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EXHIBIT 4.3
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SENIOR SUBORDINATED CREDIT AGREEMENT
dated as of
December 20, 2000
among
AMERISTAR CASINOS, INC.,
as Borrower,
THE SUBSIDIARY GUARANTORS named herein,
THE LENDERS named herein
and
BANKERS TRUST COMPANY,
as Agent
and
BEAR XXXXXXX,
as Documentation Agent
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TABLE OF CONTENTS
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SECTION 1 DEFINITIONS.............................................................................1
1.1 Certain Defined Terms...................................................................1
1.2 Accounting Terms.......................................................................36
1.3 Other Definitional Provisions; Anniversaries...........................................36
SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS; NOTES...................................37
2.1 Bridge Loan and Bridge Note............................................................37
2.2 Term Loan and Term Note................................................................38
2.3 Interest on the Loans..................................................................39
2.4 Fees...................................................................................41
2.5 Prepayments and Payments...............................................................41
2.6 Use of Proceeds........................................................................45
SECTION 3 CONDITIONS.............................................................................45
3.1 Conditions to Bridge Loan..............................................................45
3.2 Conditions to Term Loan................................................................50
SECTION 4 REPRESENTATIONS AND WARRANTIES.........................................................51
4.1 Company Status.........................................................................51
4.2 Company Power and Authority............................................................52
4.3 No Violation...........................................................................52
4.4 Governmental Approvals.................................................................52
4.5 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc...................................................................53
4.6 Litigation.............................................................................54
4.7 True and Complete Disclosure...........................................................54
4.8 Tax Returns and Payments...............................................................54
4.9 Compliance with ERISA..................................................................55
4.10 Representations and Warranties in Documents............................................56
4.11 Properties.............................................................................56
4.12 Capitalization.........................................................................57
4.13 Subsidiaries...........................................................................57
4.14 Compliance with Statutes, etc..........................................................57
4.15 Investment Company Act.................................................................58
4.16 Public Utility Holding Company Act.....................................................58
4.17 Environmental Matters..................................................................58
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4.18 Labor Relations........................................................................59
4.19 Patents, Licenses, Franchises and Formulas.............................................59
4.20 Indebtedness...........................................................................59
4.21 Transactions...........................................................................60
4.22 Insurance..............................................................................60
4.23 No Default.............................................................................60
4.24 Compliance with Contracts, etc.........................................................60
4.25 Use of Proceeds; Margin Stock, etc.....................................................61
4.26 Survival of Representations and Warranties.............................................61
4.27 Guarantees.............................................................................61
4.28 Senior Subordinated Indenture; etc.....................................................62
SECTION 5 AFFIRMATIVE COVENANTS..................................................................62
5.1 Financial Statements and Other Reports.................................................62
5.2 Books, Records and Inspections.........................................................65
5.3 Maintenance of Property; Insurance.....................................................65
5.4 Corporate Franchises...................................................................66
5.5 Compliance with Statutes, etc..........................................................66
5.6 Compliance with Environmental Laws.....................................................66
5.7 ERISA..................................................................................67
5.8 Performance of Obligations.............................................................68
5.9 Payment of Taxes.......................................................................69
5.10 Ownership of Subsidiaries..............................................................69
5.11 Take-Out Financing.....................................................................69
5.12 Exchange of Term Notes.................................................................70
5.13 Payments in U.S. Dollars...............................................................71
5.14 Register...............................................................................71
SECTION 6 NEGATIVE COVENANTS.....................................................................71
6.1 Limitation on Incurrence of Additional Indebtedness....................................71
6.2 Limitation on Liens....................................................................72
6.3 Limitation on Restricted Payments......................................................73
6.4 Prohibition on Incurrence of Senior Subordinated Debt..................................76
6.5 Merger, Consolidation and Sale of Assets...............................................76
6.6 Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.......................................................................79
6.7 Limitations on Transactions with Affiliates............................................81
6.8 Subsidiary Stock.......................................................................82
6.9 Conduct of Business....................................................................82
6.10 Amendments or Waivers of Certain Documents.............................................82
6.11 Refinancing of the Loans in Part.......................................................82
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6.12 Limitation on Asset Sales..............................................................83
6.13 Additional Subsidiary Guarantees.......................................................84
6.14 Limitation on Preferred Stock of Restricted Subsidiaries...............................84
SECTION 7 EVENTS OF DEFAULT......................................................................84
7.1 Failure To Make Payments When Due......................................................85
7.2 Default in Other Agreements............................................................85
7.3 Breach of Certain Covenants............................................................85
7.4 Breach of Warranty.....................................................................85
7.5 Other Defaults Under Agreement or Loan Documents.......................................85
7.6 Involuntary Bankruptcy; Appointment of Custodian, etc..................................86
7.7 Voluntary Bankruptcy; Appointment of Custodian, etc....................................86
7.8 Judgments and Attachments..............................................................86
7.9 Guarantee..............................................................................87
7.10 Foreclosure............................................................................87
7.11 Gaming Licenses........................................................................87
SECTION 8 SUBORDINATION..........................................................................88
8.1 Securities Subordinated to Senior Debt.................................................88
8.2 Suspension of Payment When Senior Debt Is in Default...................................88
8.3 Loan Obligations Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation or Reorganization of Company..............................90
8.4 Payments May Be Paid Prior to Dissolution..............................................91
8.5 Lenders To Be Subrogated to Rights of Holders of Senior Debt...........................92
8.6 Loan Obligations of the Company Unconditional..........................................92
8.7 Reliance on Judicial Order or Certificate of Liquidating Agent.........................93
8.8 Subordination Rights Not Impaired by Acts or Omissions of the Company or
Holders of Senior Debt.............................................................93
8.9 Lenders Authorize Agent To Effectuate Subordination of Loan Obligations................94
8.10 This Section 8 Not To Prevent Events of Default........................................94
8.11 Amendments or Modifications to Section 8...............................................94
SECTION 9 THE AGENT..............................................................................95
9.1 Appointment............................................................................95
9.2 Delegation of Duties...................................................................95
9.3 Exculpatory Provisions.................................................................95
9.4 Reliance by Agent......................................................................96
9.5 Notice of Default......................................................................96
9.6 Non-Reliance on Agent..................................................................97
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9.7 Indemnification........................................................................97
9.8 Agent in Its Individual Capacity.......................................................98
9.9 Resignation of the Agent; Successor Agent..............................................98
9.10 Documentation Agent....................................................................98
SECTION 10 GUARANTEE..............................................................................98
10.1 Unconditional Guarantee................................................................98
10.2 Subordination of Guarantee.............................................................99
10.3 Severability..........................................................................100
10.4 Release of a Guarantor................................................................100
10.5 Limitation of Guarantor's Liability...................................................100
10.6 Guarantors May Consolidate, etc., on Certain Terms....................................101
10.7 Contribution..........................................................................101
10.8 Waiver of Subrogation.................................................................102
10.9 Evidence of Guarantee.................................................................102
10.10 Waiver of Stay, Extension or Usury Laws...............................................102
SECTION 11 SUBORDINATION OF GUARANTEE OBLIGATIONS................................................103
11.1 Guarantee Obligations Subordinated to Guarantor Senior Debt...........................103
11.2 Suspension of Guarantee Obligations When Guarantor Senior Debt Is in Default..........103
11.3 Guarantee Obligations Subordinated to Prior Payment of All Guarantor Senior
Debt on Dissolution, Liquidation or Reorganization of Such Guarantor..............104
11.4 Payments May Be Paid Prior to Dissolution.............................................106
11.5 Lenders To Be Subrogated to Rights of Holders of Guarantor Senior Debt................106
11.6 Guarantee Obligations of the Guarantors Unconditional.................................106
11.7 Reliance on Judicial Order or Certificate of Liquidating..............................107
11.8 Subordination Rights Not Impaired by Acts or Omissions of the Guarantors or
Holders of Guarantor Senior Debt..................................................107
11.9 Lenders Authorize Agent To Effectuate Subordination of Guarantee Obligations..........108
11.10 This Section 11 Not To Prevent Events of Default......................................108
11.11 Amendments or Modifications to Section 11.............................................108
SECTION 12 MISCELLANEOUS.........................................................................109
12.1 Representation of the Lenders.........................................................109
12.2 Participations in and Assignments of Loans and Notes..................................109
12.3 Expenses..............................................................................111
12.4 Indemnity.............................................................................112
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12.5 Setoff................................................................................112
12.6 Amendments and Waivers................................................................113
12.7 Independence of Covenants.............................................................114
12.8 Entirety..............................................................................114
12.9 Notices...............................................................................114
12.10 Survival of Warranties and Certain Agreements.........................................114
12.11 Failure or Indulgence Not Waiver; Remedies Cumulative.................................115
12.12 Severability..........................................................................115
12.13 Headings..............................................................................115
12.14 Applicable Law........................................................................115
12.15 Successors and Assigns; Subsequent Holders of Notes...................................115
12.16 Counterparts; Effectiveness...........................................................116
12.17 Consent to Jurisdiction; Venue; Waiver of Jury Trial..................................116
12.18 Payments by Agent.....................................................................117
12.19 Taxes.................................................................................117
12.20 Waiver of Stay, Extension or Usury Laws...............................................119
12.21 Requirements of Law...................................................................119
12.22 Confidentiality.......................................................................119
12.23 Application of Gaming Regulations.....................................................120
12.24 Post-Closing Actions..................................................................120
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SCHEDULES
A - TAXES
B - SUBSIDIARIES
C - INTELLECTUAL PROPERTY
D - EXISTING DEBT
E - INSURANCE
F - ENVIRONMENTAL
EXHIBITS
I FORM OF BRIDGE NOTE
II FORM OF TERM NOTE
III FORM OF COMPLIANCE CERTIFICATE
IV-A FORM OF NOTICE OF BORROWING
IV-B FORM OF NOTICE OF CONVERSION
V FORM OF REGISTRATION RIGHTS AGREEMENT
VI-A FORM OF OPINION OF XXXXXX, XXXX & XXXXXXXX LLP, COUNSEL FOR THE
COMPANY AND THE GUARANTORS
VI-B FORM OF LOCAL COUNSEL OPINIONS
VI-C FORM OF OPINION OF GAMING COUNSEL FOR THE COMPANY AND THE GUARANTORS
VII FORM OF OPINION OF XXXXXX XXXXXX & XXXXXXX, COUNSEL FOR THE LENDERS
VIII FORM OF NOTATION OF GUARANTEE
IX FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
X FORM OF SECTION 12.2E CERTIFICATE
XI FORM OF SENIOR SUBORDINATED INDENTURE
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This Senior Subordinated Credit Agreement is dated as of December 20,
2000, and entered into by and among Ameristar Casinos, Inc., a Nevada
corporation (the "Company"), the Guarantors named on the signature pages hereto,
the Lenders named on the signature pages hereto (the "Lenders"), Bankers Trust
Company ("BTCo"), as Agent for the Lenders (in such capacity, the "Agent") and
Bear Xxxxxxx Corporate Lending Inc. ("Bear Xxxxxxx"), as Documentation Agent for
the Lenders (in such capacity, the "Documentation Agent")..
RECITALS
WHEREAS, the Company desires that the Lenders extend a senior
subordinated credit facility to the Company in connection with the Transactions
(as defined herein);
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings:
"Acceleration Notice" shall have the meaning ascribed to such term in
Section 7.
"ACLVI" shall mean Ameristar Casino Las Vegas, Inc., a Nevada
corporation.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary of the Company or at the time
it merges or consolidates with or into the Company or any of its Subsidiaries or
assumed in connection with the acquisition of assets from such Person and in
each case not incurred by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the Company or
such acquisition, merger or consolidation.
"Acquired Properties" means the assets and liabilities acquired by the
Company pursuant to the Acquisition Agreements.
"Acquisition Agreements" means (i) the Asset Purchase Agreement dated
as of October 17, 2000 by and among Ameristar Casino Kansas City, Inc., the
Company, Kansas City Station Corporation and Station Casinos, Inc. and (ii) the
Asset Purchase Agreement dated as of October 17, 2000 by and among Ameristar
Casino St. Xxxxxxx, Inc., the Company,
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St. Xxxxxxx Riverfront Station, Inc. and Station Casinos, Inc., in each case
together with all related and ancillary documents and in each case as such
agreements as amended on December 13, 2000 and as in effect on the Closing Date.
"Acquisitions" shall mean the acquisition by the Company through its
wholly owned subsidiaries of the operating assets of Xxxxxxx Xxxxxx Xx. Xxxxxxx
xxx Xxxxxxx Xxxxxx Xxxxxx Xxxx from Station Casinos, Inc. and/or its affiliates
pursuant to the terms of the respective Acquisition Agreements .
"Adjusted Net Assets" shall have the meaning provided in Section 10.7.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing.
"Affiliate Transaction" has the meaning ascribed to such term in
Section 6.7.
"Agent" has the meaning ascribed to such term in the introduction to
this Agreement.
"Agreement" means this Senior Subordinated Credit Agreement dated as of
December 20, 2000, as it may be amended, supplemented or otherwise modified from
time to time in accordance with the terms hereof.
"Ameristar 10.50% Notes" shall mean the Company's 10.50% Senior
Subordinated Notes due 2004.
"Applicable Rate" means for each Monthly Period, the greater of (i)
11.00% per annum or (ii) the LIBOR Rate then in effect plus the Applicable
Spread provided, that, in no event, other than that set forth in Section 2.3.C.
will the interest rate on any Loan exceed 15.50% per annum.
"Applicable Spread" means 4.25% per annum for the period from and
including the Closing Date and to but excluding the 180th day following the
Closing Date; 5.25% per annum for the 90-day period from and including the 180th
day following the Closing Date; and for each subsequent 90-day period the
Applicable Spread in effect for the immediately preceding 90-day period plus
0.5%.
"Asset Acquisition" means (1) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall
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become a Restricted Subsidiary of the Company or any Restricted Subsidiary of
the Company, or shall be merged with or into the Company or any Restricted
Subsidiary of the Company, or (2) the acquisition by the Company or any
Restricted Subsidiary of the Company of the assets of any Person (other than a
Restricted Subsidiary of the Company) which constitute all or substantially all
of the assets of such Person or comprise any division or line of business of
such Person or any other properties or assets of such Person other than in the
ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company, a Guarantor or a Wholly Owned Restricted
Subsidiary of the Company of: (1) any Capital Stock of any Restricted Subsidiary
of the Company; or (2) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business; provided, however, that asset sales or other dispositions shall not
include: (a) a transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration of less
than $2.0 million; (b) the sale, lease, conveyance, disposition or other
transfer of all or substantially all of the assets of the Company as permitted
under Section 6.5; (c) any foreclosure sale of FF&E pursuant to a FF&E
Financing; (d) any Restricted Payment permitted by Section 6.3 or that
constitutes a Permitted Investment; (e) leases or subleases of real or personal
property in the ordinary course of business on commercially reasonable terms to
the extent that the Company determines that such property is immaterial and no
longer necessary in the conduct of its business or such lease or sublease is to
an operator of a restaurant, store or other enterprise within or adjacent to a
casino facility of the Company or its Subsidiaries.
"Bankruptcy Law" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute or any
other United States federal, state or local law or the law of any other
jurisdiction relating to bankruptcy, insolvency, winding up, liquidation,
reorganization or relief of debtors, whether in effect on the date hereof or
hereafter.
"Bankruptcy Order" means any court order made in a proceeding pursuant
to or within the meaning of any Bankruptcy Law, containing an adjudication of
bankruptcy or insolvency, or providing for liquidation, winding up, dissolution
or reorganization, or appointing a custodian of a debtor or of all or any
substantial part of a debtor's property, or providing for the staying,
arrangement, adjustment or composition of indebtedness or other relief of a
debtor.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
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"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Agent.
"Bridge Loan" means, collectively, the loans made by the Lenders
pursuant to Section 2.1A.
"Bridge Loan Commitment" means the commitment of the Lenders to make
the Bridge Loan as set forth in Section 2.1A.
"Bridge Notes" has the meaning ascribed to such term in Section 2.1D.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of New York, New York or is a day on
which banking institutions therein located are authorized or required by law or
other governmental action to close.
"Capital Stock" means:
(1) with respect to any Person that is a corporation, any and all
shares, interests, participations or other equivalents (however designated
and whether or not voting) of corporate stock, including each class of
Common Stock and Preferred Stock of such Person; and
(2) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means:
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time
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of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x Investors
Service, Inc. ("Moody's");
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia or any U.S. branch of a foreign bank having at the
date of acquisition thereof combined capital and surplus of not less than
$250.0 million;
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered
into with any bank meeting the qualifications specified in clause (4)
above; and
(6) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (1) through
(5) above.
"Cash Proceeds" means, with respect to any Asset Sale, cash payments
(including any cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise (other than the portion of such
deferred payment constituting interest, which shall be deemed not to constitute
Cash Proceeds) but only as and when so received) received from such Asset Sale.
