10/5/99
$16,300,000
CREDIT AGREEMENT
dated as of October __, 1999
between
GAMBLERS SUPPLY MANAGEMENT COMPANY
as the Borrower,
and
ISLE OF CAPRI CASINOS, INC.
as the Lender.
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS......................................2
1.1. Defined Terms.................................................2
1.2. Use of Defined Terms.........................................12
1.3. Cross-References.............................................12
1.4. Accounting and Financial Determinations......................12
ARTICLE II
COMMITMENT, BORROWING PROCEDURES AND NOTE.............................12
2.1. Commitment...................................................12
2.1.1. Commitment To Make Loan......................................12
2.1.2. Lender Not Permitted or Required To Make Loan................12
2.2. Borrowing Procedure..........................................12
2.3. Note.........................................................13
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES............................13
3.1. Repayments and Prepayments...................................13
3.2. Interest Provisions..........................................14
3.2.1. Rates........................................................14
3.2.2. Post-Maturity Rate...........................................14
3.2.3. Payment Dates................................................14
3.3. Fees.........................................................14
3.3.1 Upfront Fee..................................................15
3.3.2 Prepayment/Repayment Fee.....................................15
ARTICLE IV
TAXES, PAYMENTS, CALCULATIONS, ETC...................................15
4.1. Taxes.......................................................15
4.2. Payments, Computations, etc.................................16
4.3. Use of Proceeds.............................................16
ARTICLE V
CONDITIONS TO LOAN....................................................16
5.1. Conditions to Loan..........................................16
5.1.1. Resolutions, etc............................................16
5.1.2. Delivery of Note............................................16
5.1.3. Acquisition Consummated.....................................16
5.1.4. Payment of Outstanding Indebtedness, etc....................17
5.1.5. Equity Infusion.............................................17
5.1.6. Security Agreement..........................................17
5.1.7. Mortgage....................................................18
5.1.8. Ship Mortgage...............................................18
5.1.9. Opinions of Counsel.........................................19
5.1.10. Closing Fees, Expenses, etc.................................19
5.1.11. Compliance with Warranties, No Default, etc.................19
5.1.12. Borrowing Request...........................................20
5.1.13. Financial Condition.........................................20
5.1.14 Satisfactory Legal Form; Other Documents....................20
5.1.15. Payoff Letters..............................................20
5.1.16. Amendment to CIBC Credit Agreement..........................20
ARTICLE VI
REPRESENTATIONS AND WARRANTIES........................................20
6.1. Organization, etc...........................................20
6.2. Due Authorization, Non-Contravention, etc...................21
6.3. Government Approval, Regulation, etc........................21
6.4. Validity, etc...............................................21
6.5. Financial Information.......................................21
6.6. No Material Adverse Change..................................22
6.7. Litigation, Labor Controversies, etc........................22
6.8. Subsidiaries................................................22
6.9. Ownership of Properties.....................................22
6.10. Taxes.......................................................22
6.11. Pension and Welfare Plans...................................22
6.12. Environmental Warranties....................................23
6.13. Regulations U and X........................................24
6.14. Accuracy of Information.....................................24
ARTICLE VII
COVENANTS.............................................................24
7.1. Affirmative Covenants..............................24
7.1.1. Financial Information, Reports, Notices, etc.......24
7.1.2. Compliance with Laws, etc..........................26
7.1.3. Maintenance of Properties..........................26
7.1.4. Insurance..........................................26
7.1.5. Books and Records..................................26
7.1.6. Environmental Covenant.............................27
7.1.7. Year 2000 Compliance...............................27
7.2. Negative Covenants.................................28
7.2.1. Business Activities................................28
7.2.2. Indebtedness.......................................28
7.2.3. Liens..............................................28
7.2.4. Financial Condition................................29
7.2.5. Investments........................................29
7.2.6. Restricted Payments, etc...........................30
7.2.7. Capital Expenditures, etc..........................30
7.2.8. Rental Obligations.................................30
7.2.9. Take or Pay Contracts..............................31
7.2.10. Consolidation, Merger, etc.........................31
7.2.11. Asset Dispositions, etc............................31
7.2.12. Modification of Certain Agreements.................31
7.2.13. Transactions with Affiliates.......................31
7.2.14. Negative Pledges, etc..............................31
ARTICLE VIII
EVENTS OF DEFAULT.....................................................32
8.1. Listing of Events of Default................................32
8.1.1. Non-Payment of Obligations..................................32
8.1.2. Breach of Warranty..........................................32
8.1.3. Non-Performance of Certain Covenants and Obligations........32
8.1.4. Non-Performance of Other Covenants and Obligations..........32
8.1.5. Default on Other Indebtedness...............................32
8.1.6. Judgments...................................................32
8.1.7. Pension Plans...............................................33
8.1.8. Control of the Borrower.....................................33
8.1.9. Bankruptcy, Insolvency, etc.................................33
8.1.10. Impairment of Security, etc.................................34
8.2. Action if Nonpayment, etc...................................34
8.3. Action if Bankruptcy........................................34
8.4. Action if Other Event of Default............................34
ARTICLE IX MISCELLANEOUS PROVISIONS.........................................35
9.1. Waivers, Amendments, etc...........................35
9.2. Notices............................................35
9.3. Payment of Costs and Expenses......................35
9.4. Indemnification....................................36
9.5. Survival...........................................37
9.6. Severability.......................................37
9.7. Headings...........................................37
9.8. Execution in Counterparts, Effectiveness, etc......37
9.9. Governing Law; Entire Agreement....................37
9.10. Successors and Assigns.............................37
9.11. Confidentiality....................................37
9.12. Other Transactions.................................38
9.13. Forum Selection and Consent to Jurisdiction........38
9.14. Waiver of Jury Trial...............................39
9.15. Limitation of Liability............................40
9.16. Interest Rates.....................................41
9.17. Iowa Gaming Licenses...............................42
SCHEDULE I - Disclosure Schedule
EXHIBIT A - Form of Note
EXHIBIT B - Form of Borrowing Request
EXHIBIT C - Form of Certificate of Authorized Officer
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October __, 1999 between
GAMBLERS SUPPLY MANAGEMENT COMPANY, a South Dakota corporation (the
"Borrower"), and ISLE OF CAPRI CASINOS, INC., a Delaware corporation (the
"Lender"),
W I T N E S S E T H:
WHEREAS, Lady Luck Gaming Corporation, a Delaware corporation
("Parent"), is engaged directly and through its various Subsidiaries in the
business of operating gaming casinos; and
WHEREAS, pursuant to a Stock Purchase Agreement, dated July 30,
1999 (as so originally executed and delivered, the "Sodak Stock Purchase
Agreement"), among Parent, the Borrower and Sodak Gaming Inc., a South
Dakota corporation ("Sodak"), Parent intends to acquire all of the issued
and outstanding stock of the Borrower from Sodak for $47,100,000 (including
the assumption of approximately $4,250,000 of indebtedness in connection
with an existing equipment lease and approximately $640,000 of indebtedness
related to a hotel on the premises of the Borrower's gaming facilities, and
up to $485,000 of prepayment premiums) (the "Acquisition"); and
WHEREAS, in connection with, and to fund, the Acquisition, the
Borrower desires to obtain a Commitment from the Lender pursuant to which a
Loan, in a maximum aggregate principal amount not to exceed $16,300,000,
will be made to the Borrower prior to the Commitment Termination Date;
WHEREAS, Lender, Parent and Isle Merger Corp., a Delaware
corporation ("Merger Sub"), have entered into an Agreement and Plan of
Merger, dated as of October __, 1999 (as so originally executed and
delivered, the "Isle Merger Agreement"), pursuant to which Merger Sub will
merge with and into Parent (the "Isle Merger"); and
WHEREAS, the Lender is willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitment and make such Loan to the Borrower; and
WHEREAS, the proceeds of such Loan will be used to make partial
payment of the Parent's obligations under the Sodak Stock Purchase
Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular
and plural forms thereof):
"Acquisition" is defined in the recitals.
"Affiliate" of any Person means any other Person which, directly
or indirectly, controls, is controlled by or is under common control with
such Person (excluding any trustee under, or any committee with
responsibility for administering, any Plan). A Person shall be deemed to be
"controlled by" any other Person if such other Person possesses, directly
or indirectly, power
(a) to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of
directors, managers or managing general partners; or
(b) to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.
"Agreement" means, on any date, this Credit Agreement as
originally in effect on the Effective Date and as thereafter from time to
time amended, supplemented, amended and restated, or otherwise modified and
in effect on such date.
"Authorized Officer" means, relative to the Borrower, those of its
officers whose signatures and incumbency shall have been certified to the
Lender pursuant to Section 5.1.1.
"Base Rate" means, on any date, a fluctuating rate of interest per
annum equal to the rate of interest most recently established by CIBC as
its Base Rate. The Base Rate is not necessarily intended to be the lowest
rate of interest determined by CIBC in connection with extensions of
credit. Changes in the rate of interest will take effect simultaneously
with each change in the Base Rate. The Lender will give notice promptly to
the Borrower of changes in the Base Rate.
"Borrower" is defined in the preamble.
"Borrower Excess Cash Flow" means, for any period, EBITDA for such
period less the sum of (i) cash interest expense, (ii) cash income taxes,
(iii) the sum of (x) $150,000 monthly scheduled principal payments and (y)
any voluntary prepayments of the Borrower on the Loan, (iv) maintenance
Capital Expenditures not to exceed $100,000 per quarter, (v) Capital
Expenditures in connection with the replacement of the mooring barge not to
exceed $1,000,000 in the aggregate, and (vi) such other Capital
Expenditures as shall be agreed to by the Lender.
"Borrowing Request" means the loan request and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the
form of Exhibit B hereto.
"Business Day" means any day which is neither a Saturday or Sunday
nor a legal holiday on which banks are authorized or required to be closed
in New York or Mississippi.
"Capital Expenditures" means, for any period, the sum of
(a) the aggregate amount of all expenditures of the
Borrower for fixed or capital assets made during such period
which, in accordance with GAAP, would be classified as capital
expenditures; and
(b) the aggregate amount of all Capitalized Lease
Liabilities incurred during such period.
"Capitalized Lease Liabilities" means all monetary obligations of
the Borrower under any leasing or similar arrangement which, in accordance
with GAAP, would be classified as capitalized leases, and, for purposes of
this Agreement and each other Loan Document, the amount of such obligations
shall be the capitalized amount thereof, determined in accordance with
GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than
one year after such time, issued or guaranteed by the United
States Government;
(b) commercial paper, maturing not more than nine months
from the date of issue, which is issued by
(i) a corporation (other than an Affiliate of
the Borrower) organized under the laws of any state of
the United States or of the District of Columbia and
rated A-l or higher by Standard & Poor's Corporation or
P-l or higher by Xxxxx'x Investors Service, Inc., or
(ii) CIBC;
(c) any certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued
by either
(i) a commercial banking institution that is a
member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less
than $500,000,000, or
(ii) CIBC; or
(d) any repurchase agreement entered into with CIBC (or
other commercial banking institution of the stature referred to in
clause (c)(i)) which
(i) is secured by a fully perfected security
interest in any obligation of the type described in any
of clauses (a) through (c), and
(ii) has a market value at the time such
repurchase agreement is entered into of not less than
100% of the repurchase obligation of CIBC (or other
commercial banking institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means the failure of Parent to own, free and
clear of all Liens or other encumbrances, 100% of the outstanding shares of
voting stock of the Borrower on a fully diluted basis (other than prior to
the closing under the Sodak Stock Purchase Agreement, and except for a
pledge of all capital stock of the Borrower pursuant to the Indenture).
"CIBC" means Canadian Imperial Bank of Commerce.
"CIBC Credit Agreement" means the Credit Agreement dated as of
April 23, 1999 by and among the Lender, various lenders and agents and
CIBC, as administrative agent.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" means the Lender's obligation to make the Loan pursuant
to Section 2.1.1.
"Commitment Amount" means $16,300,000.
"Commitment Termination Date" means the earliest of
(a) October 31, 1999, or such other date as Parent,
Borrower and Sodak agree to extend the closing date under the
Sodak Stock Purchase Agreement;
(b) the date on which the Commitment Amount is terminated
in full or reduced to zero pursuant to this Agreement;
(c) the date on which any Commitment Termination Event
occurs; and
(d) the Maturity Date.
