each case, so long as it is owned by a Borrower or a Restricted
Subsidiary; and (b) any other gaming facility or gaming operation owned and
controlled or to be owned and controlled after the Closing Date by a Borrower or
a Restricted Subsidiary and that contains, or that based upon a plan approved by
such Borrower’s Managers will contain upon the completion of the construction or
development thereof, an aggregate of at least 500 slot machines or other gaming
devices, provided, in each case, that the property and assets (other than
Excluded Assets) of such Gaming Property constitute Collateral.
“General Intangibles”
means general intangibles (as that term is defined in the Code), including
payment intangibles, contract rights, rights to payment, rights to gaming
permits, rights arising under common law, statutes, or regulations, choses or
things in action,
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“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 Security
Agreement” means one or more security agreements executed and delivered
by each Guarantor in favor of Agent, in each case in form and substance
satisfactory to Agent.
“Guarantors” means OED
Capital Corp., the Restricted Subsidiaries and all other Persons executing a
Guaranty of the Obligations in favor of Agent.
“Guaranty” means one
or more guaranties in favor of Agent, for the benefit of the Lender Group,
executed and delivered by any Person (other than the guarantor under the ▇▇▇▇▇▇▇
Guaranty) guaranteeing or providing an indemnity for all or any part of the
Obligations, in each case, in form and substance satisfactory to Agent,
including, without limitation, the Subsidiary Guaranty.
“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.
“Hedging Obligations”
means, with respect to any Person, the obligations of such Person under
(a) interest rate swap agreements, interest rate cap agreements, interest
rate exchange agreements and interest rate collar agreements and (b) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates, including any arrangement whereby, directly or indirectly,
such Person is entitled to receive from time to time
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“Holdout Lender” has
the meaning set forth in Section 15.2.
“Impacted Lender”
means a Defaulting Lender or a Lender (a) that has defaulted in fulfilling its
lending obligations under one or more other syndicated credit facilities after
the Closing Date, or (b) as to which an entity that controls such Lender has
been deemed insolvent by, or has been placed under the receivership or
conservatorship of, any Governmental Authority or become the subject of a
bankruptcy, insolvency or other similar proceeding.
“Indebtedness” of any
Person means (without duplication) (i) all liabilities and obligations,
contingent or otherwise, of such Person (a) in respect of borrowed money
(regardless of whether the recourse of the lender is to the whole of the assets
of such Person or only to a portion thereof), (b) evidenced by bonds,
debentures, notes or other similar instruments, (c) representing the
deferred purchase price of property or services (other than trade payables on
customary terms incurred in the ordinary course of business), (d) created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) representing Capitalized
Lease Obligations, (f) under bankers’ acceptances and letter of credit
facilities, (g) to purchase, redeem, retire, defease or otherwise acquire
for value any Disqualified Capital Stock or (h) in respect of Hedging
Obligations, (ii) all Indebtedness of others that is guaranteed by such
Person, and (iii) all Indebtedness of others that is secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
provided, that
the amount of such Indebtedness shall (to the extent such Person has not assumed
or become liable for the payment of such Indebtedness) be the less of
(1) the fair market value of such property at the time of determination and
(2) the amount of such Indebtedness. The amount of Indebtedness of any
Person at any date shall be the outstanding balance as of such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations at such date. The principal amount outstanding of any
Indebtedness issued with original issue discount is the accreted value of such
Indebtedness.
“Indemnified
Liabilities” has the meaning set forth in Section 11.3.
“Indemnified Person”
has the meaning set forth in Section 11.3.
“Indenture” means,
collectively, the Secured Notes Indenture and the Unsecured Notes
Indenture.
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“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, the Restricted Subsidiaries and Agent, the form and substance of
which is satisfactory to Agent.
“Intercreditor
Agreement” means that certain Intercreditor Agreement between ▇▇▇▇▇ Fargo
Foothill, as agent under the Existing Loan Agreement, and the Secured Notes
Trustee, dated as of August 6, 2009.
“Interest Coverage
Ratio” means with respect to Parent for any period, the ratio of
(a) Consolidated EBITDA, to (b) Consolidated Interest Expense, in each
case, for such period. In calculating Interest Coverage Ratio for any
period, (i) pro forma effect shall be given
to the incurrence, repayment or retirement by any Borrower or any of its
Restricted Subsidiaries of any Indebtedness (other than Indebtedness incurred in
the ordinary course of business for general corporate purposes pursuant to
working capital facilities) subsequent to the commencement of the period for
which the Interest Coverage Ratio is being calculated, as if the same had
occurred at the beginning of the applicable period; and (ii) acquisitions
that have been made by any Borrower or any of the Restricted Subsidiaries,
including all mergers and consolidations, subsequent to the commencement of such
period shall be calculated on a pro forma basis, assuming that
all such acquisitions, mergers and consolidations had occurred on the first day
of such period, including giving effect to reductions in costs for such period
that are directly attributable to the elimination of duplicative functions and
expenses (regardless of whether such cost savings could then be reflected in pro
forma financial statements under GAAP, Regulation S-X promulgated by the SEC or
any other regulation or policy of the SEC) as a result of such acquisition,
merger or consolidation; provided that (x)
such cost savings were identified and quantified in an officer’s certificate
delivered to Agent at the time of the consummation of such acquisition, merger
or consolidation and such officer’s certificate states that such officers
believe in good faith that actions will be commenced or initiated within ninety
(90) days of the consummation of such acquisition, merger or consolidation to
effect such cost savings and sets forth the specific steps to the be taken
within the ninety (90) days after such acquisition, merger or consolidation to
accomplish such cost savings, and (y) with respect to each acquisition, merger
or consolidation completed prior to the 90th day preceding such date of
determination, actions were commenced or initiated by Parent or any of its
Restricted Subsidiaries within ninety (90) days of such acquisition, merger or
consolidation to effect the cost savings identified in such officer’s
certificate (regardless, however, of whether the corresponding cost savings have
been achieved).
“Interest Period”
means, with respect to each LIBOR Rate Loan, a period commencing on the date of
the making of such LIBOR Rate Loan (or the continuation of a
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“Inventory” means
inventory (as that term is defined in the Code).
“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,
(b) bona fide
Accounts arising in the ordinary course of business consistent with past
practices and (c) deposits and prepaid expenses incurred in the ordinary
course of business or in connection with proposed transactions that are not
consummated), purchases or other acquisitions for consideration of Indebtedness
or Capital 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 “investment property” (as that term is defined in the Code), and any and
all supporting obligations in respect thereof.
“Iowa Code” means the
Code of Iowa (1999), as amended from time to time.
“Iowa Regulatory
Authorities” means the Iowa Racing and Gaming Commission, or any
successor Gaming Authority in Iowa.
“IRC” means the
Internal Revenue Code of 1986, as amended from time to time.
“L/C” has the meaning
set forth in Section 2.12(a).
“L/C Disbursement”
means a payment made by Agent pursuant to a Letter of Credit.
“L/C Undertaking” has
the meaning set forth in Section 2.12(a).
“Lender” has the
meaning set forth in the preamble to this Agreement.
“Lender Group” means,
individually and collectively, each of the Lenders and Agent.
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“Lender Group
Expenses” means all (a) costs or expenses (including taxes, and
insurance premiums) required to be paid by a Borrower, its Subsidiaries or a
Guarantor under any of the Loan Documents or the ▇▇▇▇▇▇▇ Guaranty that are paid,
advanced or incurred by the Lender Group, (b) the actual fees or charges
paid or incurred by Agent in connection with the Lender Group’s transactions
with Borrowers, their Subsidiaries or the Guarantors, including, fees or charges
for photocopying, notarization, couriers and messengers, telecommunication,
public record searches (including tax lien, litigation, and Uniform Commercial
Code 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 or other members of the Lender Group (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
the ▇▇▇▇▇▇▇ Guaranty, 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 the ▇▇▇▇▇▇▇
Guaranty or in connection with the transactions contemplated by the Loan
Documents or the ▇▇▇▇▇▇▇ Guaranty or the Lender Group’s relationship with any
Borrower or any Guarantor of the Obligations, (h) Agent’s reasonable fees and
expenses (including attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering, or amending the Loan Documents or the ▇▇▇▇▇▇▇
Guaranty, 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 in
exercising rights or remedies under the Loan Documents), or defending the Loan
Documents or, irrespective of whether suit is brought, or in taking any Remedial
Action concerning the Collateral.
“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 or any of such Lender’s Affiliates.
“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 face
amount of all outstanding Letters of Credit.
“LIBOR Deadline” has
the meaning set forth in Section 2.16(b)(i).
“LIBOR Notice” means a
written notice in the form of Exhibit L-1.
“LIBOR Option” has the
meaning set forth in Section 2.16(a).
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“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.
“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, the Disbursement Letter, the Fee Letter,
the Guaranties, the Intercompany Subordination Agreement, the Intercreditor
Agreement, the Letters of Credit, the Mortgages, the Ship Mortgage, the
Management Fees Subordination Agreement, the Guarantor Security Agreement, the
Officers’ Certificate, the Trademark Security Agreement, the Pledge Agreement,
the PGP Pledge Agreement, the Subordination of Mortgage, the Consent Fee Letter,
any Commercial Tort Claim/Judgment Assignments, any note or notes executed by a
Borrower in connection with this Agreement and payable to a member of the Lender
Group, any subordination agreement, subordination instrument or other
subordination document executed and/or delivered by any Person in favor of Agent
or the Lender Group and any other agreement entered into by any Borrower or any
Guarantor in favor of Agent or the Lender Group, now or in the future, in
connection with this Agreement and, except to the extent amended or replaced as
of the Closing Date, any other agreement entered into prior to the date hereof
in connection with the Existing Loan Agreement. For the avoidance of
doubt, the ▇▇▇▇▇▇▇ Guaranty shall not constitute a Loan Document.
“Louisiana Regulatory
Authorities” means, collectively, the Louisiana Gaming Control Board and
the Louisiana State Racing Commission, or any successor Gaming Authority in
Louisiana.
“Management
Agreements” means, collectively, profits interests grants or similar
equity interest arrangements, employment agreements, consulting agreements,
management agreements and other similar arrangements entered into from time to
time by and among any Borrower, any Guarantor or any of their Affiliates and any
manager, officer, holder of Equity Interests or employee or consultant of any
Borrower, any Guarantor or such Affiliates and such
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“Management Fees
Subordination Agreement” means that certain Amended and Restated
Management Fees Subordination Agreement, dated as of the Closing Date, among
Borrowers, Agent, and PGP, and each supplement thereto executed by any Person
entitled to receive management or similar fees from any Borrower, the form and
substance of which is satisfactory to Agent.
“Manager” means, with
respect to any Person (a) if such Person is a limited liability company,
the members of the board of managers, or members of such other body performing
similar functions for such Person, manager or managers, as appointed pursuant to
the operating agreement of such Person as then in effect, or in the event that
there are no managers or board of managers or similar governing body, the sole
member or (b) otherwise, the members of the board of directors (if such
Person is a corporation) or other governing body of such Person.
“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 their Subsidiaries taken as a whole,
(b) a material impairment of a Borrower’s or a Subsidiary of a Borrower’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 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 Subsidiary of a
Borrower.
“Maturity Date” has
the meaning set forth in Section 3.4.
“Maximum Revolver
Amount” means $58,500,000.
“Monthly Financial
Report” has the meaning set forth in Section 6.3(a).
“Moody’s” means
▇▇▇▇▇’▇ Investors Service, Inc., a Delaware corporation, and its
successors.
“Mortgage Policy” has
the meaning set forth in Section 3.1(o).
“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, in form and substance satisfactory to Agent, that encumber the Real
Property Collateral and the related improvements thereto, including, without
limitation, the mortgages, deeds of trust and deeds to secure debt executed in
connection with the Existing Loan Agreement.
“Negotiable
Collateral” means 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.
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“Net Income” means,
with respect to any Person for any period, (a) the net income (or loss) of
such Person for such period, determined in accordance with GAAP, excluding (to
the extent included in calculating such net income) (i) any gain or loss,
together with any related taxes paid or accrued on such gain or loss, realized
in connection with any asset sale or abandonment, including pursuant to
sale-leaseback transactions, and (ii) any extraordinary gain or loss,
together with any taxes paid or accrued on such gain or loss, reduced by
(b) an amount equal to the amount of Permitted Tax Distributions actually
made (without duplication) to any parent or equity holder of such Person for
such period in accordance with clause (3) of
Section 7.11 as
though such amounts had been paid as income taxes directly by such Person for
such period.
“Net Proceeds” means
the aggregate proceeds received in the form of cash or Cash Equivalents in
respect of any Asset Sale (including insurance or other payments in an Event of
Loss and payments in respect of deferred payment obligations and any cash or
Cash Equivalents received upon the sale or disposition of any non-cash
consideration received in any Asset Sale, in each case when received), net
of:
(a) the
reasonable and customary direct out-of-pocket costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees
and sales commissions), other than any such costs payable to an Affiliate of
Borrowers,
(b) taxes
required to be paid by Borrowers, any of their Restricted Subsidiaries, or any
Equity Holder of Borrowers (or, in the case of any Equity Holder of Borrowers
that is a Flow Through Entity, the Upper Tier Equity Holder of such Flow Through
Entity) in connection with such Asset Sale in the taxable year that such sale is
consummated or in the immediately succeeding taxable year, the computation of
which shall take into account the reduction in tax liability resulting from any
available operating losses and net operating loss carryovers, tax credits and
tax credit carryforwards, and similar tax attributes,
(c) amounts
required to be applied to the permanent repayment of Indebtedness in connection
with such Asset Sale, and
(d) appropriate
amounts provided as a reserve by the applicable Borrower or any Restricted
Subsidiary, in accordance with GAAP, against any liabilities associated with
such Asset Sale and retained by the applicable Borrower or such Restricted
Subsidiary, as the case may be, after such Asset Sale (including, without
limitation, as applicable, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations arising from such Asset Sale).
“Notes” means,
collectively, the Secured Notes and the Unsecured Notes.
“Notes Documents”
means, collectively, the Secured Notes Documents and the Unsecured Notes
Documents.
“Note Issuance Date”
means August 6, 2009.
“Notes Trustee” means,
collectively, the Secured Notes Trustee and the Unsecured Notes
Trustee.
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“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 (including the Applicable Prepayment Premium), 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 or by law. 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.
“OED Capital Corp.”
means Peninsula Gaming Corp. (formerly known as The Old ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Corp.), a Delaware corporation.
“OED Hotel” means that
certain hotel and event center owned or managed by OED and located in Opelousas,
Louisiana.
“Officers’
Certificate” means the representations and warranties of officers form
submitted by Agent to each Borrower, together with such Borrower’s completed
responses to the inquiries set forth therein, the form and substance of such
responses to be satisfactory to Agent.
“Operating Assets”
means, collectively (i) the ▇▇▇▇▇▇▇ ▇▇▇ Casino, (ii) the ▇▇▇▇▇▇▇ ▇▇
Worth Casino, (iii) the ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and (iv) the ▇▇▇▇▇▇ Belle
Casino.
“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).
“Participant Register”
has the meaning set forth in Section 14.1(i).
“Patriot Act” has the
meaning set forth in Section 17.10.
“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, transfers or other dispositions by
any Borrower or any Guarantor of any personal property (other than any Gaming
Property or any assets that comprise a material portion of any Gaming Property)
that is substantially worn,
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“Permitted
Investments” means:
(a) Investments
in Borrowers or in any Restricted Subsidiary;
(b) Investments
in Cash Equivalents;
(c) Investments
in a Person, if, as a result of such Investment, such Person (i) becomes a
Wholly Owned Subsidiary that is a Guarantor, or (ii) is, subject to the
terms of Section 7.3,
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, a Borrower or a
Guarantor;
(d) Hedging
Obligations;
(e) Investments
as a result of consideration received in connection with an Asset Sale made in
compliance Section 7.4;
(f) Investments
existing on the Closing Date and set forth on Schedule P-2
attached hereto;
(g) Investments
paid for solely with Capital Stock (other than Disqualified Capital Stock) of
Parent;
(h) credit
extensions to gaming customers in the ordinary course of business, consistent
with industry practice;
(i) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to Borrowers (i) in satisfaction of
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(j) loans or
other advances to employees of Borrowers and the Restricted Subsidiaries in an
aggregate amount not to exceed $2,500,000 at any one time
outstanding;
(k) intercompany
Indebtedness incurred pursuant to clause (f) of
Section 7.1;
(l) Investments
in the Notes or any additional Notes to the extent permitted by Section
7.8(a)(iv);
(m) the
Gaming Acquisition; and
(n) Investments
not otherwise permitted by clauses (a)
through (m)
above, not to exceed $20,000,000 at any time outstanding; provided, however, Investments
in Unrestricted Subsidiaries shall not exceed $10,000,000 at any time
outstanding.