"Change of Control" means the occurrence of one or more of the
following events:
(1) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets
of the Company to any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Agreement), other than to the Permitted Holders or a Guarantor and other
than a transaction where the holders of the Capital Stock of the Company
immediately prior to such transaction own, directly or indirectly, not less
than a majority of the Capital Stock of the acquiring Person;
(2) the approval by the holders of Capital Stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company (whether
or not otherwise in compliance with the provisions of this Agreement);
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(3) any Person or Group (other than the Permitted Holders) shall
become the owner, directly or indirectly, beneficially or of record, of
shares representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company and
at such time (i) the Permitted Holders together do not beneficially own,
directly or indirectly, a greater percentage of the aggregate ordinary
voting power of the Capital Stock of the Company than is beneficially owned
by such other Person or Group and (ii) the Permitted Holders do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Company;
or
(4) the replacement of a majority of the Board of Directors of the
Company over a two-year period from the directors who constituted the Board
of Directors of the Company at the beginning of such period, and such
replacement shall not have been approved by a vote of at least a majority
of the Board of Directors of the Company then still in office who either
were members of such Board of Directors at the beginning of such period or
whose election as a member of such Board of Directors was previously so
approved.
"Change of Control Date" has the meaning ascribed to such term in
Section 2.5A(iv).
"Change of Control Offer" has the meaning ascribed to such term in
Section 2.5A(iv).
"Closing Date" means December 20, 2000.
"Commission" means the Securities and Exchange Commission or any
successor agency.
"Commitment Letter" means the letter agreement dated October 16, 2000,
between the Company and Bankers Trust Corporation, pursuant to which Bankers
Trust Corporation committed to provide the Loans to the Company, subject to the
terms and conditions thereof, and the Company committed to pay Bankers Trust
Corporation certain fees and to satisfy certain other obligations to Bankers
Trust Corporation in respect of such commitment.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Closing Date or issued after the Closing Date, and includes, without limitation,
all series and classes of such common stock.
"Company" has the meaning ascribed to such term in the introduction to
this Agreement.
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"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of:
(1) Consolidated Net Income; and
(2) to the extent Consolidated Net Income has been reduced thereby:
(a) all income taxes of such Person and its Restricted
Subsidiaries paid or accrued in accordance with GAAP for
such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or
taxes attributable to sales or dispositions outside the
ordinary course of business);
(b) Consolidated Interest Expense;
(c) all preopening expenses of such Person and its Restricted
Subsidiaries paid or accrued in accordance with GAAP; and
(d) Consolidated Non-cash Charges less any non-cash items
increasing Consolidated Net Income for such period, all as
determined on a consolidated basis for such Person and its
Restricted Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the "Transaction
Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to:
(1) the incurrence or repayment of any Indebtedness of such Person or
any of its Restricted Subsidiaries (and the application of the proceeds
thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the incurrence or re payment of Indebtedness
in the ordinary course of business for working capital purposes pursuant to
working capital facilities, occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such incurrence or repayment, as the
case may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period; and
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(2) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being
liable for Acquired Indebtedness and also including any Consolidated EBITDA
(including any pro forma expense and cost reductions calculated on a basis
consistent with Regulation S-X under the Exchange Act) attributable to the
assets which are the subject of the Asset Acquisition or Asset Sale during
the Four Quarter Period) occurring during the Four Quarter Period or at any
time subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such Acquired
Indebtedness) occurred on the first day of the Four Quarter Period. If such
Person or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall
give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness (as determined under the
definition of "Indebtedness").
Furthermore, in calculating "Consolidated Fixed Charges" for purposes
of determining the denominator (but not the numerator) of this "Consolidated
Fixed Charge Coverage Ratio":
(1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date; and
(2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered
by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation
of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of:
(1) Consolidated Interest Expense; plus
(2) the product of (x) the amount of all dividend payments on any
series of Preferred Stock of such Person and, to the extent permitted under
this Agreement, its Restricted Subsidiaries (other than dividends paid in
Qualified Capital Stock) paid, accrued or scheduled to be paid or accrued
during such period times (y) a fraction, the numerator of which is one and
the denominator of which is one minus the then current
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effective consolidated federal, state and local tax rate of such Person,
expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of, without duplication:
(1) the aggregate of the interest expense of such Person and its
Restricted Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP, including without limitation: (a) any amortization
of debt discount and amortization or write-off of deferred financing costs;
(b) the net costs under Interest Swap Obligations; (c) all capitalized
interest; and (d) the interest portion of any deferred payment obligation;
and
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided that there shall be excluded therefrom:
(1) after-tax gains from Asset Sales (without regard to the $2.0
million limitation set forth in the definition thereof) or abandonments or
reserves relating thereto;
(2) after-tax items classified as extraordinary or nonrecurring gains;
(3) the net income of any Person acquired in a "pooling of interests"
transaction accrued prior to the date it becomes a Restricted Subsidiary of
the referent Person or is merged or consolidated with the referent Person
or any Restricted Subsidiary of the referent Person;
(4) the net income (but not loss) of any Restricted Subsidiary of the
referent Person to the extent that the declaration of dividends or similar
distributions bythat Restricted Subsidiary of that income is restricted by
a contract, operation of law or otherwise;
(5) the net income of any Person, other than a Restricted Subsidiary
of the referent Person, except to the extent of cash dividends or
distributions paid to the referent Person or to a Wholly Owned Restricted
Subsidiary of the referent Person by such Person;
17
-10-
(6) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of Consolidated Net
Income accrued at any time following the Closing Date;
(7) income or loss attributable to discontinued operations (including,
without limitation, operations disposed of during such period whether or
not such operations were classified as discontinued);
(8) in the case of a successor to the referent Person by consolidation
or merger or as a transferee of the referent Person's assets, any earnings
of the successor corporation prior to such consolidation, merger or
transfer of assets; and
(9) non-cash charges relating to compensation expense arising upon
exercise, vesting or termination of employee stock options.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"Consolidated Non-cash Charges" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and other non-cash expenses
of such Person and its Restricted Subsidiaries reducing Consolidated Net Income
of such Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (including amortization of goodwill
and other intangibles and excluding any such charges constituting an
extraordinary item or loss or any such charge which requires an accrual of or a
reserve for cash charges for any future period).
"Contested Claim" means any Tax, Indebtedness or other claim or
liability (i) the validity or amount of which is being diligently contested in
good faith, (ii) for which adequate reserve, or other appropriate provision, if
any, as required in conformity with GAAP shall have been made, and (iii) with
respect to which any right to execute upon or sell any assets of the Company or
of any of its Subsidiaries has not matured or has been and continues to be
effectively enjoined, superseded or stayed.
"Contractual Obligation", as applied to any Person, means any provision
of any Security issued by that Person or of any indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to which it or
any of its properties is subject.
"Conversion Date" means the one year anniversary of the Closing Date or
such later date to which the Conversion Date may be deferred pursuant to Section
3.2D.
"Covered Taxes" has the meaning ascribed to it in Section 12.19.
18
-11-
"Credit Agreement" means the Credit Agreement dated as of December 20,
2000, between the Company, the lenders party thereto in their capacities as
lenders thereunder and Bankers Trust Company, as administrative agent, together
with the related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder (provided that such
increase in borrowings is permitted by Section 6.1) or adding Restricted
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"Custodian" means any receiver, interim receiver, receiver and manager,
trustee, assignee, liquidator, sequestrator or similar official charged with
maintaining possession or control over property for one or more creditors,
whether under any Bankruptcy Law or otherwise.
"Demand Take-Out Notes" means senior subordinated notes of the Company
issued under an indenture (i) with such terms, conditions and covenants as are
customary for similar high-yield financings and as are reasonably satisfactory
in all respects to the Agent and the Company and (ii) the proceeds of which
shall be used to repay the Notes in whole or in part, which Demand Take-Out
Notes shall be guaranteed by each entity that guarantees the Bridge Loan.
"Designated Senior Debt" means (1) Indebtedness under or in respect of
the Credit Agreement and (2) any other Indebtedness constituting Senior Debt
which, at the time of determination, has an aggregate principal amount
(available or committed) of at least $25.0 million and is specifically
designated in the instrument evidencing such Senior Debt as "Designated Senior
Debt" by the Company.
"Disposition" shall mean the sale by ACLVI of The Reserve to Lake Xxxx
Station, Inc. pursuant to the Disposition Documents.
"Disposition Documents" shall mean that certain Asset Purchase
Agreement dated as of October 17, 2000 by and among ACLVI, the Company, Lake
Xxxx Station, Inc. and Station, as in effect on the Closing Date and without
giving effect to any subsequent amendment, modification and supplement thereto
made without the prior written consent of the Majority Lenders (other than
amendments, modifications and supplements that, when considered either
individually or in the aggregate, are not materially less favorable to the
Company and its Subsidiaries, taken as a whole, or the Lenders with respect
thereto).
00
-00-
"Xxxxxxxxxxxx Xxxxxxx Xxxxx" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event (other than an event which would
constitute a Change of Control), matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the sole option
of the holder thereof (except, in each case, upon the occurrence of a Change of
Control) on or prior to the final maturity date of the Notes.
"Documents" means the Loan Documents, the Acquisition Agreements, the
Credit Agreement and the Tender Offer Documents.
"Dollars" or the sign "$" means the lawful money of the United States
of America.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary
incorporated or otherwise organized or existing under the laws of the United
States, any state thereof or any territory or possession of the United States.
"Eligible Assignee" means (A) (i) a commercial bank organized under the
laws of the United States of America or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, in each case (under clauses (i) through
(iv) above) that is reasonably acceptable to the Agent; and (B) any Lender and
any Affiliate of any Lender. An Eligible Assignee must also be a Qualified
Person.
"Employment Agreements" has the meaning ascribed to such term in
Section 3.1L.
"Environmental Claim" shall mean any and all administrative, regulatory
or judicial actions, suits, written demands, demand letters, written claims,
liens, written notices of non-compliance or violation, investigations or
proceedings arising under any Environmental Law (hereafter "Claims") or any
permit issued under any such law, including, without limitation, (a) any and all
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Haz-
20
-13-
ardous Materials or arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Laws" shall mean any applicable Federal, state,
provincial, foreign or local statute, law, rule, regulation or rule of common
law now or hereafter in effect and in each case as amended, and any legally
binding judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA, the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. SECTION 6901, et seq.; the Federal Water Pollution Control
Act, 33 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C. Section 1801 et seq.; and any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Company or a Subsidiary of the Company would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Company or a Subsidiary of the
Company being or having been a general partner of such person.
"Event of Default" means each of the events set forth in Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"Exchange Notes" has the meaning ascribed to it in Section 5.12(ii).
"Exchange Request" has the meaning ascribed to it in Section 5.12.
"Existing Debt" means the Indebtedness of the Company and its
Restricted Subsidiaries outstanding on the Closing Date and set forth on
Schedule D.
"fair market value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of
21
-14-
Directors of the Company acting reasonably and in good faith whose determination
shall be conclusive if evidenced by a Board Resolution of the Board of Directors
of the Company delivered to the Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
equal for each day during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal Funds brokers of recognized standing
selected by the Agents.
"FF&E Financing" means Indebtedness the proceeds of which will be used
to finance the acquisition or lease by the Company or its Restricted
Subsidiaries of furniture, fixtures or equipment ("FF&E") used in the operation
of its business and secured by a Lien on such FF&E.
"Fixed Rate" has the meaning ascribed to it in Section 2.3(A)(ii).
"Fixed Rate Loans" means Loans described in Section 2.3A(ii).
"Floating Rate Loans" means Loans described in Section 2.3A(i).
"Four Quarter Period" has the meaning provided in the definition of
Consolidated Fixed Charge Coverage Ratio.
"Funding Guarantor" has the meaning ascribed to it in Section 10.7.
"Futuresouth Royalty" means the royalty payments required to be made
pursuant to the Asset Purchase and Sale Agreement, dated as of February 15,
2000, by and between Futuresouth, Southboat Xxxxx, Inc., Southboat Limited
Partnership and Ameristar Casino St. Louis, Inc., as in effect on the Closing
Date and without giving effect to any subsequent amendment, modification and
supplement.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the date hereof.
22
-15-
"Gaming Authority" means any governmental authority with regulatory
oversight of, authority to regulate or jurisdiction over any gaming businesses
or enterprises, including the Nevada State Gaming Control Board, the Nevada
Gaming Commission, the Mississippi Gaming Commission, the Mississippi State Tax
Commission, the Missouri Gaming Commission, the Iowa Racing and Gaming
Commission, and any agency established by a federally recognized Indian tribe to
regulated gaming on such tribe's reservation with regulatory oversight of,
authority to regulate or jurisdiction over any gaming operation (or proposed
gaming operation) owned, managed or operated by the Company or any Subsidiary.
"Gaming Regulations" shall mean the laws, rules, regulations and orders
applicable to the casino and gaming businesses or activities of the Company or
any of its Subsidiaries in any jurisdiction, as in effect from time to time,
including the policies, interpretations and administration thereof by the Gaming
Authorities.
"Grace Period" shall have the meaning ascribed to it in Section 3.2D.
"Guarantee Obligations" shall mean, as to any Guarantor, all
Obligations of every nature of such Guarantor from time to time owing to the
Lenders and the Agent under the Loan Documents to which it is a party (including
its Guarantee).
"Guarantees" means, collectively, the guarantees delivered to the
Lenders by the Guarantors pursuant to Section 10 which are evidenced by
notations of guarantee substantially in the form of Exhibit IX.
"Guarantor" means: (1) each of the Company's existing Subsidiaries
other than ACLVI; and (2) each of the Company's Restricted Subsidiaries that in
the future agrees to be bound by the terms of this Agreement as a Guarantor;
provided that any Person constituting a Guarantor as described above shall cease
to constitute a Guarantor when its respective Guarantee is released in
accordance with the terms of this Agreement.
"Guarantor Senior Debt" means, with respect to any Guarantor: the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of a Guarantor, whether
outstanding on the Closing Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Guarantee of such Guarantor. Without limiting the generality of the foregoing,
"Guarantor Senior Debt" shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other amounts owing in respect of:
23
-16-
(x) all monetary obligations of every nature of such Guarantor under,
or with respect to, the Credit Agreement, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities (and guarantees thereof);
and
(y) all Interest Swap Obligations (and guarantees thereof);
in each case whether outstanding on the Closing Date or thereafter incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall not
include:
(1) any Indebtedness of such Guarantor to a Subsidiary of such
Guarantor;
(2) Indebtedness to, or guaranteed on behalf of, any shareholder,
director, officer or employee of such Guarantor or any Subsidiary of such
Guarantor (including, without limitation, amounts owed for compensation)
other than a shareholder who is also a lender (or an Affiliate of a lender)
under the Credit Agreement;
(3) Indebtedness to trade creditors;
(4) Indebtedness represented by Preferred Stock and Disqualified
Capital Stock;
(5) any liability for federal, state, local or other taxes owed or
owing by such Guarantor;
(6) that portion of any Indebtedness incurred in violation of Section
6.1 (but, as to any such obligation, no such violation shall be deemed to
exist for purposes of this clause (6) if the holder(s) of such obligation
or their representative shall have received an Officers' Certificate of the
Company to the effect that the incurrence of such Indebtedness does not
(or, in the case of revolving credit indebtedness, that the incurrence of
the entire committed amount thereof at the date on which the initial
borrowing thereunder is made would not) violate such provisions of this
Agreement);
(7) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to the Company; and
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of such Guarantor.
"Guarantor Senior Debt Obligations" means all obligations of any
Guarantor for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, damages
24
-17-
and other liabilities payable under the documentation governing any Guarantor
Senior Debt, and all guarantees by such Guarantor of any of the foregoing.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"restricted hazardous materials," "extremely hazardous materials," "restrictive
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar meaning and regulatory effect under any
applicable Environmental Law.
"incur" has the meaning set forth in Section 6.1 (and "incurrence,"
"incurred," "incurrable" and "incurring" shall have meanings correlative to the
foregoing).
"Indebtedness" means with respect to any Person, without duplication:
(1) all Obligations of such Person for borrowed money;
(2) all Obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all Obligations of such Person for the deferred purchase price of
property or services (other than, to the extent deferred in the ordinary
course of business, deferred payments in respect of services by employees)
which remain unpaid more than 120 days after the due date therefor other
than payments which are being contested in good faith;
(5) all Obligations for the reimbursement of any obligor on any letter
of credit, banker's acceptance or similar credit transaction;
(6) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (1) through (5) above and clause (8)
below;
(7) all Obligations of any other Person of the type referred to in
clauses (1) through (6) which are secured by any lien on any property or
asset of such Person, the amount of such Obligation being deemed to be the
lesser of the fair market value of such property or asset or the amount of
the Obligation so secured;
(8) all Interest Swap Obligations of such Person; and
25
-18-
(9) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference
and its maximum fixed repurchase price at any time prior to its stated
repurchase date, but excluding accrued dividends, if any.
For purposes hereof, (1) the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital Stock
and (2) the principal amount of Indebtedness arising from royalty obligations
representing the deferred purchase price of property or services shall equal the
greater of (x) the principal amount thereof as determined in accordance with
GAAP and (y) the present value of the amounts the management of the Company
believes in good faith will be required to be paid under such royalty
obligation, provided that in the case of the Futuresouth Royalty, the principal
amount of such Indebtedness shall equal the present value of the greater of (x)
the minimum royalty payments and (y) the amount actually paid in respect of the
Futuresouth Royalty in respect of the most recently ended period.
"Indemnified Liabilities" has the meaning ascribed to such term in
Section 12.4.
"Indemnitees" has the meaning ascribed to such term in Section 12.4.