Upon the occurrence of any event described in clause (b), (c) or (d), the
Commitment shall terminate automatically and without any further action.
"Commitment Termination Event" means
(a) the occurrence of any Default described in clauses
(a) through (d) of Section 8.1.9 with respect to the Borrower; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of the Loan to be due and
payable pursuant to Section 8.2, or
(ii) in the absence of such declaration, the
giving of notice by the Lender to the Borrower that the
Commitment has been terminated.
"Contingent Liability" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes
or is contingently liable upon (by direct or indirect agreement, contingent
or otherwise, to provide funds for payment, to supply funds to, or
otherwise to invest in, a debtor, or otherwise to assure a creditor against
loss) the indebtedness, obligation or any other liability of any other
Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions
upon the shares of any other Person. The amount of any Person's obligation
under any Contingent Liability shall (subject to any limitation set forth
therein) be deemed to be the outstanding principal amount (or maximum
principal amount, if larger) of the debt, obligation or other liability
guaranteed thereby.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c)
of the Code or Section 4001 of ERISA.
"Default" means any Event of Default or any condition, occurrence
or event which, after notice or lapse of time or both, would constitute an
Event of Default.
"Disclosure Schedule" means the Disclosure Schedule attached
hereto as Schedule I, as it may be amended, supplemented or otherwise
modified from time to time by the Borrower with the written consent of the
Lender.
"Dollar" and the sign "$" means lawful money of the United States.
"EBITDA" means the sum for any period of (i) net income for the
Borrower (excluding extraordinary gains or losses), on a pro forma basis
for periods prior to the date of the Acquisition, such net income being the
net income of the Xxxx Xxxxxxxxx Gaming Facility, (ii) provisions for taxes
deducted in determining such net income, (iii) interest expense deducted in
determining such net income, (iv) depreciation expense deducted in
determining such net income, and (v) amortization expense deducted in
determining such net income.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 9.8.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to public
health and safety and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 8.1.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar
months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "1999 Fiscal Year") refer to
the Fiscal Year ending on December 31 occurring during such calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Gaming Vessel" means the vessel Xxxx Xxxxxxxxx having Official
No. 950558 of approximately 99.96 gross and 67 net tons and with dimensions
of approximately 228.4 feet by 55 feet, built in 1989 at Freeport, Florida,
by Freeport Ship Builders and Marine Repair, Inc., which is duly documented
in the name of the Borrower under the laws of the United States at the
National Vessel Documentation Center at Falling Waters, West Virginia.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous
or toxic chemical, material or substance within the meaning of any
other applicable federal, state or local law, regulation,
ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or
standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended or hereafter amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and all other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates or currency (or currency unit) exchange
rates.
"Xxxxxx" means Xxxxxx Financial, Inc. in its capacity as lessor under
the Xxxxxx Lease.
"Xxxxxx Lease" means the Master Lease Agreement dated June 30,
1997 between the Borrower, as lessee, and Xxxxxx (as successor to PDS
Financial Corporation).
"herein", "hereof", "hereto", "hereunder" and similar terms
contained 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 Section, paragraph or provision of this Agreement or
such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of the Borrower, any qualification or exception to such opinion
or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of
any item in such financial statement and which, as a condition to
its removal, would require an adjustment to such item the effect
of which would be to cause the Borrower to be in default of its
obligation under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and
each other Loan Document, the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statement, which is
followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(b) all obligations, contingent or otherwise, relative to
the face amount of all letters of credit, whether or not drawn,
and banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(d) all other items which, in accordance with GAAP, would
be included as liabilities on the liability side of the balance
sheet of such Person as of the date at which Indebtedness is to be
determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services, and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; and
(g) all Contingent Liabilities of such Person in respect
of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
"Indemnified Liabilities" is defined in Section 9.4.
"Indemnified Parties" is defined in Section 9.4.
"Indenture" means the Indenture, dated as of February 17, 1994, by
and among Lady Luck Gaming Finance Corporation, the Parent, certain
subsidiary guarantors named therein and First Trust National Association,
as amended and supplemented, relating to the 11 7/8% First Mortgage Notes.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person
in any other Person.
The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal
to the fair market value of such property.
"Isle Merger" is defined in the recitals.
"Isle Merger Agreement" is defined in the recitals.
"Lender" is defined in the preamble.
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property to secure
payment of a debt or performance of an obligation or other priority or
preferential arrangement of any kind or nature whatsoever.
"Loan" is defined in Section 2.1.1.
"Loan Document" means this Agreement, the Note, the Mortgage, the
Ship Mortgage and the Security Agreement.
"Material Adverse Effect" means, with respect to the Borrower, a
material adverse effect upon the ability of the Borrower to pay the
Obligations or upon the business, financial condition, results of
operation, prospects or properties of the Borrower.
"Maturity Date" means the earliest to occur of the following: (i)
the Isle Merger Agreement shall, in whole or in part, terminate, cease to
be effective or cease to be the legally valid, binding and enforceable
obligation of Parent and (a) such termination or cessation shall continue
for two Business Days if resulting from the Parent's acceptance of a
Superior Proposal (as defined in the Isle Merger Agreement) to be acquired
by another Person other than the Lender or (b) such termination or
cessation shall continue for 180 days if resulting for any other reason
under the Isle Merger Agreement; (ii) the Parent or any Affiliate of the
Parent shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability or (iii)
consummation of the Isle Merger.
"Merger Sub" is defined in the recitals.
"Xxxx Xxxxxxxxx Gaming Facility" means the Xxxx Xxxxxxxxx gaming
property in Marquette, Iowa, including the Gaming Vessel, gaming equipment,
and dockside buildings, including a motel, an enclosed walkway, a parking
lot, a restaurant, an administrative office and other entertainment
facilities.
"Monthly Payment Date" means the last day of each calendar month,
beginning with November 30, 1999, or, if any such day is not a Business
Day, the next succeeding Business Day.
"Mortgage" means the Mortgage on the Xxxx Xxxxxxxxx Gaming
Facility (excluding the Gaming Vessel).
"Note" means a promissory note of the Borrower payable to the
Lender, in the form of Exhibit A hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate indebtedness of the Borrower to the Lender resulting from the
outstanding Loan, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower arising under or in connection with this Agreement, the Note and
each other Loan Document.
"Organic Document" means, relative to the Borrower, its
certificate of incorporation, its by-laws and all shareholder agreements,
voting trusts and similar arrangements applicable to any of its authorized
shares of capital stock.
"Parent Excess Cash Flow" means Excess Cash Flow (as such term is
defined in the Indenture) less, without duplication, the sum of (i) the sum
of (x) scheduled principal payments and (y) any voluntary prepayments by
the Parent or the Borrower on the Loan and (ii) amounts paid by the Parent
to repurchase 11 7/8% First Mortgage Notes from the holders thereof
pursuant to the terms of the Indenture.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan," as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which
the Borrower or any corporation, trade or business that is, along with the
Borrower, a member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within the
meaning of Section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under
Section 4069 of ERISA.
"Person" means any natural person, corporation, limited liability
company, firm, association, government, governmental agency or any other
entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Quarterly Payment Date" means the 45th day after the end of each
calendar quarter, beginning with February 14, 2000, or, if any such day is
not a Business Day, the next succeeding Business Day.
"Release" means a "release," as such term is defined in CERCLA.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as in
effect from time to time.
"Security Agreement" means the Security Agreement
executed and delivered pursuant to Section 5.1.6, substantially in a form
acceptable to the Lender, as amended, supplemented, restated or otherwise
modified from time to time.
"Ship Mortgage" means the First Preferred Mortgage executed and
delivered by the Borrower to the Lender pursuant to Section 5.1.8, in form
and substance acceptable to the Lender, as amended, supplemented, restated
or otherwise modified from time to time.
"Sodak" is defined in the recitals.
"Sodak Stock Purchase Agreement" is defined in the recitals.
"Subsidiary" means, with respect to any Person, any other Person
of which more than 50% of the outstanding capital stock or other equity
interest having ordinary voting power to elect a majority of the board of
directors or similar management group of such other Person (irrespective of
whether at the time equity of any other class or classes of such other
Person shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by
such Person and one or more other Subsidiaries of such Person, or by one or
more other Subsidiaries of such Person.
"Taxes" is defined in Section 4.1.
"United States" or "U.S." means the United States of America, its
fifty States and the District of Columbia.
"Welfare Plan" means a "welfare plan," as such term is defined in
Section 3(1) of ERISA.
"Year 2000 Compliant" is defined in Section 7.1.7.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and
the Note and in each Borrowing Request, Loan Document, notice and other
communication delivered from time to time in connection with this Agreement
or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified,
references in this Agreement and in each other Loan Document to any Article
or Section are references to such Article or Section of this Agreement or
such other Loan Document, as the case may be, and, unless otherwise
specified, references in any Article, Section or definition to any clause
are references to such clause of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder (including under Section 7.2.4) shall
be made, and all financial statements required to be delivered hereunder or
thereunder shall be prepared in accordance with, those generally accepted
accounting principles ("GAAP") applied in the preparation of the financial
statements referred to in Section 6.5.
ARTICLE II
COMMITMENT, BORROWING PROCEDURES AND NOTE
SECTION 2.1. Commitment. On the terms and subject to the conditions of
this Agreement (including Article V), the Lender agrees to make a Loan
pursuant to the Commitment described in this Section 2.1.
SECTION 2.1.1. Commitment To Make Loan. On a Business Day
occurring prior to the Commitment Termination Date, the Lender will make a
loan (the "Loan") to the Borrower equal to the aggregate amount of the
amount requested by the Borrower to be made on such day. The commitment of
the Lender described in this Section 2.1.1 is herein referred to as its
"Commitment". No amounts paid or prepaid with respect to the Loan may be
reborrowed.
SECTION 2.1.2. Lender Not Permitted or Required To Make Loan. The
Lender shall not be permitted or required to make the Loan if it would exceed
the Commitment Amount.
SECTION 2.2. Borrowing Procedure. By delivering a Borrowing
Request to the Lender on or before 10:00 a.m. (Central time) on a Business
Day, the Borrower may irrevocably request, on not less than one nor more
than three Business Days' notice, that the Loan be made in an amount up to
the Commitment Amount. On the terms and subject to the conditions of this
Agreement, the Loan shall be made on the Business Day specified in such
Borrowing Request. On or before 11:00 a.m. (Central time) on such Business
Day, the Lender shall make funds in an amount equal to the requested Loan
available to the Borrower by wire transfer to the accounts the Borrower
shall have specified in the Borrowing Request.
SECTION 2.3. Note. The Lender's Loan under its Commitment shall be
evidenced by the Note payable to the order of the Lender in a maximum
principal amount equal to the original Commitment Amount. The Borrower
hereby irrevocably authorizes the Lender to make (or cause to be made)
appropriate notations on the grid attached to the Lender's Note (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of and the outstanding principal amount of the Loan
evidenced thereby. Such notations shall be conclusive and binding on the
Borrower absent manifest error; provided, however, that the failure of the
Lender to make any such notations shall not limit or otherwise affect any
Obligations of the Borrower.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall cause
the Parent to make three equal monthly principal payments each in the
amount of $500,000 on the Monthly Payment Date in each of March 2000, April
2000 and May 2000. In addition, the Borrower shall make equal monthly
principal payments each in the amount of $150,000 on each Monthly Payment
Date after the making of the Loan, with any remaining principal and
interest payable on the Maturity Date. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding
principal amount of the Loan; provided, however, that
(i) all such voluntary prepayments shall require
at least one but no more than three Business Days' prior
written notice to the Lender; and
(ii) all such voluntary partial prepayments
shall be in an aggregate minimum amount of $100,000 and
an integral multiple of $25,000;
(b) shall, immediately upon any acceleration of the
Maturity Date of the Loan pursuant to Section 8.2 or Section 8.3,
repay the Loan, unless, pursuant to Section 8.2, only a portion of
the Loan is so accelerated. Each prepayment of the Loan made
pursuant to this Section shall be without premium or penalty
(except for the fees provided in Section 3.3);
(c) shall, on each Quarterly Payment Date, pay an amount
equal to the Borrower Excess Cash Flow for the immediate prior
calendar quarter; and
(d) shall, on August 1, 2000, cause to be paid an amount
equal to the Parent Excess Cash Flow.
All prepayments of the Loan shall be applied to the installments of the
Loan in the inverse order of maturity.
SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of the Loan shall accrue and be payable in accordance
with this Section 3.2.
SECTION 3.2.1. Rates. Prior to maturity (whether on the Maturity
Date, upon acceleration or otherwise) the Loan and the Note shall bear interest
at a rate per annum equal to the Base Rate plus a margin of 3.625%.
SECTION 3.2.2. Post-Maturity Rate. After the date any principal
amount of the Loan is due and payable (whether on the Maturity Date, upon
acceleration or otherwise), after any other monetary Obligation of the
Borrower shall have become due and payable, or pursuant to Section 8.4, the
Borrower shall pay, but only to the extent permitted by law, interest
(after as well as before judgment) on such amounts at a rate per annum
equal to the Base Rate plus a margin of 10.00%.
SECTION 3.2.3. Payment Dates. Interest accrued on the Loan shall
be payable, without duplication:
(a) on the Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole
or in part, of principal
outstanding on the Loan;
(c) on each Monthly Payment Date occurring after the
making of the Loan hereunder;
(d) on that portion of the Loan the Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on the Loan or other monetary Obligations arising under
this Agreement or any other Loan Document after the date such amount is due
and payable (whether on the Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth
in this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1 Upfront Fee. The Borrower agrees to pay to the
Lender an upfront fee in an amount equal to 2.5% of the Commitment Amount
(without regard to any reduction thereto), payable on the date of the Loan
hereunder.
SECTION 3.3.2 Prepayment/Repayment Fee. The Borrower agrees to pay
to the Lender a repayment/prepayment fee in an amount equal to 2% of any
principal amount of the Loan repaid or prepaid hereunder. Such fee shall
be payable upon the date of each such repayment or prepayment on the amount
so repaid or prepaid.
ARTICLE IV
TAXES, PAYMENTS, CALCULATIONS, ETC.
SECTION 4.1. Taxes. All payments by the Borrower of principal of,
and interest on, the Loan and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future
income, excise, stamp or other taxes, fees, duties, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, other
than franchise taxes and taxes imposed on or measured by the Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Lender an official receipt or
other documentation satisfactory to the Lender evidencing such
payment to such authority; and
(c) pay to the Lender such additional amount or amounts
as are necessary to ensure that the net amount actually received
by the Lender will equal the full amount the Lender would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Lender with
respect to any payment received by the Lender hereunder, the Lender may pay
such Taxes and the Borrower will promptly pay such additional amounts
(including any penalties, interest or expenses) as are necessary so that
the net amount received by such person after the payment of such Taxes
(including any Taxes on such additional amounts) shall equal the amount
such Person would have received had not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Lender the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Lender for any incremental Taxes, interest or penalties that may become
payable by the Lender as a result of any such failure.
SECTION 4.2. Payments, Computations, etc. All payments by the
Borrower pursuant to this Agreement, the Note or any other Loan Document
shall be made by the Borrower to the Lender, without setoff, deduction or
counterclaim, not later than 11:00 a.m. (Central time) on the date due, in
same day or immediately available funds, to such account as the Lender
shall specify from time to time by notice to the Borrower. Funds received
after that time shall be deemed to have been received by the Lender on the
next succeeding Business Day.
All interest and fees shall be computed on the basis of the actual number
of days (including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over a year
comprised of 365 days. Whenever any payment to be made shall otherwise be
due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included
in computing interest and fees, if any, in connection with such payment.
SECTION 4.3. Use of Proceeds. The Borrower shall apply the
proceeds of the Loan to make the payment due under the Sodak Stock Purchase
Agreement.
ARTICLE V
CONDITIONS TO LOAN
SECTION 5.1. Conditions to Loan. The obligation of the Lender to
fund the Loan shall be subject to the prior or concurrent satisfaction of each
of the conditions precedent set forth in this Section 5.1.
SECTION 5.1.1. Resolutions, etc. The Lender shall have received
from the Borrower a certificate, dated on or prior to the date on which the
Loan is made, of its Secretary or Assistant Secretary as to
(a) resolutions of its Board of Directors then in full
force and effect authorizing the execution, delivery and
performance of this Agreement, the Note and each other Loan
Document to be executed by it; and
(b) the incumbency and signatures of those of its
officers authorized to act with respect to this Agreement, the
Note and each other Loan Document executed by it,
upon which certificate the Lender may conclusively rely until it shall have
received a further certificate of the Secretary of the Borrower canceling
or amending such prior certificate.
SECTION 5.1.2. Delivery of Note. The Lender shall have received
its Note duly executed and delivered by the Borrower.
SECTION 5.1.3. Acquisition Consummated. The conditions
set forth in Section 6.1 and Section 6.2 of the Sodak Stock Purchase
Agreement regarding the obligations of the Parent, Sodak and Borrower to
consummate the Acquisition shall have been satisfied in all material
respects, and the Acquisition shall have been consummated in accordance
therewith to the satisfaction of the Lender.
SECTION 5.1.4. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, shall have been paid in
full (including, to the extent necessary, from proceeds of the Loan).
(b) The Borrower shall use all reasonable efforts from and after
the date hereof until the date on which the Loan is made to cause the
Xxxxxx Lease to remain in full force and effect and not to become part of
the Indebtedness to be Paid. If such efforts of the Borrower fail, then the
Lender agrees to take all reasonable efforts to cause Xxxxxx to keep the
Xxxxxx Lease in full force and effect and not to become part of the
Indebtedness to be Paid. If such efforts of the Lender fail, then the
Lender shall either guaranty the obligations of the Borrower under the
Xxxxxx Lease or take an assignment from Xxxxxx of the Xxxxxx Lease.
SECTION 5.1.5. Equity Infusion. The Borrower shall have received a
cash equity infusion from Parent in the amount of $25,367,000.
SECTION 5.1.6. Security Agreement. The Lender shall have received
executed counterparts of the Security Agreement, dated on or before the date
on which the Loan is made, duly executed by the Borrower, together with
(a) acknowledgment copies of properly filed Uniform
Commercial Code financing statements (Form UCC-1), dated a date
reasonably near to the date of the Loan, or such other evidence of
filing as may be acceptable to the Lender, naming the Borrower as
the debtor and the Lender as the secured party, or other similar
instruments or documents, filed under the Uniform Commercial Code
of all jurisdictions as may be necessary or, in the opinion of the
Lender, desirable to perfect the security interest of the Lender
pursuant to the Security Agreement;
(b) executed copies of proper Uniform Commercial Code
Form UCC-3 termination statements, if any, necessary to release
all Liens and other rights of any Person
(i) in any collateral described in the Security
Agreement previously granted by any Person, and
(ii) securing any of the Indebtedness identified
in Item 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule,
together with such other Uniform Commercial Code Form UCC-3
termination statements as the Lender may reasonably request from
such obligors; and
(c) certified copies of Uniform Commercial Code Requests
for Information or Copies (Form UCC-11), or a similar search
report certified by a party acceptable to the Lender, dated a date
reasonably near to the date of the Loan, listing all effective
financing statements which name the Borrower (under its present
name and any previous names including Sodak) as the debtor and
which are filed in the jurisdictions in which filings were made
pursuant to clause (a) above, together with copies of such
financing
statements (none of which (other than those described in clause
(a), if such Form UCC-11 or search report, as the case may be, is
current enough to list such financing statements described in
clause (a)) shall cover any collateral described in the Security
Agreement).
SECTION 5.1.7. Mortgage. The Lender shall have received
counterparts of the Mortgage, dated on or before the date on which the Loan
is made, duly executed by the Borrower, together with
(a) evidence of the completion (or satisfactory
arrangements for the completion) of all recordings and filings of
the Mortgage as may be necessary or, in the reasonable opinion of
the Lender, desirable effectively to create a valid, perfected
Lien against the properties purported to be covered thereby,
subject only to the Lien in favor of Xxxxxxx and Xxxxxx Xxxxx
described in Item 7.2.3 ("Liens") of the Disclosure Schedule;
(b) mortgagee's title insurance policies (and survey
required by the Lender in connection therewith) in favor of the
Lender in amounts and in form and substance and issued by
insurers, reasonably satisfactory to the Lender, with respect to
the property purported to be covered by the Mortgage, insuring
that title to such property is marketable and that the interests
created by the Mortgage constitute valid first Liens thereon free
and clear of all defects and encumbrances other than as approved
by the Lender, and such policies shall also include such
endorsements as the Lender shall request and shall be accompanied
by evidence of the payment in full of all premiums thereon; and
(c) such other approvals, opinions, or documents relating
to the Mortgage as the Lender may reasonably request.
SECTION 5.1.8. Ship Mortgage.
(a) The Lender shall have received from the Borrower a
duly executed Ship Mortgage, dated on or before the date on which
the Loan is made, on the Gaming Vessel; the Ship Mortgage shall
have been duly filed and recorded in the manner prescribed by the
laws of the United States of America; and the Borrower shall have
complied with and shall have provided to the Lender evidence
reasonably satisfactory to the Lender that the Borrower has
satisfied all requisite formalities and provisions of such laws so
that the Ship Mortgage constitutes a valid and enforceable first
"preferred mortgage" on the Gaming Vessel as provided in such laws
(including Chapter 313 of Title 46, United States Code), having
the effect and with the priority as therein provided.
(b) The Lender shall have received the report of the
Borrower's marine insurance broker required pursuant to Section
2.15.6(a) of the Ship Mortgage, together with such evidence of
insurance as is required by Section 2.15.6(b) of the Ship Mortgage
and such other evidence of the maintenance of the insurance
required by Section 2.15 of the Ship Mortgage as the Lender shall
reasonably request.
(c) The Lender shall have received such other approvals,
opinions, and documents relating to the Ship Mortgage as the
Lender may reasonably request.
SECTION 5.1.9. Opinions of Counsel. The Lender shall have received
opinions, dated the date of the Loan and addressed to the Lender, from
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, special counsel to the Borrower and
Parent, and from Lane & Xxxxxxxx, counsel to the Borrower and Parent, each
in form and substance satisfactory to the Lender.
SECTION 5.1.10. Closing Fees, Expenses, etc. The Lender shall
have received all fees, costs and expenses due and payable pursuant to
Section 3.3 and 9.3, if then invoiced.
Compliance with Warranties, No Default, etc. Both before and
after giving effect to the Loan (but, if any Default of the nature referred
to in Section 8.1.5 shall have occurred with respect to any other
Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true
and correct
(a) the representations and warranties set forth in
Article VI shall be true and correct in all material respects
(except as to representations and warranties which are qualified
as to materiality, which representations and warranties shall be
true in all respects), unless stated to relate solely to an early
date, in which case such representations and warranties shall be
true and correct as of such earlier date;
(b) except as disclosed by the Borrower to the Lender
pursuant to Section 6.7
(i) no labor controversy, litigation,
arbitration or governmental investigation or proceeding
shall be pending or, to the knowledge of the Borrower,
threatened against the Borrower which could reasonably be
expected to have a Material Adverse Effect or which
purports to affect the legality, validity or
enforceability of this Agreement, the Note or any other
Loan Document; and
(ii) no development shall have occurred in any
labor controversy, litigation, arbitration or
governmental investigation or proceeding disclosed
pursuant to Section 6.7 which could reasonably be
expected to materially adversely affect the consolidated
businesses, operations, assets, revenues, properties or
prospects of the Borrower; and
(c) no Default shall have then occurred and be
continuing, and the Borrower shall not be in material violation of
any law or governmental regulation or court order or decree.
SECTION 5.1.12. Borrowing Request. The Lender shall have received a
Borrowing Request for the Loan. Each of the delivery of such Borrowing
Request and the acceptance by the Borrower of the proceeds of the Loan
shall constitute a representation and warranty by the Borrower that on the
date of the Loan (both immediately before and after giving effect to such
Loan and the application of the proceeds thereof) the statements made in
Section 5.1.11 are true and correct in all material respects.
SECTION 5.1.13. Financial Condition. The Lender shall have
received an unaudited pro forma balance sheet of the Borrower as of
September 30, 1999 after giving effect to the Loan (if the Borrower is able
to produce such balance sheet after using all reasonable efforts).
SECTION 5.1.14. Satisfactory Legal Form; Other Documents. All
documents executed or submitted pursuant hereto by or on behalf of the
Borrower shall be satisfactory in form and substance to the Lender and its
counsel; the Lender and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Lender or its counsel
may reasonably request.