“Permitted Lien”
means:
(a) Liens in
favor of Agent securing the Obligations;
(b) Liens
arising by reason of any judgment, decree or order of any court for an amount
and for a period not resulting in an Event of Default with respect thereto, so
long as such Lien is being contested in good faith and is adequately bonded, and
any appropriate legal proceedings that may have been duly initiated for the
review of such judgment, decree or order shall not have been finally adversely
terminated or the period within which such proceedings may be initiated shall
not have expired;
(c) security
for the performance of bids, tenders, trade, contracts (other than contracts for
the payment of borrowed money) or leases, surety and appeal bonds, performance
and return-of-money bonds and other obligations of a like nature incurred in the
ordinary course of business, consistent with industry practice and not in
connection with the borrowing of money;
(d) Liens for
taxes, assessments or other governmental charges that do not cause an Event of
Default hereunder and are either (i) not yet delinquent or (ii) the
subject of a Permitted Protest;
(e) Liens of
carriers, warehousemen, mechanics, landlords, material men, suppliers, repairmen
or other like Liens, in each case arising by operation of law in the ordinary
course of business consistent with industry practices (other than Liens arising
under ERISA) and not in connection with the borrowing of money if (i) the
underlying obligations are not overdue for a period of more than 30 days or
(ii) such Liens are the subject of a Permitted Protest;
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(f) easements,
rights of way, zoning and similar restrictions and other similar encumbrances or
title defects incurred in the ordinary course of business, and that, in the
aggregate, do not materially detract from the value of the property subject
thereto (as such property is used by Borrowers or a Restricted Subsidiary) or
materially interfere with the ordinary conduct of the business of Borrowers or
any of the Restricted Subsidiaries;
(g) Liens
arising from deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social security
legislation or otherwise arising from statutory or regulatory requirements of
Borrowers or any of the Restricted Subsidiaries;
(h) Liens
securing Refinancing Indebtedness incurred in compliance with the terms hereof
to refinance Indebtedness secured by Permitted Liens; provided,
(i) such Liens do not extend to any additional property or assets;
(ii) if the Liens securing the Indebtedness being refinanced were
subordinated to or pari passu with the Obligations, such new Liens are
subordinated to or pari passu with such Liens to the same extent, and any
related subordination or intercreditor agreement is confirmed on terms
reasonably satisfactory to Agent; and (iii) such Liens are no more adverse
to the interests of the Lenders than the Liens replaced or extended
thereby;
(i) Liens
that secure Acquired Debt or Liens on property acquired by a Borrower or any
Restricted Subsidiary in the ordinary course of business or in connection with a
Permitted Investment; provided, that such
Liens do not extend to or cover any other property or assets and were not put in
place in anticipation of such acquisition;
(j) any
interest or title of a lessor under any operating lease; provided that such
Liens do not extend to any property or assets which are not leased property
subject to such operating lease;
(k) Liens
that secure Purchase Money Obligations and Capitalized Lease Obligations
permitted to be incurred under this Agreement; provided that such
Liens do not extend to or cover any property or assets other than those being
acquired, leased or developed and property and assets which, immediately prior
to the incurrence of such Purchase Money Obligations or Capitalized Lease
Obligations, secured other Indebtedness of a Borrower and the Restricted
Subsidiaries (to the extent such other Indebtedness and the Liens securing such
other Indebtedness are permitted under this Agreement) to the lender of such
Purchase Money Obligations or Capitalized Lease
Obligations;
(l) Liens in
favor of the Secured Notes Trustee securing the Secured Notes Documents; provided that such
Liens are subject to the Intercreditor Agreement at all times;
(m) with
respect to any vessel included in the Collateral, certain maritime liens,
including liens for crew’s wages and salvage;
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(n) Liens on
deposit accounts or Cash Equivalents incurred in the ordinary course of business
securing Hedging Obligations, which Hedging Obligations are otherwise permitted
under this Agreement;
(o) Liens
existing on the Note Issuance Date to the extent and in the manner such Liens
are in effect on the Note Issuance Date;
(p) Liens on
the Capital Stock of any Unrestricted Subsidiary securing any Indebtedness of
such Unrestricted Subsidiary;
(q) leases or
subleases of Real Property (other than the Real Property comprising any
Operating Asset) granted to others that do not interfere in any material respect
with the business of Borrowers or any of the Restricted Subsidiaries or
materially detract from the value of the relative assets of Borrowers or any
Restricted Subsidiary;
(r) Liens
securing reimbursement obligations with respect to commercial letters of credit
that encumber documents and other property relating to such letters of credit
and the products and proceeds thereof;
(s) 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; and
(t) Liens
securing guarantees by Borrowers and Restricted Subsidiaries of Indebtedness
incurred by any Borrowers or Restricted Subsidiary that is secured by a Lien
permitted under any of the above clauses (a)-(s) if such guarantees are
permitted by Section
7.6.
“Permitted Protest”
means the right of any Borrower or any of its Restricted Subsidiaries, as
applicable, to protest any Lien (other than any such Lien that secures the
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 such Borrower or any of its
Restricted 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 Tax
Distribution” in respect of Borrowers, means, with respect to any taxable
year or portion thereof in which a Borrower is a Flow Through Entity, the sum
of: (i) the product of (a) the excess of (1) all items
of taxable income or gain (other than capital gain) of such Borrower for such
year or portion thereof over (2) all items of taxable deduction or loss
(other than capital loss) of such Borrower for such year or portion thereof,
multiplied by (b) the Applicable Income Tax Rate, plus (ii) the
product of (a) the net capital gain (i.e., net long-term capital gain over
net short-term capital loss), if any, of such Borrower for such year or portion
thereof, multiplied by (b) the Applicable Capital Gain Tax Rate, plus
(iii) the product of (a) the net short-term capital gain (i.e., net
short-term capital gain in excess of net long-term capital
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“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 Borrower Collateral other than Real Property
Collateral and the proceeds thereof constituting Real Property.
“PGP” means Peninsula
Gaming Partners, LLC, a Delaware limited liability company, the direct parent
and sole manager of Parent.
“PGP Investors” means
PGP Investors, LLC, a Delaware limited liability company.
“PGP Pledge Agreement”
means a stock pledge agreement executed and delivered by PGP in respect of the
Capital Stock of Parent, in form and substance satisfactory to
Agent.
“Pledge Agreement”
means a stock pledge agreement executed and delivered by Borrowers in respect to
the Capital Stock of the Restricted Subsidiaries, in form and substance
satisfactory to Agent.
“Pre-Opening Expenses”
means, with respect to any fiscal period, the amount of expenses (other than
interest expense) incurred with respect to capital projects that are classified
as “pre-opening expenses” on the applicable financial statements of the
Borrowers and the Restricted Subsidiaries for such period, prepared in
accordance with GAAP.
“Pro Rata Share”
means, as of any date of determination:
(a) with
respect to a Lender’s obligation to make Advances and receive payments of
principal, interest, fees, costs, and expenses with respect thereto and, with
respect to a Lender’s obligation to participate in Letters of Credit, to
reimburse Agent, and to receive payments of fees with respect thereto,
(i) prior to the Commitments being terminated or reduced to zero, the
percentage obtained by dividing (y) such Lender’s Commitment, by
(z) the aggregate Commitments of all Lenders, and (ii) from and after
the time that the Commitments have been terminated or reduced to zero, the
percentage obtained by dividing (y) the aggregate outstanding principal
amount of such Lender’s Advances by (z) the aggregate outstanding principal
amount of all Advances, and
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(b) with
respect to all other matters as to a particular Lender (including the
indemnification obligations arising under Section 16.7),
the percentage obtained by dividing (i) such Lender’s Commitment, by
(ii) the aggregate amount of Commitments of all Lenders; provided, however, that in the
event the Commitments have been terminated or reduced to zero, Pro Rata Share
under this clause shall be the percentage obtained by dividing (A) the
outstanding principal amount of such Lender’s Advances plus such Lender’s
ratable portion of the Risk Participation Liability with respect to outstanding
Letters of Credit, by (B) the outstanding principal amount of all Advances
plus the aggregate amount of the Risk Participation Liability with respect to
outstanding Letters of Credit.
“Projections” means
Borrowers’ forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a consistent
basis with Borrowers’ historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.
“Purchase Money
Obligations” means Indebtedness the proceeds of which are used solely by
Borrowers and the Restricted Subsidiaries (and concurrently with the incurrence
of such Indebtedness) to acquire or lease or improve, any assets; provided, that such
Indebtedness is secured only by the assets so financed and assets which,
immediately prior to the incurrence of such Indebtedness, secured other
Indebtedness of Borrowers and the Restricted Subsidiaries (to the extent such
other Indebtedness and the Liens securing such other Indebtedness are permitted
under this Agreement) to the lender of such Indebtedness.
“Real Property” means
any estates or interests in real property now owned or hereafter acquired by any
Borrower, any Restricted Subsidiary of a Borrower or any Guarantor and the
improvements thereto.
“Real Property
Collateral” means the parcel or parcels of Real Property identified on
Schedule R-1,
and any Real Property not constituting Excluded Assets hereafter acquired by any
Borrower or any Guarantor.
“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.
“Refinance” has the
meaning set forth in Section 7.1(k).
“Refinancing
Indebtedness” has the meaning set forth in Section 7.1(k).
“Register” has the
meaning set forth in Section 14.1(h).
“Registered Loan” has
the meaning set forth in Section 2.13.
“Registered Note” has
the meaning set forth in Section 2.13.
“Related Business”
means the gaming, entertainment and hotel businesses conducted (or proposed to
be conducted) by Borrowers and their Restricted Subsidiaries as of the Closing
Date and any and all other businesses that in the good faith judgment of the
Managers of
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“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 § 9601.
“Replacement Lender”
has the meaning set forth in Section 15.2.
“Report” has the
meaning set forth in Section 16.17(a).
“Required Lenders”
means, Lenders whose Pro Rata Shares aggregate 51% of the Commitments, or, if
the Commitments have been terminated, 51% of the Obligations outstandings, provided, however, that if any
Lender shall be a Defaulting Lender at such time, there shall be excluded from
the determination of Required Lenders at such time (a) the aggregate principal
amount of the Advances made by such Lender and outstanding at such time, (b)
such Lender’s Pro Rata Share of the Letter of Credit Usage outstanding at such
time, and (c) such Lender’s Commitment at such time. For purposes of
this definition, (i) the portion of the Letter of Credit Usage relating to
the Letters of Credit issued by ▇▇▇▇▇ Fargo and (ii) the aggregate principal
amount of Swing Loans owing to the Swing Lender shall be considered to be owed
to the Lenders ratably in accordance with their respective Commitments, except
to the extent any such Lender shall be a Defaulting Lender, in which case ▇▇▇▇▇
Fargo Foothill shall retain the right to vote the ratable amount of such
Defaulting Lender.
“Reserve Percentage”
means on any day, for Agent, 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 Agent, but so long as Agent is not required or directed under
applicable regulations to maintain such reserves, the Reserve Percentage shall
be zero.
“Restricted
Investment” means an Investment other than a Permitted
Investment.
“Restricted Payment”
means:
(a) any
dividend or other distribution declared or paid by a Borrower or a Restricted
Subsidiary on account of any Equity Interests of a Borrower or any of the
Subsidiaries, any payment by a Borrower or a Restricted Subsidiary of any
management fees to any Person, or any other payment by a Borrower or a
Restricted Subsidiary to any Affiliate of a Borrower or any Excluded Person or
Affiliate thereof (other than, in each case, (i) dividends or distributions
payable in Equity Interests (other than Disqualified Capital Stock) of such
Borrower
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(b) any
payment by a Borrower or a Restricted Subsidiary to purchase, redeem or
otherwise acquire or retire for value any Equity Interest of a Borrower, any
Subsidiary or any other Affiliate of such Borrower (other than any such Equity
Interest owned by the applicable Borrower or any Restricted Subsidiary);
or
(c) any
Restricted Investment.
“Restricted
Subsidiaries” means any Subsidiary of a Borrower which at the time of
determination is not an Unrestricted Subsidiary.
“Return from Unrestricted
Subsidiaries” has the meaning set forth in the Secured Notes
Indenture.
“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.
“Risk Participation
Liability” means, as to each Letter of Credit, all reimbursement
obligations of Borrowers to Agent 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 Agent 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.
“S&P” means
Standard & Poor’s Rating Service, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., a New York corporation, and its successors.
“SEC” means the United
States Securities and Exchange Commission and any successor
thereto.
“Secured Debt” means
consolidated Indebtedness of Parent and its Restricted Subsidiaries secured by a
Lien (other than a Lien permitted to be incurred pursuant to clauses (d)-(g),
(j), (m)-(n) or (p)-(t) of the definition of Permitted Liens).
“Secured Leverage
Ratio” means, as of any date of determination, the ratio of (a) the
aggregate principal amount of Secured Debt outstanding on such date (and, for
this purpose, letters of credit will be deemed to have a principal amount equal
to the face amount thereof, whether or not drawn) to (b) Consolidated
EBITDA of Parent for the most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding such date of
determination, in each case with such pro forma adjustments to Secured Debt and
Consolidated EBITDA as are appropriate and consistent with the pro forma
adjustment provisions set forth in the definition of “Interest Coverage
Ratio”.
“Secured Notes” means
the “Notes” (as such term is defined in the Secured Notes
Indenture).
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“Secured Notes
Documents” means the Secured Notes Indenture, the Secured Notes, the
“Subsidiary Guaranty” and the “Security Documents” (in each case, as such terms
are defined in the Secured Notes Indenture), in each case, as such document may
be amended, restated, supplemented or otherwise modified from time to time to
the extent any such amendment, restatement, supplement or other modification is
permitted hereby.
“Secured Notes
Indenture” means that certain Indenture, dated as of August 6, 2009,
among Parent, OED Capital Corp., DJL, DJW, OED and Secured Notes
Trustee.
“Secured Notes
Trustee” means (a) U.S. Bank National Association, a national
association, in its capacity as trustee under the Secured Notes Indenture, or
(b) any successor trustee under the Secured Notes Indenture from time to
time.
“Securities Account”
means a “securities account” as that term is defined in the Code.
“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).
“Ship Mortgage” means
a first preferred ship mortgage granted in favor of Agent on the ▇▇▇▇▇▇ Belle
Casino, a vessel registered as the BELLE OF ORLEANS with the National
Vessel Documentation Center, bearing official number 1033140.
“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).
“Specified Equity
Contributions” means the Cash Equivalents or other assets (valued at
their fair market value) received by Parent after the Note Issuance Date from
(i) contributions to its common equity capital, and (ii) the sale
(other than to a Subsidiary of Parent) of Equity Interests (other than
Disqualified Capital Stock) of Parent, in each case, designated as Specified
Equity Contributions pursuant to an Officers’ Certificate on or promptly after
the date such capital contributions are made or the date such Equity Interests
are sold, as the case may be.
“Specified Lender” has
the meaning set forth in Section 15.2.
“▇▇▇▇▇▇▇ Guaranty”
means the guaranty, made as of the Closing Date, by M. ▇▇▇▇▇ ▇▇▇▇▇▇▇
substantially in the form of Exhibit S-1 attached hereto, in favor of
Agent.
“Subordination of
Mortgage” means those certain subordination agreements relating to the
Mortgages (as such term is defined in the Secured Notes Indenture) executed by
the Secured Notes Trustee in favor of Agent from time to time, in form and
substance satisfactory to Agent.
“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 Capital Stock having ordinary voting power to elect a majority of the board
of directors (or
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“Subsidiary Guaranty”
means each guaranty, in form and substance satisfactory to Agent, executed by
the Restricted Subsidiaries in favor of Agent.
“Swing Lender” means
▇▇▇▇▇ Fargo Foothill or any other Lender that, at the request of a Borrower and
with the consent of Agent agrees, in such Lender’s sole discretion, to become
the Swing Lender under Section 2.3(d).
“Swing Loan” has the
meaning set forth in Section 2.3(d)(i).
“Taxes” has the
meaning set forth in Section 16.11(e).
“Tax Loss Benefit
Amount” means with respect to any taxable year, the amount by which the
Permitted Tax Distributions would be reduced were a net operating loss or net
capital loss from a prior taxable year of any Borrower ending subsequent to the
first day of the taxable year of such Borrower following the taxable year that
includes the Note Issuance Date (such date, the “Loss Date”) carried
forward to the applicable taxable year; provided that for
such purpose the amount of any such net operating loss or net capital loss shall
be used only once and in each case shall be carried forward to the next
succeeding taxable year until so used. For purposes of calculating
the Tax Loss Benefit Amount, the proportionate part of the items of taxable
income, gain, deduction, or loss (including capital gain or loss) of any
Subsidiary that is a Flow Through Entity for a taxable year of such Subsidiary
ending subsequent to the Loss Date, which items of income, gain, deduction or
loss are allocated to or otherwise treated as items of income, gain deduction or
loss of such Borrower for Federal income tax purposes, shall be included in
determining the amount of net operating loss or net capital loss of the
applicable Borrower.
“Trademark Security
Agreement” means a trademark security agreement executed and delivered by
Borrowers and Agent, the form and substance of which is satisfactory to
Agent.
“Transactions” means
the transactions described on Schedule T-1
attached hereto.
“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 Agent for the benefit of
Borrowers.
“Underlying Letter of
Credit” means a letter of credit that has been issued by an Underlying
Issuer.
"Unrestricted
Subsidiary” means any Subsidiary of a Borrower that, at or prior to the
time of determination, shall have been designated by the Managers of Borrowers
as an Unrestricted Subsidiary and each subsidiary of such Subsidiary; provided, that such
Subsidiary or any of its subsidiaries does not hold any Indebtedness or Capital
Stock of, or any Lien on any assets of, Borrowers or any Restricted Subsidiary
or own any Operating Asset. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this
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“Unsecured Notes”
means the “Notes” (as such term
is defined in the Unsecured Notes Indenture).
“Unsecured Notes
Documents” means the Unsecured Notes Indenture, the Unsecured Notes and
the “Subsidiary Guaranty” (as such term is defined in the Unsecured Notes
Indenture), in each case as such document may be amended, restated, supplemented
or otherwise modified from time to time to the extent any such amendment,
restatement, supplement or other modification is permitted hereby.
“Unsecured Notes
Indenture” means that certain Indenture, dated as of August 6, 2009,
among Parent, OED Capital Corp., DJL, DJW, OED and Unsecured Notes
Trustee.
“Unsecured Notes
Trustee” means (a) U.S. Bank National Association, a national
association, in its capacity as trustee under the Unsecured Notes Indenture, or
(b) any successor trustee under the Unsecured Notes Indenture from time to
time.
“Upper Tier Equity
Holder” means, in the case of any Flow Through Entity, the Equity Holder
of which is, in turn, a Flow Through Entity, the Person that is ultimately
subject to tax on a net income basis on the items of taxable income, gain,
deduction, and loss of Borrowers and the Subsidiaries that are Flow Through
Entities.
“Voidable Transfer”
has the meaning set forth in Section 17.7.
“Voting Stock” means
Stock of any Person which at the time are entitled to vote in the election of,
as applicable, directors, Managers, members or partners generally of such
Person.
“Warner Land” means
the 93 acres of land adjacent to ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ acquired by OED from ▇▇▇▇ ▇.
▇▇▇▇▇▇ pursuant to the Sale with Mortgage, dated October 24,
2003.
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“▇▇▇▇▇ Fargo” means
▇▇▇▇▇ Fargo Bank, National Association, a national banking
association.
“▇▇▇▇▇ Fargo Foothill”
means ▇▇▇▇▇ Fargo Foothill, Inc., a California corporation, and its successors
and assigns.
“Wholly Owned
Subsidiary” means, with respect to any Person, a Subsidiary of such
Person all the Capital Stock of which (other than directors’ qualifying shares)
is owned directly or indirectly by such Person; provided, that with
respect to Borrowers, the term Wholly Owned Subsidiary shall exclude
Unrestricted Subsidiaries.
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 “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.
2. LOAN AND TERMS OF
PAYMENT.
2.1 Advances.
(a) Subject
to the terms and conditions of this Agreement, and during the term of this
Agreement, each Lender, severally and not jointly, in accordance with such
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(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 Borrowing Base, 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 assets,
rents or other amounts payable under such leases) and has failed to pay under
any Section of this Agreement or any other Loan Document, and (ii) amounts
owing by Borrowers or their Subsidiaries 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.
(c) The
Lenders with Commitments shall not have any obligation to make additional
Advances hereunder to the extent such additional Advances would cause the
Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts
borrowed pursuant to this Section 2.1 may
be repaid and, subject to the terms and conditions of this Agreement, reborrowed
at any time during the term of this Agreement.
2.2 Intentionally
Omitted.
2.3 Borrowing
Procedures and Settlements.
(a) Procedure for
Borrowing. Each Borrowing shall be made by a 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) three (3) Business
Days, in the case of a Borrowing of a LIBOR Rate Loan, and
one (1) Business Day, in the case of a Borrowing of a Base Rate
Loan, prior to the date 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; provided, however, that in the
case of a request for 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)
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(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 Loans.