"Independent Financial Advisor" means a firm: (1) which does not, and
whose directors, officers and employees or Affiliates do not, have any material
a direct or indirect financial interest in the Company; and (2) which, in the
good faith judgment of the Board of Directors of the Company, is otherwise
independent and qualified to perform the task for which it is to be engaged.
"Initial Request Date" shall have the meaning ascribed to it in Section
5.11A.
"Interest Rate Determination Date" means, with respect to any Monthly
Period, the second Business Day on which banks in New York and London are open
prior to the first Business Day of such Monthly Period.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by
26
-19-
such other Person calculated by applying a fixed or a floating rate of interest
on the same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.
"Internal Revenue Code" or "Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor code or statute.
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any Person. "Investment" shall exclude extensions of trade credit by the
Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. If the Company or any Restricted Subsidiary of
the Company sells or otherwise disposes of any Common Stock of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Restricted Subsidiary is no longer a
Restricted Subsidiary of the Company, the Company shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Common Stock of such Restricted Subsidiary not sold or
disposed of.
"Laws" means all applicable statutes, laws, ordinances, regulations,
rules, orders, judgments, writs, injunctions or decrees of any state,
commonwealth, nation, territory, possession or province, or Tribunal, and "Law"
means each of the foregoing.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lenders" has the meaning ascribed to that term in the introduction to
this Agreement and shall include any assignee of any Loan, Note or Loan
Commitment to the extent of such assignment.
"LIBOR Rate" means the rate determined on the basis of the offered
rates for deposits in U.S. Dollars in the London interbank market for a period
of three months which is published by the British Bankers' Association and
currently appears on Telerate page 3750 as of 11:00 a.m., London time, on the
Interest Rate Determination Date for such Monthly Period; provided that if, for
any reason, such a rate is not published by the British Bankers' Association,
the LIBOR Rate shall be equal to a rate per annum equal to the average rate
(rounded upwards, if necessary, to the nearest 1/100 of 1%) at which the Agent
determines that U.S. Dollars in an amount comparable to the amount of the
applicable Loans are being offered to prime banks at approximately 11:00 a.m.,
London time, on the Interest Rate Determination
27
-20-
Date for such Monthly Period for settlement in immediately available funds by
leading banks in the London interbank market selected by the Agent divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including without limitation any marginal, emergency, supplemental, special or
other reserves) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"License Subsidiary" means each Subsidiary of the Company on the
Closing Date and any future Subsidiary, in either case that holds any gaming
license from any Gaming Authority requiring approval for the incurrence of
Indebtedness of such Subsidiary for the incurring of any Lien on the Capital
Stock of such Subsidiary.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Litigation" means any action, suit, proceeding, claim, lawsuit and/or
investigation conducted or threatened by or before any Tribunal.
"Loan Commitment" means the Bridge Loan Commitment and the Term Loan
Commitment.
"Loan Documents" means this Agreement, the Bridge Notes, the Term
Notes, the Guarantees, the Senior Subordinated Indenture, the Exchange Notes and
the Registration Rights Agreement.
"Loan Obligations" means all Obligations of every nature of the Company
from time to time owing to the Lenders and Agent under the Loan Documents.
"Loans" means the Bridge Loan and the Term Loan as each may be
outstanding.
"Majority Lenders" means the Agent together with Lenders holding in the
aggregate more than 50% of the outstanding principal amount of Notes.
"Margin Stock" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"Material Adverse Change" means a material adverse change in the
business, results of operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole.
28
-21-
"Material Adverse Effect" means a material adverse effect on the
business, results of operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole.
"Material Subsidiary" means, with respect to any accounting period, any
Restricted Subsidiary of the Company (i) whose revenues constitute greater than
10% of the aggregate dollar value of the revenues of Company and its Restricted
Subsidiaries, taken as a whole, for such accounting period or (ii) the fair
market value of whose assets at any time during such accounting period is
greater than 10% of the fair market value of all of the assets of Company and
its Restricted Subsidiaries taken as a whole at such time.
"Maturity Date" has the meaning ascribed to such term in Section 2.2D.
"Missouri Stock Option Agreements" means the four Non-Qualified Stock
Option Agreements dated as of December 18, 2000 between the Company on the one
hand, and Xxxx Xxxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxx and Xxxxxxx Xxxxxx on the
other hand, in each case as in effect on the Closing Date and without giving
effect to any amendment, modification or supplement thereto made without the
prior written consent of the Agent.
"Monthly Period" shall mean the period commencing on the first calendar
day of each month, if such day is a Business Day, or the first Business Day
succeeding the first calendar day of each month and ending on the day next
preceding the first Business Day of the following Monthly Period; provided that
the first Monthly Period shall commence on the Closing Date.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of:
(1) reasonable out-of-pocket expenses and fees relating to such Asset
Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions);
(2) taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions and
any tax sharing arrangements;
(3) repayment of Indebtedness that is secured by the property or
assets that are the subject of such Asset Sale; and
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(4) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained
(or indemnified against) by the Company or any Restricted Subsidiary, as
the case may be, after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related
to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale.
"Non-payment Default" shall have the meaning ascribed to such term in
Section 8.2(b).
"Notes" means, collectively, the Bridge Notes and the Term Notes.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit IV-A with respect to a proposed borrowing.
"Notice of Conversion" means a notice substantially in the form of
Exhibit IV-B with respect to a proposed conversion.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, expenses, damages and other
liabilities payable under the documentation governing any such obligation.
"Offer Payment Date" has the meaning ascribed to such term in Section
2.5A(iv)(c)(2).
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer, the Controller, the Treasurer, the
Secretary or Assistant Secretary.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by an Officer.
"Other Taxes" has the meaning ascribed to such term in Section 12.19B.
"Payment Blockage Notice" has the meaning ascribed to such term in
Section 8.2(b).
"Payment Blockage Period" has the meaning ascribed to such term in
Section 8.2(b).
"Payment Default" shall have the meaning ascribed to such term in
Section 8.2(a).
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"Payment Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Agent
may designate to the Company and the Lenders from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation, and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.
"Permitted Holders" shall mean and include (i) Xxxxx X. Xxxxxxx or Xxx
Xxxxxxx, their respective estates, spouses, heirs, ancestors, lineal
descendants, legatees, legal representatives or the trustee of any bona fide
trust of which no one other than the foregoing has any interests and (ii) any
entity controlled, directly or indirectly, by any of the foregoing referred to
in the previous clause (i), whether through the ownership of voting securities,
by contract or otherwise, and (iii) Xxxxx X. Xxxxxxx or Xxx Xxxxxxx (a) in their
respective capacity as a trustee under a revocable trust of which no one other
than the persons and entities listed in the foregoing clause (i) has any
interest, together with each successor trustee thereof or (b) as the executor of
the estate of Xxxxxxxxx Xxxxxxxx or of any Person named in clause (i).
"Permitted Indebtedness" means, without duplication, each of the
following:
(1) the Loans, this Agreement and the Guarantees and all Obligations
under the Loan Documents;
(2) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $575.0
million less the amount of all permanent repayments actually made (which
are accompanied by a corresponding permanent commitment reduction)
thereunder as a result of the application of the Net Cash Proceeds of any
Asset Sale;
(3) the Existing Debt, reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or
permanent reductions thereon;
(4) Interest Swap Obligations of the Company or any Restricted
Subsidiary of the Company covering Indebtedness of the Company or any of
its Restricted Subsidiaries; provided, however, that such Interest Swap
Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on their outstanding
Indebtedness to the extent the notional principal amount of such Interest
Swap Obligation does not, at the time of the incurrence thereof, exceed the
principal amount of the Indebtedness to which such Interest Swap Obligation
relates;
(5) Indebtedness of a Restricted Subsidiary of the Company to the
Company or a Guarantor for so long as such Indebtedness is held by the
Company or a
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Guarantor, in each case subject to no Lien held by a Person other than the
Company, a Guarantor or the Agent acting on behalf of the lenders under the
Credit Agreement; provided that if as of any date any Person other than the
Company, a Guarantor or the Agent acting on behalf of the lenders under the
Credit Agreement owns or holds any such Indebtedness or holds a Lien in
respect of such Indebtedness, such date shall be deemed the incurrence of
Indebtedness not constituting Permitted Indebtedness by the issuer of such
Indebtedness;
(6) Indebtedness of the Company to a Guarantor for so long as such
Indebtedness is held by a Guarantor, subject to no Lien held by any person
other than a Guarantor or the Agent acting on behalf of the lenders under
the Credit Agreement; provided that if as of any date any Person other than
a Guarantor or the Agent acting on behalf of the lenders under the Credit
Agreement owns or holds any such Indebtedness or holds a Lien in respect of
such Indebtedness, such date shall be deemed the incurrence of Indebtedness
not constituting Permitted Indebtedness by the Company;
(7) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within three business days of notice of
incurrence;
(8) Indebtedness of the Company or any of its Restricted Subsidiaries
in respect of bankers' acceptances, workers' compensation claims, appeal
bonds, payment obligations in connection with self-insurance or similar
obligations, deferred compensation to employees and bank overdrafts (and
letters of credit in respect thereof), in each case in the ordinary course
of business;
(9) Indebtedness of the Company or any of its Restricted Subsidiaries
incurred solely in respect of performance, surety and similar bonds or
completion guarantees, to the extent that such incurrence does not result
in the incurrence of any obligation for the payment of borrowed money of
others;
(10) Indebtedness represented by Capitalized Lease Obligations of the
Company and its Restricted Subsidiaries incurred in the ordinary course of
business (including any refinancing thereof) not to exceed (x) $10.0
million less the aggregate amount outstanding pursuant to clause (11)(x) of
this definition at any one time outstanding before the Conversion Date and
(y) $30.0 million less the aggregate amount outstanding pursuant to clause
(11)(y) of this definition at any one time outstanding after the Conversion
Date;
(11) FF&E Financing and Purchase Money Indebtedness of the Company and
its Restricted Subsidiaries incurred in the ordinary course of business
(including
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any refinancing thereof) not to exceed (x) $10.0 million less the aggregate
amount outstanding pursuant to clause (10)(x) of this definition in the
aggregate at any one time outstanding before the Conversion Date and (y)
$30.0 million less the aggregate amount outstanding pursuant to clause
(10)(y) of this definition in the aggregate at any one time outstanding
after the Conversion Date;
(12) Refinancing Indebtedness;
(13) the guarantee by the Company or any Guarantors of Indebtedness of
the Company or a Restricted Subsidiary that was permitted to be incurred by
another provision of this covenant (other than Indebtedness that is
subordinate or junior in right of payment to the Notes);
(14) Indebtedness under the Futuresouth Royalty; and
(15) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed (x) $5.0
million at any one time outstanding before the Conversion Date and (y)
$10.0 million at any one time outstanding after the Conversion Date (in
each case which amount may, but need not, be incurred in whole or in part
under the Credit Agreement).
For purposes of determining compliance with Section 6.1, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through (15) above
or is entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage
Ratio provisions of Section 6.1, the Company shall, in its sole discretion,
classify (or later reclassify) such item of Indebtedness in any manner that
complies with Section 6.1. Accrual of interest, accretion or amortization of
original issue dis count, the payment of interest on any Indebtedness in the
form of additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Capital Stock in the form of additional shares of the
same class of Disqualified Capital Stock will not be deemed to be an incurrence
of Indebtedness or an issuance of Disqualified Capital Stock for purposes of
Section 6.1.
"Permitted Investments" means:
(1) Investments by the Company or any Restricted Subsidiary of the
Company in any Person that is or will become immediately after such
Investment a Restricted Subsidiary of the Company engaged in a Permitted
Line of Business or that will merge or consolidate into the Company or a
Restricted Subsidiary of the Company engaged in a Permitted Line of
Business;
(2) Investments in the Company by any Guarantor;
33
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(3) investments in cash and Cash Equivalents;
(4) loans and advances to employees and officers of the Company and
its Restricted Subsidiaries (or Guarantees of third party loans to
employees and officers) in the ordinary course of business for bona fide
business purposes not in excess of (x) $1.0 million at any one time
outstanding prior to the Conversion Date and (y) $2.5 million at any one
time outstanding subsequent to the Conversion Date;
(5) Currency Agreements and Interest Swap Obligations entered into in
the ordinary course of the Company's or its Restricted Subsidiaries'
businesses and otherwise in compliance with this Agreement;
(6) Investments in entities engaged or to be engaged in Permitted
Lines of Business in an amount not to exceed (x) $2.5 million in the
aggregate at any one time outstanding prior to the Conversion Date and (y)
$10.0 million in the aggregate at any one time outstanding subsequent to
the Conversion Date;
(7) Investments in securities of trade creditors or customers received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers in good faith
settlement of delinquent obligations of such trade creditors or customers;
(8) Investments made by the Company or its Restricted Subsidiaries as
a result of consideration received in connection with an Asset Sale made in
compliance with Section 6.12 or in connection with any disposition of
assets not constituting an Asset Sale; and
(9) the redemption, repurchase, retirement, defeasance or other
acquisition of any Senior Debt, any Guarantor Senior Debt or the Notes.
"Permitted Liens" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(2) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums that not yet
delinquent, are bonded or are being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
34
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(3) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with industry practice
in connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(4) judgment Liens not giving rise to an Event of Default;
(5) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Restricted Subsidiaries;
(6) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
(7) Liens upon specific items of inventory or other goods and proceeds
of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods;
(8) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(9) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and
set-off;
(10) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Agreement;
(11) Liens securing Indebtedness permitted pursuant to clause (10) of
the definition of "Permitted Indebtedness"; provided, however, that the
Indebtedness shall not be secured by any property or assets of the Company
or any Restricted Subsidiary of the Company other than the property or
assets subject to such initial Capitalized Lease Obligation.
(12) Liens securing Indebtedness permitted pursuant to clause (11) of
the definition of "Permitted Indebtedness"; provided, however, that (a) the
Indebtedness
35
-28-
shall not exceed the cost of such property or assets and shall not be
secured by any property or assets of the Company or any Restricted
Subsidiary of the Company other than the property and assets so acquired,
installed, constructed or improved and (b) the initial Lien securing such
Indebtedness shall be created within 180 days of such acquisition,
installation, construction or improvement or, in the case of a refinancing
of any such Indebtedness, within 180 days of such refinancing;
(13) Liens securing Refinancing Indebtedness permitted to be incurred
under this Agreement or amendments or renewals of Liens that were permitted
to be incurred; provided, in each case, that such Liens do not extend to
any additional property or asset that did not secure the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded or that did
not secure the Indebtedness affected by such amendment or renewal;
(14) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary with respect to obligations that do not exceed
$1,000,000 at any one time outstanding; and
(15) Liens securing Acquired Indebtedness incurred in accordance with
Section 6.1; provided that:
(a) such Liens secured such Acquired Indebtedness at the time of
and prior to the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary of the Company and were not granted
in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary of the
Company; and
(b) such Liens do not extend to or cover any property or assets
of the Company or of any of its Restricted Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or
a Restricted Subsidiary of the Company and, when considered as a
whole, are not materially more favorable to the lienholders than those
securing the Acquired Indebtedness prior to the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary of the
Company.
"Permitted Lines of Business" means, with respect to any Person, any
casino gaming business of such Person (whether owned, leased or managed by such
Person) or any business that is related to, ancillary to or supportive of,
connected with or arising out of the gaming business of such Person (including,
without limitation, developing and operating lodging, dining, amusement, sports
or entertainment facilities, transportation services or other related activities
or enterprises and any additions or improvements thereto).
36
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"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Plan" shall mean any multiemployer or single-employer plan, as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of), the Company or a Subsidiary of the
Company or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Company, a Subsidiary of the
Company or an ERISA Affiliate maintained, contributed or had an obligation to
contribute to such plan.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Agreement, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act as interpreted by the
Company's chief financial officer or Board of Directors in consultation with its
independent certified public accountants.
"Pro Forma Balance Sheet" has the meaning ascribed to such term in
Section 4.5(a).
"Projections" means the financial projections dated as of November
2000, previously distributed to the Agent.
"Purchase Money Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
installation, construction or improvement, of property or equipment.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Person" shall mean, with respect to any Lender party to this
Agreement on the Closing Date or that becomes a Lender pursuant to Section 12.2,
any Person which shall not have been found unsuitable under the Gaming
Regulations of any, and which meets the requirements of all, jurisdictions
regulating the gaming business of the Company and its Subsidiaries to the extent
that the Company has so notified the Lenders of such requirements of such
jurisdictions pursuant to Section 12.2E.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
37
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"Reference Date" shall have the meaning ascribed to such term in
Section 6.3(iii)(w).
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of Indebtedness incurred in accordance with
Section 6.1 (other than pursuant to clauses (2), (4), (5), (6), (7), (8), (9),
(10), (11), (13), (14) or (15) of the definition of "Permitted Indebtedness"),
in each case that does not:
(1) result in an increase in the aggregate principal amount of
Indebtedness of such Person as of the date of such proposed Refinancing
(plus the amount of any premium required to be paid under the terms of the
instrument governing such Indebtedness and plus the amount of reasonable
expenses incurred by the Company in connection with such Refinancing); or
(2) create Indebtedness with: (a) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the Indebtedness
being Refi nanced; or (b) a final maturity earlier than the final maturity
of the Indebtedness being Refinanced; provided that (x) if such
Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company and
(y) if such Indebtedness being Refinanced is subordinate or junior to the
Notes or the Guarantees, then such Refinancing Indebtedness shall be
subordinate to the Notes or the Guarantees at least to the same extent and
in the same manner as the Indebtedness being Refinanced.
