THIRD AMENDMENT TO
REDUCING REVOLVING CREDIT AGREEMENT
THIS THIRD AMENDMENT TO REDUCING REVOLVING CREDIT AGREEMENT ("Third
Amendment to Credit Agreement") is made and entered into as of the 30th day of
September, 1996, by and among HARVEYS CASINO RESORTS, a Nevada corporation
("HCR"), HARVEYS C.C. MANAGEMENT COMPANY, INC., a Nevada corporation ("HCCMC"),
HARVEYS WAGON WHEEL CASINO LIMITED LIABILITY COMPANY, a Colorado limited
liability company ("HWWLLC") and HARVEYS IOWA MANAGEMENT COMPANY, INC., a Nevada
corporation ("HIMC" and together with HCR and HCCMC and HWWLLC collectively the
"Borrowers"), XXXXX FARGO BANK, National Association (successor by merger with
FIRST INTERSTATE BANK OF NEVADA, N.A. and FIRST INTERSTATE BANK OF CALIFORNIA),
U.S. BANK OF NEVADA, BANK OF THE WEST, FIRST SECURITY BANK, N.A. formerly known
as FIRST SECURITY BANK OF IDAHO, N.A., IMPERIAL BANK, NORWEST BANK OF NEBRASKA,
N.A., NBD BANK, SOCIETE GENERALE, THE SUMITOMO BANK, LIMITED, Chicago Branch and
ARGENTBANK (herein together with their respective successors and assigns
collectively the "Lenders"), XXXXX FARGO BANK, National Association, as the
swingline lender (herein in such capacity, together with its successors and
assigns, the "Swingline Lender"), XXXXX FARGO BANK, National Association, as the
issuer of letters of credit hereunder (herein in such capacity, together with
its successors and assigns, the "L/C Issuer") and XXXXX FARGO BANK, National
Association, as administrative and collateral agent for the Lenders, Swingline
Lender and L/C Issuer (herein, in such capacity, called the "Agent Bank" and,
together with the Lenders, Swingline Lender and L/C Issuer, collectively
referred to as the "Banks").
R_E_C_I_T_A_L_S:
WHEREAS:
A. HCR, HCCMC, HIMC and Banks (The Sumitomo Bank, Limited, Chicago
Branch, having acquired the interest of The Daiwa Bank, Limited by Assignment,
Assumption and Consent Agreement dated as of February 2, 1996; Xxxxx Fargo Bank,
National Association, having succeeded to the interests of First Interstate Bank
of Nevada, N.A. and First Interstate Bank of California by merger; and, U.S.
Bank of Nevada having acquired the interest of U.S. Bank of Idaho, formerly
known as West One Bank, Idaho concurrently with the Third Amendment Effective
Date, as hereinafter defined) entered into a Reducing Revolving Credit Agreement
dated as of August 14, 1995 (the "Original Credit Agreement"). Borrowers and
Banks
entered into a First Amendment to Reducing Revolving Credit Agreement dated as
of May 15, 1996 (the "First Amendment to Credit Agreement") and a Second
Amendment to Reducing Revolving Credit Agreement dated as of May 23, 1996 (the
"Second Amendment to Credit Agreement" and, together with the Original Credit
Agreement and First Amendment to Credit Agreement, collectively the "Existing
Credit Agreement").
B. In this Third Amendment to Credit Agreement, all capitalized
words and terms shall have the respective meanings and be construed herein as
provided in Section 1.01 of the Existing Credit Agreement, as that Section is
amended hereby. This Third Amendment to Credit Agreement shall be deemed to
incorporate such words and terms as a part hereof in the same manner and with
the same effect as if the same were fully set forth herein.
C. The Equity Exchange Effective Date has occurred and the Central
City Property is encumbered by the Central City Security Documents in favor of
Agent Bank on behalf of Lenders as additional collateral for the Bank
Facilities. The Senior Subordinated Notes Effective Date has occurred and
Borrowers have received the proceeds thereof. Borrowers and Banks desire to
further amend the Existing Credit Agreement for the purposes of (i) reducing the
Maximum Availability to One Hundred Fifteen Million Dollars ($115,000,000.00),
(ii) extending the Maturity Date to February 15, 2002, (iii) revising the
Aggregate Commitment Reduction Schedule, (iv) amending the Schedule for the
Calculation of the Nonusage Percentage, and (v) making additional amendments and
modifications to the General Covenants of Borrowers contained in Article V and
the Financial Covenants contained in Article VI, together with other amendments
and modifications more particularly hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the parties
hereto agree to amend the Existing Credit Agreement by amending and
substituting, as applicable, the amended terms and provisions as hereinafter set
forth, which amended terms shall be deemed effective as of the Third Amendment
Effective Date.
1. DEFINITIONS. Section 1.01 of the Existing Credit Agreement shall
be and is hereby amended to include the following definitions. Those terms
which are currently defined by Section 1.01 of the Existing Credit Agreement and
which are also defined below shall be defined as set forth below as of the Third
Amendment Effective Date:
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"Adjusted HCR Contingent Liabilities" shall mean the cumulative
aggregate of all HCR Contingent Liabilities less each HCR Contingent Liability
relating to a Recourse New Venture, in which such Recourse New Venture has
achieved a New Venture Interest Coverage Ratio of 1.75 to 1.0, or greater, for
four (4) consecutive Fiscal Quarters for so long as: (a) such Recourse New
Venture maintains a New Venture Interest Coverage Ratio of 1.75 to 1.0, or
greater, on a rolling four (4) Fiscal Quarter basis, or (b) if after having
achieved a New Venture Interest Coverage Ratio of 1.75 to 1.0, or greater, on a
rolling four (4) Fiscal Quarter basis such Recourse New Venture has a New
Venture Interest Coverage Ratio as of the end of no more than two (2)
consecutive Fiscal Quarters, each determined on a rolling four (4) Fiscal
Quarter basis, of less than 1.75 to 1.0 but greater than 1.50 to 1.0.
"Agent Bank" shall mean WFB, successor by merger to FINV, in its
capacity as administrative and collateral agent for Lenders, Swingline Lender
and L/C Issuer.
"Aggregate Commitment" shall mean reference to the aggregate amount
committed by Lenders for advance to or on behalf of Borrowers as Borrowings
under the Credit Facility in the principal amount of One Hundred Fifteen Million
Dollars ($115,000,000.00) as of the Third Amendment Effective Date, subject to
reduction on each Reduction Date by the amount of the applicable Scheduled
Reduction, as set forth on the Aggregate Commitment Reduction Schedule.
"Aggregate Commitment Reduction Schedule" shall mean the Aggregate
Commitment Reduction Schedule marked Schedule 2.01(c) affixed to the Third
Amendment to Credit Agreement and by this reference incorporated herein and made
a part hereof, setting forth the Scheduled Reductions and Maximum Scheduled
Balance as of each Reduction Date under the Credit Facility, which shall fully
supersede and restate the Aggregate Commitment Reduction Schedule affixed to the
Original Credit Agreement as Schedule 2.01(c).
"Annualized EBITDA" shall mean, as of each date of determination,
collective reference to the aggregate of Borrower Consolidation Annualized
EBITDA, Hard Rock Annualized Earnings, Majority New Venture Annualized EBITDA
and Minority New Venture Annualized Advances.
"Borrower Consolidation Annualized EBITDA" shall mean with reference
to the Hotel/Casino Facilities, as of the last day of each Fiscal Quarter
(a) Borrower Consolidation EBITDA for the fiscal period consisting of that
Fiscal Quarter
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and the three (3) immediately preceding Fiscal Quarters, or (b) with respect to
any such fiscal period in which the Iowa Riverboat/Hotel Facilities have been
open for business to the public for at least one (1) full Fiscal Quarter but
less than four (4) full Fiscal Quarters, such amount as is necessary to reflect
the annualization of EBITDA attributable to the Iowa Riverboat/Hotel Facilities
using the following calculations:
(i) if the Iowa Riverboat/Hotel Facilities have been open for
business to the public for one (1) full Fiscal Quarter, the EBITDA
attributable to the Iowa Riverboat/Hotel Facilities for that Fiscal
Quarter shall be multiplied by four (4);
(ii) if the Iowa Riverboat/Hotel facilities have been open for
business to the public for two (2) full Fiscal Quarters, the EBITDA
attributable to the Iowa Riverboat/Hotel Facilities for those Fiscal
Quarters shall be multiplied by two (2); and
(iii) if the Iowa Riverboat/Hotel Facilities have been open for
business to the public for three (3) full Fiscal Quarters, the EBITDA
attributable to the Iowa Riverboat/Hotel Facilities of such business
operation for those Fiscal Quarters shall be multiplied by four-thirds
(4/3).
