CONSENT AND WAIVER August 6, 2009
EXHIBIT
10.2
August 6,
2009
Xxxxxxx
Xx, LLC
c/o
Peninsula Gaming Partners, LLC
000 X.
Xxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxx,
Xxxx 00000
The Old
Xxxxxxxxxx Xxxxx, L.L.C.
c/o
Peninsula Gaming Partners, LLC
00000
Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Ladies
and Gentlemen:
Reference is hereby made to that
certain Loan and Security Agreement, dated as of June 16, 2004 (as amended,
restated, supplemented or otherwise modified from time to time, the “Loan Agreement”;
capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Loan Agreement), among The Old Xxxxxxxxxx Xxxxx,
L.L.C., a Louisiana limited liability company (“OED”), and Xxxxxxx
Xx, LLC, a Delaware limited liability company (each, a “Borrower” and
collectively, the “Borrowers”; and
together with the Guarantors and any additional “Borrower” as contemplated
hereunder, the “Loan
Parties”), the lenders party thereto from time to time (the “Lenders”), and Xxxxx
Fargo Foothill, Inc., as agent for the Lenders (“Agent”).
The Borrowers have informed Agent and
the Lenders that Peninsula Gaming, LLC, a Delaware limited liability company
(“Parent”), and
Peninsula Gaming Corp., a Delaware corporation (“PGC”), as co-issuers
(collectively, the “Issuers”) intend to
issue 8 3/8% senior
secured notes due 2015 in an aggregate principal amount equal to $240,000,000
(the “Secured
Notes”) and 10 ¾% senior unsecured notes due 2017 in an aggregate
principal amount equal to $305,000,000 (the “Unsecured Notes”;
together with the Secured Notes, collectively, the “Notes”) which Notes
shall, among other things, have a maturity date beyond the maturity date of the
existing 8 ¾% senior secured notes due 2012 issued by Parent (the “Parent Notes”) and,
in the case of the Secured Notes, be secured by substantially the same
collateral that currently secures the Parent Notes as well as certain additional
collateral (the “Additional
Collateral”) (the “Note
Transactions”). The proceeds of the Notes shall be used by the
Issuers or, following certain intercompany transfers thereof (the “Intercompany
Transfers”), certain affiliates of the Issuers to, among other things,
(i) subject to the proviso at the end of this sentence, fund the purchase price
of the acquisition of Belle of Orleans, L.L.C., a Louisiana limited liability
company (“Xxxxxx
Belle”) by Parent (the “AB Acquisition”),
(ii) redeem and/or repurchase all of the Parent Notes, (iii) redeem and/or
repurchase all of the existing 11% senior secured notes due 2012 (the “DJW Notes”) issued by
Xxxxxxx Xx Worth, LLC, a Delaware limited liability company (“DJW”) in the
aggregate principal amount of $110,029,000, (iv) redeem and/or repurchase all of
the existing 13% senior notes due 2010 issued by OED, (v) repay a portion of the
outstanding indebtedness under the Loan Agreement and (vi) pay for fees and
expenses related to such issuances and the other transactions described herein;
provided, that
if the AB Acquisition is not consummated or the definitive purchase agreement
related thereto is terminated, in either case, on or prior to December 31, 2009,
a portion of the net proceeds of the Notes will be used to redeem (the “Mandatory
Redemption”; together with the redemptions described in clauses (ii)
through (iv) above, the “Redemptions” and,
together with the Note Transactions and the Intercompany Transfers, the “Transactions”) an
aggregate principal amount of outstanding Notes equal to $100,000,000, together
with accrued and unpaid interest thereon, on a pro rata basis. Additionally, the
Borrowers have requested that Parent, DJW and, upon the consummation of the AB
Acquisition, Xxxxxx Belle become Borrowers under the Loan Agreement, and that
the Required Lenders allow each Loan Party (except Parent and PGC), after giving
effect to the transaction described above, to become a guarantor of the
Notes.