"Register" has the meaning ascribed to such term in Section 5.14.
"Registration Rights Agreement" means a registration rights agreement
substantially in the form of Exhibit V (with such changes therein as the Agent
and the Company shall approve).
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Reportable Event" means an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day notice period is waived under subsection .22, .23,
.25, .27 or .28 of PBGC Regulation Section 4043.
38
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"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"Request" shall have the meaning ascribed to such term in Section
5.11A.
"Restricted Payment" has the meaning ascribed to such term in Section
6.3.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"Returns" has the meaning ascribed to such term in Section 4.8.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person, or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Closing Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such Property.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any profit
sharing agreement or arrangement, bonds, debentures, options, warrants, notes,
or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Closing Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes. Without limiting the generality
of the foregoing, "Senior Debt" shall also include the principal of, premium, if
any, interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect
39
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thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other amounts owing in respect of:
(1) all monetary obligations of every nature of the Company under, or
with respect to, the Credit Agreement, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities (and guarantees thereof);
and
(2) all Interest Swap Obligations (and guarantees thereof);
in each case whether outstanding on the Closing Date or thereafter incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include:
(1) any Indebtedness of the Company to a Subsidiary of the Company;
(2) Indebtedness to, or guaranteed on behalf of, any shareholder,
director, officer or employee of the Company or any Subsidiary of the
Company (including, without limitation, amounts owed for compensation)
other than a shareholder who is also a lender (or an Affiliate of a lender)
under the Credit Agreement;
(3) Indebtedness to trade creditors;
(4) Indebtedness represented by Preferred Stock and Disqualified
Capital Stock;
(5) any liability for federal, state, local or other taxes owed or
owing by the Company;
(6) that portion of any Indebtedness incurred in violation of Section
6.1 (but, as to any such obligation, no such violation shall be deemed to
exist for purposes of this clause (6) if the holder(s) of such obligation
or their representative shall have received an Officers' Certificate of the
Company to the effect that the incurrence of such Indebtedness does not
(or, in the case of revolving credit indebtedness, that the incurrence of
the entire committed amount thereof at the date on which the initial
borrowing thereunder is made would not) violate Section 6.1);
(7) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to the Company; and
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of the Company.
40
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"Senior Debt Obligations" means all obligations of the Company for
principal, premium, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Senior Debt, and all guarantees by the Company of any of the foregoing.
"Senior Subordinated Indenture" means an indenture between the Company
and a trustee substantially in the form of Exhibit XI hereto (with such changes
as the Agent and the Company shall approve, and, at such time, if any, as notes
issued thereunder are sold in a public offering, with other appropriate changes
to reflect such public offering), as the same may at any time be amended,
modified and supplemented and in effect.
"Significant Subsidiary", with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Exchange Act.
"Solvent Entity" has the meaning ascribed to such term in Section
4.5(c).
"Station" shall mean Station Casinos, Inc., a Nevada corporation.
"Subordinated Indebtedness" means Indebtedness of the Company or any
Guarantor which is expressly subordinated in right of payment to the Notes or
the Guarantee of such Guarantor, as the case may be.
"Subsidiary", with respect to any Person, means:
(1) any corporation of which the outstanding Capital Stock having at
least a majority of the votes entitled to be cast in the election of
directors under ordinary circumstances shall at the time be owned, directly
or indirectly, by such Person; or
(2) any other Person of which at least a majority of the voting
interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person.
"Surviving Entity" shall have the meaning ascribed to such term in
Section 6.5(b).
"Syndication" has the meaning ascribed to such term in Section 12.2A.
"Take-Out Bank" has the meaning ascribed to such term in Section
3.1H(i).
"Take-Out Securities" means (i) any Securities of the Company and/or
the Guarantors the proceeds of which are used to repay the Notes in full and
(ii) any Securities of the Company issued in accordance with Section 6.11 the
proceeds of which are used to Refinance the Notes in part, including, without
limitation, the Demand Take-Out Notes.
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"Taxes" means all taxes, assessments, fees, levies, imposts, duties,
penalties, deductions, liabilities, withholdings or other charges of any nature
whatsoever, including interest penalties, from time to time or at any time
imposed by any Law or any Tribunal.
"Tender Offer" means the Company's Offer to Purchase and Consent
Solicitation Statement dated November 20, 2000, as amended, with respect to the
Ameristar 10.50% Notes.
"Tender Offer Documents" means the documents relating to the Tender
Offer.
"Term Loan" shall have the meaning ascribed to such term in Section
2.2A.
"Term Loan Commitment" has the meaning ascribed to such term in Section
2.2A.
"Term Notes" has the meaning ascribed to such term in Section 2.2E.
"The Reserve" shall mean the property known as The Reserve Hotel Casino
and located at 000 Xxxx Xxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxx.
"Transaction Costs" means the fees, costs and expenses payable by the
Company pursuant hereto and other fees, costs and expenses payable by the
Company or a Subsidiary of the Company in connection with the Transactions.
"Transaction Date" has the meaning ascribed to such term in the
definition of "Consolidated Fixed Charge Coverage Ratio."
"Transactions" shall mean, collectively, (i) the Acquisitions, (ii) the
incurrence of the loans drawn down on the Closing Date under the Credit
Agreement, (iii) the incurrence of the Bridge Loan hereunder on the Closing
Date, (iv) the Tender Offer, (v) any other transaction on the Closing Date
contemplated in relation to the foregoing and (vi) the payment of fees and
expenses in connection with the foregoing.
"Transferee" has the meaning ascribed to such term in Section 12.19A.
"Tribunal" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency, authority or
instrumentality of the United States or any state, province, commonwealth,
nation, territory or possession whether now or hereafter constituted and/or
existing, including, but not limited to, any Gaming Authority.
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the value of the accumulated plan benefits under the Plan, determined
on a plan termination basis in accordance with actuarial assumptions at such
time consistent with those pre-
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scribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the fair
market value of all plan assets allocable to such liabilities under Title IV of
ERISA (excluding any accrued but unpaid contributions).
"Unrestricted Subsidiary" of any Person means:
(1) any Subsidiary of such Person that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the
Board of Directors of such Person in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary), other than Ameristar Casino Council
Bluffs, Inc., Ameristar Casino Vicksburg, Inc., Ameristar Casino Kansas City,
Inc., Ameristar Casino St. Xxxxxxx, Inc., Cactus Pete's, Inc. and (prior to the
sale of The Reserve) ACLVI, to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, the Company or any other Subsidiary of the Company that is not a Subsidiary
of the Subsidiary to be so designated; provided that:
(1) the Company certifies to the Agent that such designation complies
with Section 6.3; and
(2) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable
with respect to any Indebtedness pursuant to which the lender has recourse
to any of the assets of the Company or any of its Restricted Subsidiaries.
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary only if:
(1) immediately after giving effect to such designation, the Company
is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 6.1; and
(2) immediately before and immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing.
Any such designation by the Board of Directors shall be evidenced to
the Agent by promptly filing with the Agent a copy of the Board Resolution
giving effect to such designation and an officers' certificate certifying that
such designation complied with the foregoing provisions.
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"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Wholly
Owned Subsidiary of such Person which at the time of determination is a
Restricted Subsidiary of such Person.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than in the case of
a foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly Owned Subsidiary of such Person.
1.2 Accounting Terms
For the purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to them in conformity with GAAP.
1.3 Other Definitional Provisions; Anniversaries
Any of the terms defined in Section 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference.
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SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS; NOTES
2.1 Bridge Loan and Bridge Note
A. Bridge Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the Company
herein set forth, the Lenders hereby severally and not jointly agree to lend to
the Company on the Closing Date $300,000,000 in the aggregate (the "Bridge
Loan"), each such Lender committing to lend the amount set forth next to such
Lender's name on the signature pages hereto. The Lender's commitment to make the
Bridge Loan to the Company pursuant to this Section 2.1A are herein called
individually, the "Bridge Loan Commitment" and collectively the "Bridge Loan
Commitments."
B. Notice of Borrowing. When the Company desires to borrow under this
Section 2.1, it shall deliver to the Agent a Notice of Borrowing no later than
3:00 P.M. (New York time) at least one Business Day in advance of the Closing
Date or such later date as shall be agreed to by the Agent. The Notice of
Borrowing shall specify the applicable date of borrowing (which shall be a
Business Day). Upon receipt of such Notice of Borrowing, the Agent shall
promptly notify each Lender of its pro rata share of the Bridge Loan and the
other matters covered by the Notice of Borrowing.
C. Disbursement of Funds. (a) No later than 11:00 A.M. on the Closing
Date, each Lender will make available its pro rata share of the Bridge Loan
requested to be made on such date in the manner provided below. All amounts
shall be made available to the Agent in U.S. Legal Tender and immediately
available funds at the Payment Office and the Agent immediately will make
available to the Company by depositing to its account at the Payment Office the
aggregate of the amounts so made available in the type of funds received.
Unless the Agent shall have been notified by any Lender prior to the
Closing Date that such Lender does not intend to make available to the Agent its
pro rata share of the Bridge Loan to be made on such date, the Agent may assume
that such Lender has made such amount available to the Agent on such date, and
the Agent, in reliance upon such assumption, may (in its sole discretion and
without any obligation to do so) make available to the Company a corresponding
amount. If such corresponding amount is not in fact made available to the Agent
by such Lender and the Agent have made available same to the Company, the Agent
shall be entitled to recover such corresponding amount from such Lender. If such
Lender does not pay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent shall promptly notify the Company, and the Company shall
immediately pay such corresponding amount to the Agent. The Agent shall also be
entitled to recover from such Lender or the Company, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Company to the date
such corresponding amount is recovered by the Agent, at a rate per an-
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num equal to (x) if paid by such Lender, the overnight Federal Funds Rate or (y)
if paid by the Company, the then applicable rate of interest on the Loans.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Bridge Loan Commitment hereunder or to prejudice any
rights which the Company may have against any Lender as a result of any default
by such Lender hereunder.
D. Bridge Notes. The Company shall execute and deliver to each Lender
on the Closing Date a Bridge Note dated the Closing Date substantially in the
form of Exhibit I to evidence such Lender's pro rata share of the Bridge Loan
Commitment and with appropriate insertions (the "Bridge Notes").
E. Scheduled Payment of Bridge Loan. Subject to Section 2.2, the
Company shall pay in full the out standing amount of the Bridge Loan and all
other Obligations owing hereunder no later than the Conversion Date.
F. Termination of Bridge Loan Commitment. The Bridge Loan Commitment
hereunder shall terminate on the earlier of (i) the termination of either
Acquisition Agreement in accordance with the respective terms thereof or (ii)
April 30, 2001 if no portion of the Bridge Loan has been funded (other than as a
result of the failure of the Lenders to fulfill their obligations hereunder) on
or before such date.
G. Pro Rata Borrowings. The Bridge Loan made under this Agreement shall
be made by the Lenders pro rata on the basis of their respective Bridge Loan
Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make its portion of the Bridge
Loan hereunder and that each Lender shall be obligated to make its portion of
the Bridge Loan hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.
2.2 Term Loan and Term Note
A. Term Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the Company
herein set forth, the Lenders hereby agree, on the Conversion Date, upon the
request of the Company, to convert the then outstanding principal amount of the
Bridge Notes of each such Lender into a term loan (the "Term Loan"), such Term
Loan to be in the aggregate principal amount of the then outstanding principal
amount of the Bridge Notes. The Lenders' commitments under this Section 2.2A are
herein called collectively, the "Term Loan Commitment."
B. Notice of Conversion/Borrowing. If the Company has not repaid the
Bridge Loan in full on or prior to the Conversion Date, then the Company shall
convert the then outstanding principal amount of the Bridge Notes into a Term
Loan under this Section 2.2. The Company shall deliver to the Lenders a Notice
of Conversion no later than 11:00
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A.M. (New York time), at least two Business Days in advance of the Conversion
Date. The Notice of Conversion shall specify the principal amount of the Bridge
Notes outstanding on the Conversion Date to be converted into a Term Loan.
C. Making of Term Loan. Upon satisfaction or waiver of the conditions
precedent specified in Section 3.2, each Lender shall extend to the Company the
Term Loan to be issued on the Conversion Date by such Lender by canceling on its
records a corresponding principal amount of the Bridge Notes held by such
Lender.
D. Maturity of Term Loan. The Term Loan shall mature and the Company
shall pay in full the outstanding principal amount thereof and accrued interest
thereon on June 20, 2008 (the "Maturity Date").
E. Term Notes. The Company, as borrower, shall execute and deliver to
each Lender on the Conversion Date a Term Note dated the Conversion Date
substantially in the form of Exhibit II to evidence the Term Loan made on such
date, in the principal amount of the Bridge Notes held by such Lender on such
date and with other appropriate insertions (collectively the "Term Notes").
2.3 Interest on the Loans
A. Rate of Interest. The Loans shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
prepayment, acceleration or otherwise) at a rate determined as set forth below.
(i) Floating Rate Loans. Subject to Sections 2.3A(ii) and (iii), the
Loans shall bear interest for each Monthly Period at a rate per annum equal
to the Applicable Rate for such period.
(ii) Fixed Rate Loans. Subject to Section 2.3A(iii), at any time on
and after the Conversion Date, at the request of any Lender and with the
written consent of the Majority Lenders, all or any portion of the Term
Loan owing to such Lender shall bear interest at a fixed rate per annum
equal to the rate of interest borne by the Term Loans at the time of such
request (such rate of interest equal to the Applicable Rate (the "Fixed
Rate" and such a Loan, a "Fixed Rate Loan"), effective as of the first
interest payment date with respect to such Term Loan after such notice so
long as the 30 Business Days' notice set forth below is given; provided
that no such conversion shall be permitted in respect of amounts to be
voluntarily prepaid following receipt of a notice of prepayment pursuant to
Section 2.5A. In order to request the conversion of a Floating Rate Loan to
a Fixed Rate Loan, the Lender shall notify the Agent in writing of its
intention to do so at least 45 Business Days prior to an interest payment
date, indicating the amount of the Term Loan for which it is requesting
conversion to a Fixed Rate Loan, which shall be not less than $5,000,000
and increments of $100,000 in ex-
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cess thereof, and the Agent shall notify the other Lenders, and if the
Majority Lenders consent to such request, the Agent shall so notify the
Company at least 30 Business Days prior to such next succeeding interest
payment date. Upon the conversion of a portion of a Floating Rate Loan to a
Fixed Rate Loan an appropriate notation will be made on the Term Note and,
on and after the first interest payment date following the receipt by the
Company of a notice hereunder, such portion of the Term Loan which is
converted to a Fixed Rate Loan shall bear interest at the Fixed Rate until
repaid.
(iii) Notwithstanding clause (i) or (ii) of this Section 2.3A or any
other provision herein, in no event, other than that set forth below in
Section 2.3C, will the interest rate on any Loan exceed the cash and
combined interests rates set forth in Section 2.3B(ii).
B. Interest Payments. (i) Interest shall be payable (a) with respect to
the Bridge Loan, in arrears on April 1, 2001, July 1, 2001, October 1, 2001,
January 1, 2002, and upon any prepayment of the Bridge Loan (to the extent
accrued on the amount being prepaid) and at maturity of the Bridge Loan in
respect of any amounts paid on such date and not converted to Term Loans and (b)
with respect to the Term Loan, (X) in arrears on April 1, July 1, October 1, and
January 1 of each year, in the case of Floating Rate Loans, and (Y) in arrears
on April 1 and October 1 of each year, in the case of Fixed Rate Loans, in each
case commencing on the first of such dates to follow the Conversion Date, upon
any prepayment of the Term Loan (to the extent accrued on the amount being
prepaid) and at maturity of the Term Loan.
(ii) Interest on the Bridge Loan and the Term Loan will be paid in cash
to the extent that the combined sum of the interest on the Bridge Loan and the
Term Loan is less than or equal to a rate per annum of 13.50%. To the extent
that such combined sum is not paid in cash, it shall be paid in debt securities
having terms and provisions identical to the Bridge Loan or the Term Loan, as
the case may be; provided, however, that in no event, other than that set forth
below in Section 2.3C, will the combined sum of interest (cash or otherwise) on
the Bridge Loan and the Term Loan exceed 15.50% per annum.
C. Post-Maturity Interest. Notwithstanding any other provision of this
Agreement to the contrary, any principal payments on the Loans not paid when due
and, to the extent permitted by applicable law, any interest payment on the
Loans not paid when due, in each case whether at stated maturity, by notice of
prepayment, by acceleration or otherwise, shall thereafter bear interest payable
upon demand at a rate which is 2.00% per annum in excess of the rate of interest
otherwise payable under this Agreement for the Loans.
D. Computation of Interest. Interest on the Loans shall be computed on
the basis of a 365-day year and, with respect to any amount of the Loans which
are Floating Rate Loans, the actual number of days elapsed in the period during
which it accrues or, with respect to any amount of the Loans which are Fixed
Rate Loans, twelve 30-day months. In
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computing interest on the Loans, the date of the making of the Loans shall be
included and the date of payment shall be excluded; provided that if a Loan is
repaid on the same day on which it is made, one day's interest shall be paid on
that Loan.
2.4 Fees
The Company agrees to pay to Bankers Trust Corporation all fees and
other obligations in accordance with, and at the times specified by, the
Commitment Letter.