"Borrower Consolidation EBIT" shall mean with reference to the
Hotel/Casino Facilities on a consolidated basis, for any fiscal period under
review, the sum of (i) Net Income for that period (exclusive of any interest
income received from any New Venture Subsidiary), plus (ii) any one-time non-
Cash loss and pre-opening expenses reflected in such Net Income, minus (iii) any
one-time non-Cash gain reflected in such Net Income, plus (iv) Interest Expense
for that period, plus (v) the aggregate amount of federal and state taxes on or
measured by income for that period (whether or not payable during that period),
in each case determined in accordance with GAAP and, in the case of items (iv)
and (v), only to the extent deducted in the determination of Net Income for that
period.
"Borrower Consolidation EBITDA" shall mean with reference to the
Hotel/Casino Facilities on a consolidated basis, for any fiscal period, the sum
of (i) Borrower Consolidation EBIT for that period, plus (ii) depreciation and
amortization for that period attributable to the Borrower Consolidation, to the
extent deducted in the determination of Net Income, determined in accordance
with GAAP.
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"Borrowers" shall mean collective reference to HCR, HCCMC, HWWLLC and
HIMC.
"Compliance Certificate" shall mean a compliance certificate as
described in Section 5.08(f) which is more particularly described on "Exhibit
F", affixed to the Third Amendment to Credit Agreement and by this reference
incorporated herein and made a part hereof which shall fully supersede and
restate the form of Compliance Certificate affixed to the Original Credit
Agreement as Exhibit F.
"Credit Agreement" shall mean the Existing Credit Agreement as amended
by the Third Amendment to Credit Agreement, as it may be further amended,
modified, extended, renewed or restated from time to time.
"Deeds of Trust" shall mean collective reference to the Tahoe Deed of
Trust, the California Deed of Trust and the Central City Deed of Trust.
"Equity Exchange Effective Date" shall mean the date upon which the
Equity Exchange was consummated and the Mountain City Interests were acquired by
HCR, which date occurred on April 30, 1996.
"Existing Credit Agreement" shall have the meaning set forth in
Recital Paragraph A to the Third Amendment to Credit Agreement.
"Financial Covenants" shall mean collective reference to the financial
covenants set forth in Article VI of this Credit Agreement.
"Financing Statements" shall mean the Uniform Commercial Code
Financing Statements required to be filed with (i) the Office of the Secretary
of State of Nevada, (ii) the Office of the Recorder of Xxxxxxx County, Nevada,
(iii) the Office of the Secretary of State of Iowa, (iv) the Office of the
Recorder of Pottawattamie County, Iowa, (v) the Office of the Secretary of State
of the State of Colorado and (vi) the Office of the Recorder of Xxxxxx County,
Colorado, in order to perfect the security interest granted to Agent Bank under
the Mortgages and other Security Documentation in accordance with the
requirements of the Uniform Commercial Code.
"First Amendment to Credit Agreement" shall have the meaning set forth
in Recital Paragraph A to the Third Amendment to Credit Agreement.
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"First Reduction Date" shall mean October 1, 1998.
"Fourth Reduction Date" shall mean October 1, 2001.
"HCR Contingent Liabilities" shall mean collective reference to the
sum of the Contingent Liabilities relating to all agreements, undertakings
and/or arrangements by which any member of the Borrower Consolidation
guaranties, endorses or otherwise becomes a guarantor or surety or is
contingently liable upon the Indebtedness of or upon contingent assessments for
additional capitalization and/or Investment in any Person which is not a member
of the Borrower Consolidation, including, without limitation, in any New Venture
Subsidiary, Recourse New Venture or the Hard Rock Hotel.
"Hotel/Casino Facilities" shall mean collective reference to: (i) the
Tahoe Hotel/Casino Facility, (ii) Iowa Riverboat/Hotel Facilities; and (iii) the
Central City Hotel/Casino Facility; all together with any future expansions
thereof, related thereto or used in connection therewith, and all appurtenances
thereto.
"Majority New Venture Subsidiary" shall mean a wholly owned Subsidiary
of HCR (other than HIMC, HCCMC, HWWLLC or HLVMC) that is a majority partner,
stockholder or co-owner of a New Venture.
"Maturity Date" shall mean February 15, 2002.
"Mortgages" shall mean collective reference to: (i) the Tahoe Deed of
Trust, California Deed of Trust, (ii) Iowa Mortgage and Iowa Ship Mortgage; and
(iii) the Central City Deed of Trust.
"New Venture Interest Coverage Ratio" shall mean with reference to any
Recourse New Venture, as of the end of any Fiscal Quarter, the ratio resulting
by dividing EBIT by Interest Expense, determined with reference to the Fiscal
Quarter under review, together with the most recently ended three (3) preceding
Fiscal Quarters on a rolling four (4) Fiscal Quarter basis.
"Nonusage Fee" shall have: (i) the meaning ascribed to such term in
Section 2.10(b) of the Existing Credit Agreement until the occurrence of the
Third Amendment Effective Date, and (ii) on and after the Third Amendment
Effective Date, the meaning ascribed to such term in Section 2.10(b) as amended
by Paragraph 5 of the Third Amendment to Credit Agreement.
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"Original Credit Agreement" shall have the meaning set forth in
Recital Paragraph A to the Third Amendment to Credit Agreement.
"Person" means an individual, firm, corporation, trust, association,
partnership, joint venture, tribunal or other entity.
"Pricing Certificate" shall mean a pricing certificate as described in
Section 5.08(c) which is more particularly described on "Exhibit G", affixed to
the Third Amendment to Credit Agreement and by this reference incorporated
herein and made a part hereof which shall fully supersede and restate the form
of Pricing Certificate affixed to the Original Credit Agreement as Exhibit G.
"Prime Rate" shall mean the rate of interest per annum which WFB from
time to time identifies and publicly announces as its prime rate and is not
necessarily, for example, the lowest rate of interest which WFB collects from
any borrower or group of borrowers.
"Real Properties" shall mean collective reference to: (i) the Tahoe
Real Property, the California Greenbelt Property, the Tahoe Greenbelt Property,
the Park Cattle Property, (ii) the Iowa Real Property; and (iii) the Central
City Property.
"Schedule of Lenders' Proportions in Credit Facility" shall mean the
Schedule of Lenders' Proportions in Credit Facility, a copy of which is marked
"Schedule 2.01(a)", affixed to the Third Amendment to Credit Agreement and by
this reference incorporated herein and made a part hereof, setting forth the
respective Syndication Interest and maximum amount to be funded under the Credit
Facility by each Lender, which shall fully supersede and restate the Schedule of
Lenders' Proportions in Credit Facility affixed to the Original Credit Agreement
as Schedule 2.01(a).
"Second Amendment to Credit Agreement" shall have the meaning set
forth in Recital Paragraph A to the Third Amendment to Credit Agreement.
"Second Reduction Date" shall mean October 1, 1999.
"Security Documentation" shall mean collective reference to the Tahoe
Security Documents, the Iowa Security Documents, the Central City Security
Documents, the Security Agreement and Pledge of Stock, the Trademark Security
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Agreement and all other instruments and agreements to be executed by or on
behalf of Borrowers or other applicable persons, in favor of Agent Bank on
behalf of the Lenders, securing repayment of the Bank Facilities.
"Significant Subsidiary" shall mean HLVMC, RPI and each New Venture
Subsidiary having a book value or fair market value in excess of One Million
Dollars ($1,000,000.00), but shall not include HRHI, HCCMC, HWWLLC and HIMC.
"Subsidiary Guarantor" shall mean HLVMC, RPI and each Significant
Subsidiary which has executed the Subsidiary Guaranty or a Certificate of
Joinder to the Subsidiary Guaranty.
"Syndication Interest" shall mean the proportionate interest of each
Lender in the Credit Facility as set forth on the Schedule of Lenders'
Proportions in Credit Facility.
"TFCC Ratio" as of the end of any Fiscal Quarter shall mean with
reference to the HCR Consolidation:
The sum of net profit after tax, plus Interest Expense (accrued
and capitalized), plus depreciation and amortization expense,
plus operating lease expense, plus rental expense, minus
dividends declared, minus actual Capital Expenditures (not
including (a) budgeted project costs of the Iowa Riverboat/Hotel
Facilities paid in 1995 and 1996 and (b) costs of acquisition of
the Central City Parking Garage Property and construction of a
parking garage facility thereon) in each case for such Fiscal
Quarter and the three (3) Fiscal Quarters immediately preceding
such Fiscal Quarter,
Divided by (/)
The sum of Interest Expense (accrued and capitalized), plus
operating lease expense, plus rental expense in each case for
such Fiscal Quarter and the three (3) Fiscal Quarters immediately
preceding such Fiscal Quarter, plus the current portion of long
term Indebtedness (including all payments actually paid in
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reduction of principal as all or any portion of a Scheduled Reduction
under the Credit Facility), plus the current portion of Capitalized
Lease Liabilities, as of the end of such Fiscal Quarter under review.