(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 Borrowers on the
applicable Funding Date by transferring immediately available funds equal to
such proceeds received by Agent to the applicable 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 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.
(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
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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 Borrowers 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 any 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 Agent for the account of such Defaulting
Lender. Solely for the purposes of voting or consenting to matters
with respect to the Loan Documents which require the consent of all Lenders,
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 Defaulting Lender until (w) the Obligations
under this Agreement shall have been declared or shall have become immediately
due and payable, (x) the non-Defaulting Lenders, Agent, and Borrowers shall
have waived such Defaulting Lender’s default in writing, (y) such Defaulting
Lender shall no longer be a Lender hereunder in accordance with and pursuant to
the terms of Section 15.2 hereof, 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
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Lender
shall constitute a material breach by such Defaulting Lender of this Agreement
and such Defaulting Lender may be permanently replaced or terminated as a Lender
hereunder in accordance with and pursuant to the terms of Section 15.2 hereof;
provided further, however, that any
such permanent replacement of any such Defaulting Lender or termination of such
Defaulting Lender as a Lender hereunder shall not be deemed to constitute a
waiver of any of the Lender Group’s 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 the applicable Borrower’s Designated Account;
provided that,
notwithstanding anything to the contrary contained in this Section 2.3(d),
the aggregate principal amount of Swing Loans outstanding at any one time shall
not exceed $5,000,000; provided that if any
Lender is an Impacted Lender, the Swing Lender shall have no obligation to fund
a Swing Loan unless such Impacted Lender or Borrowers have entered into
arrangements reasonably satisfactory to Agent and the Swing Lender to eliminate
any funding risk associated with the Impacted Lender. Each Swing Loan
shall be deemed to be 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 to be a LIBOR Rate Loan 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 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. 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, constitute Obligations hereunder,
and bear interest at the rate applicable from time to time to Advances that are
Base Rate Loans.
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(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 (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”);
provided, that notwithstanding anything to the contrary contained in this
Section 2.3(e),
the aggregate principal amount of Agent Advances outstanding at any one time
shall not exceed $2,000,000. Each Agent Advance is an Advance
hereunder and shall be subject to all the terms and conditions applicable to
other Advances, except that 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.
(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 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 the outstanding Swing
Loans, (2) for itself, with respect to each Agent Advance, and
(3) with respect to Collections of Borrowers or their Subsidiaries
received, as to each by notifying the Lenders by telecopy, telephone, or other
similar form of transmission, of such requested Settlement, no later than
1:00 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, as applicable, 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 (including Swing
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Loans and
Agent Advances) exceeds such Lender’s Pro Rata Share of the Advances (including
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
(including Swing Loans and Agent Advances); and (z) if a Lender’s balance
of the Advances (including Swing Loans and Agent Advances) is less than such
Lender’s Pro Rata Share of the Advances (including Swing Loans and Agent
Advances) as of a Settlement Date, such Lender shall, by 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 (including 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 Loans or Agent Advances and, together with the portion of such
Swing Loans or Agent Advances 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 of Borrowers or
their Subsidiaries 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
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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,
such records constituting conclusive evidence, absent manifest error, of the
accuracy of the information contained therein. 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) [Intentionally
Omitted].
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 any 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
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(b) Apportionment, Application and
Reversal of Payments.
(i) Except as
otherwise provided with respect to Defaulting Lenders and except as otherwise
provided in the Loan Documents (and 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, after
giving effect to any letter agreements between Agent and individual Lenders) and
payments of fees and expenses (other than fees or expenses that are for Agent’s
separate account), 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 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) Intentionally
Omitted.
(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) Intentionally
Omitted.
(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) Intentionally
Omitted.
(H) Intentionally
Omitted,
(I) ninth, to pay the
principal of all Swing Loans until paid in full,
(K) tenth, so long as no
Event of Default has occurred and is continuing, to pay principal of all
Advances until paid in full,
(K) eleventh, if an Event
of Default has occurred and is continuing, ratably (i) to pay the principal
of all Advances until paid in full and (ii) to Agent, to be held by Agent,
for the ratable benefit of Agent and those Lenders having a Commitment, as cash
collateral in an amount up to 105% of the then extant Letter of Credit Usage
until paid in full,
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(L) twelfth, if an Event
of Default has occurred and is continuing, to pay any other Obligations,
and
(M) thirteenth, to
Borrowers (to be wired to the Designated Account) or such other Person entitled
thereto under applicable law.
(ii) In each
instance, so long as no Default or Event of Default has occurred and is
continuing, this Section 2.4(b)
shall not be deemed to apply to any payment by Borrowers specified by Borrowers
to be for the payment of specific Obligations then due and payable (or
prepayable) under any provision of this Agreement.
(iii) 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.
(iv) 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(a)
and 2.12 is
greater than either the Dollar or percentage limitations set forth in Sections 2.1(a)
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 Agent as and when due
and payable under the terms of this Agreement and the other Loan
Documents.
2.6 Interest: 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
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(b) Letter of Credit
Fee. Borrowers shall pay Agent (for the ratable benefit of the
Lenders, 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 Applicable Margin with respect to
Letters of Credit times
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 the Letter of Credit fee provided for above shall be
increased to 2 percentage points above the per annum rate otherwise applicable
hereunder.
(d) Payment. Interest
on Base Rate Loans, 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 obligation to extend credit hereunder are
outstanding. Interest on LIBOR Rate Loans shall be due and payable,
in arrears, on the last day of each Interest Period therefor; provided that, if the
Interest Period for such Advance is greater than 3 months, then interest
thereon shall be due and payable on each 3 month anniversary of such
Advance. 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.
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(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 Agent 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). Each
Borrower agrees to establish and maintain the Designated Account of such
Borrower with the Designated Account Bank for the purpose of receiving the
proceeds of the Advances requested by such Borrower and made by Agent or the
Lenders hereunder. A Borrower may add or replace the Designated
Account Bank or the Designated Account on 30 days’ prior written notice to
Agent; provided, however, that
(i) such prospective Designated Account Bank shall be satisfactory to Agent
and Agent shall have consented in writing in advance to the opening of such
Designated Account with the prospective Designated Account Bank, and
(ii) prior to the time of the opening of such Designated Account, Borrowers
and such prospective Designated Account Bank shall have executed and delivered
to Agent a Control Agreement. Unless otherwise agreed by Agent and
Borrowers, any Advance, Agent Advance or Swing Loan requested by Borrowers and
made by Agent or the Lenders hereunder shall be made to the applicable
Borrower’s 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 Agent for Borrowers’
account, and with all other payment Obligations
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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):
(a) Fee Letter Fees. As
and when due and payable under the terms of the Fee Letter, Borrowers shall pay
to Agent the fees set forth in the Fee Letter,
(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) 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 (iii) 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, provided that
so long as no Event of Default has occurred in any 12 consecutive month period,
Borrowers shall not be obligated to reimburse Agent for the costs and expenses
of more than 21 audit days in any such 12 consecutive month period,
and
(c) Unused Line Fee. On
the first day of each quarter during the term of this Agreement, an unused line
fee payable quarterly in arrears (for the account of the Lenders in accordance
with their Pro Rata Shares of the Commitment) in an amount equal to 0.625% per
annum times the result of (x) the Maximum Revolver Amount, less
(y) the sum of (1) the average Daily Balance of Advances that were
outstanding during the immediately preceding quarter, plus (2) the average
Daily Balance of the Letter of Credit Usage during the immediately preceding
quarter.
2.12 Letters
of Credit.
(a) Subject
to the terms and conditions of this Agreement, Agent 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), a Borrower shall hand deliver or telecopy
(or transmit by electronic communication, if arrangements for doing so have been
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(i) the
Letter of Credit Usage would exceed the Borrowing Base less the then extant
amount of outstanding
Advances,
or
(ii) the
Letter of Credit Usage would exceed $10,000,000, or
(iii) the
Letter of Credit Usage would exceed the Maximum Revolver Amount less the then
extant amount
of
outstanding Advances;
provided if any
Lender is an Impacted Lender, Agent shall have no obligation to issue a Letter
of Credit unless such Impacted Lender or Borrowers have entered into
arrangements reasonably satisfactory to Agent to eliminate any funding risk with
respect to such Impacted Lender.
Borrowers
and Agent 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 Agent (in the
exercise of its Permitted Discretion), including the requirement that the
amounts payable thereunder must be payable in Dollars. If Agent is
obligated to advance funds under a Letter of Credit, Borrowers shall immediately
reimburse such L/C Disbursement to Agent 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 any 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 any
Borrower prior to such time on such date, then not later than 11:00 a.m.,
California time, on the (i) Business Day that any 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 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.
(b) Promptly
following receipt of a notice of L/C Disbursement pursuant to Section 2.12(a),
each Lender 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 Agent the
amounts so
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(c) Each
Borrower hereby agrees to indemnify, save, defend, and hold Agent harmless from
any loss, cost, expense, or liability, and reasonable attorneys fees incurred by
Agent 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
Agent. Each Borrower agrees to be bound by the Underlying Issuer’s
regulations and interpretations of any Underlying Letter of Credit or by Agent’s
interpretations of any L/C issued by Agent 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 Agent 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 Agent 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 Agent harmless with respect to any loss,
cost, expense (including reasonable attorneys fees), or liability incurred by
Agent under any L/C Undertaking as a result of Agent’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
Agent.
(d) Each
Borrower hereby authorizes and directs any Underlying Issuer to deliver to Agent
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 Agent’s instructions with respect to all matters arising in connection
with such Underlying Letter of Credit and the related application.
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(e) Any and
all charges, commissions, fees, and costs incurred by Agent relating to
Underlying Letters of Credit shall be Agent Expenses for purposes of this
Agreement and immediately shall be reimbursable by Borrowers to Agent for the
account of Agent; it being acknowledged and agreed by each Borrower that, as of
the Closing Date, the issuance charge imposed by the prospective Underlying
Issuer is .850% per annum times the face amount of each Underlying Letter of
Credit, that such issuance charge may be changed from time to time, and that the
Underlying Issuer also imposes a schedule of charges for amendments,
extensions, drawings, and renewals.
(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 Agent with any
direction, request, or requirement (irrespective of whether having the force of
law) of any Governmental Authority or monetary authority:
(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 Agent 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
Agent of issuing, making, guaranteeing, or maintaining any Letter of Credit or
to reduce the amount receivable in respect thereof by Agent, 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 any
Borrower, and Borrowers shall pay on demand such amounts as Agent may specify to
be necessary to compensate Agent 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 Advances that are 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.
(g) The
letters of credit described on Schedule 2.12
hereto shall be deemed Letters of Credit issued pursuant to this Section 2.12.
2.13 Registered
Notes. Agent
agrees to record each Advance on the Register referenced in Section 14.1(h). Each
Advance recorded on the Register (each a “Registered Loan”) may
not be evidenced by promissory notes other than Registered Notes (as defined
below). Upon the registration of any Advance, Borrowers agree at the
request of any Lender, to execute and deliver to such Lender a promissory note,
in conformity with the terms of this Agreement, in registered form to evidence
such Registered Loan, in form and substance reasonably satisfactory to such
Lender, and registered as provided in Section 14.1(h)
(a “Registered
Note”), payable to the order of such Lender and otherwise duly completed,
provided that
any Registered Note issued to evidence Advances shall be issued in the principal
amount of the applicable Lender’s Commitment. Once recorded on the
Register, each Advance may not be
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2.14 Capital
Requirements. If, after the date hereof, any Lender determines
that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, 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 (whether or not having
the force of law), will have the effect of reducing the return on such Lender’s
or such holding company’s capital as a consequence of such Lender’s obligations
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 Borrowers 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
Borrower is accepting joint and several liability hereunder and under the other
Loan Documents in consideration of the financial accommodations to be provided
by Agent and the Lenders under this Agreement, for the mutual benefit, directly
and indirectly, of each Borrower and in consideration of the undertakings of the
other Borrowers to accept joint and several liability for the
Obligations.
(b) Each
Borrower, 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
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(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 the 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 the 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 the 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 Borrower assents to any other action or delay in acting or
failure to act on the part of Agent or the Lenders 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 the
Lenders. 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 the Lenders.
(f) Each
Person composing Borrowers represents and warrants to Agent and the 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 the 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,
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(g) The
provisions of this Section 2.15 are
made for the benefit of 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, the Lenders, 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 the Lenders 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.
(h) 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 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 the Lenders 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.
(i) 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 Agent, and such Borrower shall deliver any such amounts
to Agent for application to the Obligations in accordance with Section 2.4(b).
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2.16 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 Agent has elected to accelerate the maturity of the
Obligations, (iii) termination of this Agreement pursuant to the terms
hereof, or (iv) as set forth in Section 2.6(d). On
the last day of each applicable Interest Period, unless any 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) The
requesting 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 such 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).
(ii) Each
LIBOR Notice shall be irrevocable and binding on Borrowers. In
connection with each LIBOR Rate Loan, each Borrower shall jointly and severally
indemnify, defend, and hold Agent and the Lenders harmless against any loss,
cost, or expense incurred by Agent or the Lenders 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 be deemed to equal the amount
determined by Agent 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,
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(iii) Borrowers
shall have not more than 7 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
of Borrowers or their Subsidiaries in accordance with Section 2.4(b)
or for any other reason, including early termination of the term of this
Agreement or acceleration of the Obligations pursuant to the terms hereof,
Borrowers shall indemnify, defend, and hold Agent, the Lenders and any Lender’s
Participants harmless against any and all Funding Losses in accordance with
clause (b)(ii)
above.
(d) Special Provisions Applicable to
LIBOR Rate.
(i) The LIBOR
Rate may be adjusted by Agent on a prospective basis to take into account any
additional or increased costs to the Lenders 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, Agent shall give Borrowers notice of such a
determination and adjustment and, upon its receipt of the notice from Agents,
Borrowers may, by notice to Agent (y) require Agent to furnish to Borrowers
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
Agent, make it unlawful or impractical for the Lenders to fund or maintain LIBOR
Rate Loans or to continue such funding or maintaining, or to determine or charge
interest rates at the LIBOR Rate, Agent shall give notice of
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(e) No Requirement of Matched
Funding. Anything to the contrary contained herein
notwithstanding, none of Agent, any Lender, nor any Lender’s 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 Agent, the Lenders or their
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.
3. CONDITIONS; TERM OF
AGREEMENT.
3.1 Conditions
Precedent to Initial Extension of Credit. In addition to
satisfying each of the conditions precedent set forth in Section 3.3, the
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise extend any credit hereunder) is subject to the prior
fulfillment, to the satisfaction of Lender Group, of each of the conditions set
forth below:
(a) the
Closing Date shall occur on or before October 29, 2009;
(b) Agent
shall have received all financing statements required by Agent, and Agent shall
have received searches reflecting the filing of all such financing
statements;
(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 (to the extent not previously delivered to Agent and in full
force and effect),
(ii) the
Disbursement Letter,
(iii) the Fee
Letter,
(iv) the
Guaranty executed by OED Capital Corp. and the Guarantor Security Agreement (or
ratifications
thereof to the extent previously delivered to Agent and in
full force and
effect),
(v) the
▇▇▇▇▇▇▇ Guaranty,
(vi) the
Intercompany Subordination Agreement,
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(vii) an
acknowledgement to the Intercreditor Agreement by U.S. Bank National
Association, in its
cpacity
as Secured Notes Trustee, in form and substance acceptable to
Agent,
(viii) the
Management Fees Subordination Agreement,
(ix) the Mortgages (to the
extent not previously delivered to Agent and in full force and effect),
together with any consents or
amendments required for such Mortgages,
(x) the Ship
Mortgage,
(xi) the
Officers’ Certificate,
(xii) a
solvency certificate with respect to Borrowers and Guarantors,
(xiii) the PGP
Pledge Agreement (or ratifications thereof to the extent previously delivered to
Agent
and in
full force and effect), together with all certificates representing
the shares of Capital Stock of
Parent
pledged thereunder, as well as Capital Stock powers with respect thereto
endorsed in blank
(xiv) the
Pledge Agreement (or ratifications thereof to the extent previously delivered to
Agent and in
full
force and
effect), together with all certificates representing the shares of
Capital Stock pledged
thereunder,
as well
as Capital Stock powers with respect thereto endorsed in blank, and
(xv) the
Trademark Security Agreement (or ratifications thereof to the extent previously
delivered to
Agent and
in full force and effect);
(d) Agent
shall have received a certificate from the Secretary of each Borrower and
Guarantor attesting to the resolutions of such Person’s board of directors (or
comparable manager) authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Person is a party and
authorizing specific officers of such Person to execute the same;
(e) Agent
shall have received copies of each Borrower’s and Guarantor’s Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of such Borrower or Guarantor, as applicable, or certifications
from the Secretary of such Borrower or Guarantor that (1) none of its Governing
Documents have been amended, modified or supplemented since the delivery thereof
to Agent on the Note Issuance Date or (2) attached thereto is a true, correct
and complete copy of any such amendment, modification or supplement
thereto
(f) Agent
shall have received a certificate of status with respect to each Borrower and
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
Borrower or
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(g) Agent
shall have received certificates of status with respect to each Borrower and
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 Borrower or Guarantor, as applicable) in
which its failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that such Borrower or
Guarantor, as applicable, is in good standing in such
jurisdictions;
(h) Agent
shall have received a certificate 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;
(i) Agent
shall have received Collateral Access Agreements with respect to any leased
property of Parent or any Restricted Subsidiary for which a Collateral Access
Agreement was not delivered to Agent in connection with the Existing Loan
Agreement;
(j) Agent
shall have received opinions of Borrowers’ and Guarantors’ counsel (including,
without limitation, maritime, real estate counsel and regulatory counsel) in
form and substance satisfactory to Agent;
(k) 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 and
payroll taxes) have been paid prior to delinquency, except such taxes that are
the subject of Permitted Protests;
(l) Agent
shall have completed its business, legal, and collateral due diligence to the
extent necessary to determine to Agent’s satisfaction the verification of
Borrowers’ representations and warranties to the Lender Group;
(m) Agent
shall have received and reviewed the Closing Date Business Plan and its detailed
budget on remaining construction costs at the Racino Project in form and
substance satisfactory to Agent;
(n) Borrowers
shall have paid all Lender Group Expenses incurred in connection with the
transactions evidenced by this Agreement;
(o) Agent
shall have received 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 (or such bring down endorsements as Agent may
request to any such Mortgage Policies previously delivered to Agent and in full
force and effect) 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;
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(p) Agent
shall have received (i) copies of each of the following documents, together with
a certificate of the Secretary of Parent certifying each document as being true,
correct, and complete: (A) the Management Agreements,
(B) the Secured Notes Documents and the Unsecured Notes Documents, (C)
evidence, including, corporate merger documents, that AB Casino Acquisition,
LLC, a Delaware limited liability company, has merged with Parent and
(D) the documents relating to the Gaming Acquisition or, in each case, to
the extent previously delivered to Agent on the Note Issuance Date a
certification from the Secretary of Parent that (1) no such agreement,
instrument or document has been amended, restated, supplemented or otherwise
modified since such date or (2) attached thereto is a true, correct and complete
copy of any such amendment, restatement, supplement or other
modification;
(q) Borrowers
shall have received all licenses (including the Gaming Licenses), approvals or
evidence of other actions required by any Governmental Authority, including the
Louisiana Regulatory Authorities and the Iowa Gaming Authorities, in connection
with the execution and delivery by Borrowers of this Agreement or any other Loan
Document or with the consummation of the transactions contemplated hereby and
thereby;
(r) Agent
shall have received an acknowledgement from each Borrower and Guarantor that,
upon making of the initial Advance hereunder, the outstanding “Obligations”
under and as defined in the Existing Loan Agreement and the other “Loan
Documents” (as defined therein) constitute Obligations hereunder and under the
other Loan Documents;
(s) Agent
shall have received the “Consent Fee” (as defined in the Consent Fee Letter) for
the account of CIT Lending Services Corporation and American Trust and Savings
Bank, as described in the Consent Fee Letter; and
(t) 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.