2.5 Prepayments and Payments
A. Prepayments
(i) Voluntary Prepayments. The Company may, upon not less than three
Business Days' prior written or telephonic notice confirmed in writing to the
Agent at any time and from time to time, prepay the Loans made to the Company in
whole or in part; provided that unless Loans are to be prepaid in full, without
the written consent of the Majority Lenders, such voluntary prepayments (i)
shall not result in the aggregate amount of the Loans outstanding being less
than $150,000,000 or (ii) shall not be made at a time when the aggregate amount
of the Loans outstanding is less than $150,000,000; provided, further, that at
such time as all or part of the Term Loan bears interest at the Fixed Rate, the
Term Loan or such part that bears interest at the Fixed Rate, as the case may
be, will not be redeemable prior to January 1, 2005, and thereafter will be
redeemable at the option of the Company, in whole or in part, at any time at the
redemption prices (expressed as a percentage of principal amount) set forth
below, plus accrued and unpaid interest (which shall be paid in cash) to the
redemption date, if redeemed during the 12-month period beginning January 1 of
the years indicated below:
Year Percentage
---- ----------
2005 ...................................................... 106.75%
2006 ...................................................... 104.50%
2007 ...................................................... 102.25%
2008 ...................................................... 100.00%
Notice of prepayment having been given as aforesaid, the principal
amount of the Loans to be prepaid shall become due and payable on the prepayment
date. Amounts of the Loans so prepaid may not be reborrowed. No such prepayment
shall be made without the consent of the Lenders unless all amounts owing are
paid in full.
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(ii) Mandatory Prepayments.
(a) Prepayments from Asset Sales. Upon receipt by the Company or any
Restricted Subsidiary of the Company of Cash Proceeds of any Asset Sale
permitted by Section 6.12, the Company or any Restricted Subsidiary of the
Company shall, or shall cause its Restricted Subsidiaries to, apply the Net Cash
Proceeds of such Asset Sale (w) to prepay the term loans outstanding under the
Credit Agreement, (x) to prepay revolving loans outstanding under the Credit
Agreement; provided that the commitment under the Credit Agreement is
permanently reduced to the extent of the prepayment, (y) to prepay any other
Senior Debt or Guarantor Senior Debt or (z) apply any Net Cash Proceeds
remaining after application pursuant to clauses (w), (x) and (y) above to a
Permitted Line of Business; provided, that with respect to the Disposition, the
Company may apply up to $20.0 million of Net Cash Proceeds to prepay revolving
loans under the Credit Agreement without a permanent reduction of the commitment
thereunder and shall apply the balance pursuant to clause (w). Promptly after
the consummation of an Asset Sale, the Company shall deliver to the Agent an
Officers' Certificate demonstrating the derivation of Net Cash Proceeds from the
gross sales price of such Asset Sale.
To the extent not used as above, the Company shall, or shall cause its
Restricted Subsidiaries to, prepay the Floating Rate Loans and make offers to
repurchase the Fixed Rate Loans and the Exchange Notes, all on a pro rata basis,
with the Net Cash Proceeds received from any Asset Sale on a date not later than
the Business Day next succeeding the 365th day after the consummation of such
Asset Sale if and to the extent that such Net Cash Proceeds are not applied by
the Company or any Restricted Subsidiary of the Company within 365 days as
provided in the immediately preceding paragraph; provided that the offers to
repurchase Fixed Rate Loans and Exchange Notes shall be at 100% of the principal
amount thereof plus accrued and unpaid interest thereon (in cash) to the date of
repurchase; provided, further, that to the extent holders of Fixed Rate Loans or
Exchange Notes do not accept such offer the Company will apply any Net Cash
Proceeds not accepted by such holders (1) to prepay additional amounts of
Floating Rate Loans and (2) to the extent additional Net Cash Proceeds remain
after application of clause (1), to purchase additional Fixed Rate Loans or
Exchange Notes, as the case may be, which were tendered for repurchase and not
accepted.
Notwithstanding the foregoing provisions of this paragraph, after the
Conversion Date, so long as no Default or Event of Default shall have occurred
and be continuing, no mandatory repayments shall be required pursuant to this
paragraph until the date on which the aggregate Net Cash Proceeds from all Asset
Sales not reinvested within the time periods specified by this paragraph equal
or exceed $5.0 million.
(b) Prepayments from Issuances of Take-Out Securities. Concurrently
with the receipt by the Company of proceeds from the issuance of Take-Out
Securities the
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Company shall prepay the Bridge Loans (at a price per Note equal to the
principal amount of such Note plus accrued and unpaid interest (in cash), if
any, to the date of payment).
(c) Notice. The Company shall notify the Agent of any prepayment to be
made pursuant to this Section 2.5A(ii) at least two Business Days prior to such
prepayment date (unless shorter notice is satisfactory to the Agent).
(iii) Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued interest on the
principal amount so prepaid and shall be applied to payment of interest before
application to principal.
(iv) Mandatory Offer to Purchase Notes. (a) Upon the occurrence of a
Change of Control (the date of such occurrence, the "Change of Control Date"),
the Lenders shall have the right to require the repurchase of all of the Notes
pursuant to an offer to purchase (the "Change of Control Offer") at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued
interest thereon to the date of repurchase. Prior to the mailing of the notice
to the Agent provided for in paragraphs (b) and (c) below but in any event
within 30 days following any Change of Control, the Company hereby covenants to
(i) repay in full and terminate all commitments under Indebtedness under the
Credit Agreement and all other Senior Debt the terms of which require repayment
upon a Change of Control (or that prohibits consummation of the Change of
Control Offer) or to offer to repay in full and terminate all commitments under
all Indebtedness under the Credit Agreement and all other such Senior Debt and
to repay the Indebtedness of each lender which has accepted such offer or (ii)
obtain the requisite consents under the Credit Agreement and all other such
Senior Debt to permit the repurchase of the Notes as provided for in paragraph
(d) below. The Company shall first comply with the covenant in the immediately
preceding sentence before it shall be required to repurchase the Notes pursuant
to this Section 2.5A(iv).
(b) The notice to the Agent shall contain all instructions and
materials necessary to enable the Lenders to tender Notes pursuant to the Change
of Control Offer.
(c) Within 30 days following the Change of Control Date the Company
shall mail a notice to the Agent stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 2.5A(iv) and that all Notes validly tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which shall be a
Business Day that is no earlier than 30 days nor later than 60 days from
the date such notice is mailed (the "Offer Payment Date");
(3) that any Note not tendered will continue to accrue interest;
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(4) that any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Offer Payment Date
unless the Company shall default in the payment of the repurchase price of
the Notes;
(5) that if a Lender elects to have a Note purchased pursuant to the
Change of Control Offer it will be required to surrender the Note, with the
form entitled "Op tion of Holder to Elect Purchase" on the reverse of the
Note completed, to the Company prior to 9:00 a.m. New York time on the
Offer Payment Date;
(6) that a Lender will be entitled to withdraw its election if the
Company receives, not later than 9:00 a.m. New York time on the Business
Day preceding the Offer Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the principal amount of Notes such
Lender delivered for purchase, and a statement that such Lender is
withdrawing its election to have such Note purchased; and
(7) that if Notes are purchased only in part a new Note of the same
type will be issued in principal amount equal to the unpurchased portion of
the Notes surrendered.
(d) On or before the Offer Payment Date, the Company shall (i) accept
for payment Notes or portions thereof which are to be purchased in
accordance with the above, and (ii) deposit at the Payment Office U.S.
Legal Tender sufficient to pay the purchase price of all Notes to be
purchased. The Agent shall promptly mail to the Lenders whose Notes are so
accepted payment in an amount equal to the purchase price unless such
payment is prohibited pursuant to Section 8 hereof or otherwise.
(e) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with
the purchase of Notes pursuant to an offer hereunder. To the extent the
provisions of any securities laws or regulations conflict with the
provisions under this Section, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached
its obligations under this Section by virtue thereof.
B. Manner and Time of Payment. All payments of principal and interest
hereunder and under the Notes by the Company shall be made without defense,
setoff or counterclaim and in same-day funds and delivered to the Agent, unless
otherwise specified, not later than 3:00 P.M. (New York time) on the date due at
the Payment Office for the account of the Lenders; funds received by the Agent
after that time shall be deemed to have been paid by the Company on the next
succeeding Business Day. The Company hereby authorizes the Agent to charge its
account with the Agent in order to cause timely payment to be made of all
principal, interest and fees due hereunder (subject to sufficient funds being
available in its account for that purpose).
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C. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which is not a
Business Day, the payment shall be made on the next succeeding Business Day and
such extension of time shall be included in the compu tation of the payment of
interest hereunder or under the Notes or of the commitment and other fees
hereunder, as the case may be.
D. Notation of Payment. Each Lender agrees that before disposing of any
Note held by it, or any part thereof (other than by granting participations
therein), such Lender will make a notation thereon of all principal payments
previously made thereon and of the date to which interest thereon has been paid
and will notify the Company of the name and address of the transferee of that
Note; provided that the failure to make (or any error in the making of) such a
notation or to notify the Company of the name and address of such transferee
shall not limit or otherwise affect the obligation of the Company hereunder or
under such Notes with respect to the Loans and payments of principal or interest
on any such Note.
2.6 Use of Proceeds
A. Bridge Loan. The proceeds of the Bridge Loan shall be applied by the
Company, together with borrowings under the Credit Agreement, to the payment of
the Transaction Costs, to pay for the Acquisitions, to consummate the Tender
Offer and to repay other outstanding Indebtedness of the Company.
B. Term Loan. Upon the extension of a Term Loan by a Lender, the
Company and such Lender shall cancel a corresponding principal amount of Bridge
Notes held by such Lender.
C. Margin Regulations. No portion of the proceeds of any borrowing
under the Loan Documents shall be used by the Company in any manner which might
cause the borrowing or the application of such proceeds to violate the
applicable requirements of Regulation U, Regulation T or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation of the
Board of Governors or to violate the Exchange Act, in each case as in effect on
the date or dates of such borrowing and such use of proceeds.
SECTION 3 CONDITIONS
3.1 Conditions to Bridge Loan
The obligations of the Lenders to make the Bridge Loan are subject to
prior or concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all
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documents incidental hereto and thereto not previously found acceptable by the
Agent shall be reasonably satisfactory in form and substance to the Agent, and
the Agent shall have received on behalf of the Lenders the following items, each
of which shall be in form and substance reasonably satisfactory to the Agent
and, unless otherwise noted, dated the Closing Date:
(1) a copy of the Company's and each Guarantor's charter, certified as
of the Closing Date by one of its Officers, together with a certificate of
status, compliance, good standing or like certificate with respect to the
Company and each Guarantor issued by the appropriate government officials
of the jurisdiction of its incorporation, each to be dated a recent date
prior to the Closing Date;
(2) a copy of the Company's and each Guarantor's bylaws, certified as
of the Closing Date by one of its Officers;
(3) resolutions of the Company's and each Guarantor's Board of
Directors approving and authorizing the execution, delivery and performance
of this Agreement, each of the other Documents to which it is a party and
any other documents, instruments and certificates required to be executed
by the Company or such Guarantor in connection herewith and therewith and
approving and authorizing the execution and delivery of the Documents and
the consummation of the Transactions, each certified as of the Closing Date
by one of its Officers as being in full force and effect without
modification or amendment;
(4) executed copies of this Agreement and the Bridge Notes
substantially in the form of Exhibit I executed in accordance with Section
2.1D drawn to the order of the Lenders and with appropriate insertions;
(5) an originally executed Notice of Borrowing substantially in the
form of Exhibit IV-A, signed by a duly authorized Officer of the Company;
(6) originally executed copies of the written opinions of (i) Xxxxxx,
Xxxx & Xxxxxxxx LLP, special counsel to the Company and the Guarantors,
addressed to the Agent and each of the Lenders covering the matters set
forth in Exhibit VI-A, (ii) local counsel satisfactory to the Agent, each
of which shall be in form and substance reasonably satisfactory to the
Agent and the Majority Lenders and shall cover such other matters incident
to the transactions contemplated herein as the Agent may reasonably
request, substantially in the form of Exhibit VI-B and (iii) local gaming
counsel reasonably satisfactory to the Agent, each of which shall be in
form and substance reasonably satisfactory to the Agent and the Majority
Lenders and shall cover Missouri,
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Nevada, Mississippi and Iowa Gaming Regulations and such other matters
incident to the transactions contemplated herein as the Agent may
reasonably request, substantially in the form of Exhibit VI-C, and (III)
such other opinions of counsel and such certificates or opinions of
accountants, appraisers or other professionals as the Agent shall have
reasonably requested including, without limitation, receipt of an
environmental report and technical reports from independent consultants in
respect of the Company and the Subsidiaries of the Company and their
respective properties, reasonably satisfactory to the Agent;
(7) a solvency certificate addressed to the Agent and dated the
Closing Date from the chief financial officer of the Company, which
solvency certificate shall be in the form of Exhibit L (appropriately
completed) to the Credit Agreement, expressing opinions of value and other
appropriate factual information regarding the solvency of the Company and
its Subsidiaries (on a consolidated basis) after giving effect to the
Transactions and the incurrence of all financings contemplated herein;
(8) true and correct copies of the Acquisition Agreements, which shall
not have been amended without the Agent's consent (which consent shall not
be unreasonably withheld or delayed) and which shall be in full force and
effect and each of the conditions to purchase contained therein shall have
been performed or complied with substantially on the terms set forth
therein and not waived without the Agent's consent (which consent shall not
be unreasonably withheld or delayed);
(9) (i) executed or conformed copies of the Credit Agreement and any
amendments thereto made on or prior to the Closing Date and a copy of each
legal opinion delivered in connection with the Credit Agreement, and the
terms and provisions of the Credit Agreement and all documents and
instruments relating thereto shall be reasonably satisfactory to the Agent,
(ii) an Officers' Certificate from the Company certifying that the Credit
Agreement is in full force and effect on the Closing Date and (iii) an
Officers' Certificate from the Company to the effect that such party has
performed or complied with all agreements and conditions contained in the
Credit Agreement, except where such agreements or conditions would not
reasonably be expected to have a Material Adverse Effect; the Company shall
have received $475.0 million in cash on the Closing Date from borrowings
under the Credit Agreement; and
(10) a notation of Guarantee, executed and delivered by each
Guarantor, dated the date of this Agreement, substantially in the form of
Exhibit VIII, as applicable.
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B. On or prior to the Closing Date, (A) all necessary governmental
(domestic and foreign), regulatory and third party approvals in connection with
the Transactions including, but not limited to all authorizations, consents and
approvals of the relevant Gaming Authorities (except those described in Section
12.24), shall have been obtained and remain in full force and effect and all
applicable waiting periods under Law applicable to the Acquisitions shall have
expired without any action being taken by any competent authority (including
without limitation, any Tribunal) which restrains, prevents or imposes
materially adverse conditions upon the completion of the Acquisitions or the
financing thereof and evidence of the receipt of such authorizations, consents
and approvals satisfactory to the Agent shall have been delivered to the Agent
and (B) all necessary material governmental (domestic and foreign), regulatory
and third party approvals in connection with any Existing Debt which are to
remain outstanding after the Closing Date and the consummation of the
Transactions shall have been obtained and remain in full force and effect and
evidence thereof shall have been provided to the Agent. On the Closing Date, no
litigation by any entity (private or governmental) shall be pending or
threatened in writing (i) with respect to the Transactions or any documentation
executed in connection therewith (including any Loan Document) or the
transactions contemplated thereby or with respect to any Existing Debt or (ii)
which the Agent shall reasonably determine would reasonably be likely to have
(x) a materially adverse effect on the Transactions or on the rights or remedies
of the Agent or the Lenders or on the ability of the Company or any of its
Subsidiaries to perform their respective obligations hereunder to the Agent and
the Lenders or (y) a Material Adverse Effect.
C. On or before the Closing Date, the Company shall have paid to
Bankers Trust Corporation the fees payable on the Closing Date pursuant to
Section 2.4.
D. The Company shall have received valid tenders and consents of the
holders of at least 51% of the outstanding principal amount of the Ameristar
10.50% Notes pursuant to the Tender Offer, and the Company shall have,
simultaneously with the funding of the Bridge Loan, purchased all Ameristar
10.50% Notes so tendered pursuant to the Tender Offer and shall have executed a
supplemental indenture therefor.
E. Simultaneously with the making of the Bridge Loan by the Lenders,
the Company shall have delivered to the Agent an Officers' Certificate from the
Company in form and substance satisfactory to the Agent to the effect that (i)
the representations and warranties in Section 4 are true, correct and complete
in all material respects on and as of the Closing Date to the same extent as
though made on and as of that date, (ii) on or prior to the Closing Date, the
Company has performed and complied with in all material respects all covenants
and conditions to be performed and observed by the Company hereunder on or prior
to the Closing Date (other than such conditions the
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satisfaction of which is subject to the satisfaction of the Agent and/or the
Majority Lenders) and (iii) all conditions to the consummation of the
Acquisitions in the Acquisition Agreements have been satisfied substantially on
the terms set forth therein and have not been waived or amended without the
Agent's prior written consent (which consent shall not be unreasonably withheld
or delayed).
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of Borrowing which
would constitute an Event of Default or Default.