Notwithstanding anything to the
contrary contained herein, in the Loan Agreement or in any of the other Loan
Documents, the Required Lenders hereby
(A) consent to:
(i) the
issuance of the Notes by the Issuers, the guarantee by the Loan Parties (except
Parent and PGC) of the Notes, the other Note Transactions (including the
granting of the liens in connection therewith) and the Intercompany Transfers,
so long as (a) the aggregate principal amount of the Notes does not exceed
$545,000,000, (b) the Notes have a final scheduled maturity that equals or
exceeds the final stated maturity of the Parent Notes, and, assuming the
Mandatory Redemption does not occur, a weighted average life to maturity that is
equal or greater than the weighted average life to maturity of the Parent Notes,
(c) Agent receives, from the trustee under the Secured Notes (the “New Indenture
Trustee”), a fully executed intercreditor agreement, in form and
substance reasonably satisfactory to Agent and substantially similar to the
existing Intercreditor Agreement, (d) all other documentation with respect to
the issuance of the Notes and such guarantees are in form and substance
reasonably satisfactory to Agent (it being acknowledged and agreed that the
execution by Agent of the intercreditor agreement referred to in clause (c)
above shall be conclusive evidence of such satisfaction), and (e) Agent is
granted a first priority perfected Lien on the Additional Collateral to be
granted to the New Indenture Trustee prior to or contemporaneously with the New
Indenture Trustee and receives a guaranty of the Obligations from each guarantor
of the Notes that is not already a Loan Party, together with such certificates,
opinions of counsel and other documents as Agent may reasonably request, in each
case, in form and substance reasonably acceptable to Agent;
(ii) the
joinder of each of Xxxxxx Belle, Parent and DJW as Borrowers under the Loan
Agreement, so long as, in each such case, (a) such proposed Borrower delivers to
Agent all joinder supplements and all other agreements (including any amendments
to the financial covenant requirements of the Loan Agreement and a pledge of the
Capital Stock of each such Person), documents, certificates, instruments and
opinions of counsel reasonably requested by Agent, in each case, in form and
substance reasonably satisfactory to Agent, (b) Agent has received the results
of legal and business due diligence on such proposed Borrower and its assets and
earnings, the results of which are reasonably satisfactory to Agent and the
Required Lenders and (c) no Default or Event of Default shall exist or occur
upon such joinder to the Loan Documents;
(iii) the
AB Acquisition, pursuant to the terms of that certain Purchase Agreement by and
among Columbia Properties New Orleans, L.L.C., AB Casino Acquisition LLC (“AB Casino
Acquisition”) and Peninsula Gaming Partners, LLC (“PGP”), dated June 18,
2009, as such agreement may be amended or waived from time to time with the
prior written consent of the Agent, and the dissolution of each of Xxxxxxx Xx
Worth Holdings, LLC, a Delaware limited liability company (“DJWH”), Xxxxxxx Xx
Worth Corp., a Delaware corporation (“DJWC”), and AB Casino
Corp., a Delaware corporation (“AB Casino”);
and
(iv) the
Redemptions and the transfers at any time or from time to time on or after the
date hereof of all or any portion of those certain 7.5% Urban Renewal Tax
Increment Revenue Bonds, Taxable Series 2007 (regardless of whether any such
transfers have previously been made) by any Loan Party, directly or indirectly,
to PGP; and
(B)
waive:
(i) the
failure of the Borrowers to deliver the certificate referred to in Section
7.14(d)(iii) of the Loan Agreement at the time specified therein so long as such
certificate is delivered on the date hereof;
(ii) any
requirement under the Loan Documents that requires that any Loan Party xxxxx x
Xxxx to Agent, for the benefit of the Lenders, on any interest that such Loan
Party may have in:
(a) any
lease entered into after the date hereof by any Loan Party for off-track betting
parlors or similar facilities;
(b) any
agreements, permits, licenses (including Gaming Licenses) or the like described
in subsection (d) of the definition of “Excluded Assets” contained in the Loan
Agreement;
(c)
Securities Accounts and Deposit Accounts used solely for payroll, taxes,
employee wage or benefit payments and trust or escrow
purposes;
(d) the
facility (including all related real property and amenities), currently owned by
DJW, known as “Pheasant Links” located in Emmons, Minnesota on which a “member’s
only” 9-hole golf course and 9-station sporting clay course and hunting facility
are located; or
(e) any
other property or asset of Parent or any Subsidiary of Parent not already
contained in the definition of “Excluded Assets” (other than any Deposit