Notwithstanding
the foregoing, the Lenders are under no obligation to make the initial Advance
(or otherwise to extend any credit provided for hereunder) unless and until all
of the conditions set forth in Section 3.3
below are satisfied to the satisfaction of Agent.
3.2 Conditions
Subsequent to 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):
(a) within
180 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.
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3.3 Conditions
Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make any Advances or issue any Letter of
Credit (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, 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 January 15, 2014 (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,
whether on the Maturity Date or earlier in accordance with Section 3.4, 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 (a) providing cash
collateral to be held by Agent for the benefit of the Lenders with a Commitment
in an amount equal to 105% of the then extant Letter of Credit Usage, or
(b) causing the original Letters of Credit to be returned to
Agent). No termination of this Agreement, however, shall relieve or
discharge Borrowers or the Guarantors of their duties, Obligations, or covenants
hereunder and the Agent’s Liens in the Collateral shall remain in effect until
all Obligations have been fully and finally paid in full 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 paid in full 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 Uniform Commercial Code 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.
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3.6 Early
Termination by Borrowers. Borrowers have the option, at any
time upon 60 days’ prior written notice by Borrowers to Agent, to terminate this
Agreement by paying to Agent, for the benefit of the Lender Group, in cash, the
Obligations (including (a) either (a) providing cash collateral to be held
by Agent for the benefit of the Lenders with a Commitment in an amount equal to
105% of the then extant Letter of Credit Usage, or (b) causing the original
Letters of Credit to be returned to Agent, in full. If Borrowers have
sent a notice of termination pursuant to the provisions of this Section, then
the Lenders’ obligations to extend credit hereunder shall terminate and
Borrowers shall be obligated to repay the Obligations (including either
(a) providing cash collateral to be held by Agent for the benefit of the
Lenders with a Commitment in an amount equal to 105% of the then
extant Letter of Credit Usage, or (b) causing the original Letters of
Credit to be returned to Agent), in full on the date of termination of this
Agreement in such notice.
4. CREATION OF SECURITY
INTEREST.
4.1 Grant of
Security Interest.
(a) 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. 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.
(b) Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except as permitted by Section 7.4,
Borrowers have no authority, express or implied, to dispose of any item or
portion of the Personal Property Collateral.
4.2 Negotiable
Collateral.
(a) In the
event that any Personal Property Collateral, including proceeds, is evidenced by
or consists of Negotiable Collateral, the applicable Borrower shall immediately
notify Agent and, and if and to the extent that perfection of priority of
Agent’s security interest is dependent on or enhanced by possession, such
Borrower, immediately upon the request of Agent, shall endorse and deliver
physical possession of such Negotiable Collateral to Agent.
(b) Upon
request by Agent, the applicable Borrower shall take all steps reasonably
necessary to grant Agent control of all electronic chattel paper in accordance
with the Code and all “transferable records” as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and National
Commerce Act; and
(c) In the
event a Borrower retains possession of any chattel paper or instruments
otherwise required to be endorsed and delivered to Agent pursuant to Section 4.2(a),
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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 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 agrees that it will hold in trust for Agent,
as Agent’s trustee, any of its or its Subsidiaries’ Collections that it receives
and immediately will deliver said Collections to Agent in their original form as
received by the applicable Borrower.
4.4 Delivery
of Additional Documentation Required.
(a) Each
Borrower authorizes Agent to file, transmit, or communicate, as applicable,
Uniform Commercial Code financing statements, original financing statements
in-lieu of continuation statements and amendments describing the Collateral as
“all personal property of debtor” or “all assets of debtor” or words of similar
effect in order to perfect Agent’s security interest in the Collateral without
such Borrower’s signature, to the extent permitted by applicable law; provided, however, that Agent
shall clearly identify Excluded Assets as excepted items, as
applicable.
(b) At any
time upon the request of Agent, Borrowers shall execute and deliver, or cause
other Persons (including, without limitation, those in possession of any
Collateral) to execute and deliver, all further instruments and documents, and
take all further action, (i) to perfect and continue perfection of Agent’s
security interest in the Collateral (whether now owned or hereafter arising or
acquired or tangible or intangible), (ii) to create, perfect and insure
Liens in favor of Agent in any Real Property not constituting Excluded Assets
acquired after the Closing Date, (iii) in order to consummate fully all of
the transactions contemplated hereby and under the other Loan Documents and
(iv) to enable Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Borrower shall:
(i) execute
and deliver, or cause other Persons (including, without limitation, those in
possession of any Collateral) to execute and deliver, any and all financing
statements, original financing statements in lieu of continuation
statements, fixture filings, security agreements, pledges, real property
security instruments, assignments, Collateral Access Agreements, instruments,
powers of attorney, endorsements of certificates of title, and all other
documents (collectively, the “Additional
Documents”) that Agent may request in its Permitted Discretion, in form
and substance reasonably satisfactory to Agent;
(ii) at any
reasonable time, upon request by Agent, exhibit the Collateral for, and
allow inspection of the Collateral by, Agent, or persons designated by Agent;
and
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(iii) at
Agent’s reasonable request, appear in and defend any action or proceeding that
may affect Agent’s
security
interest in all or any part of the Collateral.
(c) To the
maximum extent permitted by applicable law, each Borrower authorizes Agent to
execute any such Additional Documents in the applicable Borrower’s name and
authorizes Agent to file such executed Additional Documents in any appropriate
filing office. Each Borrower also hereby ratifies its authorization
for Agent to have filed in any jurisdiction any financing statements or
amendments thereto filed prior to the date hereof. No Borrower shall
terminate, amend or file a correction statement with respect to any Uniform
Commercial Code financing statement filed pursuant to this Section 4
without Agent’s prior written consent, which consent shall not be unreasonably
withheld.
(d) In
addition, on such periodic basis as Agent shall require, each Borrower shall
(i) provide Agent with a report of all new patentable, copyrightable, or
trademarkable materials acquired or generated by such Borrower during the prior
period, (ii) cause all patents, copyrights, and trademarks acquired or
generated by such Borrower 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 such Borrower’s ownership thereof
and (iii) 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.
(e) In
addition, if any Borrower acquires any commercial tort claim or judgment after
the date hereof, such Borrower shall promptly (but in any event within 3
Business Days after such acquisition) deliver to Agent a written description of
such commercial tort claim or judgment, as applicable, and shall deliver a
written agreement, in form and substance satisfactory to Agent, pursuant to
which such Borrower shall grant a perfected security interest in all of its
right, title and interest in and to such commercial tort claim or judgment, as
applicable, to Agent, as security for the Obligations (each, a “Commercial Tort
Claim/Judgment Assignment”).
(f) In
addition, each Borrower shall furnish to Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Agent may reasonably request, all
in reasonable detail.
4.5 Power of
Attorney. Each Borrower hereby irrevocably makes, constitutes,
and appoints Agent (and any of Agent’s officers, employees, or agents designated
by Agent) as such Borrower’s true and lawful attorney, with power to, from time
to time in its discretion, take any action and to execute any instrument that it
may deem reasonably necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, the following: (a) if
such Borrower refuses to, or fails timely to execute and deliver any of the
documents described in Section 4.4,
sign the name of such Borrower 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 name on any invoice or ▇▇▇▇ of lading relating to the
Collateral, drafts against Account Debtors, or notices to Account Debtors,
(c) at any time that an Event of Default
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4.6 Right to
Inspect. Agent and each Lender (through any of their
respective officers, employees, or agents) shall have the right, from time to
time and during normal business hours hereafter, to inspect the Books and to
check, test, and appraise the Collateral, operations and assets of Borrowers in
order to verify Borrowers’ financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral.
4.7 Control
Agreements. Each
Borrower agrees that it will not transfer assets out of any Securities Accounts
not constituting Excluded Assets other than as permitted under Section 7.19
and, if to another securities intermediary, unless each of the applicable
Borrower, Agent, and the substitute securities intermediary have entered into a
Control Agreement. No arrangement contemplated hereby or by any
Control Agreement in respect of any Securities Accounts or other Investment
Property not constituting Excluded Assets shall be modified by Borrowers 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 not constituting Excluded Assets maintained or held
thereby and remit the proceeds thereof to the Agent’s Account.
5. REPRESENTATIONS AND
WARRANTIES.
In order
to induce the Lender Group to enter into this Agreement, each Borrower 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 its Restricted Subsidiaries
has good and indefeasible title to their personal property assets and good and
marketable title to their Real Property, in each case free and clear of Liens
except for Permitted Liens and except for
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5.2 [Intentionally
Omitted].
5.3 [Intentionally
Omitted].
5.4 Equipment. All
of the Equipment (other than any that may have become obsolete or worn-out) is
used or held for use in Borrowers’ business and is fit for such
purposes.
5.5 Location
of Inventory and Equipment. The Inventory and Equipment (other
than any Inventory or Equipment in transit in the ordinary course of business or
Equipment that is being serviced, repaired or modified in the ordinary course of
business) are not stored with a bailee, warehouseman, or similar party and are
located only at the locations identified on Schedule 5.5, as
such Schedule may be amended from time to time by Parent giving of prior
written notice to Agent in accordance with Section 6.9.
5.6 Inventory
Records. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Restricted Subsidiaries’ Inventory and the book value thereof.
5.7 State of
Incorporation; Location of Chief Executive Office; FEIN; Organizational ID
Number; Commercial Tort Claims.
(a) The
jurisdiction of organization of each Borrower and each of its Restricted
Subsidiaries is as set forth on Schedule 5.7.
(b) The chief
executive office of each Borrower and each of its Restricted Subsidiaries is
located at the address indicated on Schedule 5.7 or
such other addresses to the extent permitted under Section 7.18.
(c) Each
Borrower’s and each of its Restricted Subsidiaries’ FEIN and organizational
identification number, if any, are as set forth on Schedule 5.7.
(d) As of the
Closing Date, Borrowers and their Restricted Subsidiaries do not hold any
commercial tort claims, except as set forth on Schedule 5.7.
5.8 Due
Organization and Qualification; Subsidiaries.
(a) Each
Borrower 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
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(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 Capital 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, in each case, as
of the Closing Date. All of the outstanding Capital Stock of each
such Subsidiary has been validly issued and is fully paid and (if applicable)
non-assessable.
(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) Set forth
on Schedule 5.8(e),
is a complete and accurate list of each Borrower’s Restricted Subsidiaries and
Unrestricted Subsidiaries as of the Closing Date.
5.9 Due
Authorization; No Conflict.
(a) As to
each Borrower, the execution, delivery, and performance by such Borrower of this
Agreement and the other Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Borrower.
(b) As to
each Borrower, the execution, delivery, and performance by such Borrower of this
Agreement and the other 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, the Governing Documents of any Borrower, or any
order, judgment, or decree of any court or other Governmental Authority binding
on any Borrower, (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 (including any of the Notes Documents),
(iii) result in or require the creation or imposition of any Lien of any
nature whatsoever upon any properties or assets of any Borrower, other than
Permitted Liens, or (iv) require any approval of any Borrower’s members or
shareholders or any approval or consent of any Person under any material
contractual obligation of any Borrower (other than any approval that has been
obtained and remains in full force and effect).
(c) The
execution, delivery, and performance by such Borrower of this Agreement and the
Loan Documents to which such Borrower is a party and the exercise by Agent of
any rights or remedies in respect of any Collateral (whether specifically
granted or created hereunder or created or provided for by applicable law) do
not and will not require any
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(d) As to
each Borrower, this Agreement and the other Loan Documents to which such
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Borrower, will be the legally valid and
binding obligations of such Borrower, enforceable against such Borrower 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 first priority Liens, subject
only to Permitted 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 and the Guarantors 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’ and Guarantors’ 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 or Guarantors since the date
of the latest financial statements submitted to the Lender Group on or before
the Closing Date.
5.12 Fraudulent
Transfer.
(a) Borrowers
and their Restricted Subsidiaries, on a consolidated basis, are
Solvent.
(b) No
transfer of property is being made by any Borrower or any Restricted Subsidiary
and no obligation is being incurred by any Borrower or any Restricted Subsidiary
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 or their Subsidiaries.
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5.13 Employee
Benefits. None of Borrowers, any of their Subsidiaries, or any
of their ERISA Affiliates maintains or contributes to any Benefit
Plan.
5.14 Environmental
Condition. Except as set forth on Schedule 5.14,
(a) to Borrowers’ knowledge, none of Borrowers’ or their Subsidiaries’
properties or assets has ever been used by Borrowers, their Subsidiaries 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’
knowledge, none of Borrowers’ nor their Subsidiaries’ properties or assets has
ever been designated or identified in any manner pursuant to any Environmental
Law as a Hazardous Materials disposal site, (c) none of Borrowers nor any
of their Subsidiaries 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 Borrowers or their Subsidiaries, and (d) none of Borrowers nor
any of their Subsidiaries 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
Subsidiary of a Borrower resulting in the releasing or disposing of Hazardous
Materials into the environment.
5.15 Brokerage
Fees. Borrowers and their Subsidiaries 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 Restricted Subsidiary 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 one of its Restricted Subsidiaries is
the owner or is an exclusive licensee as of the Closing Date.
5.17 Leases. Borrowers
and their Subsidiaries enjoy peaceful and undisturbed possession under all
leases material to their business and to which they are parties or under which
they are operating. All of such leases are valid and subsisting and
no material default (after giving effect to any applicable notice and cure
periods) by Borrowers or their Subsidiaries exists under any of
them.
5.18 Deposit
Accounts. Set forth on Schedule 5.18
are all of the Deposit Accounts of each Borrower and each of its Restricted
Subsidiaries, as of the Closing Date, including, with respect to each depository
(i) the name and address of such 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 Borrowers or their Subsidiaries 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
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5.20 Indebtedness. Set
forth on Schedule 5.20 is
a true and complete list of all Indebtedness of each Borrower and each
Restricted Subsidiary 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 Licenses
and Permits.
(a) (i) All
material licenses (including all necessary Gaming 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 each Borrower
and each Restricted Subsidiary, have been validly issued and are in full force
and effect; (ii) each Borrower and each Restricted Subsidiary 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 any Borrower’s knowledge, threatened
proceeding for the revocation, cancellation, suspension, or non-renewal
thereof. As of the Closing Date (and as of each subsequent date on
which a Borrower delivers to Agent an updated Schedule pursuant to Section 6.17
below), set forth on Schedule 5.21 is
a complete and accurate list of all such licenses, permits, and consents that
are necessary and appropriate for the operation of the businesses of each
Borrower and each Restricted Subsidiary 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 Restricted Subsidiary has obtained (i) all material
licenses, permits, and consents necessary or appropriate to conduct its business
and operations 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.
(c) Each
Borrower and each Restricted Subsidiary owns or possesses all patents,
trademarks, trade names, copyrights, and other similar rights necessary for the
conduct of business as now carried on or proposed to be conducted, without any
known conflict of the rights of others.
5.22 Senior
Debt. (a) This Agreement is the Existing Senior Secured
Credit Facility (as defined in the Secured Notes Indenture and the Unsecured
Notes Indenture) and Borrowers have not designated any other agreement to be the
Existing Senior Secured Credit
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6. AFFIRMATIVE
COVENANTS.
271. Each
Borrower covenants and agrees that, so long as any credit hereunder shall be
available and until full and final payment of the Obligations, Borrowers shall
and shall cause each of their respective 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 Borrower Collateral that contain information as from time to
time reasonably may be requested by Agent.
6.2 Reporting. Provide Agent and each
Lender with the following documents at the following times in form satisfactory
to the Required Lenders:
|
Monthly
(not later than the 15th day
of
each month)
|
(a) a
detailed itemized report reflecting the prior months and year-to-date
revenues from each Gaming Property,
(b) a
detailed itemized report reflecting tax payments (including real estate,
ad valorem and gaming taxes) made during the prior
month,
|
|
(c) a
detailed itemized report showing the following items by Gaming
Property: (i) the average daily dollar amount of winnings
for all Gaming Equipment for such month, (ii) the average daily
number of customers admitted into such Gaming Property for such month, and
(iii) the average daily dollar amount of winnings per customer
admitted for such month,
|
|
|
Monthly
(not later than the 30th day
of
each month) or 45 days in the case
of
a month that is the end of one of
the
first three fiscal quarters in a fiscal
year
or 90 days in the case of a month
that
is the end of the fiscal year
|
(d) a
Borrowing Base Certificate setting forth Parent’s Consolidated EBITDA
(including detail for the respective contributions of each Gaming
Property),
|
|
As
prepared or received
|
(e) copies
of each report in respect of any Borrower’s or Restricted Subsidiary’s
business issued by a Gaming Authority or made by Borrower or a Restricted
Subsidiary to a Gaming Authority other than in the ordinary course of
business within 15 days of their respective issuance or filing date,
and
|
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|
Upon
request by Agent
|
(f) such
other reports as to the Collateral, or the financial condition of
Borrowers and their Subsidiaries, as Agent may
request.
|
In
addition, each Borrower agrees to cooperate fully with Agent to facilitate and
implement a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth above.