G. The pro forma consolidated capital structure of the Company and its
Subsidiaries, after giving effect to the Transactions, shall be consistent with
the capital structure contemplated in the Commitment Letter, and other than the
Bridge Loan and the Credit Agreement and the Existing Debt, the Company and its
Subsidiaries, after giving effect to, and upon consummation of, the
Transactions, shall have no outstanding indebtedness for money borrowed.
H. The Company shall have entered into an agreement to engage Deutsche
Bank Securities Inc. (the "Take-Out Bank") reasonably satisfactory to the Agent
providing that the Take-Out Bank will, to the extent that the Company deems it
necessary and advisable, publicly sell or privately place the Demand Take-Out
Notes, and such agreement shall be in full force and effect.
I. (i) There shall not have occurred since June 30, 2000 (and the
Lenders shall have become aware of no facts or conditions not previously known
to the Lenders) anything which the Lenders shall reasonably determine could have
a material adverse effect on the rights or remedies of the Lenders, or on the
ability of the Company to perform its obligations to the Lenders or which could
reasonably be expected to have a materially adverse effect on the business,
property, assets, nature of assets, liabilities, condition (financial or
otherwise), results of operations or prospects of the Company after giving
effect to the Transactions; (ii) trading in securities generally on the New York
or American Stock Exchange shall not have been suspended; minimum or maximum
prices shall not have been established on any such exchange; (iii) a banking
moratorium shall not have been declared by New York or United States
authorities; or (iv) there shall not have occurred either (A) an outbreak or
escalation of hostilities between the United States and any foreign power, or
(B) an outbreak or es calation of any other insurrection or armed conflict
involving the United States or any other national or international calamity or
emergency, or (C) any material change in the general financial markets of the
United States since the date of the Commitment Letter which, in each case, in
the reasonable judgment of the Agent, would materially and adversely affect the
ability to sell or syndicate the Bridge Loan or to sell or place the Demand
Take-Out Notes.
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J. The Agent and its counsel shall be satisfied that the consummation
of the Acquisitions and the related financing, including the funding of the
Bridge Loan, shall be in compliance with all applicable Laws (including without
limitation Regulation T, U or X of the Board of Governors of the Federal Reserve
System).
K. Copies of the Projections shall have been made available to the
Agent.
L. On or prior to the Closing Date, there shall have been made
available to the Agent true and correct copies of the following documents, in
each case as the same will be in effect on the Closing Date after the
consummation of the Transactions:
(1) any material employment agreements entered into by the Company or
any of its Subsidiaries in connection with the Acquisitions (collectively,
the "Employment Agreements"); and
(2) all agreements evidencing or relating to Existing Debt of the
Company or any of its Subsidiaries after giving effect to the Transactions
(other than Existing Debt in the aggregate not in excess of $1.0 million);
all of which Employment Agreements and Existing Debt agreements shall be in form
and substance reasonably satisfactory to the Agent and the Majority Lenders and
shall be in full force and effect on the Closing Date.
M. Simultaneously with the making of the Bridge Loan by the Lender,
the Acquisitions shall have been consummated on the terms set forth in the
Acquisition Agreements and no conditions set forth therein shall have been
waived or amended without the Agent's prior written consent.
3.2 Conditions to Term Loan
The obligation of the Lenders to make the Term Loan on the Conversion
Date is subject to the prior or concurrent satisfaction or waiver of the
following conditions precedent:
A. The Agent shall have received in accordance with the provisions of
Section 2.2B an originally executed Notice of Conversion.
B. An Event of Default or Default shall not have occurred and be
continuing under Section 7.6 or 7.7.
C. No Event of Default or Default (whether matured or not) shall have
occurred and be continuing under Section 7.1.
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D. No Event of Default or Default shall have occurred under Section
7.2; provided that for purposes of this Section 3.2D the reference to
$10,000,000 in Section 7.2 shall be deemed to be $5,000,000; provided,
further, that if an event described in this Section 3.2D is continuing at
the Conversion Date but 10 days has not passed since the date of written
notice of the commencement of such 10-day period from the Majority Lenders
(the "Grace Period"), the Conversion Date shall be deferred until the
earlier to occur of (x) the cure of such event or (y) the expiration of
such Grace Period.
E. On the Conversion Date, the Agent shall have received an Officers'
Certificate from the Company, dated the Conversion Date and satisfactory in
form and substance to the Agent, to the effect that the conditions in this
Section 3.2 are satisfied on and as of the Conversion Date.
F. The Company shall have executed and delivered to the Agent on the
Conversion Date for delivery to the Lenders Term Notes dated the Conversion
Date substantially in the form of Exhibit II to evidence the Term Loan, in
the principal amount of (which principal amount shall be the aggregate
principal amount of the Bridge Loan outstanding on the Conversion Date) the
Term Loan and with other appropriate insertions.
G. The Company shall have paid any fees owing pursuant to Section 2.4
in cash to Bankers Trust Corporation.
H. The conversion to the Term Loan shall not violate Regulation T, U
or X of the Board of Governors of the Federal Reserve System or any other
regulation of the Board.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make
the Loans, the Company represents and warrants to the Lenders that, at the time
of execution hereof and after consummation of the Transactions, the following
statements are true, correct and complete:
4.1 Company Status
Each of the Company and its Subsidiaries (i) is a duly organized and
validly existing company in good standing under the laws of the jurisdiction of
its organization, (ii) has the company power and authority to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the conduct of its
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business requires such qualification except for failures to be so qualified
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
4.2 Company Power and Authority
Each of the Company and its Subsidiaries has the power and authority to
execute, deliver and perform the terms and provisions of each of the Documents
to which it is a party and has taken all necessary company action to authorize
the execution, delivery and performance by it of each of such Documents. Each of
the Company and its Subsidiaries has duly executed and delivered each of the
Documents to which it is a party, and each of such Documents constitutes the
legal, valid and binding obligation of such party enforceable in accordance with
its terms, except to the extent that the enforceability thereof may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
4.3 No Violation
Neither the execution, delivery or performance by the Company or any of
its Subsidiaries of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, nor consummation of the transactions
contemplated therein (i) will contravene any material provision of any
applicable law, statute, rule or regulation or of any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Credit Agreement) upon any of the material
properties or assets of the Company or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument, to which the
Company or any of its Subsidiaries is a party or by which it or any of its
material property or assets is bound or to which it may be subject (including,
without limitation, the indenture relating to the Ameristar 10.50% Notes, the
Credit Agreement and, on and after the execution and delivery thereof, the
indentures relating to the Exchange Notes, the Demand Take-Out Notes and the
Take-Out Securities), or (iii) will violate any provision of the certificate of
incorporation or by-laws (or equivalent organizational documents) of the Company
or any of its Subsidiaries.
4.4 Governmental Approvals
Subject to certain filings which must be made with the Mississippi
Gaming Commission in connection with the Take-Out Securities and except for the
approvals described in Section 12.24 hereof or Section 13.17 of the Credit
Agreement, no order, consent, approval, license, authorization or validation of,
or filing, recording or registration with (except as have been obtained or made
prior to the date when required and which remain in full
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force and effect), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with, (i) the Transactions, (ii) the execution, delivery and
performance of any Document or (iii) the legality, validity, binding effect or
enforceability of any such Document.
4.5 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc.
(a) The balance sheets, statements of operations, statements of
stockholders' equity, statements of changes in stockholders' equity and
statements of cash flows of the Company and its Subsidiaries as furnished to the
Lenders prior to the Closing Date fairly present the financial condition and
operations of the Company and its Subsidiaries at and for the periods indicated.
All such financial statements have been prepared in accordance with GAAP,
consistently applied. After giving effect to the Transactions, since June 30,
2000, there has been no material adverse change in the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole.
(b)(i) On and as of the Closing Date, after giving effect to the
Transactions and to all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by the Company and its Subsidiaries in connection
therewith, (a) the sum of the assets, at a fair valuation, of the Company and
its Subsidiaries will exceed their debts; (b) the Company and its Subsidiaries
taken as a whole have not incurred and do not intend to incur, and do not
believe that they will incur, debts beyond their ability to pay such debts as
such debts mature; and (c) the Company and its Subsidiaries taken as a whole
will have sufficient capital with which to conduct their businesses. For
purposes of this Section 4.5(b), "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 4.5(a) or as disclosed in writing to the Lenders prior to
the Closing Date, there were as of the Closing Date no liabilities or
obligations with respect to the Company or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, would be material to the
Company or to the Company and its Subsidiaries taken as a whole. As of the
Closing Date the Company does not know of any basis for the assertion against it
of any liability or obligation of any nature whatsoever that is not fully
disclosed in the financial statements delivered pur-
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suant to Section 4.5(a) which, either individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
(d) On and as of the Closing Date, the financial projections dated as
of November 2000 (the "Projections") previously delivered to the Agent and the
Lenders have been prepared on a basis consistent with the financial statements
referred to in Section 4.5(a) (other than as set forth or presented in such
Projections), and there are no statements or conclusions in any of the
Projections which are based upon or include information known to the Company to
be misleading in any material respect or which fail to take into account
material information regarding the matters reported therein. On the Closing
Date, the Company believed that the Projections were reasonable estimates of the
Company's anticipated performance, based on good faith assumptions and the best
information available to the Company as of the date of delivery thereof and as
of the Closing Date.
4.6 Litigation
There are no actions, suits or proceedings pending or, to the best
knowledge of the Company, threatened (i) with respect to any Document on the
Closing Date or (ii) that could reasonably be expected to have a Material
Adverse Effect
4.7 True and Complete Disclosure
All factual information (taken as a whole) furnished by or on behalf of
the Company or any of its Subsidiaries in writing to the Agent or any Lender
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement, the other Documents or any
transaction contemplated herein or therein is, and all other such information
(taken as a whole) hereafter furnished by or on behalf of any such Person in
writing to the Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided; provided that with
respect to projected financial information, the only representations and
warranties made hereby are that such information was prepared based on good
faith estimates and assumptions made by management of the Company believed to be
reasonable at the time made and that there are no statements or conclusions in
any such information which are based upon or include information known to the
executive officers of the Company to be misleading or which fail to take into
account material information regarding the matters reported therein.
4.8 Tax Returns and Payments
Each of the Company and its Subsidiaries has timely filed or caused to
be timely filed, on the due dates thereof or within applicable grace periods,
with the appropriate taxing authority, all Federal and all material state and
foreign returns, statements, forms and
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reports for taxes (the "Returns") required to be filed by or with respect to the
income, properties or operations of the Company and/or any of its Subsidiaries.
The Returns accurately reflect in all material respects all liability for taxes
of the Company and its Subsidiaries, as the case may be, for the periods covered
thereby. Each of the Company and its Subsidiaries has paid all material taxes
payable by them other than taxes which are not delinquent or are being contested
in good faith and for which adequate reserves have been established in
accordance with GAAP. Except as disclosed in the financial statements referred
to in Section 4.5(a), as of the Closing Date there is no material action, suit,
proceeding, investigation, audit, or claim now pending or, to the best knowledge
of the Company or any of its Subsidiaries, threatened by any authority regarding
any taxes relating to the Company or any of its Subsidiaries. As of the Closing
Date, except as set forth in Schedule A, neither the Company nor any of its
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of the Company or any of its Subsidiaries, or is
aware of any circumstances that would cause the taxable years or other taxable
periods of the Company or any of its Subsidiaries not to be subject to the
normally applicable statute of limitations. Neither the Company nor any of its
Subsidiaries has incurred, or will incur, any material income tax liability in
connection with the Transactions and the other Transactions contemplated hereby
(other than as a result of the operations after the Closing Date of properties
acquired in the Transactions)
4.9 Compliance with ERISA
As of the Closing Date, neither Company, any Subsidiary or any ERISA
Affiliate sponsors, contributes to or maintains a Plan or has any actual or
contingent liability under any Plan. To the extent that Company, any Subsidiary
or any ERISA Affiliate becomes the sponsor, contributes to or maintains a Plan
or has any actual or contingent liability under a Plan, Company shall schedule
such Plan. To the extent applicable, each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws including, without limitation, ERISA and the Code; each Plan
(and each re lated trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401(a)
and 501(a) of the Code; no Reportable Event has occurred with respect to a Plan;
no Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA) is insolvent or in reorganization; no Plan has a material Unfunded
Current Liability; no Plan has an accumulated or waived funding deficiency, has
permitted decreases in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Code or Section 302 of ERISA has an accumulated funding deficiency, within the
meaning of such sections of the Code or ERISA, or has applied for or received a
waiver of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA; all contributions required to be made with respect to a Plan have been
timely made; neither the Company nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any
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material liability (including any indirect, contingent or secondary liability)
to or on account of a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or reasonably expects to incur any such liability under any of
the foregoing Sections with respect to any Plan; no condition exists which
presents a material risk to the Company or any of its Subsidiaries or any ERISA
Affiliate of incurring a material liability to or on account of a Plan pursuant
to the foregoing provisions of ERISA and the Code; to the knowledge of Company,
Subsidiary and each ERISA Affiliate, no proceedings have been instituted to
terminate or appoint a trustee to administer any Plan which is subject to Title
IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any Plan
(other than routine claims for benefits) is pending or, to the knowledge of
Company, Subsidiary and each ERISA Affiliate, expected or threatened; using
actuarial assumptions and computation methods consistent with Part 1 of subtitle
E of Title IV of ERISA, the aggregate liabilities of the Company, its
Subsidiaries and their ERISA Affiliates to all Plans which are multiemployer
plans (as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $5,000,000; each group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) which covers or has covered employees or
former employees of the Company, any Subsidiary of the Company, or any ERISA
Affiliate has at all times been operated in compliance in all material respects
with the provisions of Part 6 of subtitle B of Title I of ERISA and Section
4980B of the Code; no lien imposed under the Code or ERISA on the assets of the
Company or any Subsidiary of the Company or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and the Company and its Subsidiaries may
cease contributions to or terminate any employee benefit plan maintained by any
of them without incurring any material liability
4.10 Representations and Warranties in Documents
All representations and warranties by the Company and its Subsidiaries
set forth in the other Documents were true and correct in all material respects
at the time as of which such representations and warranties were made (or deemed
made) and shall be true and correct in all material respects as of the Closing
Date as if such representations or warranties were made on and as of such date,
unless stated to relate to a specific earlier date, in which case such
representations or warranties shall be true and correct in all material respects
as of such earlier date.
4.11 Properties
Each of the Company and its Subsidiaries has good and marketable title
to, or a validly subsisting leasehold interest in, all material properties owned
or leased by them, including all property reflected in the balance sheets
referred to in Section 4.5(a) and in the Pro
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Forma Balance Sheet (except as sold or otherwise disposed of since the
respective dates of such balance sheets in the ordinary course of business or as
otherwise permitted by this Agreement), free and clear of all Liens, other than
(i) as referred to in the balance sheets or in the notes thereto or (ii) Liens
not prohibited by Section 6.2.
4.12 Capitalization
On the Closing Date and after giving effect to the Transactions and the
other Transactions contemplated hereby, the authorized capital stock of the
Company shall consist of 30,000,000 shares of common stock, $0.01 par value per
share, 20,441,254 of which shares are outstanding. All such outstanding shares
of common stock have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights. As of the Closing Date, other
than options held by officers, directors, employees and consultants, neither the
Company nor its Subsidiaries has outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
4.13 Subsidiaries
On and as of the Closing Date, the Company has no Subsidiaries other
than those Subsidiaries listed on Schedule B. Schedule B correctly sets forth,
as of the Closing Date, the percentage ownership (direct and indirect) of the
Company in each class of capital stock or other equity interests of each of its
Subsidiaries and also identifies the direct owner thereof. All outstanding
shares of capital stock of each Subsidiary of the Company have been duly and
validly issued, are fully paid and nonassessable and have been issued free of
preemptive rights. Except as set forth on Schedule B, no Subsidiary of the
Company has out standing any securities convertible into or exchangeable for its
capital stock or outstanding any right to subscribe for or to purchase, or any
options or warrants for the purchase of, or any agreement providing for the
issuance (contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its capital stock or any stock appreciation or similar
rights.
4.14 Compliance with Statutes, etc.
Each of the Company and its Subsidiaries and each of their respective
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (excluding applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls, which matters are
covered under Section 4.17), except such noncompliances as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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4.15 Investment Company Act
Neither the Company nor any of its Subsidiaries is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
4.16 Public Utility Holding Company Act
Neither the Company nor any of its Subsidiaries is 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.
4.17 Environmental Matters
Except for matters that either individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect or as is set forth
on Schedule F:
(a) Each of the Company and its Subsidiaries has complied and is in
compliance with all applicable Environmental Laws and the requirements of
any permits issued under such Environmental Laws. There are no past,
pending or, to the best knowledge of the Company or any of its
Subsidiaries, threatened Environmental Claims against the Company or any of
its Subsidiaries or any Real Property currently or, to the best knowledge
of the Company or any of its Subsidiaries, previously owned or operated by
the Company or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences on any Real Property cur rently owned or operated
by the Company or any of its Subsidiaries or, to the best knowledge of the
Company or any of its Subsidiaries, on any formerly owned or operated Real
Property or any property adjoining or in the vicinity of any currently
owned or operated Real Property that could reasonably be expected (i) to
form the basis of an Environmental Claim against the Company or any of its
Subsidiaries or any currently owned or operated Real Property or (ii) to
cause any such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property by the
Company or any of its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, or Released on or from,
any Real Property owned or operated by the Company or any of its
Subsidiaries except in compliance with all Environmental Laws and
reasonably required in connection with the operation, use and maintenance
of any such Real Property by the Company's or such Subsidiary's business.