"Third Amendment Effective Date" shall mean September 30, 1996,
subject to the satisfaction of each of the Conditions Precedent set forth in
Paragraph 14 of the Third Amendment to Credit Agreement.
"Third Amendment Fee" shall have the meaning ascribed to such term in
paragraph 13 of the Third Amendment to Credit Agreement.
"Third Amendment to Credit Agreement" shall mean the Third Amendment
to Reducing Revolving Credit Agreement dated as of September 30, 1996, executed
by and among Borrowers and Banks.
"Third Reduction Date" shall mean October 1, 2000.
"Title Insurance Policies" shall mean collective reference to the Iowa
Title Insurance Policy, the Tahoe Title Insurance Policy and the Central City
Title Insurance Policy.
"WFB" shall mean Xxxxx Fargo Bank, National Association.
2. VOLUNTARY REDUCTION OF MAXIMUM SCHEDULED BALANCE. Pursuant to
Section 2.01(c) of the Existing Credit Agreement, Borrowers hereby irrevocably
and permanently declare a Voluntary Reduction of the Maximum Permitted Balance
to One Hundred Fifteen Million Dollars ($115,000,000.00) as of the Third
Amendment Effective Date and Borrowers and Banks do hereby agree by the
execution of the Third Amendment to Credit Agreement that the Maximum Permitted
Balance shall be and is hereby reduced to One Hundred Fifteen Million Dollars
($115,000,000.00) as of the Third Amendment Effective Date.
3. RESTATEMENT OF SECTION 2.01(A). Subsection 2.01(a) shall be and
is hereby amended and restated in its entirety as follows:
"a. Subject to the conditions and upon the terms hereinafter set
forth and in accordance with the terms and provisions of the Note,
Lenders severally agree in the proportions set forth on the
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Schedule of Lenders' Proportions in Credit Facility, marked
Schedule 2.01(a) attached to the Third Amendment to Credit Agreement
and by this reference incorporated herein and made a part hereof, to
lend and advance Borrowings to Borrowers, up to the Maximum Permitted
Balance, such amounts as Borrowers may request by Notice of Borrowing
duly executed by an Authorized Officer and delivered to Agent Bank
from time to time as provided in Section 2.03. "
4. RESTATEMENT OF SECTION 2.07(b). Subsection 2.07(b) of the
Existing Credit Agreement shall be and is hereby amended and restated in its
entirety as follows:
"b. All such amounts payable by Borrowers shall be made to Agent
Bank at its office located at Xxxxx Fargo Bank, Gaming Division, Xxx
Xxxx Xxxxx Xxxxxx, Xxxx, Xxxxxx 00000, Att'n: Xxx Xxxxxxxx, V.P. If
such payment is received by Agent Bank prior to 11:00 o'clock a.m.,
Agent Bank shall credit Borrowers with such payment on the day so
received and shall disburse to the appropriate Lenders on the same day
such Lenders' Pro Rata Shares of payments relating to the Credit
Facility based on the respective Syndication Interests, in immediately
available funds. If such payment is received by Agent Bank after
11:00 o'clock a.m., Agent Bank shall credit Borrowers with such
payment as of the next Banking Business Day and disburse to the
appropriate Lenders on the next Banking Business Day such Lenders' Pro
Rata Shares of such payment relating to the Credit Facility based on
their respective Syndication Interests, in immediately available
funds. Any payment on the Credit Facility made by Borrowers to Agent
Bank pursuant to the terms of this Credit Agreement or the Note for
the account of Lenders shall constitute payment to the appropriate
Lenders. If the Note or any payment required to be made thereon or
hereunder, is or becomes due and payable on a day other than a Banking
Business Day, the due date thereof shall be extended to the next
succeeding Banking Business Day and interest thereon shall be payable
at the then applicable rate during such extension.
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5. RESTATEMENT OF SUBSECTION 2.10(b). Subsection 2.10(b) shall be
and is hereby amended and restated in its entirety as follows:
"b. Borrowers shall pay a quarterly nonusage fee (the "Nonusage
Fee") for the account of Lenders in the proportions of their
respective Syndication Interests based on the Funded Debt to EBITDA
Ratio, determined as of the end of the immediately prior Fiscal
Quarter with reference to the Borrower Consolidation, in accordance
with the following schedule:
FUNDED DEBT TO EBITDA NONUSAGE
RATIO PERCENTAGE
Less than or equal to 2.5
to 1.0 .375%
Greater than 2.5 to 1.0
but less than 3.5 to 1.0 .425%
Equal to or
greater than 3.5 to 1.0 .500%
The Nonusage Fee shall be calculated as of the last day of each Fiscal
Quarter as the product of (i) the applicable Nonusage Percentage
determined as set forth above multiplied by (ii) as of each Fiscal
Quarter end, the daily average during such Fiscal Quarter of the
Maximum Permitted Balance less the daily average during such Fiscal
Quarter of the Funded Outstandings and less the daily average during
such Fiscal Quarter of the amount of L/C Exposure attributable to all
outstanding Standby Letters of Credit, all on the basis of a three
hundred sixty-five (365), or three hundred sixty-six (366) when
appropriate, day year. Each Nonusage Fee shall be payable in arrears
on a quarterly basis on or before ten (10) Banking Business Days
following each applicable Fiscal Quarter end and upon termination of
this Credit Agreement, whether at maturity, by acceleration or
otherwise. Each Nonusage Fee shall be distributed by Agent Bank to
Lenders in proportion to their respective Syndication Interests in the
Credit Facility."
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6. RESTATEMENT OF SECTION 5.23. INVESTMENTS AND ADVANCES. As of
the Third Amendment Effective Date, Section 5.23 of the Original Credit
Agreement entitled "Investments and Advances", as previously amended by
Section 5 of the First Amendment to Credit Agreement, shall be and is hereby
amended and restated in its entirety as follows:
"Section 5.23. INVESTMENTS AND ADVANCES. Other than
Investments, Advances and Contingent Liabilities made or incurred as
of the Closing Date or otherwise consented to by Requisite Lenders, no
member of the Borrower Consolidation shall make any further
Investments or Advances or incur any further Contingent Liabilities in
connection with or relating to HLVMC, HRHI, the Hard Rock Hotel, or
any of them. Additionally, no member of the Borrower Consolidation
shall make any Advances or Investments or incur Contingent Liabilities
other than as specifically permitted below or by Section 5.25:
a. Investments: (i) in Cash Equivalents, or
(ii) pursuant to and consistent with the HCR Investment Policy
which Investments are first approved by Requisite Lenders.
b. New Venture Investments by HCR and Contingent
Liabilities in respect thereof so long as: (i) the cumulative
aggregate of all New Venture Investments plus the aggregate of
Adjusted HCR Contingent Liabilities (exclusive of the Colorado
Slot Lease Guaranty) as of any date of determination shall not
exceed Forty Million Dollars ($40,000,000.00) at any time prior
to Bank Facility Termination, and (ii) the construction plans and
specifications, all material construction contracts and
construction agreements, construction budgets and projections and
construction time tables for construction and completion of each
New Venture is first approved by Agent Bank upon the consent of
Requisite Lenders.
c. On and after the Third Amendment Effective Date,
Investments and Advances between and among the Borrower
Consolidation.
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d. Advances received by HCR from any of its
Subsidiaries.
e. Investments received in settlement of arms-length
disputes with non-Affiliates of Borrowers.
f. Investments received as consideration for asset
sales made in arms-length transactions for fair market
consideration."
7. RESTATEMENT OF SECTION 5.24. ADDITIONAL INDEBTEDNESS. As of the
Third Amendment Effective Date, Section 5.24 of the Original Credit Agreement
entitled "Additional Indebtedness", as previously amended by Section 6 of the
First Amendment to Credit Agreement shall be and is hereby amended and restated
in its entirety as follows:
"Section 5.24. ADDITIONAL INDEBTEDNESS. The Borrower
Consolidation will not provide or incur any Additional Indebtedness,
except as specifically permitted hereinbelow as follows:
a. Secured Interest Rate Xxxxxx up to the maximum
aggregate notional principal amount of Seventy-Five Million Dollars
($75,000,000.00) at any time outstanding;
b. Incurrence of secured purchase money Indebtedness and
Capital Lease Liabilities up to the maximum aggregate principal amount
of Fifteen Million Dollars ($15,000,000.00) at any time outstanding;
c. HCR Contingent Liabilities to the extent permitted
under Section 5.23 of the Credit Agreement; and
d. The Senior Subordinated Notes. Provided, however, that
notwithstanding anything contained in the Existing Credit Agreement to
the contrary, none of Borrowers nor any Subsidiary of Borrowers shall,
except with the prior written consent of the Requisite Lenders,
purchase, redeem, retire or otherwise acquire for value, or set apart
any money for a sinking, defeasance or other analogous fund for, the
purchase, redemption, retirement or other acquisition of, or make any
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voluntary payment or prepayment of the principal of or interest on, or
any other amount owing in respect of, the Senior Subordinated Notes,
except for regularly scheduled payments of principal and interest in
respect of such Senior Subordinated Notes required pursuant to the
instruments evidencing such Senior Subordinated Notes. Any breach of
the covenant set forth in the preceding sentence shall be deemed to be
an Event of Default under the Credit Agreement.