6.3 Financial
Statements, Reports, Certificates. Deliver to Agent and each
Lender:
(a) as soon
as available, but in any event 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 or 90
days in the case of a month that is the end of the fiscal year) after the end of
each month during each of Parent’s fiscal years (the “Monthly Financial
Report”),
(i) a company
prepared consolidated balance sheet, income statement, and statement of cash
flow covering Parent’s and its Restricted 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 and being subject to year-end audit
adjustments) and fairly present in all material respects the financial condition
of Parent and its Restricted Subsidiaries,
(B) the
representations and warranties of Borrowers 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),
(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 have taken,
are taking, or propose to take with respect thereto),
(D) each
Borrower and Guarantor is in compliance with its obligations (including, without
limitation, rental payment obligations) under each lease agreement relating to
real property leased by such Borrower or Guarantor (except for such defaults
described as required pursuant to Section 6.3(a)(ii)(C)),
and
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(b) as soon
as available, but in any event within 90 days after the end of each of Parent’s
fiscal years, financial statements of Parent and its Restricted 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),
(c) as soon
as available, but in any event no later than 30 days after the end of each of
Parent’s fiscal years, copies of Borrowers’ Projections, in form and substance
(including as to scope and underlying assumptions) satisfactory to Agent, in its
sole discretion, for the forthcoming fiscal year, month by month, certified by
the chief financial officer of Parent as being such officer’s good faith best
estimate of the financial performance of Borrowers and their Restricted
Subsidiaries during the period covered thereby,
(d) if and
when filed by any Borrower,
(i) any
filings or monthly reports submitted by any Borrower to the Louisiana Regulatory
Authorities,
the Iowa Regulatory Authorities or any other Gaming Authority other than
such
filings or monthly reports submitted in the ordinary course of
business,
(ii) any
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 in their capacities
as
shareholders
generally,
(e) if and
when filed by any Borrower or any Restricted Subsidiary and as requested by
Agent, satisfactory evidence of payment of applicable excise taxes in each
jurisdiction in which (i) any Borrower or any Restricted Subsidiary
conducts business or is required to pay any such excise tax, (ii) where any
Borrower’s or any Restricted Subsidiary’s failure to pay any such applicable
excise tax would result in a Lien on the properties or assets of any Borrower or
any Restricted Subsidiary, or (iii) where any Borrower’s or any Restricted
Subsidiary’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 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 propose to take with respect thereto,
(g) Intentionally
Omitted,
74
(h) as soon
as any Borrower has knowledge thereof, notice of any proposed legislation or
administrative action specifically affecting any Borrower’s or any Restricted
Subsidiary’s gaming activities or any Gaming Property submitted to the floor for
business before any Governmental Authority in the state of Louisiana or Iowa or
any other state where a Gaming Property may be located (including the state
legislature or any committee thereof),
(i) promptly
following the end of each fiscal quarter during which any Restricted Payment was
made pursuant to Section 7.11(3),
Borrowers shall deliver to Agent a certificate signed by the chief financial
officer of each Borrower stating that each such Restricted Payment was permitted
and setting forth the basis upon which the calculations required by Section 7.11
were computed, which calculations may be based upon the Borrowers’ latest
available internal financial statements, and
(j) upon the
request of Agent, any other report reasonably requested relating to the
financial condition of Borrowers or their Subsidiaries.
273. In
addition to the financial statements referred to above, Borrowers agree
(a) to deliver (i) financial statements for Borrowers and their
Subsidiaries prepared on both a consolidated and consolidating basis (except for
audited financial statements) and (ii) audited financial statements for
Borrowers and their Subsidiaries to the extent available and (b) that no
Restricted Subsidiary of Parent, will have a fiscal year different from that of
Parent. Borrowers agree that their independent certified public
accountants are authorized to communicate with Agent and to release to Agent
whatever financial information concerning Borrowers or their Subsidiaries that
Agent reasonably may request. Each Borrower 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. Cause all material properties which are owned
or leased by Borrowers and their Subsidiaries and used in the conduct of their
business and the business of each of their Subsidiaries to be maintained and
kept in good condition, repair and working order (reasonable wear and tear
excepted) and supplied with all necessary equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in their reasonable judgment may be necessary, so that the
business carried on in connection therewith may be properly conducted at all
times; provided, however, that nothing
in this Section 6.6
shall prevent Borrowers from discontinuing any operation or maintenance of any
of such properties, or disposing of any of them if such discontinuance or
disposal is (a) (i) in the judgment of the Managers of Borrowers,
desirable in the conduct of the business of such entity and (ii) would not
have a material adverse effect on the ability of Borrowers and their
Subsidiaries to satisfy their obligations under this Agreement and
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6.7 Taxes. Cause
all assessments and taxes, whether real, personal, or otherwise, due or payable
by, or imposed, levied, or assessed against Borrowers, their Subsidiaries or any
of their respective 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 will and will cause their Subsidiaries to make
timely payment or deposit of all tax payments and withholding taxes required of
them 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 or Subsidiary of a Borrower has made such payments or
deposits. Borrowers shall deliver satisfactory evidence of payment of
applicable excise taxes in each jurisdictions in which any Borrower is required
to pay any such excise tax.
6.8 Insurance.
(a) At
Borrowers’ expense, maintain insurance respecting their and their Restricted
Subsidiaries assets 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. Borrowers
also shall maintain business interruption and comprehensive general liability
insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. In addition to the foregoing, Borrowers shall
maintain the following insurance with respect to the Real
Property: (i) special causes of loss insurance (formerly known
as all-risk insurance), flood and sprinkler leakage, if applicable, in an amount
sufficient to prevent any Borrower or any Restricted Subsidiary from being or
becoming a co-insurer within the terms of the policy or policies providing such
insurance, and in any event for not less than the full replacement value of the
improvements and the fixtures to the Real Property, as reasonably determined by
Agent; (ii) business interruption insurance for loss occasioned by the
perils commonly insured in a special causes of loss policy for a period ending
no earlier than the Maturity Date and in an aggregate amount not less than the
real estate taxes, additional interest and other assessments for the Real
Property and all other continuing expenses of the Real Property including,
without limitation, all payments required to be made by any Borrower or any
Restricted Subsidiary under the Leases; (iii) worker’s compensation and
employer’s liability insurance, subject to statutory limits or better, in
respect of any work or other operations on, about or in connection with the Real
Property; and (iv) such other insurance with respect to the Real Property
in such amounts as Agent, from time to time, may reasonably request against such
other insurable hazards which are commonly insured against in respect of
property similar to the Real Property.
(b) All such
policies of insurance shall be in such amounts and with such insurance companies
as are reasonably satisfactory to Agent. Borrowers shall deliver
copies of all such policies, any renewals thereof and evidence of payment of the
premiums therefor to Agent, together with a satisfactory lender’s loss payable
endorsement naming Agent as loss payee as its interests may appear with respect
to property insurance or additional insured with respect to liability policies
and, if appropriate, a standard noncontributory endorsement in favor of
Agent. Each policy of insurance or endorsement shall contain a clause
requiring the
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(c) Borrowers
shall give Agent prompt notice of the occurrence of any loss covered by such
insurance policies or of any loss relating to a condemnation or taking by
eminent domain. Borrowers and Agent agree that the right to make any
adjustment of any losses covered by insurance and the distribution and
application of monies received for such losses, condemnation or eminent domain
shall be as follows:
(i) In the
absence of a Default or Event of Default, Agent shall have the exclusive right
to adjust any losses payable with respect to the Collateral under any such
insurance policies in excess of $2,000,000 in the aggregate, without any
liability to Borrowers whatsoever in respect of such adjustments, and any monies
received as payment for any loss under any insurance policy mentioned above with
respect to the Collateral (other than liability insurance policies) or as
payment of any award or compensation for condemnation or taking by eminent
domain with respect to the Collateral, may be retained by the applicable
Borrower 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 of property destroyed prior to such damage or
destruction. Borrowers shall consult with Agent in connection with
adjusting any losses payable with respect to the Collateral not in excess of
$2,000,000.
(ii) During
the existence of a Default or Event of Default, Agent shall have the exclusive
right to adjust any losses payable with respect to the Collateral under any such
insurance policies in excess of $150,000 without any liability to Borrower
whatsoever in respect of such adjustments, and any monies in excess of $150,000
received as payment for any loss under any insurance policy mentioned above with
respect to the Collateral (other than liability insurance policies) or as
payment of any award or compensation for condemnation or taking by eminent
domain with respect to the Collateral, shall be paid over to Agent to be applied
at the election of the Required Lenders either to the prepayment of the
Obligations or shall be disbursed to Borrowers under staged payment terms
reasonably satisfactory to Agent for application to the cost of repairs,
replacements, or restorations.
(d) Borrowers
shall not, and shall not suffer or permit their Restricted Subsidiaries to, take
out separate or additional 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 and such insurance
designates that such insurance is providing coverage secondary to the insurance
required to be carried hereunder. Nothing contained herein shall
prohibit any Borrower or any Restricted Subsidiary from holding or obtaining an
owner’s
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6.9 Location
of Inventory and Equipment. Keep Borrowers’ and their
Restricted Subsidiaries’ Inventory and Equipment only at the locations
identified on Schedule 5.5;
provided, however, that
Borrowers 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 provides any financing statements or fixture filings necessary to
perfect and continue perfected the Agent’s Liens on such assets and, if
requested by Required Lenders, 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 any Restricted Subsidiary is a party or by which any Borrower’s or
any Restricted Subsidiary’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 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
Restricted Subsidiary’s valid existence and good standing and any rights and
franchises material to their respective businesses.
6.14 Environmental.
(a) Keep any
property either owned or operated by any Borrower or any Restricted Subsidiary
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 in any reportable quantity from or onto property owned or
operated by any Borrower or any Subsidiary of a Borrower and take any Remedial
Actions
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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 Government
Authorization. Deliver to Agent, as soon as practicable, and
in any event within 10 days after the receipt by such Borrower from any Gaming
Authority or other Governmental Authority having jurisdiction over the
operations of such Borrower or any Restricted Subsidiary of such Borrower or
filing or receipt thereof by such Borrower or any Restricted Subsidiary of such
Borrower (a) copies of any order or notice of such Gaming Authority or such
other Governmental Authority or court of competent jurisdiction which designates
any Gaming License or other material franchise, permit, or other governmental
operating authorization of such Borrower or any Restricted Subsidiary of such
Borrower or any application therefor, for a hearing or which refuses renewal or
extension of, or revokes or suspends the authority of such Borrower or any
Restricted Subsidiary of such Borrower to construct, own, manage, or operate its
businesses, and (b) a copy of any competing application filed with respect
to any such Gaming License or other authorization, or application therefor, of
such Borrower or any Restricted Subsidiary of such Borrower, or 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 such Borrower or any
Restricted Subsidiary of such Borrower.
6.17 License
Renewals. Commencing on the date 6 months following the
Closing Date and continuing every 6 months thereafter, deliver to Agent an
updated Schedule 5.21
reflecting thereon, as of the date of such delivery, the information described
in Section 5.21.
6.18 Licenses
and Permits. (a) Ensure that all material licenses
(including all necessary Gaming 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 each Borrower and each Restricted
Subsidiary 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.
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6.19 Subsidiary
Guarantees. Cause (a) each Restricted Subsidiary that is
formed or acquired after the date hereof or is determined to be a Restricted
Subsidiary, concurrently therewith, to (i) become a Guarantor hereunder and
execute and deliver to Agent a supplement to the Subsidiary Guaranty pursuant to
which such Restricted Subsidiary shall unconditionally guarantee all of the
Obligations in form and substance acceptable to Agent and (ii) execute a
supplement to the Guarantor Security Agreement in form and substance acceptable
to Agent and such other agreements or documents necessary or requested by Agent,
including, without limitation, Mortgages with respect to any Real Property not
constituting Excluded Assets of such Restricted Subsidiary, to grant Agent a
valid, enforceable, perfected Lien on the collateral described therein, subject
only to Permitted Liens; and (b) cause such Restricted Subsidiary to
deliver to Agent an opinion of counsel, in form reasonably satisfactory to
Agent, that (i) such guaranty, security agreement, and other agreements and
documents have been duly authorized, executed and delivered by such Restricted
Subsidiary and (ii) such guaranty, security agreement, and such other
agreements and documents constitute a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary, subject to customary assumptions and
exceptions, including for bankruptcy, fraudulent transfer and equitable
principles. Concurrently with such formation, acquisition or
determination, such Borrower will provide to Agent a pledge agreement and
appropriate certificates and powers or Uniform Commercial Code financing
statements, hypothecating all of the direct or beneficial ownership interest in
such Restricted Subsidiary, in form and substance satisfactory to Agent, and all
other documentation, in form and substance satisfactory to Agent, including one
or more opinions of counsel satisfactory to Agent, which in Agent’s opinion is
appropriate with respect to the execution and delivery of the applicable
documentation referred to above. Any document, agreement, or instrument executed
or issued subject to this Section 6.19
shall be a Loan Document.
6.20 Intentionally
Omitted.
6.21 Patriot
Act. Following any request therefor, provide all documentation
and other information required by bank regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including
the Patriot Act.
7. NEGATIVE
COVENANTS.
Each
Borrower covenants and agrees that, so long as any credit hereunder shall be
available and until full and final payment of the Obligations, Borrowers 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 7.1(b);
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(c) Indebtedness
represented by Capitalized Lease Obligations or Purchase Money Obligations;
provided, that the aggregate principal amount of such Indebtedness outstanding
at any time does not exceed an amount equal to $7,500,000 times the number of
Gaming Properties owned and controlled by any of the Borrowers or their
respective Restricted Subsidiaries on the date of incurrence of such
Indebtedness;
(d) Indebtedness
solely in respect of appeal bonds, surety bonds, insurance obligations or bonds,
and performance bonds, and similar bonds or obligations, all incurred in the
ordinary course of business (including, without limitation, to maintain any
license or permits) in accordance with customary industry
practices;
(e) Hedging
Obligations incurred to fix or hedge interest rate risk with respect to any
fixed or variable rate Indebtedness otherwise permitted by this Agreement; provided, that the
notional principal amount of each such Hedging Obligation does not exceed the
principal amount of the Indebtedness to which such Hedging Obligation
relates;
(f) Indebtedness
of any Borrower or any Restricted Subsidiary owed to and held by a Borrower that
is unsecured and subordinated in right of payment to the Obligations; provided, that any
subsequent issuance or transfer of any Capital Stock that results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary, or any transfer of
such Indebtedness (other than to a Borrower) shall be deemed, in each case, to
constitute the incurrence of such Indebtedness by such Borrower or such
Restricted Subsidiary, as the case may be;
(g) Indebtedness
outstanding under (i) the Secured Notes Documents in an aggregate principal
amount outstanding not to exceed at any time $240,000,000 less any principal
repayments made after the Closing Date and (ii) the Unsecured Notes
Documents in an aggregate principal amount outstanding not to exceed at any time
$305,000,000 less any principal repayments made after the Closing
Date;
(h) Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business;
provided such
obligation shall not continue to exist more than 2 Business Days after the date
the applicable Borrower or Restricted Subsidiary receives written
notification;
(i) the
accrual of interest, the accretion or amortization of original issue discount
and the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms;
(j) Indebtedness
arising from agreements for indemnification, adjustment of purchase price or
similar obligations, in each case incurred in connection with the disposition of
any business or assets of Borrowers or any of the Restricted Subsidiaries; provided that the
maximum aggregate liability in respect of all such Indebtedness shall at no time
exceed the gross proceeds actually received by Borrowers or the applicable
Restricted Subsidiary in connection with such disposition;
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(k) Indebtedness
issued in exchange for, or the proceeds of which are substantially
contemporaneously used to extend, repay, redeem, discharge, refinance, renew,
replace, or refund (collectively, “Refinance”),
Indebtedness incurred pursuant clause (b) or
(g) above,
clause (l)
below or this clause (k) (the
“Refinancing
Indebtedness”); provided, that
(i) the principal amount of such refinancing Indebtedness does not exceed
the principal amount of Indebtedness so Refinanced (plus any required premiums
and out-of-pocket expenses reasonably incurred in connection therewith),
(ii) the Refinancing Indebtedness has a final scheduled maturity that
equals or exceeds the final stated maturity, and a weighted average life to
maturity that is equal to or greater than the weighted average life to maturity,
of the Indebtedness being refinanced, (iii) the Refinancing Indebtedness
ranks, in right of payment, no more favorable to the Obligations or applicable
Guaranty, as the case may be, than the Indebtedness being Refinanced and any
subordination terms of the Refinancing Indebtedness must be at least as
favorable to the Lenders as those in the Indebtedness being refinanced, and
(iv) the Refinancing Indebtedness is not secured by a Lien on any asset
that did not so secure the Indebtedness being refinanced;
(l) unsecured
Indebtedness (including, without limitation, Acquired Debt) to acquire or
construct (to the extent the proceeds of such Indebtedness are used to acquire
land, furniture, fixtures and equipment, prepare the site or construct
improvements thereon) one or more Gaming Properties if: (i) no
Default or Event of Default shall have occurred and be continuing at the time
of, or would occur after giving effect on a pro forma basis to such incurrence;
(ii) the Interest Coverage Ratio for Parent’s most recently ended 4 full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is to be
incurred (the “Four
Quarter Reference Period”) would have been greater than 2.0 to 1.0
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as set forth in the definition of Interest Coverage Ratio,
as if such additional Indebtedness had been incurred at the beginning of such
4-quarter period; and (iii) the final stated maturity of such Indebtedness
is after the Maturity Date (except for Acquired Debt); provided, however, the
foregoing shall not prohibit the issuance of any such Indebtedness on a secured
basis so long as (A) such Indebtedness is evidenced as “Additional Notes” under
and as defined in the Secured Notes Indenture, (B) such Indebtedness is issued
under the Secured Notes Indenture and has the same terms (other than the issue
date, issue price and principal amount) as the Secured Notes issued on the Notes
Issuance Date, including, without limitation, the same interest rate,
amortization schedule and maturity date as the Secured Notes Indenture, (C) such
Indebtedness is subject to an intercreditor agreement, in substantially the same
form as the Intercreditor Agreement, and (E) immediately after giving effect to
the issuance thereof, the Secured Leverage Ratio does not exceed 2.0 to
1.0;
(m) unsecured
Indebtedness not otherwise permitted by clauses (a)
through (l)
above or clause (n) or
(o) below in an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding (including all Refinancing Indebtedness incurred in connection
therewith), not to exceed $50,000,000;
(n) Indebtedness
permitted by Section 7.6;
and
(o) Indebtedness
incurred in connection with the acquisition or construction (to the extent the
proceeds of such Indebtedness are used to acquire land, furniture,
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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 (for
purposes of this Section, Permitted Liens shall include Liens that are
replacements of Permitted Liens to the extent that the original Indebtedness is
refinanced, renewed, or extended under Section 7.1(k)
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 Capital Stock; or
(b) Liquidate,
wind up, or dissolve itself (or suffer any liquidation or
dissolution).
Notwithstanding
the foregoing, nothing in this Section 7.3
shall prohibit (i) the ability of Restricted Subsidiaries to enter into any
merger with another Restricted Subsidiary, (ii) the ability of a Restricted
Subsidiary to enter into any merger with a Borrower, so long as (A) such
Borrower shall survive any such merger and (B) such Borrower shall assume,
in a manner satisfactory to Agent, the obligations of such Restricted Subsidiary
under the Loan Documents to which such Restricted Subsidiary was a party and
(iii) the ability of a Borrower to enter into any merger with another
Borrower, so long as the surviving Borrower shall assume, in a manner
satisfactory to Agent, the obligations of such other Borrower under the Loan
Documents to which such other Borrower was a party.