SECTION 5.1.15. Payoff Letters. The Lender shall have received
payoff letters with regard to Indebtedness to be paid, including without
limitation any such Indebtedness relating to the Xxxx Xxxxxxxxx Gaming
Facility.
SECTION 5.1.16. Amendment to CIBC Credit Agreement. An amendment
to the CIBC Credit Agreement shall have been executed by the Requisite
Lenders (as defined in the CIBC Credit Agreement) which, among other
things, contains the consent of such Requisite Lenders to the making of the
Loan by the Lender under this Agreement, provided that the Lender shall use
all reasonable efforts to cause such amendment to be executed.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan hereunder, the Borrower represents and warrants unto the
Lender as set forth in this Article VI.
SECTION 6.1. Organization, etc. The Borrower is a corporation
validly existing and in good standing under the laws of the State of its
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the nature of its business
requires such qualification, except where the failure to so qualify and be
in good standing could not reasonably be expected to have a Material
Adverse Effect, and has full corporate power and authority and holds all
requisite governmental licenses, permits and other approvals to enter into
and perform its Obligations under this Agreement, the Note and each other
Loan Document to which it is a party and to own and hold under lease its
property and to conduct its business substantially as currently conducted
by it.
SECTION 6.2 Due Authorization, Non-Contravention, etc.
The execution, delivery and performance by the Borrower of this Agreement,
the Note and each other Loan Document executed or to be executed by it,
and the Borrower's participation in the consummation of the Acquisition are
within the Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not
(a) contravene the Borrower's Organic Documents;
(b) contravene any material contractual restriction, law
or governmental regulation or court decree or order binding on or
affecting the Borrower, except where such contravention could not
reasonably be expected to have a Material Adverse Effect; or
(c) result in, or require the creation or imposition of,
any Lien on any of the Borrower's or the Parent's properties.
SECTION 6.3. Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or other Person is
required for the due execution, delivery or performance by the Borrower of
this Agreement, the Note or any other Loan Document or for the Borrower's
and Parent's participation in the consummation of the Acquisition, except
as described in Item 6.3 ("Government Approvals") of the Disclosure
Schedule, all of which have been duly obtained or made and are in full
force and effect or will be prior to the making of the Loan. The Borrower
is not an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, or a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and the
Note and each other Loan Document executed by the Borrower will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance
with their respective terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally.
SECTION 6.5. Financial Information. The pro-forma balance sheet of
the Borrower as at June 30, 1999, and the related statements of earnings
and cash flow of the Borrower (or the Xxxx Xxxxxxxxx Gaming Facility),
copies of which have been furnished to the Lender, have been prepared in
accordance with GAAP consistently applied, except as indicated on Item 6.5
("Financial Information") of the Disclosure Schedule, and present fairly in
all material respects the consolidated financial condition of the Borrower
as at the dates thereof and the results of the Borrower's operations for
the periods then ended, subject to the absence of complete footnotes and
subject to normal year-end adjustments.
SECTION 6.6. No Material Adverse Change. Since the date of the
financial statements described in Section 6.5, there has been no material
adverse change in the financial condition, operations, assets, business,
properties or prospects of the Borrower or the Xxxx Xxxxxxxxx Gaming
Facility, other than general economic conditions in the United States and
conditions affecting the gaming business generally.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no
pending or, to the knowledge of the Borrower, threatened litigation,
action, proceeding or labor controversy affecting the Borrower, or any of
its properties, assets or revenues, which could reasonably be expected to
have a Material Adverse Effect or which purports to affect the legality,
validity or enforceability of this Agreement, the Note or any other Loan
Document, except as disclosed in Item 6.7 ("Litigation") of the Disclosure
Schedule.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries.
SECTION 6.9. Ownership of Properties. The Borrower owns good and
marketable title to all of its properties and assets, real and personal,
tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of
all Liens, charges or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except as permitted pursuant
to Section 7.2.3 and as set forth in Item 7.2.3 ("Liens") of the Disclosure
Schedule.
SECTION 6.10. Taxes. The Borrower has filed, or caused to be
filed, all tax returns and reports required by law to have been filed by it
or on its behalf and has paid, or has made adequate provision for the
payment of, all taxes and governmental charges shown to be owing on such
tax returns and reports, except as shown on Item 6.10 ("Taxes") of the
Disclosure Schedule and except for any such taxes or charges which are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and
delivery of this Agreement and prior to the date of the Loan, no steps have
been taken to terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction
has occurred with respect to any Pension Plan which might result in the
incurrence by the Borrower of any material liability, fine or penalty.
Except as disclosed in Item 6.11 ("Employee Benefit Plans") of the
Disclosure Schedule, the Borrower has no contingent liability with respect
to any post-retirement benefit under a Welfare Plan, other than liability
for continuation coverage described in Part 6 of Title I of ERISA.
SECTION 6.12. Environmental Warranties. Except as set forth in
Item 6.12 ("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower have been, and
continue to be, owned or leased by the Borrower in material
compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or,
to the Borrower's knowledge, threatened
(i) claims, complaints, notices or requests for
information received by the Borrower with respect to any
alleged violation of any Environmental Law, or
(ii) complaints, notices or inquiries to the
Borrower regarding potential liability under any
Environmental Law;
(c) there have been no Releases of Hazardous Materials
at, on or under any property now or, to the Borrower's knowledge,
previously owned or leased by the Borrower that, singly or in the
aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect;
(d) the Borrower has been issued and is in material
compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and
necessary or desirable for its business;
(e) no property now or, to the Borrower's knowledge,
previously owned or leased by the Borrower is listed or proposed
for listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any
property now or, to the Borrower's knowledge, previously owned or
leased by the Borrower that, singly or in the aggregate, have, or
could reasonably be expected to have, a Material Adverse Effect;
(g) Borrower has not directly transported or directly
arranged for the transportation of any Hazardous Material to any
location which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or
local enforcement actions or other investigations which may lead
to material claims against the Borrower thereof for any remedial
work, damage to natural resources or personal injury, including
claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable
asbestos present at any property now or, to the knowledge of the
Borrower, previously owned or leased by the Borrower that, singly
or in the aggregate, have, or could reasonably be expected to
have, a Material Adverse Effect; and
(i) no conditions exist at, on or under any property now
or, to the knowledge of the Borrower, previously owned or leased
by the Borrower which, with the passage of time, or the giving of
notice or both, would give rise to material liability under any
Environmental Law, except where such conditions could not
reasonably be expected to have a Material Adverse Effect.
SECTION 6.13. Regulations U and X. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Loan will be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation U or X.
Terms for which meanings are provided in F.R.S. Board Regulation U or X or
any regulations substituted therefor, as from time to time in effect, are
used in this Section with such meanings.
SECTION 6.14. Accuracy of Information. No representation or
warranty of the Borrower contained in this Agreement, any Loan Document,
the Sodak Stock Purchase Agreement or any other document, certificate or
written statement furnished to the Lender or its representatives by or on
behalf of the Borrower for use in connection with this Agreement or any
Loan Document contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements contained
therein not misleading.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with the
Lender that, until the Commitment has terminated and all Obligations have
been paid and performed in full, the Borrower will perform the obligations
set forth in this Section 7.1.
SECTION 7 Financial Information, Reports, Notices, etc.
The Borrower will furnish, or will cause to be furnished, to the Lender copies
of the following financial statements, reports, notices and information:
(a) as soon as available and in any event within 45 days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Borrower, a balance sheet of the Borrower as of
the end of such Fiscal Quarter and statements of earnings and cash
flow of the Borrower for such Fiscal Quarter and for the period
commencing at the end of the previous Fiscal Year and ending with
the end of such Fiscal Quarter, certified by the chief financial
officer of the Borrower;
(b) as soon as available and in any event within 90 days
after the end of each Fiscal Year of the Borrower, a copy of the
annual audit report for such Fiscal Year for the Borrower
including therein a balance sheet of the Borrower as of the end of
such Fiscal Year and a statement of earnings and cash flow of the
Borrower for such Fiscal Year, in each case certified (without any
Impermissible Qualification) in a manner acceptable to the Lender
by Xxxxxx Xxxxxxxx, LLP or other independent public accountants
acceptable to the Lender, together with a certificate from such
accountants containing a computation
of, and showing compliance with, the financial ratio and
restriction contained in Section 7.2.4 and to the effect that, in
making the examination necessary for the signing of such annual
report by such accountants, they have not become aware of any
Default or Event of Default that has occurred and is continuing,
or, if they have become aware of such Default or Event of Default,
describing such Default or Event of Default and the steps, if any,
being taken to cure it;
(c) as soon as available and in any event within 45 days
after the end of each Fiscal Quarter, a certificate, executed by
the chief financial officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and
computations in all respects satisfactory to the Lender)
compliance with the financial covenant set forth in Section 7.2.4;
(d) as soon as possible and in any event within three
days after the occurrence of each Default, a statement of the
chief financial officer of the Borrower setting forth details of
such Default and the action which the Borrower has taken and
proposes to take with respect thereto;
(e) as soon as possible and in any event within three
days after (x) the occurrence of any adverse development with
respect to any litigation, action, proceeding or labor controversy
described in Section 6.7 or (y) the commencement of any labor
controversy, litigation, action or proceeding of the type
described in Section 6.7, notice thereof and copies of all
documentation relating thereto;
(f) promptly after the sending or filing thereof, copies
of all reports which the Borrower sends to any of its
securityholders, and all reports and registration statements which
the Borrower files with the Securities and Exchange Commission or
any national securities exchange;
(g) immediately upon becoming aware of the institution of
any steps by the Borrower or any other Person to terminate any
Pension Plan, or the failure to make a required contribution to
any Pension Plan if such failure is sufficient to give rise to a
Lien under section 302(f) of ERISA, or the taking of any action
with respect to a Pension Plan which could result in the
requirement that the Borrower furnish a bond or other security to
the PBGC or such Pension Plan, or the occurrence of any event with
respect to any Pension Plan which could result in the incurrence
by the Borrower of any material liability, fine or penalty, or any
material increase in the contingent liability of the Borrower with
respect to any post-retirement Welfare Plan benefit, notice
thereof and copies of all documentation relating thereto; and
(h) such other information respecting the financial
condition or operations of the Borrower as the Lender may from
time to time reasonably request.
SECTION 7.1.2. Compliance with Laws, etc. The Borrower will comply
in all material respects with all applicable laws, rules, regulations and
orders, such compliance to include (without limitation):
(a) the maintenance and preservation of its corporate
existence and qualification as a foreign corporation; and
(b) the payment, before the same become delinquent, of
all taxes, assessments and governmental charges imposed upon it or
upon its property except to the extent being diligently contested
in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 7.1.3. Maintenance of Properties. The Borrower will,
consistent with past practice, maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make necessary
and proper repairs, renewals and replacements so that its business carried
on in connection therewith may be properly conducted at all times unless
the Borrower determines in good faith that the continued maintenance of any
of its properties is no longer economically desirable.
SECTION 7.1.4. Insurance. The Borrower will use commercially
reasonable efforts to maintain or cause to be maintained with responsible
insurance companies insurance with respect to its properties and business
(including business interruption insurance) against such casualties and
contingencies and of such types and in such amounts as is customary in the
case of similar businesses and will, upon request of the Lender, furnish to
the Lender at reasonable intervals a certificate of an Authorized Officer
of the Borrower setting forth the nature and extent of all insurance
maintained by the Borrower in accordance with this Section.
SECTION 7.1.5. Books and Records. The Borrower will keep books and
records which accurately reflect all of its business affairs and
transactions and permit the Lender or any of its representatives, upon
reasonable advance written notice and at reasonable times and intervals, to
visit all of its offices, to discuss its financial matters with its
officers and independent public accountant (and the Borrower hereby
authorizes such independent public accountant to discuss the Borrower's
financial matters with the Lender or its representatives whether or not any
representative of the Borrower is present) and to examine (and, at the
expense of the Borrower, photocopy extracts from) any of its books or other
corporate records. The Borrower shall pay any reasonable fees of such
independent public accountant incurred in connection with the Lender's
exercise of its rights pursuant to this Section.
SECTION 7.1.6. Environmental Covenant. The Borrower will,
(a) use and operate all of its facilities and properties
in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and
remain in material compliance therewith, and handle all Hazardous
Materials in material compliance with all applicable Environmental
Laws;
(b) immediately notify the Lender and provide copies upon
receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or
compliance with Environmental Laws; and
(c) provide such information and certifications which the
Lender may reasonably request from time to time to evidence
compliance with this Section 7.1.6.