8. RESTATEMENT OF SECTION 5.28. CONSOLIDATION, MERGER, SALE OF
ASSETS, ETC. As of the Third Amendment Effective Date, Section 5.28 of the
Original Credit Agreement entitled "Consolidation, Merger, Sale of Assets, etc."
shall be and is hereby amended and restated in its entirety as follows:
"Section 5.28. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Borrowers will not wind up, liquidate or dissolve their affairs or
enter into any transaction of merger or consolidation (other than
between members of the Borrower Consolidation), or convey, sell, lease
or otherwise dispose of (or agree to do any of the forgoing at any
future time) all or any material part of their respective property or
assets, except that (i) the Borrowers may make sales of inventory in
the ordinary course of business, (ii) the Borrowers may, in the
ordinary course of business, sell equipment which is uneconomic or
obsolete as provided in Section 5.01, and (iii) HCR may sell any
Subsidiary (other than HLVMC, HIMC, HWWLLC or HCCMC) in exchange for
its fair market value."
9. RESTATEMENT OF SECTION 5.30. NO TRANSFER OF OWNERSHIP. As of
the Third Amendment Effective Date, Section 5.30 of the Original Credit
Agreement entitled "No Transfer of Ownership" shall be and is hereby amended and
restated in its entirety as follows:
"Section 5.30. NO TRANSFER OF OWNERSHIP. HCR shall not transfer
or hypothecate its ownership interests in HLVMC, HIMC, HCCMC, HWWLLC
or any Significant Subsidiary except in connection with the Security
Documentation. Provided, however, HCR shall have the right to sell
any Significant Subsidiary (other than HLVMC, HIMC, HWWLLC or HCCMC)
in exchange for its fair market value. This
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provision shall not be effective until it is approved by any necessary
Gaming Authorities."
10. RESTATEMENT OF SECTION 6.01. TFCC RATIO. As of the Third
Amendment Effective Date, Section 6.01 of the Original Credit Agreement entitled
"TFCC Ratio" shall be and is hereby amended and restated in its entirety as
follows:
"Section 6.01. TFCC RATIO. The HCR Consolidation shall maintain
a minimum TFCC Ratio as of the end of each Fiscal Quarter of greater
than or equal to: (a) 1.3 to 1.0 from the Third Amendment Effective
Date through November 30, 1998, (b) 1.4 to 1.0 from December 1, 1998
through November 30, 1999, and (c) 1.5 to 1.0 from December 1, 1999
through the Maturity Date."
11. RESTATEMENT OF SECTION 6.02. FUNDED DEBT TO EBITDA RATIO. As of
the Third Amendment Effective Date, Section 6.02 of the Original Credit
Agreement entitled "Funded Debt to EBITDA Ratio" shall be and is hereby amended
and restated in its entirety as follows:
"Section 6.02. FUNDED DEBT TO EBITDA RATIO. The HCR
Consolidation shall maintain a Funded Debt to EBITDA ratio as of the
end of each Fiscal Quarter of less than or equal to: (a) 4.00 to 1.00
from the Third Amendment Effective Date through November 30, 1997,
(b) 3.50 to 1.0 from December 1, 1997, through November 30, 1998, and
(c) 2.75 to 1.0 from December 1, 1998 and continuing until the
Maturity Date."
12. RESTATEMENT OF SECTION 6.04. HCR CONSOLIDATION TANGIBLE NET
WORTH. As of the Third Amendment Effective Date, Section 6.04 of the Original
Credit Agreement entitled "HCR Consolidation Tangible Net Worth" shall be and is
hereby amended and restated in its entirety as follows:
"Section 6.04. HCR CONSOLIDATION TANGIBLE NET WORTH. The
HCR Consolidation shall maintain as of the last day of each
Fiscal Quarter occurring subsequent to the Third Amendment
Effective Date, a HCR Consolidation Tangible Net Worth equal to
or greater than the sum of (a) One Hundred Twenty-Six Million
Three Hundred Sixty Thousand One Hundred Eight Dollars
- 15 -
($126,360,108.00), plus (b) seventy-five percent (75%) of Net Income
after taxes realized as of each Fiscal Quarter end occurring after the
Third Amendment Effective Date (without reduction for any net losses),
plus (c) seventy-five percent (75%) of the proceeds (net of reasonable
expenses) of any and all additional Equity Offerings made after the
Third Amendment Effective Date."
13. AMENDMENT FEE. On or before one (1) Banking Business Day prior
to the Third Amendment Effective Date, Borrowers shall pay to Agent Bank a non-
refundable fee (the "Third Amendment Fee") in the amount agreed between Agent
Bank and Borrowers by side letter agreement, which shall be retained by Agent
Bank or distributed to Lenders as agreed by separate side letter agreements
executed between Agent Bank and each Lender.
14. CONDITIONS PRECEDENT TO THIRD AMENDMENT EFFECTIVE DATE. The
occurrence of the Third Amendment Effective Date is subject to Agent Bank having
received the following documents and payments, in each case in a form and
substance reasonably satisfactory to Banks:
a. Execution and delivery by each of the Borrowers and Banks of
fourteen (14) counterpart originals of the Third Amendment to Credit Agreement.
b. Delivery by HLVMC to Agent Bank of a duly authorized and
executed Certificate of Joinder to the Subsidiary Guaranty in substantially the
form of Exhibit A to the Subsidiary Guaranty.
c. Delivery to Agent Bank of a copy of a corporate resolution
of: (i) each of the Borrowers authorizing the execution and delivery of this
Third Amendment to Credit Agreement and each document, agreement and instrument
to be executed and delivered in connection herewith, and (ii) HLVMC authorizing
the execution and delivery of the Certificate of Joinder to the Subsidiary
Guaranty.
d. Payment by Borrowers and receipt by Agent Bank of the Third
Amendment Fee.
e. Reimbursement to Agent Bank by Borrowers for the reasonable
attorneys' fees of Xxxxxxxxx & Xxxxxx
- 16 -
incurred in connection with the preparation and execution of the Third Amendment
to Credit Agreement; and
f. Such other documents, instruments, legal opinions or
conditions as may reasonably be required by Agent Bank.
15. REPRESENTATIONS AND WARRANTIES. To induce Banks to enter into
this Third Amendment to Credit Agreement, Borrowers hereby: (i) ratify and
reaffirm the representations and warranties set forth in Article IV of the
Original Credit Agreement; (ii) warrant and represent that each such
representation and warranty shall be true and correct as of the Third Amendment
Effective Date, other than representations and warranties which expressly speak
as of a different date which shall be true and correct as of such date; and
(iii) represent and warrant that, as of the Third Amendment Effective Date, no
Default or Event of Default has occurred and remains continuing.
16. NO OTHER CHANGES. Except as specifically set forth herein, the
Existing Credit Agreement shall remain unchanged and in full force and effect.
17. GOVERNING LAW. This Third Amendment to Credit Agreement shall be
governed by the internal laws of the State of Nevada without reference to
conflicts of laws principles.
18. COUNTERPARTS. This Third Amendment to Credit Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any party hereto may execute this Third Amendment
to Credit Agreement by signing any such counterpart.
19. ADDITIONAL/REPLACEMENT SCHEDULES AND EXHIBITS ATTACHED. The
following replacement Schedules and Exhibits are attached hereto and
incorporated herein and made a part of the Credit Agreement as follows:
Schedule 2.01(a) - Schedule of Lenders' Proportions in Credit
Facility
Schedule 2.01(c) - Aggregate Commitment Reduction Schedule
Exhibit F - Compliance Certificate
Exhibit G - Pricing Certificate
- 17 -
IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to Credit Agreement to be executed as of the day and year first above
written.
BORROWERS:
HARVEYS CASINO RESORTS,
a Nevada corporation
By /s/Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx,
President
By /s/Xxxx X. XxXxxxxxxx
-------------------------------
Xxxx X. XxXxxxxxxx,
Treasurer
Address:
Xxxxxxx 00
X.X Xxx 000
Xxxxxxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
HARVEYS C.C.