7.4 Disposal
of Assets.
(a) Intentionally
Omitted;
(b) Make any
Asset Sale other than Permitted Dispositions; provided, however, that an
Asset Sale (other than a Permitted Disposition or any sale of any Gaming
Property or any material portion of the assets comprising any Gaming Property)
may be made if:
(i) no
Default or Event of Default shall have occurred and be continuing or would
result therefrom (other than a Default or Event of Default arising from an Asset
Sale that is a consequence of an Event of Loss);
(ii) such
Borrower or such Restricted Subsidiary, as applicable, receives consideration of
not less than the fair market value, as of the time of such Asset Sale (as
determined by the Manager of such Borrower or Restricted
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(iii) such
Borrower or such Restricted Subsidiary, as applicable, receives 75% of the
consideration for such Asset Sale (other than an Asset Sale that is a
consequence of an Event of Loss) in the form of either (A) cash or Cash
Equivalents or the assumption by the transferee of liabilities (other than
liabilities that, by their terms, are subordinated to the Obligations) of such
Borrower or such Restricted Subsidiary, as applicable (provided, that
following such Asset Sale there is no further recourse to such Borrower or its
Restricted Subsidiaries with respect to such liabilities and provided, further, that the 75%
limitation set forth in this clause (b)(iii)
of this paragraph shall not apply to any proposed Asset Sale for which an
independent certified accounting firm has certified to the Managers of the
applicable Borrower and Agent that the after-tax cash portion of the
consideration to be received by such Borrower or such Restricted Subsidiary in
such proposed Asset Sale is equal to or greater than what the net after-tax cash
proceeds would have been had such proposed Asset Sale complied with the 75%
limitation set forth in this clause (b) of
this paragraph) or (B) assets of the type described in Section 7.4(b)(iv)(A);
(iv) within
360 days of such Asset Sale, the Net Proceeds thereof are (A) invested in
assets related to the business of such Borrower or its Restricted Subsidiaries,
that would constitute Collateral, (B) applied to repay Indebtedness under
Purchase Money Obligations secured by the assets sold, (C) applied to repay
Indebtedness under this Agreement and to permanently reduce the Maximum Revolver
Amount by the amount of Indebtedness so repaid, or (D) any combination of
clauses (A),
(B), or (C); and
(v) the Net
Proceeds of any Asset Sale involving an Event of Loss are paid over to Agent in
conformance with the requirements of Section 6.8(c)
hereof;
(c) Pending
the final application of any Net Proceeds of any Asset Sale in accordance with
Section 7.4(b),
Borrowers shall apply such Net Proceeds to the outstanding Obligations or retain
such Net Proceeds (including, without limitation, for the purpose of investing
such Net Proceeds in Cash Equivalents), in each case, in accordance with the
terms hereof.
7.5 Change
Name. Change any Borrower’s or any Restricted Subsidiary’s
legal name, FEIN, corporate structure, jurisdiction of organization, or
identity, or add any new fictitious name; provided, however, that a
Borrower or a Restricted Subsidiary may change its legal name or add any new
fictitious name upon at least 30 days’ prior written notice by such
Borrower or such Restricted Subsidiary to Agent of such change and so long as,
at the time of such written notification, such Borrower or such Restricted
Subsidiary provides any financing statements or fixture filings necessary to
perfect and continue perfected Agent’s Liens.
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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 Borrowers or which are transmitted or turned over
to Agent, (b) guarantees constituting Investments permitted under Section 7.13,
(c) guarantees of obligations arising under the Notes Documents by
Borrowers and their Restricted Subsidiaries; provided that
(i) any such Restricted Subsidiary shall have guaranteed the Obligations in
accordance with Section 6.19;
and (ii) any lien securing such guarantee of the obligations under the
Secured Notes Documents shall be subordinate to any lien securing such guarantee
of the Obligations on the terms set forth in the Intercreditor Agreement,
(d) guarantees constituting Indebtedness permitted under Section 7.1 and
(e) guarantees of Subsidiaries of Indebtedness of a Borrower or Restricted
Subsidiary permitted under Section 7.1.
7.7 Nature of
Business. Directly or indirectly engage to any material extent
in any line or lines of business activity other than that which, in the
reasonable good faith judgment of the Managers of Borrowers, is a Related
Business.
7.8 Prepayments
and Amendments.
(a) Except in
connection with a refinancing permitted by Section 7.1(k),
make any principal payment on, or purchase, redeem, defease or otherwise acquire
or retire for value, any Indebtedness of a Borrower or a Subsidiary prior to any
scheduled principal payment, sinking fund payment or other payment at the stated
maturity thereof; other than (i) the Obligations, (ii) the obligations
secured by the mortgage granted by OED to the seller of the parcels of Warner
Land encumbering such parcels, (iii) [Intentionally Omitted] and (iv)
repurchases of any Secured Notes on the open market, so long as (A) no Default
or Event of Default has occurred and is continuing and (B) both before and
immediately after giving effect to such repurchase, Availability is at least
$20,000,000, and
(b) (i) Directly
or indirectly, amend, modify, alter, increase, or change any of the terms or
conditions of any of the Notes Documents in any manner that would (A) have
the effect of (1) increasing principal, interest, fee or other payment
obligations thereunder, (2) adding additional collateral or other
guarantors (other than as contemplated as of the Closing Date),
(3) shortening the maturity or increasing the amortization of the
obligations thereunder, (4) making the covenants, defaults or other
provisions thereof more burdensome, or (5) altering the subordination
provisions thereof or (B) otherwise have a material adverse effect on the
interests of the Lender Group or (ii) directly or indirectly, amend,
modify, alter, increase or change any of the terms or conditions of any
Management Agreement for which an executed subordination agreement is required
to be delivered pursuant to Section 7.21, or
any Governing Documents of a Borrower or its Subsidiary in any manner that would
make the covenants, defaults or other provisions thereof more burdensome on any
Borrower or any Guarantor or otherwise have a material adverse effect on the
interests of the Lender Group.
7.9 Change of
Control. Cause, permit, or suffer, directly or indirectly, any
Change of Control.
7.10 Intentionally
Omitted.
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7.11 Restricted
Payments. Make any Restricted Payment unless:
(a) no
Default or Event of Default has occurred and is continuing or would occur as a
consequence thereof, and
(b) immediately
after giving effect to such Restricted Payment on a pro forma basis, the
Interest Coverage Ratio for the immediately preceding 4 fiscal quarter
period for which internal financial statements have been delivered to Agent
would not have been less than 2.0:1.0, and
(c) such
Restricted Payment (the value of any such payment, if other than cash, being
determined in good faith by the Managers of Borrowers and evidenced by a
resolution set forth in a certificate signed by the chief financial officer of
Borrowers delivered to Agent), together with the aggregate of all other
Restricted Payments made after the Note Issuance Date (including Restricted
Payments permitted by clauses (1),
(2) and (7) of the following
sentence and excluding Restricted Payments permitted by the other clauses
therein), is less than the sum of:
(i) 50% of
the sum of Consolidated Net Income (taken as one accounting period) from the
beginning of the first full fiscal quarter immediately following the Note
Issuance Date 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, 100%
of such deficit), plus
(ii) 100% of
the aggregate net cash proceeds (or of the net cash proceeds received upon the
conversion of non-cash proceeds into cash) received by the applicable Borrower
from (x) the issuance or sale, other than to a Subsidiary, of Equity
Interests of such Borrower (other than Disqualified Capital Stock or in
connection with Specified Equity Contributions) and (y) any equity
contribution from a holder of such Borrower’s Capital Stock (other than a
Subsidiary and excluding Specified Equity Contributions), in each case, after
the Note Issuance Date and on or prior to the time of such Restricted Payment;
provided, that
net cash proceeds from Specified Equity Contributions shall not be included,
plus
(iii) 100% of
the aggregate net cash proceeds (or of the net cash proceeds received upon the
conversion of non-cash proceeds into cash) received by the applicable Borrower
from the issuance or sale, other than to a Subsidiary, of any convertible or
exchangeable debt security of such Borrower that has been converted or exchanged
into Equity Interests of the applicable Borrower (other than Disqualified
Capital Stock) pursuant to the terms thereof after the Note Issuance Date and on
or prior to the time of such Restricted Payment (including any additional net
cash proceeds received by such Borrower upon such conversion or exchange),
plus
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Notwithstanding
the foregoing, nothing in this Section will prohibit:
(1) the
payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would not have been
prohibited by the provisions of this Agreement;
(2) the
redemption, purchase, retirement or other acquisition of any Equity Interests of
any Borrower in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary) of, other Equity Interests of such
Borrower (other than Disqualified Capital Stock);
(3) with
respect to each tax year or portion thereof that a Borrower qualifies as a Flow
Through Entity and so long as clause (a) above
is satisfied, the payment of Permitted Tax Distributions (whether paid in such
tax year or portion thereof, or any subsequent tax year), provided, that in the
case of the portion, if any, of any Permitted Tax Distributions that is proposed
to be distributed for a particular taxable period or portion thereof, which
portion of such Permitted Tax Distribution is attributable to a Flow Through
Entity that is not a Restricted Subsidiary, such portion of such proposed
Permitted Tax Distribution shall be limited to the Excess Cash Distribution
Amount for Taxes;
(4) distributions
or payments (i) to any Excluded Person for or in respect of tax
preparation, accounting, licensure, legal and administrative fees and expenses,
including travel and similar reasonable expenses, incurred on behalf of
Borrowers or their respective Restricted Subsidiaries or in connection with
PGP’s ownership of Borrowers or their respective Restricted Subsidiaries,
consistent with industry practice, (ii) so long as clause (a) above
is satisfied pursuant to, and in accordance with, Management Agreements in
effect from time to time, provided that
(A) to the extent a subordination agreement with respect to such Management
Agreement is required to be entered into pursuant to Section 7.21,
such distributions are permitted by such subordination agreement and
(B) the aggregate amount payable to PGP or any other Excluded Person
(excluding any payments (x) permitted by Section 7.16 and
(y) payable under employment, consulting or similar agreements or
arrangements entered into in the ordinary course of business for which an
executed subordination agreement is not required to be delivered pursuant to
Section 7.21),
pursuant to the Management Agreements or any employment, consulting or similar
agreements or arrangements for any fiscal year shall not exceed 5.00% of
Consolidated EBITDA for the immediately preceding fiscal year, and (iii) so
long as clause (a) above
is satisfied, to pay reasonable and customary directors’ or managers’ fees to,
and indemnity provided on behalf of, the Managers of PGP and Borrowers, and
reimbursement of customary and reasonable travel and similar expenses incurred
on behalf of Borrowers and the Restricted Subsidiaries in the ordinary course of
business;
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(5) so
long as clause (a) above
is satisfied, (i) the repurchase, redemption or other retirement or
acquisition of Equity Interests of any Borrower’s or any Restricted Subsidiary’s
respective employees, members or managers (or their heirs or estates) that, in
each case, are not Excluded Persons or (ii) any dividend, distribution or
other payment to PGP to enable PGP to repurchase, redeem, or otherwise retire or
acquire Equity Interests of PGP’s or its Restricted Subsidiaries’ respective
employees, members or managers (or their heirs or estates) that are not Excluded
Persons, in an aggregate amount for all Restricted Payments pursuant to this
clause (5)
not to exceed $750,000 in any twelve month period on and after the Note Issuance
Date (provided, however, that any
amounts not used in any such twelve month period may be carried forward to the
next succeeding twelve month period until used);
(6) the
redemption and repurchase of any Equity Interests of Borrowers or any of the
Restricted Subsidiaries to the extent required by any Gaming
Authority;
(7) any
dividend, distribution or other payment by any of the Restricted Subsidiaries on
its Equity Interests that is paid pro rata to all holders of such Equity
Interests;
(8) payments
that are made with Specified Equity Contributions; and
(9) so
long as (A) the Restricted Payment is otherwise not prohibited by the
Indenture (after giving effect to any amendment or waiver thereof),
(B) clause (a) above
is satisfied and (C) the aggregate amount of Excess Availability plus cash
and Cash Equivalents subject to satisfactory Control Agreements, after giving
effect to each such Restricted Payment, is at least $10,000,000, Restricted
Payments not otherwise permitted by this Section 7.11 in
an aggregate amount during the term of this Agreement pursuant to this clause (9) not
to exceed $25,000,000.
7.12 Accounting
Methods. Modify or change their fiscal year or their 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’ or their Subsidiaries’ accounting records
without said accounting firm or service bureau agreeing to provide Agent
information regarding the Collateral or Borrowers’ and their Subsidiaries’
financial condition.
7.13 Investments. Except for Permitted
Investments or for Securities Accounts, 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
Borrowers and their Restricted Subsidiaries shall not have Permitted Investments
in deposit accounts or Securities Accounts (other than such accounts which are
Excluded Assets) in excess of $250,000 outstanding at any one time unless such
Borrower or Restricted Subsidiary, as applicable, and the applicable securities
intermediary or bank have entered into Control Agreements or similar
arrangements governing such Permitted Investments, as Agent shall determine in
its Permitted Discretion, to perfect (and further establish) the Agent’s Liens
in such Permitted Investments.
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7.14 Transactions
with Affiliates. Directly or indirectly sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into any contract, agreement, understanding,
loan, advance or guaranty with, or for the benefit of, (x) any Affiliate of
Borrowers or any of the Restricted Subsidiaries or (y) ▇▇▇▇▇▇▇▇▇ &
Company, Inc. or any of its Affiliates (each of the foregoing, an “Affiliate
Transaction”), except for:
(a) Except as
provided in clause (d)
below, Affiliate Transactions entered into in the ordinary course of business
that, together with all related Affiliate Transactions, have an aggregate value
of not more than $5,000,000; provided, that such
transactions are conducted in good faith and on terms that are no less favorable
to such Borrower or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction at such time by such Borrower or
such Restricted Subsidiary on an arm’s-length basis from a Person that is not an
Affiliate of such Borrower or such Restricted Subsidiary;
(b) Except as
provided in clause (d)
below, Affiliate Transactions entered into in the ordinary course of business
that, together with all related Affiliate Transactions, have an aggregate value
of not more than $10,000,000; provided, that
(i) a majority of the disinterested Managers of such Borrower or, if none,
a disinterested committee appointed by the Managers of such Borrower for such
purpose, determine that such transactions are conducted in good faith and on
terms that are no less favorable to such Borrower or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
at such time by such Borrower or such Restricted Subsidiary on an arm’s-length
basis from a Person that is not an Affiliate of such Borrower or such Restricted
Subsidiary and (ii) prior to entering into such transaction the applicable
Borrower shall have delivered to Agent a certificate signed by the chief
financial officer of such Borrower certifying to such effect;
(c) Except as
provided in clause (d)
below, Affiliate Transactions entered into in the ordinary course of business
for which a Borrower delivers to Agent an opinion issued by an accounting,
appraisal or investment banking firm of national standing (other than
▇▇▇▇▇▇▇▇▇ & Company, Inc. or any of its Affiliates) as to the fairness
of such transaction to such Borrower or such Restricted Subsidiary from a
financial point of view; or
(d) Affiliate
Transactions entered into with ▇▇▇▇▇▇▇▇▇ & Company, Inc. or any of its
Affiliates; provided, that
(i) a majority of the Managers of such Borrower determine that such
transactions are conducted in good faith and on terms that are no less favorable
to such Borrower or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction at such time by such Borrower or
such Restricted Subsidiary on an arm’s-length basis from a Person that is not an
Affiliate of such Borrower or such Restricted Subsidiary, (ii) such terms
are fully disclosed to Agent, and (iii) prior to entering into such
transaction the applicable Borrower shall have delivered to Agent a certificate
signed by the chief financial officer of such Borrower certifying to the
foregoing.
Notwithstanding
the foregoing, the following will be deemed not to be Affiliate
Transactions: (i) transactions between or among Borrowers and/or
any or all of the Restricted Subsidiaries, (ii) Restricted Payments
permitted by Section 7.11,
(iii) reasonable and customary compensation (including directors’ fees)
paid to, and indemnity and customary employee benefit
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7.15 Suspension. Suspend
or go out of a substantial portion of their business.
7.16 Compensation. Pay
annual fees and meeting fees (a) to M. ▇▇▇▇▇ ▇▇▇▇▇▇▇ in excess of $175,000
in the aggregate for each Gaming Property in fiscal year 2009 or increase any
such fees paid during any fiscal year thereafter by more than 15% over such fees
paid in the preceding fiscal year and (b) in any fiscal year to any other
director in excess of $100,000 in the aggregate or, once such fees paid to any
such director equal $100,000 in the aggregate for a fiscal year, increase any
such fees paid to such director during any fiscal year thereafter by more than
15% over such fees paid in the preceding fiscal year.
7.17 Use of
Proceeds. Use the proceeds of the Advances other than for
general corporate purposes, including working capital needs and capital
expenditures, of Borrowers consistent with the terms and conditions hereof and
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 such Borrower providing to Agent (a) 5 days’ prior written
notification thereof and (b) upon request of 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.
7.19 Securities
Accounts. Except as otherwise permitted by Section 7.13,
establish or maintain any Securities Account (other than Securities Accounts
which are Excluded Assets) unless Agent shall have received a Control Agreement
in respect of such Securities Account. Borrowers agree not to, and
shall not permit any of the Restricted Subsidiaries to, transfer assets out of
any Securities Account (other than Securities Accounts which are Excluded
Assets); provided, however, that, so
long as no Event of Default has occurred and is continuing or would result
therefrom, Borrowers and the Restricted Subsidiaries may use such assets (and
the proceeds thereof) to the extent not prohibited by this
Agreement.
7.20 Financial
Covenants.
(a) Minimum Consolidated
EBITDA. Permit Consolidated EBITDA to be less than the
required amount set forth in the following table for the applicable period set
forth opposite thereto:
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|
Applicable
Amount
|
Applicable
Period
|
|
$65,000,000
|
For
the 12-month period
ending
September 30, 2009
|
|
$70,000,000
|
For
the 12-month period
ending
December 31, 2009
|
|
$70,000,000
|
For
the 12-month period
ending
March 31, 2010
|
|
$75,000,000
|
For
the 12-month period
ending
June 30, 2010
|
|
$75,000,000
|
For
the 12-month period
ending
September 30, 2010
|
|
$80,000,000
|
For
the 12-month period ending December 31, 2010
and
ending each fiscal quarter
thereafter
|
(b) Capital Expenditures. (i)
Except as provided in Sections 7.20(b)(ii)
and 7.20(b)(iii), make
capital expenditures in any fiscal year in excess of $15,000,000 (each such
applicable amount with respect to each such fiscal year, the “Base Amount” for such
fiscal year); provided, however, that if the
aggregate amount of any capital expenditures made in the fiscal year immediately
preceding such fiscal year did not equal or exceed $15,000,000 for such
preceding fiscal year, then the Base Amount for the current fiscal year shall be
increased by an amount equal to such unused amount of the Base Amount in the
immediately preceding fiscal year.