There are not now any underground storage tanks owned or operated by the
Company or any of its Subsidiaries located on any Real Property owned or
operated by the Company or any of its Subsidiaries
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4.18 Labor Relations
Neither the Company nor any of its Subsidiaries is engaged in any
unfair labor practice that could reasonably be expected to have a Material
Adverse Effect. There is (i) no unfair labor practice complaint pending against
the Company or any of its Subsidiaries or, to the best knowledge of the Company,
threatened against any of them, before the National Labor Relations Board, and
no significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Company or
any of its Subsidiaries or, to the best knowledge of the Company, threatened
against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against the Company or any of its Subsidiaries and (iii) to
the best knowledge of the Company, no concerted and continuous effort to
organize a union with respect to the employees of the Company or any of its
Subsidiaries, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a Material Adverse Effect.
4.19 Patents, Licenses, Franchises and Formulas
Except as described on Schedule C, each of the Company and its
Subsidiaries owns all patents, trademarks, permits, service marks, trade names,
copyrights, licenses, franchises and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, reasonably necessary for the present conduct of its business,
without any known conflict with the rights of others, which, or the failure to
own or obtain which, as the case may be, would be reasonably likely to result in
a Material Adverse Effect.
4.20 Indebtedness
Schedule D sets forth a true and complete list of all Indebtedness
(exclusive of Indebtedness pursuant to (x) this Agreement and (y) the Credit
Agreement) of the Company and its Subsidiaries as of the Closing Date and which
is to remain outstanding after giving effect to the Transactions and the
incurrence of the Bridge Loan on such date, in each case showing the aggregate
principal amount thereof (and the aggregate amount of any undrawn commitments
with respect thereto) and the name of the respective borrower and any other
entity which directly or indirectly guaranteed such debt. The Company certifies
that it has provided true and complete copies of all agreements evidencing or
relating to Existing Debt (as defined in the Credit Agreement) of the Company or
any of its Subsidiaries after giving effect to the Transactions (other than
Existing Debt in the aggregate not in excess of $1.0 million);
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4.21 Transactions
As of the Closing Date and after giving effect to the application of
the proceeds thereof, the Transactions are being consummated in all material
respects in accordance with the terms of the respective Documents and all
applicable laws. As of the Closing Date, all consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the Transactions will have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained), except (x) where the failure to so
obtain, give, file or take would not have a Material Adverse Effect; and (y)
filings of reports of transactions required to be filed after the Closing Date
as provided in Section 13.17 of the Credit Agreement and other matters set forth
in Section 13.17 of the Credit Agreement. All applicable waiting periods with
respect thereto have or, prior to the time when required, will have, expired
without, in all such cases, any action being taken by any competent authority
which restrains, prevents, or imposes material adverse conditions upon the
Transactions. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Transactions, or the making of the Loans hereunder or the performance by the
Company or any Guarantor of its obligations under the respective Documents. All
actions taken by the Company and each Guarantor pursuant to or in furtherance of
the Transactions have been taken in material compliance with the respective
Documents and all applicable laws.
4.22 Insurance
Set forth on Schedule E hereto is a true, correct and complete summary
of all material insurance carried by each of the Company and its Subsidiaries on
and as of the Closing Date, with the amounts insured set forth therein.
4.23 No Default
No event has occurred and is continuing which constitutes a Default or
an Event of Default.
4.24 Compliance with Contracts, etc.
None of the Company or any of its Subsidiaries is (A) in violation of
its certificate of incorporation, bylaws or other organizational documents or
(B) in violation of any applicable law, ordinance, administrative or
governmental rule or regulation, or (C) in default (nor will an event occur
which with notice or passage of time or both would constitute such a default)
under or in violation of any indenture or loan or credit agreement or any other
material agreement or instrument to which it is a party or by which it or any of
its properties or assets may be bound or affected, except, with respect to
clauses (B) and (C), for such violations or defaults that would not, singly or
in the aggregate, have a Material Adverse Effect.
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4.25 Use of Proceeds; Margin Stock, etc.
The proceeds of the Bridge Loan will be used solely for the purposes
specified herein. Neither the making of the Loans nor the use of proceeds
thereof will violate or be inconsistent with the provisions of Regulation T, U
or X, of the Board of Governors of the Federal Reserve System.
4.26 Survival of Representations and Warranties
Subject to Section 12.10B, all representations and warranties in the
Loan Documents shall survive delivery of the Bridge Notes and the making of the
Bridge Loan and shall continue until repayment of the Notes and the Obligations,
and any investigation at any time made by or on behalf of the Lenders shall not
diminish the Lenders' right to rely thereon.
4.27 Guarantees
Each future Guarantor shall, on the date it executes and delivers a
Guarantee hereunder, have the full corporate power, authority and capacity to
execute and deliver such Guarantee and to perform all of its obligations to be
performed thereunder; all corporate and other acts, conditions and things
required to be done and performed or to have occurred prior to such execution
and delivery to constitute such Guarantee as a valid and legally binding ob
ligation of such Guarantor enforceable in accordance with its terms shall have
been done and performed and shall have occurred in due compliance with all
applicable Laws; on the date of such execution and delivery, the execution,
delivery and performance of such Guarantee by such Guarantor will not (i)
violate any provision of Law, (ii) violate any provision of the charter or
bylaws of such Guarantor, or (iii) result in a breach of, a default under
(including, without limitation, any event which with notice or lapse of time, or
both, would constitute a breach of or a default under), or the creation of any
Lien on the properties or assets of such Guarantor, the Company or any other
Subsidiary of the Company under any Contract to which such Guarantor or the
Company or any other Subsidiary of the Company is a party or by which the
properties or assets of such Guarantor, the Company or any other Subsidiary of
the Company may be bound or affected, except, in the case of clauses (i) and
(iii) for such violations, breaches, defaults or Liens which would not,
individually or in the aggregate, have a Material Adverse Effect; on the date of
such execution and delivery, each Guarantee executed and delivered by a
Guarantor shall constitute legal, valid, binding and unconditional obligations
of the Guarantor executing and delivering it to the Lenders hereunder,
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
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4.28 Senior Subordinated Indenture; etc.
Each of the Company and the Guarantors shall (to the extent such
documents are executed), on the date it executes and delivers the Senior
Subordinated Indenture and the Exchange Notes and the Demand Take-Out Notes and
the indenture governing the Demand Take-Out Notes (or the guarantees related
thereto, as the case may be), have the full corporate power, authority and
capacity to do so and to perform all of its obligations to be performed
thereunder; all corporate and other acts, conditions and things required to be
done and performed or to have occurred prior to such execution and delivery to
constitute them as valid and legally binding obligations of the Company
enforceable against the Company and the Guarantors in accordance with their
respective terms except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), shall have been done and performed and shall
have occurred in due compliance with all applicable Laws; on the date, if any,
of such execution and delivery by the Company and the Guarantors, the Senior
Subordinated Indenture and the Exchange Notes and the Demand Take-Out Notes (and
the guarantees) and the indenture governing the Demand Take-Out Notes shall
constitute legal, valid, binding and unconditional obligations of the Company
and the Guarantors, as the case may be, enforceable against the Company and the
Guarantors, as the case may be, in accordance with their respective terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
SECTION 5 AFFIRMATIVE COVENANTS
The Company covenants and agrees that, until the Loans and the Notes
and all other amounts due under this Agreement have been indefeasibly paid in
full it shall perform all covenants in this Section 5 required to be performed
by it:
5.1 Financial Statements and Other Reports
The Company will furnish to each Lender:
(a) Monthly Reports. Within 30 days after the end of each fiscal month
of the Company, the combined balance sheets of the Company and its
consolidated Subsidiaries as of the end of such month and the related
combined statements of income and statements of cash flows for such month
and for the last elapsed portion of the fiscal year ended with the last day
of such month, in each case setting forth in the statements of income only,
the comparative figures for the corresponding month in the prior fiscal
year.
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(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Company (subject to extension
in the event of a filing with the Commission under Rule 12b-25 (an "SEC
12b-25 filing")), the combined balance sheets of the Company and its
consolidated Subsidiaries as of the end of such quarter and the related
combined statements of income and statements of cash flows for such quarter
and for the last elapsed portion of the fiscal year ended with the last day
of such quarter and setting forth in the statements of income only, the
comparative figures for the corresponding quarter in the prior fiscal year
and the budgeted figures for such quarter as set forth in the respective
budget delivered pursuant to Section 5.01(e), (ii) the consolidating
balance sheets of each of the Company's Subsidiaries as of the end of such
quarter and the related consolidating statements of income and
consolidating statements of cash flows for such quarter and for the elapsed
portion of the fiscal year ended with the last day of such quarter, in each
case setting forth in the statements of income only, the comparative
figures for the corresponding quarter in the prior fiscal year and the
budgeted figures for such quarter as set forth in the respective budget
delivered pursuant to Section 5.01(e), and (iii) management's discussion
and analysis of the important operational and financial developments during
such quarterly period in respect of the Company and its Subsidiaries.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Company (subject to extension in the event of an
SEC 12b-25 filing), the consolidated balance sheets of the Company and its
consolidated Subsidiaries as at the end of such fiscal year and the related
statements of income and retained earnings and of cash flows for such
fiscal year and, setting forth comparative figures for the preceding fiscal
year commencing fiscal year 2000 and certified, in the case of such
consolidated statements, by Xxxxxx Xxxxxxxx LLP or such other independent
certified public accountants of recognized national standing reasonably
acceptable to the Agent, together with a report of such accounting firm
(which report shall be unqualified as to scope), (ii) the consolidating
balance sheets of each of the Company's Subsidiaries at the end of such
fiscal year and the related consolidating statement of income and retained
earnings and statement of cash flows for such fiscal year, in each case
setting forth comparative figures for the preceding fiscal year, and (iii)
management's discussions and analysis of the important operational and
financial developments during such fiscal year in respect of the Company
and its Subsidiaries.
(d) Management Letters. Promptly after the receipt thereof by the
Company or any of its Subsidiaries, a copy of any final "management letter"
received by the Company or such Subsidiary from its certified public
accountants and management's responses thereto.
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(e) Budgets. No later than 45 days following the commencement of the
first day of each fiscal year of the Company, a budget in form reasonably
satisfactory to the Agent prepared by the Company for (x) in the case of
budgeted statements of income, each of the twelve months of such fiscal
year prepared in detail, and (y) in the case of budgeted statements of
sources and uses of cash and balance sheets, for such fiscal year on an
annual basis and prepared in detail and for each of the five years
immediately following such fiscal year prepared in summary form,
accompanied by the statement of the Chief Executive Officer, President,
Vice President or Chief Financial Officer of the Company to the effect
that, to the best of knowledge of such Person, the budget is a reasonable
estimate of anticipated performance, based on assumptions such Person
believes to be reasonable, for the period covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 5.01(b) and (c), a certificate
in the form of Exhibit III of the Chief Executive Officer, President, Vice
President or Chief Financial Officer of the Company to the effect that, to
the best of such officer's knowledge, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof and
the action which the Company has taken, is taking, or proposes to take with
respect to each such condition or event.
(g) Notice of Default or Litigation. Promptly, and in any event within
five Business Days after an Authorized Officer of the Company obtains
knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or Event of Default and (ii) any litigation or
governmental investigation or proceeding (including, without limitation,
any investigation by any Gaming Authority) pending against the Company or
any of its Subsidiaries which could reasonably be expected to result in a
Material Adverse Effect.
(h) Other Reports and Filings. Promptly, copies of all (i) financial
information, proxy materials and other information and reports, if any,
which the Company or any of its Subsidiaries shall file with the
Commission, (ii) notices of default in the observance or performance by the
Company or any of its Subsidiaries of any agreement or condition relating
to any Indebtedness in a principal amount equal to or exceeding $5,000,000
in the aggregate (other than the Obligations) or contained in any
instrument or agreement evidencing, securing or relating thereto and (iii)
communications with holders of its public Indebtedness pursuant to the
terms of the documentation governing such public Indebtedness.
(i) Annual Meetings with Lenders. At the request of the Agent, the
Company shall within 120 days after the close of each fiscal year of the
Company hold a meeting at a time and place selected by the Company and
acceptable to the Agent with
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all of the Lenders at which meeting shall be reviewed the financial results
of the previous fiscal year and the financial condition of the Company and
the budgets presented for the current fiscal year of the Company and its
Subsidiaries.
(j) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Company or its
Subsidiaries as any Lender may reasonably request in writing; provided that
such written request shall be delivered by any such Lender to the Agent and
such other information or documents shall be delivered by the Company to
the Agent who shall promptly deliver same to the Lender making such written
request.
5.2 Books, Records and Inspections
The Company shall maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of consolidated financial
statements in conformity with generally accepted accounting principles. The
Company shall, and shall cause each of its Subsidiaries to, permit officers and
designated representatives of the Agent or any Lender to visit and inspect, at
the Agent's or such other Lender's own expense, as the case may be (or, if a
Default or Event of Default is in existence, at the Company's expense), during
regular business hours, upon reasonable advance notice and under guidance of
officers of the Company or such Subsidiary, any of the properties of the
Company and any of its Subsidiaries, and to examine the books of account of the
Company and any of its Subsidiaries and discuss the affairs, finances and
accounts of the Company and any of its Subsidiaries with, and be advised as to
the same by, its and their officers and independent accountants, all at such
reasonable times and intervals and to any reasonable extent as the Agent or any
Lender may reasonably request; provided that all such visits and inspections by
each Lender shall be limited to one such inspection and visit per Lender in each
year (except when a Default or Event of Default has occurred and is continuing,
in which case there shall be no limitations on such inspections and visits).
5.3 Maintenance of Property; Insurance
The Company will, and will cause each of its Subsidiaries to, (i) keep
all property necessary in its business in good working order and condition
(ordinary wear and tear excepted), (ii) maintain insurance on all its property
in at least such amounts and against at least such risks as is consistent and in
accordance with industry practice and (iii) furnish to each Lender, upon written
request, full information as to the insurance carried. In addition to the
requirements of the immediately preceding sentence, the Company will at all
times cause the liability and hazard insurance of the types described in
Schedule E to be maintained (with the same scope of coverage as that described
in Schedule E) at levels which are at least as great as the respective amount
described opposite the respective type of insurance on Schedule E under the
column headed "Minimum Amount Required to be Maintained". Notwithstanding the
foregoing, if such liability and hazard insurance ceases to be available or is
no longer avail-
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able on commercially reasonable terms, the Company may, with the consent of the
Agent (not to be unreasonably withheld), cease to maintain such insurance or
maintain such insurance at levels that are commercially reasonable.
5.4 Corporate Franchises
The Company shall, and shall cause each of its Subsidiaries to, do or
cause to be done, all things necessary to preserve and keep in full force and
effect its existence and its material rights, franchises, licenses and patents;
provided, however, that nothing in this Section 5.4 shall prevent (i)
transactions permitted in accordance with the applicable requirements of Section
6.5 or (ii) the withdrawal by the Company or any of its Subsidiaries of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
would not reasonably be expected to have a Material Adverse Effect.
5.5 Compliance with Statutes, etc.
The Company shall, and shall cause each of its Subsidiaries to, comply
in all material respects (i) with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property and (ii) with all applicable statutes, rules and regulations
requiring reports and disclosures to all applicable Gaming Authorities,
including, but not limited to, reporting the Transactions, within the time
periods required by the regulations of the respective Gaming Authorities.
5.6 Compliance with Environmental Laws
Promptly upon, and in any event within thirty days after, an officer of
the Company or any of its Subsidiaries obtains knowledge thereof, notice of one
or more of the following environmental matters which occurs after the Closing
Date unless such environmental matters could not, individually or when
aggregated with all other such environmental matters, be reasonably expected to
have a Material Adverse Effect:
(i) any material Environmental Claim pending or threatened in writing
against the Company or any of its Subsidiaries or any Real Property owned,
operated or occupied by the Company or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property
owned, operated or occupied by the Company or any of its Subsidiaries that (a)
results in material noncompliance by the Company or any of its Subsidiaries with
any applicable Environmental Law or (b) would reasonably be expected to form the
basis of a material Environmental Claim against the Company or any of its
Subsidiaries or any such Real Property;
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(iii) any condition or occurrence on any Real Property owned, operated
or occupied by the Company or any of its Subsidiaries that would reasonably be
expected to cause such Real Property to be subject to any material restrictions
on the ownership, occupancy, use or transferability by the Company or any of its
Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any material removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any Real Property
owned, operated or occupied by the Company or any of its Subsidiaries as
required by any Environmental Law or any governmental or other administrative
agency; provided that in any event the Company shall deliver to the Agent all
material notices received by it or any of its Subsidiaries from any government
or governmental agency under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
the Company's or such Subsidiary's response thereto. In addition, the Company
will provide the Lenders with copies of all material communications with any
government or governmental agency and all material communications with any
Person relating to any Environmental Claim of which notice is required to be
given pursuant to this Section 5.6, and such detailed reports of any such Envi
ronmental Claim as to which notice is required, as may reasonably be requested
by the Agent or the Lenders.