Account) acquired after the date on which the Notes are issued in which a
security interest cannot be perfected by the filing of a financing statement
under the Uniform Commercial Code of the relevant jurisdiction, so long as the
fair market value, as reasonably determined in good faith by the managers of
Parent, of such property or asset hereunder does not, in the aggregate, exceed
$2,500,000; provided, however, the waiver
with respect to this subsection (e) shall terminate and be of no further force
and effect on and after November 15, 2009;
provided, in the case
of clauses (a), (b), (d) and (e) above, a Loan Party does not xxxxx x Xxxx on
such property to any other Person and, in the case of clause (c) above, a Loan
Party does not xxxxx x Xxxx on such property to any other Person other than the
purported beneficiary of any such funds in such Securities Accounts and Deposit
Accounts;
(iii)
Section 7.20(b) of the Loan Agreement to the extent necessary to permit DJW to
make capital expenditures in any fiscal year in the amount permitted pursuant to
Section 7.20(b) of the Loan Agreement plus $3,000,000;
(iv) any
requirement under the Loan Documents that requires that any Loan Party pledge to
Agent, for the benefit of the Lenders, the Capital Stock of DJWH, DJWC, AB
Casino and AB Casino Acquisition until the earlier of (a) the consummation of
the AB Acquisition and (b) September 30, 2009 (and to the extent such Persons
still exist as of any such date);
(v) for
30 days any requirement under the Loan Documents that requires that any Loan
Party deliver to Agent a Control Agreement with respect to Account Number
2783669308 maintained at American Trust and Savings Bank (“American Trust”) for
the purpose of cash collateralizing Letter of Credit No. 1705 issued by American
Trust for the benefit of the Iowa Racing and Gaming Commission, which deposit
account shall not contain more than $744,000.00 at any given time;
and
(vi) any
Default or Event of Default arising under the Loan Agreement as a direct result
of the consummation of the Transactions (it being acknowledged and agreed,
however, that under no circumstance shall the waiver set forth in this clause
(v) be effective to waive at any time any Default or Event of Default arising as
a result of a violation of any financial covenant set forth in the Loan
Agreement, including Section 7.20 thereof).
Each
Lender hereby authorizes Agent, on behalf of the Lenders, to execute an
intercreditor agreement, substantially similar to the existing Intercreditor
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the “New
Intercreditor Agreement”), by and among Agent and New Indenture Trustee.
Agent, each Lender and each Loan Party hereby acknowledges and agrees that each
reference to “Intercreditor Agreement” in the Loan Agreement and the other Loan
Documents shall be deemed to be a reference to the New Intercreditor Agreement
upon the execution and delivery thereof.
By acknowledging and agreeing to this
Consent and Waiver, the Borrowers hereby represent and warrant to Agent and the
Lenders that, after giving effect to this Consent and Waiver, no Default or
Event of Default has occurred and is continuing or would occur as a consequence
thereof.
This Consent and Waiver shall be
effective only upon the execution and delivery hereof by the Borrowers and the
Required Lenders to Agent.
Except as set forth herein, all terms
and conditions of the Loan Agreement and all other Loan Documents shall remain
in full force and effect and not be affected by this Consent and Waiver and
Agent and the Lenders reserve the right to require strict compliance with the
terms and conditions of the Loan Agreement and the other Loan
Documents.
This Consent and Waiver may be executed
in any number of counterparts, each of which shall be deemed an original but all
of which, when taken together, shall constitute one and the same
agreement. Any signatures delivered by a party by facsimile
transmission or by other electronic transmission shall be deemed an original
signature hereto.
This Consent and Waiver shall be deemed
to be a Loan Document for all purposes.
[Remainder
of page intentionally left blank.]
Very truly yours,
XXXXX FARGO FOOTHILL, INC., as
Agent and a
Lender
By: /s/Xxxxxxx
XxXxxxxxx
Name:
Xxxxxxx XxXxxxxxx
Title:
Vice President
CIT LENDING SERVICES
CORPORATION, as a
Lender
By: /s/Xxxxxxx
Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
Vice President
AMERICAN TRUST AND SAVINGS
BANK, as a
Lender
By: /s/Xxxxxxxx X.
Xxxxxxx
Name:
Xxxxxxxx X. Xxxxxxx
Title:
2nd Senior Vice President
[Signatures
continued on following page.]
ACKNOWLEDGED AND
AGREED:
THE OLD XXXXXXXXXX XXXXX,
L.L.C.,
a
Louisiana limited liability company
By: /s/Xxxxxxx
Xxxxxxx
Name: Xxxxxxx
Xxxxxxx
Title: CFO
XXXXXXX XX, LLC (formerly
known as Peninsula Gaming Company, LLC),
a
Delaware limited liability company
By: /s/Xxxxxxx
Xxxxxxx
Name: Xxxxxxx
Xxxxxxx
Title: CFO