(ii) However,
in addition to the capital expenditures permitted by Section 7.20(b)(i),
so long as the aggregate amount of Excess Availability plus cash and Cash
Equivalents subject to satisfactory Control Agreements, after giving effect to
each such capital expenditure, is at least $10,000,000, Borrowers may make
capital expenditures in the amount set forth below for the projects described
with respect thereto:
(A) $8,000,000
to design, develop, construct and furnish any future off-track betting
parlors;
(B) $7,000,000
to remodel the ▇▇▇▇▇▇ Belle Casino; and
(C) $5,000,000
for construction and property development in any fiscal year (each such amount
with respect to each fiscal year, the “Construction Base
Amount” for such year); provided, however, that if the
aggregate amount of any capital expenditures for construction and property
development made in the fiscal year immediately preceding such
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(iii) Further,
in addition to the capital expenditures permitted by Sections 7.20(b)(i)
and 7.20(b)(ii), so long
as no Default or Event of Default has occurred and is continuing or would result
as a consequence thereof, Borrowers may make capital expenditures in the amount
of $25,000,000 to design, develop, construct and furnish the OED Hotel including
the remodel of the existing casino exterior, casino floor and restaurants;
and
(iv) Further,
any and all payments and obligations under (A) that certain Amended and
Restated Port of Dubuque Public Parking Facility Development Agreement, dated
October 1, 2007, between the City of Dubuque, Iowa and DJL, (B) that
certain Minimum Assessment Agreement, dated as of October 1, 2007, by and
among the City of Dubuque, Iowa, DJL and the City Assessor of the City of
Dubuque, Iowa, and (C) any other agreement entered into by DJL in
connection with the development of the parking facility for the ▇▇▇▇▇▇▇ ▇▇
Casino, so long as such agreement is in form and substance reasonably
satisfactory to Agent, shall not be considered capital expenditures under this
Section 7.20 or
any other Section of this Agreement other than Section 7.17.
7.21 Management
Agreements. Enter into any Management Agreement with an
Excluded Person or any other Person beneficially owning in excess of five
percent (5%) of the voting equity securities of Parent without delivering to
Agent (a) a subordination agreement, in form and substance satisfactory to
Agent, executed by the parties to such Management Agreement, and (b) a copy
of such fully executed Management Agreement.
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. If
Borrowers fail to pay (a) Obligations constituting principal when due and
payable, or when declared due and payable, or (b) any other portion of the
Obligations (including 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) within 3 days of the date such Obligation
described in this clause (b) is
due and payable, or when declared due and payable;
8.2. (a) If
Borrowers fail or neglect to perform, keep, or observe any term, provision,
condition, covenant, or agreement: (i) contained in Sections 6.2
(Reporting), 6.3 (Financial
Statements, Reports, Certificates), 6.7 (Taxes), 6.10 (Compliance with
Laws), 6.11
(Leases), 6.12
(Brokerage Commissions), or 6.13 (Existence) of
this Agreement and such failure continues for a period of 5 Business Days from
the earlier of (A) notice by Agent to Borrowers or (B) the date
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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 PGP, any Guarantor, any Borrower or any
of the Borrowers’ respective Restricted Subsidiaries;
8.5. If
an Insolvency Proceeding is commenced against PGP, any Guarantor, any Borrower,
or any of Borrowers’ Restricted Subsidiaries, and any of the following events
occur: (a) PGP, 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 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, PGP, 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 for a period of 5 consecutive Business
Days;
8.7. [Intentionally
Omitted];
8.8. If
a judgment or judgments for the payment of money (other than judgments as to
which a reputable insurance company has accepted full liability) is or are
entered by a court of competent jurisdiction against any Borrower or any of its
Restricted Subsidiaries and such judgment or judgments remain undischarged,
unbonded, or unstayed for a period of 60 days after entry; provided, that the
aggregate amount of all such judgments exceeds $5,000,000;
8.9. If
there is a default under any Indebtedness of any Borrower or any of its
Restricted Subsidiaries in excess of $5,000,000 and such default (a) occurs
at the final maturity of the obligations thereunder, or (b) results in a
right by the other party thereto, irrespective of
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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, except to the extent such payment is permitted
by the terms of the subordination provisions applicable to such
Indebtedness;
8.11. If
any 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
the obligation of any Guarantor under any guaranty of the Obligations or other
third Person under any Loan Document is rendered or declared unenforceable or
terminated by operation of law or by such Guarantor or third Person
thereunder;
8.13. If
this Agreement or any other Loan Document that purports to create a Lien, shall,
for any reason, fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority Lien on or
security interest in the Collateral covered hereby or thereby;
8.14. Any
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 Restricted Subsidiary, or any Guarantor or PGP, or a
proceeding shall be commenced by any Borrower or any Restricted Subsidiary, or
any Guarantor or PGP, or by any Governmental Authority having jurisdiction over
any Borrower or any Restricted Subsidiary, or any Guarantor or PGP seeking to
establish the invalidity or unenforceability thereof, or any Borrower,
Restricted Subsidiary, Guarantor or PGP shall deny that any Borrower, any
Restricted Subsidiary, any Guarantor or PGP has any liability or obligation
purported to be created under any Loan Document;
8.15. If
there is an “Event of Default” under (and as defined in) the Secured Notes
Indenture or the Unsecured Notes Indenture; or if there is an event of default
under any of the other Notes Documents or any Management Agreement (other than
as a result of a restriction herein or under any other Loan
Document);
8.16. If
any Governmental Authority (including the Louisiana or Iowa state legislature)
restricts the ability of any Borrower to operate, or restricts, limits or
prohibits any Borrower from operating, its gaming business as conducted on the
Closing Date or as otherwise permitted by Agent, and such restriction, limit or
prohibition results in a Material Adverse Change;
8.17. If,
for a period of 5 consecutive Business Days, any Borrower fails to keep in full
force and effect, suffers the termination, revocation, forfeiture, nonrenewal or
suspension of, or suffers a material adverse amendment to, any material Gaming
License, franchise, registration, qualification, finding of suitability or other
approval or authorization required to enable such
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8.18. If,
for a period of 5 consecutive Business Days, any Governmental Authority
terminates, suspends, amends, revokes, repeals or fails to renew any law,
license, franchise, registration, qualification, finding of suitability or other
approval or authorization required to enable any Borrower or any of its
Restricted Subsidiaries to own, operate, or otherwise conduct or manage its
gaming businesses, including at any Gaming Property.
9. AGENT’S RIGHTS AND
REMEDIES.
9.1 Rights
and Remedies.
(a) 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:
(i) Declare
all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or
otherwise,
immediately due and
payable;
(ii) 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;
(iii) Terminate
this Agreement and any of the other Loan Documents as to any future liability or
obligation of
the
Lender Group, but withou affecting
any of the Agent’s Liens in the Collateral and without affecting the
Obligations;
(iv) 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;
(v) Cause
Borrowers to hold all returned Inventory in trust for Agent, segregate all
returned Inventory from all
other
assets of Borrowers or in
Borrowers’ possession and conspicuously label said returned Inventory as the
property of Agent;
(vi) Without
notice to or demand upon any Borrower, make such payments and do such acts as
Agent
considers
necessary
or reasonable to
protect its security interests in the Collateral. Each Borrower
agrees 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
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is
reasonably convenient to both parties. Each Borrower authorizes 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’ owned or leased premises, each Borrower hereby
grants 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;
(vii) Without
notice to any Borrower (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 any and all (i) balances and deposits of any Borrower held by
the Lender
Group, or
(ii) Indebtedness at any time owing to or for the credit or the account of
any Borrower held by the Lender Group;
(viii) Hold, as
cash collateral, any and all balances and deposits of any Borrower held by the
Lender Group to secure the full and final repayment
of all of
the Obligations;
(ix) 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 hereby grants to Agent a license or other
right to use, without charge, such Borrower’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 rights under all licenses and all
franchise
agreements
shall inure to the Lender Group’s benefit;
(x) 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 Borrowers’ premises) as Agent
determines is commercially reasonable. It is not necessary that the
Personal
Property Collateral be present at any such sale;
(xi) Give
notice of the disposition of the Personal Property Collateral as
follows:
(A) Agent
shall give Borrowers (for the benefit of the applicable Borrower) 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, then the time on or after which the private sale or other
disposition is to be made; and
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(B) The
notice shall be personally delivered or mailed, postage prepaid, to Borrowers 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;
(xii) On behalf
of the Lender Group, credit bid and purchase at any public sale;
and
(xiii) 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.
(b) The
Lender Group shall have all other rights and remedies available to it at law or
in equity or pursuant to any other Loan Documents.
(c) Borrowers
hereby acknowledge and agree that the notice described in Section 9.1(a)(xi)(B),
when given, shall constitute a reasonable “authenticated notification of
disposition” within the meaning of Section 9-611 of the Uniform Commercial
Code, as in effect from time to time in any applicable
jurisdiction.
(d) Agent or
any other member of the Lender Group may be a purchaser of any or all of the
Collateral at any public or, to the extent permitted under the Code, private
sale in accordance with the Code and Agent, as secured party for and
representative of the Lender Group, shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such sale made in accordance with the
Code, to use and apply any of the Obligations of such Borrower as a credit on
account of the purchase price for any Collateral payable by Agent at such
sale. To the extent provided under the Code or other applicable law,
each purchaser at any such sale shall hold the property sold absolutely free
from any claim or right on the part of any Borrower and Borrower hereby waives
(to the extent permitted by applicable law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted until payment in
full of the Obligations. Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been
given. Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor and by notice to the
applicable Borrower, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Each Borrower hereby
waives any claims against Agent arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Agent accepts the
first offer received and does not offer such Collateral to more than one
offeree. Each Borrower further agrees that a breach of any of the
covenants contained in this Section 9.1 will
cause irreparable injury to Agent, that Agent has no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 9.1
shall be specifically enforceable against such Borrower, and such Borrower
hereby waives and agrees not to assert any defenses against an action for
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(e) Agent may
sell the Collateral following the occurrence and during the continuance of an
Event of Default without giving any warranties as to the
Collateral. Agent may specifically disclaim or modify, in its sole
discretion, any warranties of title or the like as to any
Collateral. This procedure will not be considered to adversely affect
the commercial reasonableness of any sale of any of the
Collateral. Agent may comply with any applicable state or federal law
requirements in connection with a disposition of the Collateral and compliance
will not be considered to adversely affect the commercial reasonableness of any
sale of the Collateral. Leasing and licensing of Collateral by Agent
to third Persons are types of sales permitted hereunder.
(f) If Agent
sells any of the Collateral of any Borrower on credit, the Obligations of such
Borrower will be credited only with payments actually made by the purchaser and
received by Agent and applied to the indebtedness of the
purchaser. In the event the purchaser fails to pay for the
Collateral, Agent may resell the Collateral.
(g) Agent
shall have no obligation to marshal any of the Collateral.
(h) All
amounts and proceeds (including checks and other instruments) received by any
Borrower in respect of amounts due to such Borrower in respect of the Collateral
or any portion thereof following the occurrence and during the continuance of an
Event of Default shall be received in trust for the benefit of Agent hereunder,
shall be segregated from other funds of such Borrower and shall be forthwith
paid over or delivered (subject to the Intercreditor Agreement to the extent
then in effect) to Agent in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section 2.4(b)
following the occurrence and during the continuance of an Event of
Default. Upon demand from Agent following the occurrence and during
the continuance of an Event of Default, Borrowers shall not adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount
thereon.
(i) Each
Borrower agrees that, upon the occurrence of and during the continuance of an
Event of Default and at Agent’s request, such Borrower will, and will cause each
Restricted Subsidiary of such Borrower to (and, by its execution and delivery of
a Subsidiary Guaranty or a joinder thereto, each of such Borrower’s Restricted
Subsidiaries agrees to), immediately file such applications for approval and
shall take all other and further actions required by Agent to obtain such
approvals or consents of regulatory authorities as are necessary to transfer
ownership and control to Agent, of the Gaming Licenses held by it, or its
interest in any Person holding any such Gaming License. To enforce
the provisions of this Section 9.1(i),
Agent is empowered to request the appointment of a receiver from any court of
competent jurisdiction. Such receiver shall be instructed to seek
from the applicable Gaming Authority an involuntary transfer of control of any
Gaming License for the purpose of seeking a bona fide purchaser to whom control
will ultimately be transferred. Each Borrower hereby agrees to
authorize, and to cause each Restricted Subsidiary of such Borrower to authorize
(and, by its
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(j) Any
deficiency in the payment of the Obligations that exists after disposition of
the Personal Property Collateral as provided above will be paid immediately by
Borrowers. Any excess that exists after disposition of the Personal
Property Collateral will be returned, without interest and subject to the rights
of third Persons, by Agent to Borrowers; and
(k) In the
event Agent elects to commence foreclosure proceeding under Louisiana law, Agent
may cause such Personal Property Collateral, or any part or parts thereof, to be
immediately seized and sold, whether in term of court or in vacation, under
ordinary or executory process, in accordance with applicable Louisiana law, to
the highest bidder for cash, with or without appraisement, and without the
necessity of making additional demand upon or notifying Borrowers or any Person
or placing Borrowers or any Person in default, all of which are expressly
waived. For purposes of foreclosure under Louisiana executory process
procedures, each Borrower confesses judgment and acknowledges to be indebted
unto and in favor of Agent up to the full amount of the Obligations, in
principal, interest, costs, expenses, attorneys’ fees and other fees and
charges. To the extent permitted under applicable Louisiana law, each
Borrower additionally waives: (a) the benefit of appraisal as
provided in Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of
Civil Procedure, and all other laws with regard to appraisal upon judicial sale;
(b) the demand and 3 days’ delay as provided under Articles 2639 and
2721 of the Louisiana Code of Civil Procedure; (c) the notice of seizure as
provided under Articles 2293 and 2721 of the Louisiana Code of Civil
Procedure; (d) the 3 days’ delay provided under Articles 2331 and 2722
of the Louisiana Code of Civil Procedure; and (e) all other benefits
provided under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other articles not specifically mentioned above. Should it
become necessary for Agent to foreclose under this Agreement, all declarations
of fact, which are made under an authentic act before a Notary Public in the
presence of 2 witnesses, by a Person declaring such facts to lie within his or
her knowledge, shall constitute authentic evidence for purposes of executory
process and also for purposes of La. R.S. 9:3509.1, La. R.S. 9:3504(D)(6) and
La. R.S. 10:9-629, as applicable. In addition to the foregoing rights
and remedies, Agent may elect to effect the
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All
rights, remedies, and powers provided in this Agreement relative to the
Collateral may be exercised only to the extent that the exercise thereof does
not violate any applicable mandatory provision of the applicable gaming laws,
rules, and regulations enacted by the applicable Gaming Authority (the “Applicable Gaming
Laws”) and all provisions of this Agreement 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 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 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, 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.
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11. WAIVERS;
INDEMNIFICATION.
11.1 Demand;
Protest. Each Borrower 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 may in any way be liable.
11.2 The
Lender Group’s Liability for Collateral. Each Borrower 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.
11.3 Indemnification. Each
Borrower 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 ARE CAUSED BY OR ARISE OUT OF ANY
NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER
PERSON.
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12. NOTICES.
Unless
otherwise provided in this Agreement, all notices or demands by Borrowers 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 such Borrower or Agent, as applicable, may designate to each other
in accordance herewith), or telefacsimile to Borrowers or to Agent, as the case
may be, at its address set forth below:
|
|
If
to any Borrower:
|
|
|
c/o
Peninsula Gaming Partners, LLC
|
|
|
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇. ▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
|
Fax
No. (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
If
to Agent:
|
▇▇▇▇▇ FARGO FOOTHILL,
INC.
|
|
|
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn: Business
Finance Division Manager
|
|
|
Fax
No. (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
with
copies to:
|
PAUL, HASTINGS,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
LLP
|
|
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
|
Attn: ▇▇▇▇▇
▇. ▇▇▇▇▇▇, III, Esq.
|
|
|
Fax
No. (▇▇▇) ▇▇▇-▇▇▇▇
|
282. Agent and
Borrowers 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 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 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
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(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 NEW YORK, STATE OF NEW YORK
AND EACH SUCH PARTY HERETO HERBY SUBMITS TO THE JURISDICTION OF EACH SUCH COURT,
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 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).
(c) BORROWERS
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) Each
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 or an Affiliate of a Lender),
and, so long as no Event of Default then exists, Borrowers, 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 (except that such minimum amount
shall not apply to an Affiliate of a Lender); provided, however, that Agent’s
and Borrowers’ consent shall not be unreasonably withheld, conditioned or
delayed; and provided further that that
Borrowers and
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(b) From and
after the date that Agent notifies the assignor Lender (with a copy to
Borrowers) 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 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 the
performance or observance by Borrowers 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
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(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 Commitments 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 Commitments, 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, 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) release all or a material portion of the Collateral, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums, 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
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(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.
(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
§203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law.
(h) Subject
to the last sentence of this Section 14.1(h),
Agent shall maintain, or cause to be maintained, a register (the “Register”) on which
it enters the name of a Lender as the registered owner of each Advance, as the
case may be, held by such Lender. A Registered Loan (and the
Registered Note, if any, evidencing the same) may be assigned or sold in whole
or in part only by registration of such assignment or sale on the Register (and
each Registered Note shall expressly so provide). Subject to the last
sentence of this Section 14.1(h),
any assignment or sale of all or part of such Registered Loan (and the
Registered Note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the Registered Note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such Registered Note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new Registered Notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of an assignment or sale of
any Registered Loan (and the Registered Note, if any, evidencing the same),
Borrowers, Agent and the Lenders shall treat the Person in whose name such
Registered Loan (and the Registered Note, if any, evidencing the same) is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the
contrary. In the case of an assignment or delegation covered by Section 14.1(a)(y),
the assigning Lender shall maintain a register comparable to the Register on
behalf of Agent.
(i) In the
event that a Lender sells participations in a Registered Loan, such Lender shall
maintain a register on which it enters the name of all participants in the
Registered Loans held by it (the “Participant
Register”). A Registered Loan (and the Registered Note, if
any, evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
Registered Note shall expressly so provide). Any participation of
such Registered Loan (and the Registered Note, if any, evidencing the same) may
be effected only by the registration of such participation on the Participant
Register.
Notwithstanding
the foregoing, to the extent required by applicable law, (a) each Assignee
or Participant shall be an “Institutional Lender” (as defined in La. R.S. 27:3
(13)) or otherwise suitable to the Louisiana Regulatory Authorities, and
(b) each assignment or
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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
Borrowers may not assign this Agreement or any rights or duties hereunder
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. Each 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 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 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 Borrowers 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 the
Lenders affected thereby and Borrowers 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,
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(i) release
any Borrower from any obligation for the payment of money, or
(j) 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 or
Swing Lender, affect the rights or duties of Agent 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, shall not require consent by or the agreement of
Borrowers.