SECTION 7.1.7. Year 2000 Compliance. (a) The Borrower agrees to
(i) prior to or promptly following the date on which the Loan is made,
initiate a review and assessment of all areas within its business and
operations that could be adversely affected by the "Year 2000 Problem"
(that is, the risk that computer applications used by the Borrower may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (ii) develop
a plan and timeline for addressing the Year 2000 Problem on a timely basis,
and (iii) implement that plan in accordance with that timetable.
(b) The Borrower agrees to use commercially reasonable efforts to
cause all computer applications that are material to its business and
operations to, on a timely basis, be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant"), except to the extent that a failure to
do so could not reasonably be expected to have a Material Adverse Effect.
(c) The Borrower will promptly notify Lender in the event the
Borrower discovers or determines that any computer application (including
those of its suppliers and vendors) that is material to its business and
operations will not be Year 2000 Compliant on a timely basis, except to the
extent that such failure to be Year 2000 Compliant could not reasonably be
expected to have a Material Adverse Effect.
SECTION 7.2. Negative Covenants. The Borrower agrees with the
Lender that, until the Commitment has terminated and all Obligations have
been paid and performed in full, the Borrower will perform the obligations
set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not engage in
any business activity, except the operation of the Xxxx Xxxxxxxxx Gaming
Facility in Marquette, Iowa and such activities as may be incidental or related
thereto.
SECTION 7.2.2. Indebtedness. The Borrower will not create, incur,
assume or suffer to exist or otherwise become or be liable in respect of any
Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of the Loan and other
Obligations;
(b) until the date of the Loan, Indebtedness identified
in Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure
Schedule;
(c) Indebtedness existing as of the Effective Date which
is identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the
Disclosure Schedule;
(d) unsecured Indebtedness incurred in the ordinary
course of business (including open accounts extended by suppliers
on normal trade terms in connection with purchases of goods and
services, but excluding Indebtedness incurred through the
borrowing of money or Contingent Liabilities);
(e) Indebtedness in respect of Capital Expenditures in an
aggregate amount not to exceed $5,400,000 (without regard to the
period in which such Capital Expenditures are incurred); and
(f) any guaranty by the Borrower of the notes issued
under or pursuant to the Indenture, as supplemented, and the
Borrower's execution of a supplemental indenture to jointly and
severally guaranty, on a senior basis, the obligations under the
Indenture.
provided, however, that no Indebtedness otherwise permitted by
clauses (d) or (e) shall be permitted if, after giving effect to
the incurrence thereof, any Default shall have occurred and be
continuing.
SECTION 7.2.3. Liens. The Borrower will not create, incur,
assume or suffer to exist any Lien upon any of its property, revenues or
assets, whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations, granted
pursuant to any Loan Document;
(b) Liens securing payment of Indebtedness of the type
permitted and described in clauses (b) and (e) of Section 7.2.2;
(c) Liens granted prior to the Effective Date to secure
payment of Indebtedness of the type permitted and described in
clause (c) of Section 7.2.2;
(d) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;
(e) Liens of carriers, warehousemen, mechanics,
materialmen and landlords incurred in the ordinary course of
business for sums not overdue or being diligently contested in
good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books;
(f) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or
other forms of governmental
insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or
to secure obligations on surety or appeal bonds;
(g) judgment Liens in existence less than 30 days after
the entry thereof or with respect to which execution has been
stayed or the payment of which is covered in full (subject to a
customary deductible) by insurance maintained with responsible
insurance companies;
(h) Liens described on Item 7.2.3 ("Liens") of the
Disclosure Schedule; and
(i) easements, rights of way, restrictions, minor defects
or irregularities in title and other similar Liens not interfering
in any material respect with the ordinary conduct of the business
of the Borrower.
SECTION 7.2.4. Financial Condition. The Borrower will not permit
EBITDA as of any Fiscal Quarter end to be less than $8,000,000 for the prior
trailing four Fiscal Quarters ending on such date.
SECTION 7.2.5. Investments. The Borrower will not make, incur,
assume or suffer to exist any Investment in any other Person, except:
(a) Investments existing on the Effective Date and
identified in Item 7.2.5(a) ("Ongoing Investments") of the
Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) Investments permitted as Indebtedness pursuant to
Section 7.2.2;
provided, however, that
(d) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such
requirements; and
(e) no Investment otherwise permitted by clause (d) shall
be permitted to be made if, immediately before or after giving
effect thereto, any Default shall have occurred and be continuing.
SECTION 7.2.6. Restricted Payments, etc. On and at all times
after the Effective Date:
(a) the Borrower will not declare, pay or make any
dividend or distribution (in cash, property or obligations) on any
shares of any class of capital stock (now or
hereafter outstanding) of the Borrower or on any warrants, options
or other rights with respect to any shares of any class of capital
stock (now or hereafter outstanding) of the Borrower (other than
dividends or distributions payable in its common stock or warrants
to purchase its common stock or splitups or reclassifications of
its stock into additional or other shares of its common stock) or
apply any of its funds, property or assets to the purchase,
redemption, sinking fund or other retirement of any shares of any
class of capital stock (now or hereafter outstanding) of the
Borrower, or warrants, options or other rights with respect to any
shares of any class of capital stock (now or hereafter
outstanding) of the Borrower;
(b) the Borrower will not make any deposit for any of the
foregoing purposes.
SECTION 7.2.7. Capital Expenditures, etc. The Borrower will not
make or commit to make Capital Expenditures in any period, except (i)
Capital Expenditures related to the purchase of a new mooring barge in an
aggregate amount not to exceed $1,700,000 and (ii) other Capital
Expenditures which do not aggregate in excess of the amount set forth below
opposite such period:
Period Amount
------ ------
4th Fiscal Quarter 1999 $975,000
Fiscal Year 2000 $2,100,000
SECTION 7.2.8. Rental Obligations. The Borrower will not enter
into at any time any arrangement which does not create a Capitalized Lease
Liability and which involves the leasing by the Borrower from any lessor of
any real or personal property (or any interest therein), except as
disclosed on Item 7.2.8 ("Rental Obligations") of the Disclosure Schedule
and arrangements which, together with all other such arrangements which
shall then be in effect, will not require the payment of an aggregate
amount of rentals by the Borrower in excess of (excluding escalations
resulting from a rise in the consumer price or similar index) $720,000 for
any Fiscal Year or $2,160,000 during the full remaining term of such
arrangements; provided, however, that any calculation made for purposes of
this Section shall exclude any amounts required to be expended for
maintenance and repairs, insurance, taxes, assessments, and other similar
charges.
SECTION 7.2.9. Take or Pay Contracts. The Borrower will not enter
into or be a party to any arrangement for the purchase of materials,
supplies, other property or services if such arrangement by its express
terms requires that payment be made by the Borrower regardless of whether
such materials, supplies, other property or services are delivered or
furnished to it.
SECTION 7.2.10. Consolidation, Merger, etc. Except as necessitated
by the Acquisition or the Isle Merger, the Borrower shall not liquidate or
dissolve, consolidate with, or merge into or with, any other corporation,
or purchase or otherwise acquire all or substantially all of the assets of
any Person (or of any division thereof).
SECTION 7.2.11. Asset Dispositions, etc. The Borrower will not
sell, transfer, lease, contribute or otherwise convey, or grant options,
warrants or other rights with respect to, all or any substantial part of
its assets to any Person other than in the ordinary course of business and
other than the disposal of damaged or obsolete property if such property is
no longer necessary for the operation of the Borrower's business.
SECTION 7.2.12. Modification of Certain Agreements. The Borrower
will not consent to any amendment, supplement or other modification of any of
the terms or provisions contained in, or applicable to, the Sodak Stock
Purchase Agreement.
SECTION 7.2.13. Transactions with Affiliates. The Borrower will
not enter into, or cause, suffer or permit to exist any arrangement or
contract with any of its other Affiliates unless such arrangement or
contract is fair and equitable to the Borrower and is an arrangement or
contract of the kind which would be entered into by a prudent Person in the
position of the Borrower with a Person which is not one of its Affiliates.
SECTION 7.2.14. Negative Pledges, etc. The Borrower will not enter
into any agreement (excluding this Agreement, any other Loan Document and
any agreement governing any Indebtedness permitted either by clause (b) of
Section 7.2.2 as in effect on the Effective Date or by clause (d) of
Section 7.2.2 as to the assets financed with the proceeds of such
Indebtedness) prohibiting the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter acquired, or
the ability of the Borrower to amend or otherwise modify this Agreement or
any other Loan Document.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an
"Event of Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall
default in the payment or prepayment when due of any principal of or
interest on the Loan, or the Borrower shall default (and such default shall
continue unremedied for a period of three Business Days) in the payment
when due of any fee or of any other Obligation.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty
of the Borrower made or deemed to be made hereunder or in any other Loan
Document or any other writing or certificate furnished by or on behalf of
the Borrower to the Lender for the purposes of or in connection with this
Agreement or any such other Loan Document (including any certificates
delivered pursuant to Article V) is or shall be incorrect when made in any
material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and
Obligations. The Borrower shall default in any material respect in the due
performance and observance of any of its obligations under Section 7.2
(except Section 7.2.4), and such default shall continue unremedied for a
period of 5 Business Days after written notice thereof shall have been
given to the Borrower by the Lender.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations.
The Borrower shall default in any material respect in the due performance
and observance of any other agreement contained herein or in any other Loan
Document, and such default shall continue unremedied for a period of 15
Business Days after written notice thereof shall have been given to the
Borrower by the Lender.
SECTION 8.1.5. Default on Other Indebtedness. A default shall
occur in the payment when due (subject to any applicable grace period),
whether by acceleration or otherwise, of any Indebtedness (other than
Indebtedness described in Section 8.1.1) of the Borrower having a principal
amount, individually or in the aggregate, in excess of $1,000,000, or a
default shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness if the effect of such default
is to accelerate the maturity of any such Indebtedness or to permit the
holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause such Indebtedness to become due and payable prior to its
expressed maturity in accordance with the terms of such Indebtedness.
SECTION 8.1.6. Judgments. Any judgment or order for the payment
of money in excess of $1,000,000 shall be rendered against the Borrower and
either
(a) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order; or
(b) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect.
SECTION 8.1.7. Pension Plans. Any of the following events shall
occur with respect to any Pension Plan:
(a) the institution of any steps by the Borrower, any
member of its Controlled Group or any other Person to terminate a
Pension Plan if, as a result of such termination, the Borrower
could be required to make a contribution to such Pension Plan, or
could reasonably expect to incur a liability or obligation to such
Pension Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA.
SECTION 8.1.8. Control of the Borrower. Any Change in Control
shall occur with respect to the Borrower.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower shall
(a) become insolvent or generally fail to pay, or admit
in writing its inability or unwillingness to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or other
custodian for the Borrower or any property of the Borrower, or
make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for the
Borrower or for a substantial part of the property of the
Borrower, and such trustee, receiver, sequestrator or other
custodian shall not be discharged within 60 days, provided that
the Borrower hereby expressly authorizes the Lender to appear in
any court conducting any relevant proceeding during such 60-day
period to preserve, protect and defend its rights under the Loan
Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect of
the Borrower and, if any such case or proceeding is not commenced
by the Borrower, such case or proceeding shall be consented to or
acquiesced in by the Borrower or shall result in the entry of an
order for relief or shall remain for 60 days undismissed, provided
that the Borrower hereby expressly authorizes the Lender to appear
in any court conducting any such case or proceeding during such
60-day period to preserve, protect and defend its rights under the
Loan Documents; or
(e) take any corporate action authorizing, or in
furtherance of, any of the foregoing.
SECTION 8.1.10. Impairment of Security, etc. (a) Any Loan
Document, or any Lien granted thereunder, shall (except in accordance with
its terms), in whole or in part in any material respect, terminate, cease
to be effective or cease to be the legally valid, binding and enforceable
obligation of the Borrower; (b) the Borrower, or any other party shall,
directly or indirectly, contest in any manner such effectiveness, validity,
binding nature or enforceability; (c) or any Lien securing any Obligation
shall, in any material respect, cease to be a perfected first priority
Lien, subject only to those exceptions expressly permitted by such Loan
Document.
SECTION 8.1.11. Loss of a Material License. The Borrower shall
lose any license (and shall exhaust all appeal procedures to regain such
license) that could reasonably be expected to have a Material Adverse
Effect.