MANAGEMENT COMPANY, INC.,
a Nevada corporation
By /s/Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx,
President
By /s/Xxxxx Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxxx,
Secretary (Assistant)
Address:
Xxxxxxx 00
X.X Xxx 000
Xxxxxxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
- 18 -
HARVEYS IOWA
MANAGEMENT COMPANY., INC.,
a Nevada corporation
By /s/Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx,
President
By /s/Xxxxx Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxxx,
Secretary (Assistant)
Address:
Xxxxxxx 00
X.X Xxx 000
Xxxxxxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
HARVEYS WAGON WHEEL CASINO
LIMITED LIABILITY COMPANY
By /s/Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx,
Board of Managers
By /s/Xxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxx,
Board of Managers
Address:
Xxxxxxx 00
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
- 19 -
BANKS:
XXXXX FARGO BANK,
National Association,
Agent Bank, Lender, Swingline
Lender and L/C Issuer
By /s/Xxx Xxxxx
-------------------------------
Title V.P.
----------------------------
Address:
Xxx Xxxx Xxxxx Xxxxxx
Xxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF THE WEST,
Lender
By /s/Xxxx Kabsar
-------------------------------
Title Regional Vice President
----------------------------
Address:
0000 Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
- 20 -
FIRST SECURITY BANK, N.A.,
formerly known as
FIRST SECURITY BANK OF
IDAHO, N.A., Lender
By /s/Xxxxx X. Xxxxxxxx
-------------------------------
Title V.P.
----------------------------
Address:
15 East 000 Xxxxx
0xx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IMPERIAL BANK,
Lender
By /s/Xxxxxx X. Xxxxxxx
-------------------------------
Title SENIOR VICE PRESIDENT
----------------------------
By /s/Xxxx X. Xxxxxxx
-------------------------------
Title ASSISTANT VICE PRESIDENT
----------------------------
Address:
0000 X. Xx Xxxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
- 21 -
NORWEST BANK OF NEBRASKA,
N.A., Lender
By /s/Xxxxxx Xxxxxx
-------------------------------
Title AVP
----------------------------
Address:
0000 Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NBD BANK,
Lender
By /s/Xxxxx Xxxxxx
-------------------------------
Title Authorized Agent
----------------------------
Address:
National Banking Division
Mezzanine Level
000 Xxxxxxxx Xxx.
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
- 22 -
SOCIETE GENERALE,
Lender
By /s/Xxxxxx X. Xxxxxxxx
-------------------------------
Title Vice President
----------------------------
Address:
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE SUMITOMO BANK, LIMITED,
Chicago Branch,
Lender
By /s/Xxxxx X. Xxxxxxxx
-------------------------------
Title Vice President & Manager
----------------------------
By /s/Xxxxxx X. Xxxxxxx
-------------------------------
Title Vice President
----------------------------
Address:
000 X. Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
- 23 -
U.S. BANK OF NEVADA,
Lender
By /s/Xxxx Xxxxxxx
-------------------------------
Title Vice President
----------------------------
Address:
Xxx Xxxx Xxxxxxx Xxxxxx
0xx Xxxxx
Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ARGENTBANK,
Lender
By /s/Xxxxxx X. Xxxxxxx, Xx.
-------------------------------
Title Vice-President
----------------------------
Address:
000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
- 24 -
SCHEDULE OF LENDER'S PROPORTIONS
IN CREDIT FACILITY
PROPORTIONATE
SYNDICATION
MAXIMUM AMOUNT INTEREST IN
NAME OF LENDER OF PRINCIPAL CREDIT FACILITY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Xxxxx Fargo Bank, $42,933,295.00 37.33330%
National Association
--------------------------------------------------------------------------------
U.S. Bank of Nevada 15,333,341.00 13.33334%
--------------------------------------------------------------------------------
Bank of the West 7,666,670.50 6.66667%
--------------------------------------------------------------------------------
First Security Bank, N.A. 7,666,670.50 6.66667%
--------------------------------------------------------------------------------
Imperial Bank 7,666,670.50 6.66667%
--------------------------------------------------------------------------------
Norwest Bank Nebraska, N.A. 7,666,670.50 6.66667%
--------------------------------------------------------------------------------
NBD Bank 7,666,670.50 6.66667%
--------------------------------------------------------------------------------
Societe Generale 7,666,670.50 6.66667%
--------------------------------------------------------------------------------
The Sumitomo Bank, Limited 7,666,670.50 6.66667%
--------------------------------------------------------------------------------
ArgentBank 3,066,670.50 2.66667%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL $115,000,000.00 100%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHEDULE 2.01(a) TO
THIRD AMENDMENT TO
REDUCING REVOLVING
CREDIT AGREEMENT
AGGREGATE COMMITMENT REDUCTION SCHEDULE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REDUCTION SCHEDULED MAXIMUM
DATE REDUCTION PERMITTED BALANCE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Closing Date -0- $115,000,000.00
--------------------------------------------------------------------------------
First Reduction Date $11,500,000.00 $103,500,000.00
- October 1, 1998
--------------------------------------------------------------------------------
Second Reduction Date $11,500,000.00 $ 92,000,000.00
- October 1, 1999
--------------------------------------------------------------------------------
Third Reduction Date $17,250,000.00 $ 74,750,000.00
- October 1, 2000
--------------------------------------------------------------------------------
Fourth Reduction Date $17,250,000.00 $ 57,500,000.00
- October 1, 2001
--------------------------------------------------------------------------------
Maturity Date - $57,500,000.00 Zero ($0.00)
February 15, 2002
(Remaining unpaid
principal balance
fully due and
payable)
--------------------------------------------------------------------------------
SCHEDULE 2.01(c) TO
THIRD AMENDMENT TO
REDUCING REVOLVING
CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
TO: XXXXX FARGO BANK, National Association,
as Agent Bank
Reference is made to that certain Reducing Revolving Credit Agreement,
dated as of August 14, 1995, as amended by First Amendment to Reducing Revolving
Credit Agreement dated as of May 15, 1996, Second Amendment to Reducing
Revolving Credit Agreement dated as of May 23, 1996, and Third Amendment to
Reducing Revolving Credit Agreement dated September 30, 1996 (collectively, as
further amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among HARVEYS CASINO RESORTS, a Nevada corporation,
HARVEYS C.C. MANAGEMENT COMPANY, INC., a Nevada corporation, HARVEYS WAGON WHEEL
CASINO LIMITED LIABILITY COMPANY, a Colorado limited liability company, and
HARVEYS IOWA MANAGEMENT COMPANY, INC., a Nevada corporation (collectively the
"Borrowers"), the Lenders therein named (each, together with their respective
successors and assigns, individually being referred to as a "Lender" and
collectively as the "Lenders"), XXXXX FARGO BANK, National Association, as the
swingline lender (herein in such capacity, together with its successors and
assigns, the "Swingline Lender"), XXXXX FARGO BANK, National Association, as the
issuer of letters of credit hereunder (herein in such capacity, together with
its successors and assigns, the "L/C Issuer") and XXXXX FARGO BANK, National
Association, as administrative and collateral agent for the Lenders, Swingline
Lender and L/C Issuer (herein, in such capacity, called the "Agent Bank" and,
together with the Lenders, Swingline Lender and L/C Issuer, collectively
referred to as the "Banks"). Terms defined in the Credit Agreement and not
otherwise defined in this Compliance Certificate ("Certificate") shall have the
meanings defined and described in the Credit Agreement. This Certificate is
delivered in accordance with Section 5.08(f) of the Credit Agreement.
I.
COMPLIANCE WITH AFFIRMATIVE COVENANTS
A. FF&E (Section 5.01): Amount of FF&E sold or disposed not replaced by FF&E
of equivalent value and utility.
$
--------------
EXHIBIT F
B. MODIFICATION OF LEASES (Section 5.03): Describe any modifications or
amendments to the Park Cattle Lease, Nevada Greenbelt Lease, California
Greenbelt Lease, Friendship Sublease and/or Westwood Lease. State whether
or not such modifications or amendments have been consented to by Requisite
Lenders as required under Section 5.03 of the Credit Agreement.
--------------
C. LIENS FILED (Section 5.04): Report any liens filed against the
Hotel/Casino Facilities and the amount claimed in such liens. Describe
actions being taken with respect thereto.
--------------
D. OTHER REAL PROPERTY (Section 5.06): Other than the Real Properties
presently encumbered by the Mortgages, attach a legal description of any
other real property or rights to the use of real property which is used in
any material manner in connection with the Hotel/Casino Facilities and
describe such use. Attach evidence that such real property or rights to
the use of such real property has been added as Collateral under the Credit
Agreement.