Notwithstanding
the foregoing, to the extent required by applicable law, amendments pursuant to
this Section 15.1
shall be subject to the consent and/or approval of the relevant Gaming
Authorities.
15.2 Replacement
of Holdout Lender.
If (a)
any Lender becomes an Impacted Lender or (b) any action to be taken by the
Lender Group or Agent hereunder requires the unanimous consent, authorization,
or agreement of all Lenders, and the Agent gives its consent, authorization or
agreement to such action but a Lender (“Holdout Lender”)
fails to give its consent, authorization, or agreement, then Agent or Parent,
upon at least 5 Business Days’ prior irrevocable notice to the Impacted Lender
or Holdout Lender (each, a “Specified Lender”),
may permanently replace the Specified Lender with one or more substitute
Eligible Transferees (each, a “Replacement Lender”),
and the Specified Lender shall have no right to refuse to be replaced
hereunder. Such notice to replace the Specified 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 Specified Lender and each
Replacement Lender shall execute and deliver a completed form of Assignment and
Acceptance Agreement, subject only to the Specified 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 Specified Lender shall refuse or fail to
execute and deliver any such Assignment and Acceptance prior to the effective
date of such replacement, the Specified Lender shall be deemed to have executed
and delivered such Assignment and Acceptance. The replacement of any
Specified 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 Specified Lender hereunder and under the other Loan
Documents, the Specified Lender shall remain obligated to make the Specified
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. In addition, if any
Lender shall become an Impacted Lender, then Borrowers at their option may
prepay in whole the aggregate outstanding amount of all Advances owing to such
Lender, including all principal, accrued but unpaid interest thereon and all
amounts owing to such Lender hereunder (other than in the case where
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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 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. Appointment and Authorization of
Agent. Each Lender hereby designates and appoints ▇▇▇▇▇ Fargo
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. The provisions of this Section 16 are
solely for the benefit of Agent, and the Lenders, and Borrowers shall have no
rights as a third party beneficiary of any of the provisions contained
herein. 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” is for convenience only, that ▇▇▇▇▇
Fargo 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 and the other Loan Documents, 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, provided that Agent
shall refrain from or take actions as directed by the Required Lenders as
provided hereunder. Without limiting the generality of the foregoing,
or of any other provision of the Loan Documents that provides rights or powers
to Agent, the Lenders agree that Agent shall have the right to exercise the
following powers as long as this Agreement remains in
effect: (i) maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Obligations, the
Collateral, the Collections of Borrowers and their Subsidiaries, and related
matters, (ii) 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,
(iii) make Advances, for the account of
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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 any Subsidiary or
Affiliate of any Borrower, 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 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 the books
or records or properties of any of Borrowers’ Restricted Subsidiaries or
Affiliates.
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 the 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
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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 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.
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
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 appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrowers 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, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrowers 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 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
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16.8 Agent in
Individual Capacity. ▇▇▇▇▇ Fargo 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
their Subsidiaries and Affiliates and any other Person (other than the Lender
Group) party to any Loan Documents as though ▇▇▇▇▇ Fargo 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, ▇▇▇▇▇ Fargo Foothill or its
Affiliates may receive information regarding Borrowers 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
Person 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 ▇▇▇▇▇ Fargo 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
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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
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 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 Person 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 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
Borrowers:
(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 any
Borrower;
(ii) if such
Lender claims an exemption from, or a reduction of, withholding tax under a
United States tax treaty, a properly completed IRS Form
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W-8BEN
before the first payment of any interest under this Agreement and at any other
time reasonably requested by Agent
or any 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, 2 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 any
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 Borrowers 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
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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 each 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 its Subsidiaries owned any interest at the time the
Agent’s Lien was granted or at any time thereafter, or (iv) constituting
property leased to a Borrower or its Subsidiaries 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 any 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 any Liens (other than those expressly being released) upon (or
obligations of Borrowers in respect of) all interests retained by Borrowers,
including, the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.
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(b) Agent
shall have no obligation whatsoever to any of the Lenders to assure that the
Collateral exists or is owned by Borrowers 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 the 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, any amounts owing by such Lender to
Borrowers or any deposit accounts of Borrowers 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 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 (including, without limitation,
proceeds or payments received by such Lender from Agent pursuant to Section 15.2), 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 Code can be perfected only by
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116
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
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 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 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 the 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 will rely
significantly upon the Books, as well as on representations of Borrowers’
personnel,
(d) agrees to
keep all Reports and other material, non-public information regarding Borrowers
and their Subsidiaries and their operations, assets, and existing and
contemplated business plans in a confidential manner; it being understood and
agreed by Borrowers that in any event such Lender may make disclosures
(a) to counsel for and other advisors, accountants, and auditors to 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, (c) of information that has become
public by disclosures made by Persons other than such Lender, its Affiliates,
assignees, transferees, or Participants, or (d) 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,
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117
(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
Borrowers the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Borrowers, Agent promptly shall provide a
copy of same to such Lender, and (z) any time that Agent renders to
Borrowers 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 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.
LEGAL_US_W
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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.
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
against Agent, any Lender or Borrowers, 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 by any Borrower or any Guarantor or the transfer to Agent or
any Lender 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 and Guarantors automatically shall
be revived, reinstated, and restored and shall exist as though such Voidable
Transfer had never been made.
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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 Combined
Administration. Each Borrower hereby irrevocably authorizes
Agent to rely on any notices, information or instructions given by any Borrower
hereunder purportedly on behalf of all Borrowers. 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 as a result
hereof. Each Borrower 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 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
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 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 any
Borrower, or (c) any other action taken by the Lender Group hereunder or
under the other Loan Documents, except that Borrowers 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.
17.10 USA
Patriot Act Notice. Agent (for itself and not on behalf of any
Lender) and each Lender that is subject to the USA Patriot Act (Title III of
Pub.L. 107 56 (signed into law October 26, 2001)) (the “Patriot Act”), hereby
notify Borrowers, their Subsidiaries and Guarantors that, pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies such Persons, or any of them, which information
includes the name and address of such Persons, or any of them, and other
information that will allow such Lender or Agent, as applicable, to identify
such Persons, or any of them, in accordance with the Patriot Act.
[Signature
page to follow]
LEGAL_US_W
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120
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed and delivered as of the
date first above written.
|
PENINSULA
GAMING, LLC, a Delaware
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limited
liability company
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By:
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Title: CFO
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▇▇▇▇▇▇▇
▇▇, LLC, a Delaware limited liability
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company
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By:
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Title: CFO
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THE
OLD ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C.,
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a
Louisiana limited liability company
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By:
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Title: CFO
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▇▇▇▇▇▇▇
▇▇ WORTH, LLC, a Delaware
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limited
liability company
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Title: CFO
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BELLE
OF ORLEANS, L.L.C., a Louisiana
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limited
liability company
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Title: CFO
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LEGAL_US_W
# 62188650.14
| ▇▇▇▇▇ FARGO FOOTHILL, INC., a | |
| California corporation, as Agent and as | |
| Lender | |
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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Title: Vice
President
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AMERICAN
TRUST AND SAVINGS BANK,
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AS
A Lender
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By:
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/s/
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Title: 2nd
Senior Vice President
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LEGAL_US_W
# 62188650.14
TABLE OF CONTENTS
Page
|
DEFINITIONS
AND CONSTRUCTION
|
2
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1.1
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Definitions
|
2
|
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1.2
|
Accounting
Terms
|
37
|
|
|
1.3
|
Code
|
37
|
|
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1.4
|
Construction
|
37
|
|
|
1.5
|
Schedules
and Exhibits
|
37
|
|
2.
|
LOAN
AND TERMS OF PAYMENT
|
37
|
|
|
2.1
|
Advances
|
37
|
|
|
2.2
|
Intentionally
Omitted
|
38
|
|
|
2.3
|
Borrowing
Procedures and Settlements
|
38
|
|
|
2.4
|
Payments
|
44
|
|
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2.5
|
Overadvances
|
46
|
|
|
2.6
|
Interest: Rates,
Payments, and Calculations
|
46
|
|
|
2.7
|
[Intentionally
Omitted]
|
48
|
|
|
2.8
|
Crediting
Payments
|
48
|
|
|
2.9
|
Designated
Account
|
48
|
|
|
2.10
|
Maintenance
of Loan Account; Statements of Obligations
|
48
|
|
|
2.11
|
Fees
|
49
|
|
|
2.12
|
Letters
of Credit
|
49
|
|
|
2.13
|
Registered
Notes
|
52
|
|
|
2.14
|
Capital
Requirements
|
53
|
|
|
2.15
|
Joint
and Several Liability of Borrowers
|
53
|
|
|
2.16
|
LIBOR
Option
|
56
|
|
3.
|
CONDITIONS;
TERM OF AGREEMENT
|
58
|
|
|
3.1
|
Conditions
Precedent to Initial Extension of Credit
|
58
|
|
|
3.2
|
Conditions
Subsequent to Initial Extension of Credit
|
61
|
|
|
3.3
|
Conditions
Precedent to all Extensions of Credit
|
61
|
|
|
3.4
|
Term
|
62
|
|
|
3.5
|
Effect
of Termination
|
62
|
|
|
3.6
|
Early
Termination by Borrowers
|
62
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# 62188650.14
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4.
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CREATION
OF SECURITY INTEREST
|
63
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4.1
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Grant
of Security Interest
|
63
|
|
|
4.2
|
Negotiable
Collateral
|
63
|
|
|
4.3
|
Collection
of Accounts, General Intangibles, and Negotiable
Collateral
|
63
|
|
|
4.4
|
Delivery
of Additional Documentation Required
|
64
|
|
|
4.5
|
Power
of Attorney
|
65
|
|
|
4.6
|
Right
to Inspect
|
66
|
|
|
4.7
|
Control
Agreements
|
66
|
|
5.
|
REPRESENTATIONS
AND WARRANTIES
|
66
|
|
|
5.1
|
No
Encumbrances
|
66
|
|
|
5.2
|
[Intentionally
Omitted]
|
66
|
|
|
5.3
|
[Intentionally
Omitted]
|
66
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|
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5.4
|
Equipment
|
67
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|
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5.5
|
Location
of Inventory and Equipment
|
67
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5.6
|
Inventory
Records
|
67
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5.7
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State
of Incorporation; Location of Chief Executive Office; FEIN; Organizational
ID Number; Commercial Tort Claims
|
67
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5.8
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Due
Organization and Qualification; Subsidiaries
|
67
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5.9
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Due
Authorization; No Conflict
|
68
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5.10
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Litigation
|
69
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5.11
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No
Material Adverse Change
|
69
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5.12
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Fraudulent
Transfer
|
69
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5.13
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Employee
Benefits
|
69
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5.14
|
Environmental
Condition
|
69
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5.15
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Brokerage
Fees
|
70
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5.16
|
Intellectual
Property
|
70
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5.17
|
Leases
|
70
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5.18
|
Deposit
Accounts
|
70
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5.19
|
Complete
Disclosure
|
70
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5.20
|
Indebtedness
|
71
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5.21
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Licenses
and Permits
|
71
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5.22
|
Senior
Debt
|
71
|
|
6.
|
AFFIRMATIVE
COVENANTS
|
72
|
|
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6.1
|
Accounting
System
|
72
|
|
|
6.2
|
Reporting
|
72
|
|
|
6.3
|
Financial
Statements, Reports, Certificates
|
73
|
|
|
6.4
|
[Intentionally
Omitted]
|
75
|
|
|
6.5
|
[Intentionally
Omitted]
|
75
|
|
|
6.6
|
Maintenance
of Properties
|
75
|
|
|
6.7
|
Taxes
|
75
|
|
|
6.8
|
Insurance
|
76
|
|
|
6.9
|
Location
of Inventory and Equipment
|
78
|
|
|
6.10
|
Compliance
with Laws
|
78
|
|
|
6.11
|
Leases
|
78
|
|
|
6.12
|
Brokerage
Commissions
|
78
|
|
|
6.13
|
Existence
|
78
|
|
|
6.14
|
Environmental
|
78
|
|
|
6.15
|
Disclosure
Updates
|
79
|
|
|
6.16
|
Government
Authorization
|
79
|
|
|
6.17
|
License
Renewals
|
79
|
|
|
6.18
|
Licenses
and Permits
|
79
|
|
|
6.19
|
Subsidiary
Guarantees
|
79
|
|
|
6.20
|
Intentionally
Omitted
|
80
|
|
|
6.21
|
Patriot
Act
|
80
|
|
7.
|
NEGATIVE
COVENANTS
|
80
|
|
|
7.1
|
Indebtedness
|
80
|
|
|
7.2
|
Liens
|
83
|
|
|
7.3
|
Restrictions
on Fundamental Changes
|
83
|
|
|
7.4
|
Disposal
of Assets
|
83
|
|
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7.5
|
Change
Name
|
84
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7.6
|
Guarantee
|
84
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7.7
|
Nature
of Business
|
85
|
|
|
7.8
|
Prepayments
and Amendments
|
85
|
|
|
7.9
|
Change
of Control
|
85
|
|
|
7.10
|
Intentionally
Omitted
|
85
|
|
|
7.11
|
Restricted
Payments
|
85
|
|
|
7.12
|
Accounting
Methods
|
88
|
|
|
7.13
|
Investments
|
88
|
|
|
7.14
|
Transactions
with Affiliates
|
88
|
|
|
7.15
|
Suspension
|
90
|
|
|
7.16
|
Compensation
|
90
|
|
|
7.17
|
Use
of Proceeds
|
90
|
|
|
7.18
|
Change
in Location of Chief Executive Office; Inventory and Equipment with
Bailees
|
90
|
|
|
7.19
|
Securities
Accounts
|
90
|
|
|
7.20
|
Financial
Covenants
|
90
|
|
|
7.21
|
Management
Agreements
|
92
|
|
8.
|
EVENTS
OF DEFAULT
|
92
|
|
9.
|
AGENT’S
RIGHTS AND REMEDIES
|
95
|
|
|
9.1
|
Rights
and Remedies
|
95
|
|
|
9.2
|
Remedies
Cumulative
|
100
|
|
10.
|
TAXES
AND EXPENSES
|
100
|
|
11.
|
WAIVERS;
INDEMNIFICATION
|
100
|
|
|
11.1
|
Demand;
Protest
|
100
|
|
|
11.2
|
The
Lender Group’s Liability for Collateral
|
100
|
|
|
11.3
|
Indemnification
|
101
|
|
12.
|
NOTICES
|
101
|
|
13.
|
CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER
|
102
|
|
14.
|
ASSIGNMENTS
AND PARTICIPATIONS; SUCCESSORS
|
103
|
|
|
14.1
|
Assignments
and Participations
|
103
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LEGAL_US_W
# 62188650.14
-iv-
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14.2
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Successors
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106
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15.
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AMENDMENTS;
WAIVERS
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107
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15.1
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Amendments
and Waivers
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107
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15.2
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Replacement
of Holdout Lender
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108
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15.3
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No
Waivers; Cumulative Remedies
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108
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16.
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AGENT;
THE LENDER GROUP
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109
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16.1
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Appointment
and Authorization of Agent
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109
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16.2
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Delegation
of Duties
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110
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16.3
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Liability
of Agent
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110
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16.4
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Reliance
by Agent
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110
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16.5
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Notice
of Default or Event of Default
|
111
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16.6
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Credit
Decision
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111
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16.7
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Costs
and Expenses; Indemnification
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111
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16.8
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Agent
in Individual Capacity
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112
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16.9
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Successor
Agent
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112
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16.10
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Lender
in Individual Capacity
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113
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16.11
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Withholding
Taxes
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113
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16.12
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Collateral
Matters
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115
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16.13
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Restrictions
on Actions by the Lenders; Sharing of Payments
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116
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16.14
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Agency
for Perfection
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116
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16.15
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Payments
by Agent to the Lenders
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117
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16.16
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Concerning
the Collateral and Related Loan Documents
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117
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16.17
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Field
Audits and Examination Reports; Confidentiality; Disclaimers by the
Lenders; Other Reports and Information
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117
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16.18
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Several
Obligations; No Liability
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118
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17.
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GENERAL
PROVISIONS
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119
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17.1
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Effectiveness
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119
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17.2
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Section Headings
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119
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17.3
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Interpretation
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119
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17.4
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Severability
of Provisions
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119
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LEGAL_US_W
# 62188650.14
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17.5
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Amendments
in Writing
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119
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17.6
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Counterparts;
Telefacsimile Execution
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119
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17.7
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Revival
and Reinstatement of Obligations
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119
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17.8
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Integration
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120
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17.9
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Combined
Administration
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120
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17.10
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USA
Patriot Act Notice
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120
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LEGAL_US_W # 62188650.14
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EXHIBITS AND SCHEDULES
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Exhibit A-1
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Form
of Assignment and Acceptance
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Exhibit B-1
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Form
of Borrowing Base Certificate
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Exhibit C-1
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Form
of Compliance Certificate
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Exhibit L-1
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Form
of LIBOR Notice
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Exhibit
S-1
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Form
of ▇▇▇▇▇▇▇ Guaranty
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Schedule A-1
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Agent’s
Account
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Schedule C-1
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Commitments
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Schedule D-1
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Designated
Accounts
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Schedule P-1
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Permitted
Liens
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Schedule P-2
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Existing
Investments
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Schedule R-1
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Real
Property Collateral
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Schedule T-1
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Transactions
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Schedule 2.12
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Existing
Letters of Credit
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Schedule 5.5
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Locations
of Equipment
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Schedule 5.7
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Jurisdiction;
Chief Executive Office; FEIN; State Organizational No.; Commercial Tort
Claims
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Schedule 5.8(b)
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Capitalization
of Borrowers
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Schedule 5.8(c)
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Capitalization
of Borrowers’ Subsidiaries
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Schedule 5.8(e)
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Restricted
Subsidiaries; Unrestricted Subsidiaries
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Schedule 5.10
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Litigation
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Schedule 5.14
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Environmental
Matters
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Schedule 5.16
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Intellectual
Property
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Schedule 5.18
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Demand
Deposit Accounts
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Schedule 5.20
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Existing
Indebtedness
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Schedule 5.21
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Licenses
and Permits
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Schedule 7.1(b)
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Indebtedness
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Schedule 7.14
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Affiliate
Transactions
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LEGAL_US_W #
62188650.14
SCHEDULE A-1
AGENT’S
ACCOUNT
286. 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 any
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 #▇▇▇▇▇▇▇▇▇.
LEGAL_US_W #
62188650.14
SCHEDULE C-1
COMMITMENTS
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Lenders
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Commitment
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▇▇▇▇▇
Fargo Foothill, Inc.
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$50,000,000
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American
Trust and Savings Bank
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$8,500,000
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All
Lenders
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$58,500,000
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LEGAL_US_W #
62188650.14