SECTION 8.2. Action if Nonpayment, etc. If any Event of Default
described in Sections 8.1.1, 8.1.3, 8.1.5, 8.1.6, 8.1.8, 8.1.10 or 8.1.11
shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Lender may by notice to the Borrower declare all or any
portion of the outstanding principal amount of the Loan and other monetary
Obligations to be due and payable and/or the Commitment (if not theretofore
terminated) to be terminated, whereupon the outstanding principal amount of
such Loan and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further notice,
demand or presentment, and/or, as the case may be, the Commitment (if not
theretofore terminated) shall terminate.
SECTION 8.3. Action if Bankruptcy. If any Event of Default
described in clauses (a) through (d) of Section 8.1.9 shall occur, the
Commitment (if not theretofore terminated) shall automatically terminate
and the outstanding principal amount of the Loan and all other monetary
Obligations shall automatically be and become immediately due and payable,
without notice or demand.
SECTION 8.4. Action if Other Event of Default. If any Event of
Default (other than any Event of Default listed in Sections 8.2 and 8.3
above) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Obligations shall bear interest at the post-maturity rate
as described in Section 3.2.2 until such Event of Default has been cured or
waived by the Lender or is no longer continuing.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing
and consented to by the Borrower and the Lender. No failure or delay on the
part of the Lender or the holder of the Note in exercising any power or
right under this Agreement or any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power
or right preclude any other or further exercise thereof or the exercise of
any other power or right. No notice to or demand on the Borrower in any
case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by the Lender or the holder of the
Note under this Agreement or any other Loan Document shall, except as may
be otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 9.2. Notices. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall
be in writing or by facsimile and addressed, delivered or transmitted to
such party at its address, or facsimile number set forth below its
signature hereto or at such other address or facsimile number as may be
designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received;
any notice, if transmitted by facsimile, shall be deemed given when
transmitted.
SECTION 9.3. Payment of Costs and Expenses. The Borrower agrees to
pay on demand all reasonable expenses of the Lender (including the fees and
out-of-pocket expenses of counsel to the Lender and of local counsel, if
any, who may be retained by counsel to the Lender) up to $___________ in
connection with
(a) the negotiation, preparation, execution and delivery
of this Agreement and of each other Loan Document, including
schedules and exhibits, and any amendments, waivers, consents,
supplements or other modifications to this Agreement or any other
Loan Document as may from time to time hereafter be required,
whether or not the transactions contemplated hereby are
consummated, and
(b) the filing, recording, refiling or rerecording of the
Mortgage and the Security Agreement and/or any Uniform Commercial
Code financing statements relating thereto and all amendments,
supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed
or recorded or refiled or rerecorded by the terms hereof or of the
Mortgage or the Security Agreement, and
(c) the preparation and review of the form of any
document or instrument relevant to this Agreement or any other
Loan Document.
The Borrower further agrees to pay, and to save the Lender harmless from
all liability for, any stamp or other taxes which may be payable in
connection with the execution or delivery of this Agreement, the borrowings
hereunder, or the issuance of the Note or any other Loan Documents. The
Borrower also agrees to reimburse the Lender upon demand for all reasonable
out-of-pocket expenses (including attorneys' fees and legal expenses)
incurred by the Lender in connection with (x) the negotiation of any
restructuring or "work-out", whether or not consummated, of any Obligations
and (y) the enforcement of any Obligations.
SECTION 9.4. Indemnification. In consideration of the execution
and delivery of this Agreement by the Lender and the extension of the
Commitment, the Borrower hereby indemnifies, exonerates and holds the
Lender and each of its officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the
action for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a
result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of any Loan;
(b) the entering into and performance of this Agreement
and any other Loan Document by any of the Indemnified Parties
(including any action brought by or on behalf of the Borrower as
the result of any determination by the Lender pursuant to Article
V not to fund the Loan);
(c) any investigation, litigation or proceeding related
to the Acquisition;
(d) any investigation, litigation or proceeding related
to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment or the Release by
the Borrower of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases
from, any real property owned or operated by the Borrower thereof
of any Hazardous Material (including any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising
under any Environmental Law), regardless of whether caused by, or
within the control of, the Borrower,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law.
SECTION 9.5. Survival. The obligations of the Borrower under
Sections 4.1, 9.3 and 9.4 shall in each case survive any termination of
this Agreement, the payment in full of all Obligations and the termination
of all Commitments. The representations and warranties made by the Borrower
in this Agreement and in each other Loan Document shall survive the
execution and delivery of this Agreement and each such other Loan Document.
SECTION 9.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or such Loan
Document or affecting the validity or enforceability of such provision in
any other jurisdiction.
SECTION 9.7. Headings. The various headings of this Agreement and
of each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 9.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts,
each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement. This Agreement shall
become effective when counterparts hereof executed on behalf of the
Borrower and the Lender (or notice thereof satisfactory to the Lender)
shall have been received by the Lender and notice thereof shall have been
given by the Lender to the Borrower.
SECTION 9.9. Governing Law; Entire Agreement. THIS AGREEMENT,
THE NOTE AND EACH OTHER LOAN DOCUMENT (OTHER THAN THE MORTGAGE)
SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the Note
and the other Loan Documents constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto.
SECTION 9.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that neither the
Borrower nor the Lender may assign or transfer its rights or obligations
hereunder without the prior written consent of the other party (other than
the collateral assignment of the Note by the Lender to CIBC as required by
an existing credit agreement between the Lender and CIBC).
SECTION 9.11.Confidentiality. The Lender shall hold all non-public
information (which has been identified as such by the Borrower) obtained
pursuant to the requirements of this Agreement in accordance with its
customary procedures for handling confidential information of this nature
and in any event may make disclosure to any of its regulators, Affiliates,
outside auditors, counsel and other professional advisors in connection
with this Agreement or as reasonably required by any bona fide transferee,
participant or assignee or as required or requested by any governmental
agency or representative thereof or pursuant to legal process; provided,
however, that
(a) unless specifically prohibited by applicable law or
court order, the Lender shall notify the Borrower of any request
by any governmental agency or representative thereof (other than
any such request in connection with an examination of the
financial condition of the Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure
of such information;
(b) prior to any such disclosure pursuant to this Section
9.11, the Lender shall require any such bona fide transferee,
participant and assignee receiving a disclosure of non-public
information to agree in writing
(i) to be bound by this Section 9.11; and
(ii) to require such Person to require any other
Person to whom such Person discloses such non-public
information to be similarly bound by this Section 9.11;
and
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, the
Lender shall not be obligated or required to return any materials
furnished by the Borrower.
SECTION 9.12. Other Transactions. Nothing contained herein shall
preclude the Lender from engaging in any transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Affiliates in which the Borrower or such Affiliate
is not restricted hereby from engaging with any other Person.
SECTION 9.13 Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
LENDER'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR
THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN
OR WITHOUT OF THE STATE OF NEW YORK. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE
BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 9.14. Waiver of Jury Trial. THE LENDER AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS
AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 9.15. Limitation of Liability.
(a) Notwithstanding any provision in the Loan Documents
to the contrary, except as set forth in subsections (b) and (c),
the Borrower shall not be personally liable for payment of the
Loan or performance of the Obligations and the Loan is intended to
be secured by Liens in favor of the Lender which are purchase
money security interests.
(b) The limitation of liability in Section 9.15(a) will
not affect or impair (i) the lien of the Mortgage, the Ship
Mortgage or the Security Agreement or the Lender's other rights
and remedies under the Loan Documents, including the Lender's
right to commence an action to foreclose (by judicial foreclosure,
power of sale or otherwise) any Lien or security interest the
Lender has under the Loan Documents; (ii) the validity of the Loan
Documents or the Obligations or (iii) the Lender's right to
present and collect on any letter of credit or other credit
enhancement document held by the Lender in connection with the
Obligations.
(c) The following are excluded and excepted from the
limitation of liability of the Borrower in Section 9.15(a) and the
Lender may recover personally against the Borrower for the
following:
(i) all losses suffered and liabilities and
expenses incurred by the Lender relating to any fraud or
intentional misrepresentation or omission by the Borrower
or any of the officers or directors of the Borrower in
connection with (A) the performance of any of the
conditions to the Lender making the Loan; (B) any
inducements to the Lender to make the Loan; (C) the
execution and delivery of the Loan Documents; (D) any
certificates, representations or warranties given in
connection with the Loan; or (E) the Borrower's
performance of the Obligations;
(ii) the cost of remediation of any
environmental activity affecting the property subject to
the Mortgage, any diminution in the value of the property
subject to the Mortgage arising from any environmental
activity affecting the property subject to the Mortgage
and any other losses suffered and liabilities and
expenses incurred by the Lender relating to a default under
Section 6.12 or Section 7.1.6;
(iii) the replacement cost of any fixtures or
personal property removed by the Borrower or its
Affiliates from the property subject to the Mortgage
after an Event of Default occurs and is continuing;
(iv) all losses suffered and liabilities and
expenses incurred by the Lender relating to any acts or
omissions by the Borrower that result in waste (including
economic and non-physical waste) on the property subject
to the Mortgage;
(v) all proceeds that are not applied in
accordance with the Mortgage or not paid to the Lender as
required under the Mortgage; and
(vi) all losses suffered and liabilities and
expenses incurred by the Lender relating to any default
by the Borrower under any of the provisions of any Loan
Document relating to ERISA.
(d) Nothing under Section 9.15(a) will be deemed to be a
waiver of any right which the Lender may have under Section
506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy
Code or under any other applicable law relating to bankruptcy or
insolvency to file a claim for the full amount of the Obligations
or to require that all collateral will continue to secure all of
the Obligations in accordance with the Loan Documents.
SECTION 9.16. Interest Rates.
(a) It is the intention of the parties hereto that the
Loan made hereunder shall conform strictly to applicable usury
laws. Accordingly, none of the terms and provisions contained in
this Agreement or any of the other Loan Documents shall ever be
construed to create a contract to pay interest to the Lender for
the use, forbearance or detention of money at a rate in excess of
the highest lawful rate applicable (the "Maximum Lawful Rate");
for purposes of this Section 9.16, "interest" shall include the
aggregate of all charges or other consideration which constitute
interest under applicable laws (whether or not denominated as
interest) and are contracted for, taken, reserved, charged or
received under this Agreement or the other Loan Documents or
otherwise in connection with the transactions contemplated by this
Agreement and the other Loan Documents. If as a result of
prepayment, acceleration of maturity or otherwise, the effective
rate of interest which would otherwise be payable to the Lender
under this Agreement or any other Loan Document would exceed the
Maximum Lawful Rate for the period during which the principal
amount of the Loan was outstanding, or if the Lender shall receive
moneys or other consideration that are deemed to constitute
interest that would increase the effective rate of interest
payable by the Borrower to the Lender under this Agreement or any
other Loan Document to a rate in excess of the Maximum Lawful Rate
for the period during which the principal amount of the Loan was
outstanding, then (i) the amount of interest that would otherwise
be payable by the Borrower to the Lender under this Agreement and
the other Loan Documents shall be reduced to the Maximum Lawful
Rate, and (ii) any interest paid by the Borrower to the Lender in
excess of the Maximum Lawful Rate shall be credited by the Lender
as an optional prepayment of the Loan and, thereafter, shall be
returned to the Borrower. All calculations of the rate or amount
of interest contracted for, taken, reserved, charged or received
by the Lender under this Agreement and the other Loan Documents
that are made for the purpose of determining whether such rate or
amount exceeds the Maximum Lawful Rate shall be made, to the
extent permitted by applicable law, by amortizing, prorating,
allocating and spreading during the full stated term of the Loan
owed to the Lender.
(b) If at any time and from time to time (i) the amount
of interest payable to the Lender on any date would otherwise
exceed the Maximum Lawful Rate, the amount of interest payable to
the Lender shall be limited to the Maximum Lawful Rate pursuant to
paragraph (a) above and (ii) in respect of any subsequent interest
computation period, the amount of interest otherwise payable to
the Lender would be less than the amount of interest payable to
the Lender computed at the Maximum Lawful Rate, then the amount of
interest payable in respect of such subsequent computation period
shall be computed at the Maximum Lawful Rate until the earlier to
occur of (x) the date upon which the total amount of interest
payable to the Lender shall equal the total amount of interest
that would have been payable to the Lender if the total amount of
interest had been computed without giving effect to paragraph (a)
above, or (y) payment in full of the Loan held by the Lender.