--------------
E. PERMITTED ENCUMBRANCES (Section 5.11): Describe any mortgage, deed of
trust, pledge, lien, security interest, encumbrance, attachment, levy,
distraint or other judicial process or burden affecting the Collateral
other than the Permitted Encumbrances. Describe any matters being
contested in the manner described in Sections 5.04 and 5.10 of the Credit
Agreement.
--------------
- 2 -
F. SIGNIFICANT SUBSIDIARIES (Section 5.16): List on a separate sheet the name
and state of incorporation or origination of each Significant Subsidiary,
other than Significant Subsidiaries which have been disclosed in prior
Compliance Certificates.
--------------
G. SUITS OR ACTIONS (Section 5.17): Describe on a separate sheet any matters
requiring advice to Banks under Section 5.17.
--------------
H. NOTICE OF HAZARDOUS MATERIALS (Section 5.21): State whether or not to your
knowledge there are any matters of which Banks should be advised under
Section 5.21. If so, attach a detailed summary of such matter(s).
--------------
II.
COMPLIANCE WITH NEGATIVE COVENANTS
A. INVESTMENTS AND ADVANCES
(Section 5.23):
a. Set forth the amount and a brief description of each Investment,
Advance and/or Contingent Liability made or incurred in connection
with or relating to HLVMC, HRHI, the Hard Rock Hotel
--------------
b. Set forth aggregate amount of Investments in Cash Equivalents
$
--------------
c. Set forth aggregate amount of Investments made pursuant to the HCR
Investment Policy
$
--------------
- 3 -
Were each of these Investments first approved by Requisite Lenders?
(Yes/No)
--------------
If no, describe on a separate sheet each Investment not so approved.
d. With respect to New Venture Investments:
(i) List on a separate sheet the name, location and a brief
description of each New Venture and the amount of all
Investments and Advances made by HCR in or to each such New
Venture or New Venture Subsidiary --------------
(ii) Set forth the aggregate amount of all New Venture Investments
$
--------------
(iii) Set forth the aggregate amount of Adjusted HCR Contingent
Liabilities
$
--------------
(iv) Total New Venture Investments and Adjusted HCR Contingent
Liabilities
$
--------------
(v) Maximum amount of New Venture Investments and Adjusted HCR
Contingent Liabilities permitted under Section 5.23b is
$40,000,000
e. Set forth the aggregate amount of Investments received in settlement
of disputes with non-affiliates and/or in consideration for asset
sales
$
--------------
- 4 -
f. Set forth the aggregate amount of Advances received by HCR from its
Subsidiaries (other than from members of the Borrower Consolidation)
$
--------------
B. ADDITIONAL INDEBTEDNESS (Section 5.24) With reference to the Borrower
Consolidation:
a. Set forth the aggregate amount of Secured Interest Rate Xxxxxx
$
--------------
Maximum permitted under Section 5.24a $ 75,000,000.00
b. Set forth the aggregate amount of secured purchase money Indebtedness
and Capital Lease Liabilities
$
--------------
Maximum permitted under Section 5.24b $ 15,000,000.00
c. Set forth and describe on a separate sheet any matter of non-
compliance, if any, with Section 5.24d
--------------
C. CONTINGENT LIABILITIES (Section 5.25):
a. Set forth the amount of any Contingent Liabilities incurred by HCCMC,
HWWLLC and/or HIMC, other than in the ordinary course of business.
None allowed.
$
--------------
b. With respect to HCR Contingent Liabilities:
(i) Set forth the aggregate amount of all HCR Contingent Liabilities
$
--------------
- 5 -
(ii) On a separate sheet identify each Recourse New Venture and the
amount of HCR Contingent Liabilities attributable to it
--------------
(iii) Submit a copy of all documentation regarding each HCR Contingent
Liability which has not been previously delivered to Lenders for
review
--------------
(iv) State whether any Recourse New Venture has achieved an Interest
Coverage Ratio of 1.75 to 1.0, or greater, for four (4)
consecutive Fiscal Quarters or if having achieved an Interest
Coverage Ratio of 1.75 to 1.0 has failed to achieve an Interest
Coverage Ratio of 1.75 to 1.0 for the Fiscal Quarter under
review. If answered in the affirmative, on a separate sheet set
forth the applicable Interest Coverage Ratio calculations.
(Yes/No)
-------------
(v) Set forth the amount of HCR Contingent Liability to be added or
deducted, as applicable to determine the amount of Adjusted HCR
Contingent Liabilities.
--------------
D. OTHER LIENS (Section 5.26): On a separate sheet describe in detail any and
all liens, encumbrances and/or negative pledges NOT permitted under Section
--------------
- 6 -
E. DIVIDENDS (Section 5.27). On a separate sheet describe in detail any and
all dividends or distributions on capital stock paid or declared during the
period under review by HCR. --------------
F. NO MERGER (Section 5.28): On a separate sheet describe any and all
mergers, consolidations and/or asset sales not permitted under Section
5.28. --------------
G. TRANSACTIONS WITH AFFILIATES (Section 5.29): On a separate sheet describe
any and all transactions with Affiliates and/or Subsidiaries not permitted
under Section 5.29. --------------
H. NO TRANSFER OF OWNERSHIP (Section 5.30): On a separate sheet describe any
and all transfers and/or hypothecations not permitted by Section 5.30.
--------------
I. LIMITATION ON CONSOLIDATED TAX LIABILITY (Section 5.31): Describe on a
separate sheet any matters requiring advice to Banks under Section 5.31.
--------------
J. ERISA (Section 5.32): Describe on a separate sheet any matters requiring
advice to Banks under Section 5.32. --------------
K. MARGIN REGULATIONS (Section 5.33): Set forth the amount(s) of and describe
on a separate sheet of paper any proceeds of Base Rate Loans or LIBOR
Loans, as the case may be, used by Borrowers to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. $
--------------
- 7 -
L. NO HIMC OR HCCMC SUBSIDIARIES (Section 5.34): On a separate sheet, describe
any Subsidiaries created by HIMC or HCCMC. State whether or not the
creation of such Subsidiaries has been consented to by the Requisite
Lenders as required under Section 5.34 of the Credit Agreement.
--------------
III.