SECTION 9.17. Iowa Gaming Licenses. No interest of the Lender created
or arising under this Agreement or any other Loan Document shall attach to
any gaming license issued by the State of Iowa.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
the day and year first above written.
GAMBLERS SUPPLY MANAGEMENT COMPANY
By:---------------------------------------------
Title:
Address: ------------------------------------
------------------------------------
Facsimile No.:----------------------------------
Attention: -------------------------------------
with copies to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
ISLE OF CAPRI CASINOS, INC.
By:----------------------------------------------
Title:
Address: 711 Xx. Xxxxxx Xxxxxx Xxxx, Xx. Boulevard
Biloxi, Mississippi 39530
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with copies to:
Isle of Capri Casinos, Inc.
0000 Xxxxxxxxx Xxxxxxxxx, X.X.
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
SCHEDULE I
Disclosure Schedule
for
U.S. $16,300,000
CREDIT AGREEMENT
dated as of October __, 1999
between
GAMBLERS SUPPLY MANAGEMENT COMPANY
as the Borrower,
and
ISLE OF CAPRI CASINOS, INC.
as the Lender
The following schedules refer to the Credit Agreement, dated as of
October __, 1999 (the "Credit Agreement"), Gamblers Supply Management
Company, as the Borrower, and Isle of Capri Casinos, Inc., as the Lender.
This Disclosure Schedule is qualified in its entirety by references to
specific provisions of the Credit Agreement and is not intended to
constitute, and shall not be construed as constituting any representations
or warranties of the Borrower, except as and to the extent provided in the
Credit Agreement.
To the extent more than one representation and warranty contained in
the Credit Agreement require the same disclosure, the appearance of such
disclosure on any single item herein shall serve as disclosure for all
other representations and warranties to which such disclosure applies.
Except to the extent explicitly provided in the respective schedule,
inclusion of any item in the schedules: (1) does not represent a
determination by the Borrower that such item is material nor shall it be
deemed to establish a standard of materiality (it being the intent that
Borrower shall not be penalized for having disclosed more than may be
required by the terms of the Credit Agreement), (2) does not represent a
determination by the Borrower that such item did not arise in the ordinary
course of business, and (3) shall not constitute, or be deemed to be, an
admission concerning such item by the Borrower. The items in the schedules
are descriptions of instruments or brief summaries of certain aspects of
the Borrower's business. Such descriptions and summaries are qualified in
their entirety by reference to the more detailed information in documents
previously delivered or made available to the Lender and its
representatives.
Capitalized terms used but not defined herein shall have the same
meanings ascribed to them in the Credit Agreement. The headings in the
following schedules are for reference only and shall not affect the
disclosures contained therein.
Item 6.3
Government Approvals
The Borrower and Sodak Gaming, Inc. ("Sodak") must notify the U.S. Coast
Guard prior to a change in ownership of the Xxxx Xxxxxxxxx Riverboat.
The Borrower and Sodak must file with the Federal Trade Commission and
the Antitrust Division of the Department of Justice a premerger
notification and report form under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976.
The Iowa Racing and Gaming Commission must determine that Parent is a
suitable buyer and approve the Parent's purchase of the shares of the
Borrower's stock from Sodak.
Item 6.5
Financial Information
The Borrower has settled a dispute relating to an Iowa sales/use tax
audit for the 1995 and 1996 tax years and has paid $150,000 in final
settlement thereof.
Item 6.7
Litigation
The Iowa Department of Natural Resources (the "DNR") has notified
Sodak and the Borrower that a treatment agreement is required to be entered
into between the City of Marquette and the owner of the Xxxx Xxxxxxxxx
Riverboat, whereby the latter shall quantify and describe its discharge to
the City and the City agrees to treat such discharge based on the disclosed
volume and quantities.
It is anticipated that pursuant to the treatment agreement and a side
agreement relating to rate structure, increased treatment rates and
surcharges will be charged to the Riverboat Complex. The treatment
agreement and side agreement have not yet been concluded. No draft of the
side agreement has been prepared or exchanged between the parties as yet.
The following actions are pending:
Case: Plaintiffs Xxxxx Xxxxxxxx and Xxxx Xxxxxxxx v. Defendants Gamblers
Supply Management Company and Sodak Gaming Iowa, Inc. a/k/a Sodak Gaming, Inc.
Xxxxx Xxxxxxxx discharge: October 2, 1996
Xxxx Xxxxxxxx discharge: July 28, 1996
Date Filed: October 1, 1997
8
Court and File Number: Xxxxxxx County Iowa Xxxxxxxx Xxxxx,
Xxxx Xx. XXXX000000
Claim and Demand: Plaintiffs allege wrongful discharge.
No specific monetary amount
of damages reported.
Insurance Company: Xxxx Xxxxxxxxx'x insurance carrier has
declined coverage.
Sodak Counsel: E. Xxxxx Xxxxxx
Dubuque, Iowa
(000) 000-0000
Status/outcome: Summary Judgment was entered in favor of
Defendants, Plaintiffs filed a Notice of
Appeal as of October 9, 1998. Briefs have
been filed with Iowa Supreme Court, the oral
arguments are scheduled for March 2000.
Case: Plaintiff Xxxxxxx Xxxxx v. Defendant Xxxx Xxxxxxxxx Riverboat Casino
---------------------------------------------------------------------
Date of Occurrence: July 13, 1995
Date Filed: July 11, 1997
Court and File Number: Xxxxxxx County Iowa Xxxxxxxx Xxxxx, Xxxx
Xx. XXXX000000
Claim and Demand: Plaintiff claims she suffered serious and
permanent personal injuries. Plaintiff's
initial settlement demand is in the amount of
$85,000.
Insurance Company: Reliance Insurance Company
Xxxxxx Xxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Sodak Counsel: E. Xxxxx Xxxxxx
Dubuque, Iowa
(000) 000-0000
Status/outcome: Pending
Case: Plaintiff Xxxxxx Xxxxxx x. Xxxxx Gaming Iowa, Inc., Gamblers
Supply Management Company and Upper Mississippi Gaming Corporation
----------------------------------------------------------------------------
Date of Occurrence: September 18, 1996
Date Filed: March 5, 1998
Court and File Number: U.S. District Court Northern District of Iowa
Eastern Division, Case No. C98-1009-MIM.
Claim and Demand: Personal Injury Claim. No specific monetary
amount of damages reported.
Insurance Company: Zurich American Insurance Company
Xxxxx X. Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
Sodak Counsel: E. Xxxxx Xxxxxx
Dubuque, Iowa
(000) 000-0000
Xxxxxxx Xxxx Xxxxxxxxx
Chicago, IL
(000) 000-0000
Status/outcome: Pending
Case: Plaintiff Xxxxxx Xxxxxxxx v. Defendant Xxxx Xxxxxxxxx
------------------------------------------------------
Date Filed: September 21, 1998
Court and File Number: United States District Court for the
Northern District of Iowa, Case
No. C98-1033-MIM.
Claim and Demand: Xxxxx Act Claim. No specific monetary amount
reported. of damages
Insurance Company: Zurich American Insurance Company
Xxxxx Xxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
(000) 000-0000
Sodak Counsel: E. Xxxxx Xxxxxx
Dubuque, Iowa
(000) 000-0000
Status/outcome: Pending
Case: Plaintiff Xxxxxxx X. Xxxxxxxxx v. Defendant Xxxx Xxxxxxxxx
----------------------------------------------------------
Date Filed: November 23, 1998
Court and File Number: United States District Court for the Western
District of Wisconsin,
Case No. 98C-0806-S.
Claim and Demand: Xxxxx Act Claim. No specific monetary amount
reported of damages
Insurance Company: Zurich American Insurance Company Xxxx Watering
Sodak Counsel: Insurance Company will be appointing Counsel
Status/outcome: Pending
Case: Plaintiff Xxxx Xxxx v. Defendant Xxxx Xxxxxxxxx
-----------------------------------------------
Date Filed: August 31, 1998
Court and File Number: United States District Court for the Northern
District of Iowa.
Claim and Demand: Xxxxx Act Claim. No specific monetary amount
reported. of damages
Insurance Company: Zurich American Insurance Company
Xxxxx Xxx
Sodak Counsel: Insurance Company will be appointing Counsel
Status/outcome: Pending
In addition, the following claims have been made by customers against the
Borrower and have been referred to its insurer:
Xxxxx Dorzaner
April 10, 1999
Said broke tooth while eating fish in buffet.
Xxxxxxxx Xxxxxxx
July 5, 1999
Said burned by a cup of coffee.
Xxxx Xxxxxxxx
July 12, 1999
Said automatic doors hit him.
No formal action has been taken with respect to any of these
claims and no additional information is known; however, the Borrower does
not expect any of these claims to have a Material Adverse Effect.
Item 6.10
Taxes
The Borrower has settled a dispute relating to an Iowa sales/use
tax audit for the 1995 and 1996 tax years and has paid $150,000 in final
settlement thereof.
The Borrower files a consolidated federal income tax return with
Sodak. Sodak allocates the consolidated provision for income tax to its
subsidiaries as if the subsidiaries filed separate federal income tax
returns. The current and deferred income tax expense allocated to the
Borrower for the year ended December 31, 1998 represents the income tax
expense realized by the consolidated group as a result of the Borrower's
1998 earnings. See the Borrower's financial statements and notes thereto
for more information.
Item 6.11
Employee Benefit Plans
The employees of the Borrower participate in the Sodak Gaming Inc.
Healthcare Plan which is a self-insured plan.
Item 6.12
Environmental Matters
The Iowa Department of Natural Resources (the "DNR") has notified
Sodak and the Borrower that a treatment agreement is required to be entered
into between the City of Marquette and the owner of the Xxxx Xxxxxxxxx
Riverboat, whereby the latter shall quantify and describe its discharge to
the City and the City agrees to treat such discharge based on the disclosed
volume and quantities.
It is anticipated that pursuant to the treatment agreement and a
side agreement relating to rate structure, increased treatment rates and
surcharges will be charged to the Riverboat Complex. The treatment
agreement and side agreement have not yet been concluded. No draft of the
side agreement has been prepared or exchanged between the parties as yet.
Item 7.2.2(b)
Indebtedness to be Paid
None.
Item 7.2.2(c)
Ongoing Indebtedness
1. Xxxxxxx and Xxxxxx Xxxxx indebtedness in the amount of approximately
$642,125.
2. Xxxxxx Capital Lease indebtedness in the amount of approximately
$4,250,000.
3. The Sodak Gaming Inc. Amended and Restated Credit Agreement among
Seller, Comerica Bank Midwest, as agent bank, and certain syndicate banks
dated February 21, 1996 is secured by a first preferred ship mortgage on
the Xxxx Xxxxxxxxx Riverboat. Sodak has obtained the consent of Comerica
Bank Midwest to the contribution of the Xxxx Xxxxxxxxx Riverboat to the
Borrower and the subsequent sale of the Borrower. In connection with the
contribution of the Xxxx Xxxxxxxxx Riverboat to the Borrower, Comerica Bank
Midwest will release its first preferred ship mortgage on the Xxxx
Xxxxxxxxx Riverboat.
Item 7.2.3
Liens
1. Approximately $642,125 payable pursuant to a contract with Xxxxxxx and
Xxxxxx Xxxxx, which is secured by the Port of Marquette hotel real estate.
2. The Sodak Gaming Inc. Amended and Restated Credit Agreement among
Seller, Comerica Bank Midwest, as agent bank, and certain syndicate banks
dated February 21, 1996 is secured by a first preferred ship mortgage on
the Xxxx Xxxxxxxxx Riverboat. Sodak has obtained the consent of Comerica
Bank Midwest to the contribution of the Xxxx Xxxxxxxxx Riverboat to the
Borrower and the subsequent sale of the Borrower. In connection with the
contribution of the Xxxx Xxxxxxxxx Riverboat to the Borrower, Comerica Bank
Midwest will release its first preferred ship mortgage on the Xxxx
Xxxxxxxxx Riverboat.
3. The Master Lease Agreement with PDS Financial Corporation dated June 30,
1997 (subsequently assigned to Xxxxxx Financial Corporation) is secured by
the gaming equipment and office equipment on the Xxxx Xxxxxxxxx Riverboat.
4. A lien search has revealed the existence of the following two liens.
Although the management of the Borrower was not aware of such liens, it
believes that they originated in connection with debts that have now been
paid off. Management will seek to have the filings made that are necessary
to remove these liens.
Debtor Secured Party Filing Number Filing Date Document Type
-------------------------------------------------------------------------------------- ----------------------------
Xxxx Xxxxxxxxx Mikohn Gaming 00K659915 06/23/1995 Financing Statement
Corporation
-------------------------------------------------------------------------------------- ----------------------------
Gambler Supply Associates Capital 00K587025 10/21/1994 Financing Statement
Management Co. Services Corp.
-------------------------------------------------------------------------------------- ----------------------------
Item 7.2.5
Investments
None.
Item 7.2.8
Rental Obligations
The Borrower is party to a lease with the City of Marquette that
obligates the Borrower to make the following payments: (i) $180,000 per
annum; (ii) $0.50 per customer who enters the Xxxx Xxxxxxxxx Riverboat; and
(iii) a percentage of the net gaming receipts (as defined in the lease)
from the Xxxx Xxxxxxxxx Riverboat equal to (A) 2.5% of net gaming receipts
greater than $20,000,000 up to $40,000,000, (B) 5.0% of net gaming receipts
greater than $40,000,000 up to $60,000,000, and (C) 7.5% of net gaming
receipts greater than $60,000,000.
The Borrower paid $759,000 in 1998 pursuant to this lease.
EXHIBIT A
NOTE
$16,300,000 October , 1999
FOR VALUE RECEIVED, the undersigned, GAMBLERS SUPPLY MANAGEMENT
COMPANY, a South Dakota corporation (the "Borrower"), promises to pay to
the order of ISLE OF CAPRI CASINOS, INC. (the "Lender") the principal sum
of SIXTEEN MILLION THREE HUNDRED THOUSAND DOLLARS ($16,300,000) or, if
less, the aggregate unpaid principal amount of the Loan shown on the
schedule attached hereto (and any continuation thereof) made by the Lender
pursuant to that certain Credit Agreement, dated as of October ___, 1999
(together with all amendments and other modifications, if any, from time to
time thereafter made thereto, the "Credit Agreement"), between the Borrower
and the Lender, payable as set forth in the Credit Agreement, with a final
installment (in the amount necessary to pay in full this Note) due and
payable on or before the Maturity Date.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until
maturity (whether by acceleration or otherwise) and, after maturity, until
paid, at the rates per annum and on the dates specified in the Credit
Agreement.
Payments of both principal and interest are to be made in lawful
money of the United States of America in same-day or immediately-available
funds to the account designated by the Lender pursuant to the Credit
Agreement.
This Note is the Note referred to in, and evidences Indebtedness
incurred under, the Credit Agreement, to which reference is made for a
description of the security for this Note and for a statement of the terms
and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by
this Note and on which such Indebtedness may be declared to be immediately
due and payable. Unless otherwise defined, terms used herein have the
meanings provided in the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of
dishonor.
A-1
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
GAMBLERS SUPPLY MANAGEMENT
COMPANY
By: ------------------------------------------------
Title:-----------------------------------------------
A-2
LOAN AND PRINCIPAL PAYMENTS
Amount of Unpaid Notation
Amount of Principal Principal Made
Date Loan Made Repaid Balance By
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A-3
EXHIBIT B
BORROWING REQUEST
Isle of Capri Casinos, Inc.
711 Xx. Xxxxxx Xxxxxx Xxxx, Xx. Boulevard
Biloxi, Mississippi 39530
Attention: Chief Executive Officer
GAMBLERS SUPPLY MANAGEMENT COMPANY
Gentlemen and Ladies:
This Borrowing Request is delivered to you pursuant to Section 2.2
of the Credit Agreement, dated as of October __, 1999 (together with all
amendments, if any, from time to time made thereto, the "Credit
Agreement"), between Gamblers Supply Management Company, a South Dakota
corporation (the "Borrower"), and you. Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
The Borrower hereby requests that the Loan be made in the
aggregate principal amount of $ ________________ on _____________, 1999.
The Borrower hereby acknowledges that, pursuant to Section 5.1.12
of the Credit Agreement, each of the delivery of this Borrowing Request and
the acceptance by the Borrower of the proceeds of the Loan requested hereby
constitute a representation and warranty by the Borrower that, on the date
of the Loan, and before and after giving effect thereto and to the
application of the proceeds therefrom, all statements set forth in Section
5.1.11 are true and correct in all material respects.
The Borrower agrees that if prior to the time of the Loan
requested hereby any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify you.
Except to the extent, if any, that prior to the time of the Loan requested
hereby you shall receive written notice to the contrary from the Borrower,
each matter certified to herein shall be deemed once again to be certified
as true and correct at the date of such Loan as if then made.
B-1
Please wire transfer the proceeds of the Loan to the accounts of
the following persons at the financial institutions indicated respectively:
Amount to be Person to be Paid Name, Address, etc.
Transferred Name Account No. of Transferee Lender
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$______ _____ _______ _____________________
_____________________
Attention: __________
_____ _____ _______ _______________________
_______________________
Attention: ____________
Balance of _______________________
such proceeds The Borrower ______ _______________________
Attention:
The Borrower has caused this Borrowing Request to be executed and
delivered, and the certification and warranties contained herein to be
made, by its duly Authorized Officer this day of , 1999.
GAMBLERS SUPPLY MANAGEMENT
COMPANY
By:-----------------------------
Title:
B-2
EXHIBIT C
Certificate of Authorized Officer
I, the undersigned, [Assistant] Secretary of Gamblers Supply
Management Company, a corporation (the "Borrower"), DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to Section 5.1.1 of that
certain Credit Agreement, dated as of October__ , 1999 (the "Credit
Agreement"), between the Borrower and Isle of Capri Casinos, Inc. (the
"Lender"). Unless otherwise defined herein, capitalized terms used in this
Certificate have the meanings assigned to such terms in the Credit
Agreement.
2. There have been no amendments to the Articles of Incorporation
of the Borrower since ______________ , 19 ___.
3. Attached hereto as Exhibit I is a true, correct and complete
copy of the by-laws of the Borrower as in effect on the date hereof.
4. Attached hereto as Exhibit II is a true, correct and complete
copy of resolutions duly adopted at a meeting of the Board of Directors of
the Borrower, convened and held on the __ day of __________, 1999, which
resolutions have not been revoked, modified, amended or rescinded and are
still in full force and effect, and the Credit Agreement, the Note and the
other Loan Documents to which the Borrower is a party are in substantially
the forms of those documents submitted to and approved by the Board of
Directors of the Borrower at such meeting.
5. The persons named in Exhibit III attached hereto have been duly
elected, have been duly qualified as and at all times since _____________ ,
1999 (to and including the date hereof), have been officers of the Borrower
holding the respective offices set forth therein opposite their names, and the
signatures set forth therein opposite their names are their genuine
signatures.
6. I know of no proceeding for the dissolution or liquidation of
the Borrower or threatening its existence.
WITNESS my hand and seal of the Borrower this __ day of ______, 1999.
__________________________________
[Assistant] Secretary
[Affix Corporate Seal]
C-1
I, the undersigned, [Vice] President of the Borrower, DO HEREBY
CERTIFY that:
1. is [a] the duly elected and qualified [Assistant] Secretary of
the Borrower and the signature above is his genuine signature.
2. The representations and warranties on the part of the Borrower
contained in the Credit Agreement are as true and correct at and as of the
date hereof as though made on and as of the date hereof.
3. No Default has occurred and is continuing, or would result from
the consummation of the Loan on this date.
WITNESS my hand on this ____ day of ________________ , 1999.
[Vice] President
C-2
EXHIBIT I
Copy of the by-laws of Gamblers Supply Management Company
EXHIBIT II
Resolutions of the Board of Directors of Gamblers Supply Management
Company
WHEREAS, there has been presented to this meeting a form of
Credit Agreement (draft of _____________ , 19 ___ ) (the "Credit Agreement"),
between this Corporation and Isle of Capri Casinos, Inc. (the "Lender"),
providing for the making by the Lender of a Loan (as defined in the Credit
Agreement) to this Corporation; and
WHEREAS, it is proposed that payment of this
Corporation's obligations under and in connection with the Credit Agreement
and the promissory note to be executed by this Corporation pursuant thereto
be secured by the following collateral security documents:
(1) A certain Mortgage, substantially in the form of the
draft Mortgage, dated ________, 1999 (the "Mortgage"),
presented to this meeting,
(2) A certain Ship Mortgage, substantially in the form of
the draft Ship Mortgage, dated ___________ , 1999 (the "Ship
Mortgage"), presented to this meeting, and
(3) A certain Security Agreement, substantially in the form
of the draft Security Agreement, dated ___________, 1999 (the
"Security Agreement"), presented to this meeting.
NOW, THEREFORE, BE IT RESOLVED, that the President or any Vice
President of this Corporation, and each of them, be and hereby is
authorized to execute, in the name and on behalf of this Corporation, and
deliver a credit agreement between this Corporation and the Lender,
substantially in the form of the Credit Agreement presented to this
meeting, except for such changes, additions and deletions as to any or all
of the terms and provisions thereof as the officer executing the Credit
Agreement on behalf of this Corporation shall deem proper, such execution
by such officer of the Credit Agreement to be conclusive evidence that such
officer deems all of the terms and provisions thereof to be proper;
FURTHER RESOLVED, that the President or any Vice President of this
Corporation, and each of them, be and hereby is authorized to borrow from
time to time on behalf of this Corporation the amounts permitted or
provided to be borrowed by this Corporation under the Credit Agreement
executed by this Corporation pursuant to these resolutions, and to execute
and deliver on behalf of this Corporation the promissory note payable to
the order of the Lender, substantially in the form provided for as an
exhibit to the Credit Agreement, evidencing such borrowings; and
FURTHER RESOLVED, that the President or any Vice President and the
Secretary or any Assistant Secretary of this Corporation, and each of them,
be and hereby is authorized to execute, in the name and on behalf of this
Corporation and under its corporate seal, and deliver to the Lender [and
trustees for the Lender], on behalf of and in the name of this Corporation
and under its corporate seal, a mortgage, substantially in the form of the
Mortgage presented to this meeting, except for such changes, additions and
deletions as to any or all of the terms and provisions thereof as the
officers executing such instrument on behalf of this Corporation shall deem
proper, such execution by such officers of such instrument to be conclusive
evidence that such officers deem all of the terms and provisions thereof to
be proper;
FURTHER RESOLVED, that the President or any Vice President of this
Corporation, and each of them, be and hereby is authorized to execute, in
the name and on behalf of this Corporation, and deliver a security
agreement, substantially in the form of the Security Agreement presented to
this meeting, except for such changes, additions and deletions as to any or
all of the terms and provisions thereof as the officer executing the
Security Agreement on behalf of this Corporation shall deem proper, such
execution by such officer of the Security Agreement to be conclusive
evidence that such officer deems all of the terms and provisions thereof to
be proper; and
FURTHER RESOLVED, that the President or any Vice President of this
Corporation, and each of them, be and hereby is authorized to execute, in
the name and on behalf of this Corporation, and deliver a ship mortgage,
substantially in the form of the Ship Mortgage presented to this meeting,
except for such changes, additions and deletions as to any or all of the
terms and provisions thereof as the officer executing the Ship Mortgage on
behalf of this Corporation shall deem proper, such execution by such
officer of the Ship Mortgage to be conclusive evidence that such officer
deems all of the terms and provisions thereof to be proper; and
FURTHER RESOLVED, that each and every officer of this Corporation
be and hereby is authorized in the name and on behalf of this Corporation
from time to time to take such actions and to execute and deliver such
certificates, instruments, notices and documents as may be required or as
such officer may deem necessary, advisable or proper in order to carry out
and perform the obligations of this Corporation under the Credit Agreement,
the Mortgage, the Ship Mortgage and the Security Agreement executed by this
Corporation pursuant to these resolu tions, or under any other instrument
or document executed pursuant to or in connection with the Credit
Agreement, the Mortgage, the Ship Mortgage and the Security Agreement; all
such actions to be performed in such manner, and all such certificates,
instruments, notices and documents to be executed and delivered in such
form, as the officer performing or executing the same shall approve, the
performance or execution thereof by such officer to be conclusive evi dence
of the approval thereof by such officer and by this Board of Directors.
EXHIBIT III
Name of Officer Office Signature
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