FINANCIAL COVENANTS OF BORROWER
A. TFCC RATIO (Section 6.01): The following line items and TFCC Ratio to be
calculated with respect to the HCR Consolidation with respect to each
Fiscal Quarter and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis unless otherwise noted:
Net profit after tax $
--------------
Plus Interest Expense (accrued and capitalized) + $
--------------
Plus depreciation and amortization expense + $
--------------
Plus operating lease expense + $
--------------
Plus rental expense + $
--------------
Minus dividends declared - $
--------------
Minus actual Capital Expenditures (not including (a) project costs of the
Iowa Riverboat/Hotel Facilities paid in 1995 and 1996 and (b) costs of
acquisition of the Central City Parking Garage Property and construction of
a parking garage facility thereon) - $
--------------
TOTAL $
--------------
Divided (DIVIDED BY) by the sum of: DIVIDED BY
- 8 -
Interest Expense (accrued and capitalized) $
--------------
Plus operating lease expense + $
--------------
Plus rental expense + $
--------------
Plus the current portion of long term Indebtedness (including all payments
actually paid in reduction of principal as all or any portion of a
Scheduled Reduction under the Credit Facility) as of the end of the Fiscal
Quarter under review + $
--------------
Plus current portion of Capitalized Lease Liabilities as of the end of the
Fiscal Quarter under review + $
--------------
TOTAL $
--------------
TFCC Ratio :1
--------------
Minimum required:
(i) 1.3 to 1.0 from the Third Amendment Effective Date through
November 30, 1998
(ii) 1.4 to 1.0 from December 1, 1998 through November 30, 1999, and
(iii) 1.5 to 1.0 from December 1, 1999 through the Maturity Date
B. FUNDED DEBT TO EBITDA RATIO (Section 6.02): To be calculated as the greater
of: (a) as of the last day of the Fiscal Quarter set forth above, or
(b) the average as of the last day of each calendar month comprising such
Fiscal Quarter:
The Funded Outstandings on the Credit Facility $
--------------
Plus the Swingline Outstandings on the Swingline Facility + $
--------------
- 9 -
Plus the L/C Exposure on the L/C Facility + $
--------------
Plus the total, as of the last day of the Fiscal Quarter under review, of
both the long-term Indebtedness and current portions of all other long-term
Indebtedness, including only those HCR Contingent Liabilities which are
Adjusted HCR Contingent Liabilities + $
--------------
Plus the total, as of the last day of the Fiscal Quarter under review, of
both the long-term Capitalized Lease Liabilities and current portion of
Capitalized Lease Liabilities + $
--------------
TOTAL FUNDED DEBT $
--------------
Divided (DIVIDED BY) by: DIVIDED BY
ANNUALIZED EBITDA
BORROWER CONSOLIDATION ANNUALIZED EBITDA
To be calculated on a cumulative basis with respect to the Fiscal Quarter
under review and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis:
Net Income (exclusive of any interest income received from any New Venture
Subsidiary) $
--------------
Plus any one-time non-Cash loss reflected in Net Income + $
--------------
Minus any one-time non-Cash gain reflected in Net Income + $
--------------
Plus Interest Expense to the extent deducted in the determination of Net
Income + $
--------------
- 10 -
Plus Federal and state taxes on or measured by income for the period under
review (whether or not payable during such period) to the extent deducted
in the determination of Net Income + $
--------------
Minus corporate expense of HCR to the extent not deducted in the
determination of Net Income for the period under review - $
--------------
Plus depreciation and amortization to the extent deducted in the
determination of Net Income + $
--------------
Total Borrower Consolidation Annualized EBITDA $
--------------
HARD ROCK ANNUALIZED EARNINGS
To be calculated on a cumulative basis with respect to the Fiscal Quarter
under review and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis. If less than four (4)
Fiscal Quarters, set forth the number of Fiscal Quarters upon which such
calculations are made:
--------------
Net profit before tax $
--------------
Plus pre-opening expenses to the extent deducted in the determination of
net profit for such period + $
--------------
Total net profit before tax and pre-opening expenses = $
--------------
Times 40% x .40
= $
--------------
Plus amount of Hard Rock Management Fees received in Cash by HLVMC for such
period, but only to the extent deducted in the determination of net profit
for such period + $
--------------
- 11 -
Total $
--------------
If above calculations are based on one Fiscal Quarter, multiply above by 4
x 4
--------------
$
--------------
If above calculations are based on two Fiscal Quarters multiply above by 2
x 2
--------------
$
--------------
If above calculations are based on three Fiscal Quarters multiply above by
4/3 x 4
--------------
DIVIDED BY 3
--------------
$
--------------
Total Hard Rock Annualized Earnings $
--------------
MAJORITY NEW VENTURE ANNUALIZED EBITDA
To be calculated on a cumulative basis with respect to the Fiscal Quarter
under review and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis. If less than four (4)
Fiscal Quarters, set forth the number of Fiscal Quarters upon which such
calculations are made: --------------
Net Income $
--------------
Plus any one-time non-Cash loss and pre-opening expenses reflected in Net
Income + $
--------------
Minus any one-time non-Cash gain reflected in Net Income - $
--------------
Plus Interest Expense (accrued and capitalized) to the extent deducted in
the determination of Net Income + $
--------------
- 12 -
Plus Federal and state taxes on or measured by income to the extent
deducted in the determination of Net Income + $
--------------
Plus depreciation and amortization to the extent deducted in the
determination of Net Income + $
--------------
Total $
--------------
Times the percentage of ownership held in the New Venture by HCR or the
applicable Majority New Venture Subsidiary x %
-------
$
--------------
Plus amount of management fees, if any, received in Cash by the Majority
New Venture Subsidiary for such period, but only to the extent deducted in
the determination of Net Income + $
--------------
Total $
--------------
If above calculations are based on one Fiscal Quarter, multiply above by 4
x 4
--------------
$
--------------
If above calculations are based on two Fiscal Quarters multiply above by 2
x 2
--------------
$
--------------
If above calculations are based on three Fiscal Quarters multiply above by
4/3 x 4
--------------
DIVIDED BY 3
--------------
$
--------------
Total Majority New Venture
Annualized EBITDA $
--------------
- 13 -
MINORITY NEW VENTURE ANNUALIZED ADVANCES
To be calculated on a cumulative basis with respect to the Fiscal Quarter
under review and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis. If less than four (4)
Fiscal Quarters, set forth the number of Fiscal Quarters upon which such
calculations are made: --------------
Aggregate amount of Minority New Venture Advances made by each Minority New
Venture Subsidiary to HCR which are received by HCR in Cash during such
period $
--------------
Total $
--------------
If above calculations are based on one Fiscal Quarter, multiply above by 4
x 4
--------------
$
--------------
If above calculations are based on two Fiscal Quarters multiply above by 2
x 2
--------------
$
--------------
If above calculations are based on three Fiscal Quarters multiply above by
4/3 x 4
DIVIDED BY 3
--------------
$
--------------
Total Minority New Venture Annualized Advances $
--------------
TOTAL ANNUALIZED EBITDA (Borrower Consolidation Annualized EBITDA plus Hard
Rock Annualized Earnings plus Majority New Venture Annualized EBITDA plus
Minority New Venture Annualized Advances) $
--------------
Funded Debt to EBITDA Ratio :1.0
--------------
- 14 -
Maximum permitted:
(i) 4.00 to 1.0 from the Third Amendment Effective Date through
November 30, 1997,
(ii) 3.50 to 1.00 from December 1, 1997 through November 30, 1998, and
(iii) 2.75 to 1.0 from December 1, 1998 through the Maturity Date.
C. CAPITAL EXPENDITURE LIMITATION (Section 6.03): Set forth the amount of
Capital Expenditures made during the Fiscal Year under review:
a. Total Capital Expenditures $
--------------
b. Minimum required annual Capital Expenditures for Fiscal Year under
review $ 4,000,000.00
c. Amount carried forward from prior Fiscal year $
--------------
d. Total minimum required Capital Expenditures (b plus c)
$
--------------
e. Amount of Capital Expenditures permitted to carry forward to next
Fiscal Year (d minus a) (May not exceed $4,000,000.00.)
$
--------------
D. HCR CONSOLIDATION TANGIBLE NET WORTH (Section 6.04): To be calculated with
respect to the HCR Consolidation as of the end of the Fiscal Quarter under
review:
HCR Consolidation Assets $
--------------
Less HCR Consolidation Intangibles - $
--------------
Less HCR Consolidation Liabilities - $
--------------
HCR Consolidation Tangible Net Worth $
--------------
- 15 -
MINIMUM REQUIRED
$126,360,108.00
Plus, 75% of Net Income realized as of each Fiscal Quarter end (without
reduction for any net losses) + $
--------------
Plus, 75% of the net proceeds of any additional Equity Offerings
+ $
--------------
Minimum required HCR Consolidation Tangible Net Worth $
--------------
IV.
NONUSAGE FEE CALCULATION
(Section 2.10b): to be calculated with respect to the Fiscal Quarter under
review:
a. Daily average of Maximum Permitted Balance $
--------------
b. Less daily average of Funded Outstandings - $
--------------
c. Less daily average of amount of L/C Exposure - $
--------------
d. Amount of Nonusage $
(a minus b, minus c) --------------
e. Funded Debt to EBITDA Ratio (See III B above) :1
--------------
f. Applicable Nonusage Percentage based on Funded Debt to EBITDA
Ratio %
--------------
---- ----
| < = 2.5:1 = .375% |
| - |
| > = 2.5:1 but < = 3.5:1 = .425% |
| - |
| < = 3.5:1 = .500% |
| - |
----- ----
x. Xxxxx Nonusage Fee $
(d times f) --------------
- 16 -
h. Number of days in Fiscal Quarter under review
--------------
i. Nonusage Fee for Fiscal Quarter under review $
(g DIVIDED BY 365 x h) --------------
V.
PERFORMANCE OF OBLIGATIONS
A review of the activities of Borrowers during the fiscal period covered by
the attached financial statements has been made under my supervision with a view
to determining whether during such fiscal period Borrowers performed and
observed all of their obligations under the Loan Documents. Except as described
in an attached document or in an earlier Certificate, to the best of my
knowledge, as of the date of this Certificate there is no Default or Event of
Default has occurred or remains continuing.
VI.
NO MATERIAL ADVERSE CHANGE
To the best of my knowledge, except as described in an attached document or
in an earlier Certificate, no Material
- 17 -
Adverse Effect has occurred since the date of the most recent Certificate
delivered to the Banks.
DATED this ____ day of _____________, 199__.
HARVEYS CASINO RESORTS, a
Nevada corporation, HARVEYS
C.C. MANAGEMENT COMPANY,
INC., a Nevada corporation,
HARVEYS WAGON WHEEL CASINO
LIMITED LIABILITY COMPANY,
a Colorado limited
liability company and
HARVEYS IOWA MANAGEMENT
COMPANY, INC., a Nevada
corporation
Name: _____________________
Title: ____________________
Authorized Officer
Print
Name: ____________________
- 18 -
PRICING CERTIFICATE
TO: XXXXX FARGO BANK, National Association,
as Agent Bank
Reference is made to that certain Reducing Revolving Credit Agreement,
dated as of August 14, 1995, as amended by First Amendment to Reducing Revolving
Credit Agreement dated as of May 15, 1996, Second Amendment to Reducing
Revolving Credit Agreement dated as of May 23, 1996, and Third Amendment to
Reducing Revolving Credit Agreement dated September 30, 1996 (collectively, as
further amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among HARVEYS CASINO RESORTS, a Nevada corporation,
HARVEYS C.C. MANAGEMENT COMPANY, INC., a Nevada corporation, HARVEYS WAGON WHEEL
CASINO LIMITED LIABILITY COMPANY, a Colorado limited liability company, and
HARVEYS IOWA MANAGEMENT COMPANY, INC., a Nevada corporation (collectively the
"Borrowers"), the Lenders therein named (each, together with their respective
successors and assigns, individually being referred to as a "Lender" and
collectively as the "Lenders"), XXXXX FARGO BANK, National Association, as the
swingline lender (herein in such capacity, together with its successors and
assigns, the "Swingline Lender"), XXXXX FARGO BANK, National Association, as the
issuer of letters of credit hereunder (herein in such capacity, together with
its successors and assigns, the "L/C Issuer") and XXXXX FARGO BANK, National
Association, as administrative and collateral agent for the Lenders, Swingline
Lender and L/C Issuer (herein, in such capacity, called the "Agent Bank" and,
together with the Lenders, Swingline Lender and L/C Issuer, collectively
referred to as the "Banks"). Terms defined in the Credit Agreement and not
otherwise defined in this Pricing Certificate ("Certificate") shall have the
meanings defined and described in the Credit Agreement. This Certificate is
delivered in accordance with Section 5.08(c) of the Credit Agreement for the
purpose of determining the Applicable Margin.
The period under review is the Fiscal Quarter ended [INSERT DATE]
together with, unless otherwise indicated, the three (3) immediately
preceding Fiscal Quarters on a rolling four (4) Fiscal Quarter basis.
The change in the Applicable Margin, if any, shall be effective on
[INSERT DATE WHICH IS THE FIRST (1ST)
EXHIBIT G
DAY OF THE THIRD (3RD) MONTH IMMEDIATELY FOLLOWING THE FISCAL QUARTER END
SET FORTH ABOVE] .
The Applicable Margins, based on the calculations for the Borrower
Consolidation as set forth below, for the period described above are:
Prime Rate Margin %
-----------
LIBO Rate Margin %
-----------
B. FUNDED DEBT TO EBITDA RATIO
(Section 6.02): To be calculated as
the greater of: (a) as of the last
day of the Fiscal Quarter set forth
above, or (b) the average as of the
last day of each calendar month
comprising such Fiscal Quarter:
The Funded Outstandings on the Credit Facility $
--------------
Plus the Swingline Outstandings on the Swingline Facility + $
--------------
Plus the L/C Exposure on the L/C Facility + $
--------------
Plus the total, as of the last day of the Fiscal Quarter under review, of
both the long-term Indebtedness and current portions of all other long-term
Indebtedness, including only those HCR Contingent Liabilities which are
Adjusted HCR Contingent Liabilities + $
--------------
Plus the total, as of the last day of the Fiscal Quarter under review, of
both the long-term Capitalized Lease Liabilities and current portion of
Capitalized Lease Liabilities + $
--------------
TOTAL FUNDED DEBT $
--------------
Divided (DIVIDED BY) by: DIVIDED BY
- 2 -
ANNUALIZED EBITDA
BORROWER CONSOLIDATION ANNUALIZED EBITDA
To be calculated on a cumulative basis with respect to the Fiscal Quarter
under review and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis:
Net Income (exclusive of any interest income received from any New Venture
Subsidiary) $
--------------
Plus any one-time non-Cash loss reflected in Net Income + $
--------------
Minus any one-time non-Cash gain reflected in Net Income + $
--------------
Plus Interest Expense to the extent deducted in the determination of Net
Income + $
--------------
Plus Federal and state taxes on or measured by income for the period under
review (whether or not payable during such period) to the extent deducted
in the determination of Net Income + $
--------------
Minus corporate expense of HCR to the extent not deducted in the
determination of Net Income for the period under review - $
--------------
Plus depreciation and amortization to the extent deducted in the
determination of Net Income + $
--------------
Total Borrower Consolidation Annualized EBITDA $
--------------
- 3 -
HARD ROCK ANNUALIZED EARNINGS
To be calculated on a cumulative basis with respect to the Fiscal Quarter
under review and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis. If less than four (4)
Fiscal Quarters, set forth the number of Fiscal Quarters upon which such
calculations are made:
--------------
Net profit before tax $
--------------
Plus pre-opening expenses to the extent deducted in the determination of
net profit for such period + $
--------------
Total net profit before tax and pre-opening expenses = $
--------------
Times 40% x .40
= $
--------------
Plus amount of Hard Rock Management Fees received in Cash by HLVMC for such
period, but only to the extent deducted in the determination of net profit
for such period + $
--------------
Total $
--------------
If above calculations are based on one Fiscal Quarter, multiply above by 4
x 4
--------------
$
--------------
If above calculations are based on two Fiscal Quarters multiply above by 2
x 2
--------------
$
--------------
- 4 -
If above calculations are based on three Fiscal Quarters multiply above by
4/3 x 4
DIVIDED BY 3
--------------
$
--------------
Total Hard Rock Annualized Earnings $
--------------
MAJORITY NEW VENTURE ANNUALIZED EBITDA
To be calculated on a cumulative basis with respect to the Fiscal Quarter
under review and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis. If less than four (4)
Fiscal Quarters, set forth the number of Fiscal Quarters upon which such
calculations are made: --------------
Net Income $
--------------
Plus any one-time non-Cash loss and pre-opening expenses reflected in Net
Income + $
--------------
Minus any one-time non-Cash gain reflected in Net Income - $
--------------
Plus Interest Expense (accrued and capitalized) to the extent deducted in
the determination of Net Income + $
--------------
Plus Federal and state taxes on or measured by income to the extent
deducted in the determination of Net Income + $
--------------
Plus depreciation and amortization to the extent deducted in the
determination of Net Income + $
--------------
Total $
--------------
Times the percentage of ownership held in the New Venture by HCR or the
applicable Majority New Venture Subsidiary x %
-------
$
--------------
- 5 -
Plus amount of management fees, if any, received in Cash by the Majority
New Venture Subsidiary for such period, but only to the extent deducted in
the determination of Net Income + $
--------------
Total $
--------------
If above calculations are based on one Fiscal Quarter, multiply above by 4
x 4
--------------
$
--------------
If above calculations are based on two Fiscal Quarters multiply above by 2
x 2
--------------
$
--------------
If above calculations are based on three Fiscal Quarters multiply above by
4/3 x 4
DIVIDED BY 3
--------------
$
--------------
Total Majority New Venture
Annualized EBITDA $
--------------
MINORITY NEW VENTURE ANNUALIZED ADVANCES
To be calculated on a cumulative basis with respect to the Fiscal Quarter
under review and the most recently ended three (3) preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis. If less than four (4)
Fiscal Quarters, set forth the number of Fiscal Quarters upon which such
calculations are made: --------------
Aggregate amount of Minority New Venture Advances made by each Minority New
Venture Subsidiary to HCR which are received by HCR in Cash during such
period $
--------------
Total $
--------------
- 6 -
If above calculations are based on one Fiscal Quarter, multiply above by 4
x 4
--------------
$
--------------
If above calculations are based on two Fiscal Quarters multiply above by 2
x 2
--------------
$
--------------
If above calculations are based on three Fiscal Quarters multiply above by
4/3 x 4
DIVIDED BY 3
--------------
$
--------------
Total Minority New Venture Annualized Advances $
--------------
TOTAL ANNUALIZED EBITDA (Borrower Consolidation Annualized EBITDA plus Hard
Rock Annualized Earnings plus Majority New Venture Annualized EBITDA plus
Minority New Venture Annualized Advances) $
--------------
- 7 -
FUNDED DEBT TO EBITDA RATIO :1.0
--------------
DATED this ___ day of _______________, 199__.
HARVEYS CASINO RESORTS, a
Nevada corporation, HARVEYS
C.C. MANAGEMENT COMPANY,
INC., a Nevada corporation,
HARVEYS WAGON WHEEL CASINO
LIMITED LIABILITY COMPANY,
a Colorado limited
liability company and
HARVEYS IOWA MANAGEMENT
COMPANY, INC., a Nevada
corporation
Name: _____________________
Title: ____________________
Authorized Officer
Print
Name: ____________________
- 8 -