5.7 ERISA
To the extent that Company, any Subsidiary or any ERISA Affiliate
sponsors, contributes to or maintains a Plan or has any actual or contingent
liability under a Plan, as soon as possible and, in any event, within ten days
after the Company or any of its Subsidiaries or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following, the Company will
deliver to each of the Lenders a certificate of an Authorized Officer of the
Company setting forth the full details as to such occurrence and the action, if
any, that the Company, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices then required or proposed to be
given to or filed with or by the Company, such Subsidiary, the Plan
administrator or such ERISA Affiliate to or with the PBGC or any other
government agency, or a Plan participant and any material notices received by
such Company, such Subsidiary or ERISA Affiliate from the PBGC or any other
government agency, or a Plan participant with respect thereto: that a Reportable
Event has occurred (except to the extent that the Company has previously
delivered to the Lenders a certificate and notices (if any) concerning such
event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur with respect
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to such Plan within the following 30 days; that an accumulated funding
deficiency, within the meaning of Section 412 of the Code or Section 302 of
ERISA, has been incurred or an application is in the reasonable opinion of the
Company, likely to be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 or Section 303 or 304 of ERISA of the Code with respect to a Plan; that any
contribution required to be made with respect to a Plan has not been timely
made; that a Plan has been or is reasonably expected to be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan has an Unfunded Current Liability; that proceedings are in the reasonable
opinion of the Company likely to be or have been instituted or notice has been
given to terminate or appoint a trustee to administer a Plan which is subject to
Title IV of ERISA; that a proceeding has been instituted pursuant to Section 515
of ERISA to collect a delinquent contribution to a Plan; that the Company, any
of its Subsidiaries or any ERISA Affiliate will or is reasonably expected to
incur any material liability (including any indirect, contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of
ERISA; or, with respect to a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under section 4980B of the Code; or
that the Company or any of its Subsidiaries may incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA or benefits the full cost of
which is borne by the employee) or any Plan. The Company will deliver to each of
the Lenders copies of any records, documents or other information that must be
furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA. The Company will also deliver to each of the Lenders a complete copy of
the annual report (Form 5500 series) of each Plan (including, to the extent
required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the annual report. In addition to any certificates or notices
delivered to the Lenders pursuant to the first sentence hereof, copies of annual
reports and any records, documents or other information required to be furnished
to the PBGC or any other government agency, and any material notices received by
the Company or any of its Subsidiaries or any ERISA Affiliate with respect to
any Plan shall be delivered to the Lenders no later than ten days after the date
such annual report has been filed with the Internal Revenue Service or such
records, documents or other information required to be furnished to the PBGC or
any other government agency or such material notice has been received by the
Company, the respective Subsidiary or the ERISA Affiliate, as applicable.
5.8 Performance of Obligations
Subject to compliance with applicable Laws, the Company shall, and
shall cause each of its Subsidiaries to, perform all of its obligations under
the terms of each mort-
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gage, deed of trust, indenture, loan agreement or credit agreement and each
other material agreement, contract or instrument, by which it is bound, except
such non-performances as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
5.9 Payment of Taxes
The Company shall pay and discharge or cause to be paid and discharged,
and will cause each of its Subsidiaries to pay and discharge, all material
Taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims for material sums that have become due and
payable which, if unpaid, might become a lien or charge upon any properties of
the Company or any of its Subsidiaries; provided that neither the Company nor
any of its Subsidiaries shall be required to pay any such Tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it maintains adequate reserves with respect thereto in accordance
with GAAP.
5.10 Ownership of Subsidiaries
Notwithstanding anything to the contrary contained in this Agreement,
the Company shall at all times own, directly or indirectly, 100% of the capital
stock of each of the Guarantors.
5.11 Take-Out Financing
A. The Company agrees that upon request (a "Request") from the Take-Out
Bank made at any time prior to the Conversion Date, the Company shall take all
reasonable actions necessary or desirable, to the extent within its power, so
that the Take-Out Bank can, as soon as practicable after such Request, publicly
offer or privately place the Demand Take-Out Notes (the "Initial Request Date").
The Company further agrees that upon notice by the Take-Out Bank (the "Take-Out
Securities Notice"), at any time and from time to time following the Initial
Request Date, the Company shall issue and sell Demand Take-Out Notes upon such
terms and conditions as specified in the Take-Out Securities Notice. The
foregoing shall not limit the Company's right to refinance the Bridge Loan by
any other means.
B. The Company agrees that it shall use its reasonable best efforts to
assist the Take-Out Bank in marketing the Demand Take-Out Notes to refinance the
Bridge Loan, including, without limitation, preparing an offering memorandum
related thereto, making senior management and other representatives available
(at mutually agreeable times) to participate in meetings with prospective
investors and providing such information and assistance as the Take-Out Bank
shall reasonably request during the course of such marketing process.
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5.12 Exchange of Term Notes
On any date after the Conversion Date, the Company shall, on the 30th
Business Day following receipt of (1) the written request (the "Exchange
Request") of a holder of Term Notes requesting the exchange of Term Notes for
Exchange Notes (and if such Term Notes are not Fixed Rate Loans, requesting the
conversion to a Fixed Rate) and (2) the written consent of the Majority Lenders
consenting to such exchange:
(i) Execute and deliver, cause each Guarantor to execute and deliver,
and cause a bank or trust company acting as trustee thereunder to execute
and deliver, the Senior Subordinated Indenture, if such Senior Subordinated
Indenture has not previously been executed and delivered;
(ii) Execute and deliver to such holders or beneficial owners in
accordance with the Senior Subordinated Indenture notes in the form
attached to the Senior Subordinated Indenture (the "Exchange Notes")
bearing a fixed interest rate equal to the Fixed Rate in exchange for such
Term Notes dated the date of the issuance of such Exchange Notes, payable
to the order of such holder or owner, as the case may be, in the same
principal amount as such Term Notes being exchanged, and cause each
Guarantor to endorse its guarantee thereon; and
(iii) Execute and deliver, and cause each Guarantor to execute and
deliver, to such holder or owner, as the case may be, a Registration Rights
Agreement in the form of Exhibit V, if such Registration Rights Agreement
has not previously been executed and delivered or, if such Registration
Rights Agreement has previously been executed and delivered and such holder
or owner is not already a party thereto, permit such holder or owner to
become a party thereto.
The principal amount of the Term Notes to be exchanged pursuant to this
Section 5.13 shall be at least $5,000,000 and integral multiples of $10,000 in
excess thereof. Term Notes delivered to the Company under this Section 5.12 in
exchange for Exchange Notes shall be canceled by the Company and the
corresponding amount of the Term Loan deemed repaid and the Exchange Notes shall
be governed by and construed in accordance with the terms of the Senior
Subordinated Indenture.
The bank or trust company acting as trustee under the Senior
Subordinated Indenture shall at all times be a corporation organized and doing
business under the laws of the United States of America or the State of New
York, in good standing and having its principal offices in the Borough of
Manhattan, in The City of New York, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal or State authority.
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5.13 Payments in U.S. Dollars
All payments of any Obligations to be made hereunder or under the Notes
by the Company or any other obligor with respect thereto shall be made solely in
U.S. Dollars or such other currency as is then legal tender for public and
private debts in the United States of America.
5.14 Register
The Company hereby designates the Agent to serve as the Company's
agent, solely for purposes of this Section 5.14, to maintain a register (the
"Register") on which they will record the Loans made by each of the Lenders and
each repayment in respect of the principal amount of the Loans of each Lender.
Failure to make any such recordation, or any error in such recordation shall not
affect the Company's obligations in respect of such Loans. With respect to any
Lender, the transfer of the Loan Commitments of such Lender and the rights to
the principal of, and interest on, any Loan made pursuant to such Loan
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Agent with re spect to ownership of such Loan
Commitments and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Loan Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Loan Commitments and Loans shall be recorded by the Agent on the Register only
upon the receipt by the Agent of a properly executed and delivered assignment
and assumption agreement pursuant to Section 12.2A. Coincident with the delivery
of such an assignment and assumption agreement to the Agent for acceptance and
registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Lender shall surrender
the Note evidencing such Loan, and thereupon one or more new Notes of the same
type and in the same aggregate principal amount shall be issued to the assigning
or transferor Lender and/or the new Lender.
SECTION 6 NEGATIVE COVENANTS
The Company covenants and agrees that until the satisfaction in full of
the Loans and the Notes and all other Obligations due under this Agreement it
will fully and timely perform all covenants in this Section 6.
6.1 Limitation on Incurrence of Additional Indebtedness
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "incur") any Indebtedness
(other than Permitted Indebtedness); provided, however, that, at any time after
the Conversion Date, if no Default or Event of Default shall have occurred and
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be continuing at the time of or as a consequence of the incurrence of any such
Indebtedness, the Company or any of its Restricted Subsidiaries that is or, upon
such incurrence, becomes a Guarantor may incur Indebtedness (including, without
limitation, Acquired Indebtedness) and any Restricted Subsidiary of the Company
that is not or will not, upon such incurrence, become a Guarantor may incur
Acquired Indebtedness, in each case if on the date of the incurrence of such
Indebtedness, after giving effect to the incurrence thereof, the Consolidated
Fixed Charge Coverage Ratio of the Company is greater than 2.0 to 1.0.
6.2 Limitation on Liens
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens of any kind against or upon any property or
assets of the Company or any of its Restricted Subsidiaries whether owned on the
Closing Date or acquired after the Closing Date, or any proceeds therefrom, or
assign or otherwise convey any right to receive income or profits therefrom
unless:
(1) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Notes, the Notes are
secured by a Lien on such property, assets or proceeds that is senior in
priority to such Liens, in each case until such time as such Liens no
longer secure other Indebtedness or obligations; and
(2) in all other cases, the Notes are equally and ratably secured, in
each case until such time as such Liens no longer secure other Indebtedness
or obligations, except for:
(a) Liens existing as of the Closing Date to the extent and in
the manner such Liens are in effect on the Closing Date;
(b) Liens securing Senior Debt and Liens securing Guarantor
Senior Debt;
(c) Liens securing the Notes and the Guarantees;
(d) Liens of the Company or a Guarantor on assets of any
Restricted Subsidiary of the Company;
(e) Liens securing Refinancing Indebtedness which is incurred to
Refinance any Indebtedness which has been secured by a Lien permitted
under this Agreement and which has been incurred in accordance with
the provisions of this Agreement; provided, however, that such Liens:
(i) are not materially less favorable to the Holders and are not
materially more favorable to the lienholders with respect to such
Liens than the Liens in respect of the Indebtedness
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being Refinanced; and (ii) do not extend to or cover any property or
assets of the Company or any of its Restricted Subsidiaries not
securing the Indebtedness so Refinanced; and
(f) Permitted Liens.
6.3 Limitation on Restricted Payments
(a) The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution (other than
dividends or distributions payable in Qualified Capital Stock of the
Company) on or in respect of shares of the Company's Capital Stock to
holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any warrants, rights or options to purchase
or acquire shares of any class of such Capital Stock;
(3) make any principal payment on, purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to any scheduled
final maturity, scheduled repayment or scheduled sinking fund payment, any
Indebtedness of the Company or a Guarantor that is subordinate or junior in
right of payment to the Notes (except for the purchase, defeasance,
redemption, prepayment or other acquisition of such subordinate or junior
Indebtedness in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year
of the date of acquisition); or
(4) make any Investment (other than Permitted Investments) (each of
the foregoing actions set forth in clauses (1), (2), (3) and (4) being
referred to as a "Restricted Payment").
(b) Notwithstanding clause (a) above and (c) below (once clause (c)
becomes operative), the provisions set forth in the immediately preceding
paragraph do not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of such dividend if the dividend would have been permitted on
the date of declaration;
(2) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any shares of Capital Stock of the Company,
either (i) solely in exchange for shares of Qualified Capital Stock of the
Company or (ii) through the appli-
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cation of net proceeds of a substantially concurrent sale for cash (other
than to a Subsidiary of the Company) of shares of Qualified Capital Stock
of the Company;
(3) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of the Company that is
subordinate or junior in right of payment to the Notes either (i) solely in
exchange for shares of Qualified Capital Stock of the Company, or (ii)
through the application of net proceeds of a substantially concurrent sale
for cash (other than to a Subsidiary of the Company) of (a) shares of
Qualified Capital Stock of the Company or (b) Refinancing Indebtedness;
(4) if no Default or Event of Default exists or would result
therefrom, (A) the Company may pay amounts required for any repurchase,
redemption or other acquisition for value of any capital stock or options
to acquire capital stock of the Company held by any director, officer,
employee or consultant of the Company or any of its Subsidiaries pursuant
to any equity subscription agreement or stock option agreement
(5) or similar agreement, or otherwise upon their death, disability,
retirement or termination of employment or departure from the board of
directors of the Company (provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired capital stock and options
(other than payments described in clause (4)(B)) shall not exceed (x)
$1,000,000 in any twelve-month period or (y) $5,000,000 in the aggregate
from and after the Closing Date) and (B) in addition to the amounts set
forth in clause 4(A) the Company may pay amounts required under the
Missouri Stock Option Agreements in effect on the Closing Date if the
trading market for the common stock of the Company is not sufficiently
liquid as provided therein;
(6) the redemption or repurchase of any Capital Stock or Indebtedness
of the Company, including the Notes, if required by any Gaming Authority or
if determined, in the good faith judgment of the Board of Directors, to be
necessary to prevent the loss or to secure the grant or reinstatement of
any gaming license or other right to conduct lawful gaming operations; and
after the Conversion Date, Restricted Payments in an amount not to exceed
$5.0 million in the aggregate.
(c) Notwithstanding clause (a) above, subsequent to the Conversion
Date, if at the time of such Restricted Payment or immediately after giving
effect thereto, (i) a Default or an Event of Default shall not have occurred and
be continuing and (ii) the Company is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 6.1,
the Company may make Restricted Payments in an aggregate amount from the Closing
Date not in excess of the sum of:
(v) 25% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the
Company earned
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subsequent to the Closing Date and on or prior to the date the Restricted
Payment occurs (the "Reference Date") (treating such period as a single
accounting period); plus
(w) 100% of the aggregate net cash proceeds received by the Company
from any Person (other than a Subsidiary of the Company) from the issuance
and sale subsequent to the Conversion Date and on or prior to the Reference
Date of Qualified Capital Stock of the Company or warrants, options or
other rights to acquire Qualified Capital Stock of the Company (but
excluding any debt security that is convertible into, or exchangeable for,
Qualified Capital Stock); plus
(x) the aggregate principal amount (or accreted value, if less) of
Indebtedness of the Company issued since the Conversion Date (other than
Indebtedness issued to or held by a Subsidiary) that has been converted
into Qualified Capital Stock (other than Capital Stock issued or sold to a
Subsidiary);
(y) without duplication of any amounts included in clause (iii)(x)
above, 100% of the aggregate net cash proceeds of any equity contribution
received by the Company from a holder of the Company's Capital Stock
subsequent to the Conversion Date; and
(z) without duplication, the sum of (1) the aggregate amount returned
in cash on or with respect to Investments (other than Permitted
Investments) made subsequent to the Conversion Date whether through
interest payments, principal payments, dividends or other distributions or
payments; (2) the net cash proceeds received by the Company or any of its
Restricted Subsidiaries from the disposition of all or any portion of such
Investments (other than to a Subsidiary of the Company); and (3) upon
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the
fair market value of such Subsidiary; provided, however, that the sum of
clauses (1), (2) and (3) of this clause (z) shall not exceed the aggregate
amount of all such Investments made subsequent to the Conversion Date.
In determining the aggregate amount of Restricted Payments in
accordance with clause (c), amounts expended pursuant to clauses (b)(1), (b)(2)
(ii), (b)(3)(iii)(a), (b)(4), (b)(5) and (b)(6) shall be included in such
calculation. The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
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6.4 Prohibition on Incurrence of Senior Subordinated Debt
The Company will not, and will not permit any Restricted Subsidiary
that is a Guarantor to, directly or indirectly, (x) prior to the Conversion
Date, incur or suffer to exist any Indebtedness (other than the Notes, the
Exchange Notes and the Take-Out Securities) that is by its terms (or by the
terms of any agreement governing such Indebtedness) subordinated in right of
payment to any other Indebtedness of the Company or of such Subsidiary
Guarantor, as the case may be, unless such Indebtedness is also by its terms (or
by the terms of any agreement governing such Indebtedness) made expressly
subordinate to the Loans and the Notes and the Guarantees to the same extent and
in the same manner as such Loans and Notes and Guarantees are subordinated to
the Credit Agreement and (y) after the Conversion Date, incur or suffer to exist
any Indebtedness that by its terms would rank senior in right of payment to the
Notes or any Guarantee, as the case may be, and would rank subordinate in right
of payment to any other Indebtedness of the Company or of such Guarantor, as the
case may be.
6.5 Merger, Consolidation and Sale of Assets
(a) Prior to the Conversion Date, the Company shall not, nor shall it
cause or permit any of the Guarantors to (i) enter into any transaction, or
series of related transactions, of merger, amalgamation, consolidation or
combination, (ii) consolidate, liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), (iii) directly or indirectly convey, sell,
lease, sublease, transfer or otherwise dispose of, in one transaction or in a
series of transactions, in the case of this clause (iii), all or substantially
all of its business, property or assets, whether now owned or hereafter
acquired, or (iv) consummate any Asset Acquisition, except:
(i) in connection with the Acquisitions;
(ii) the Company or any Guarantor may merge with an Affiliate
incorporated solely for the purposes of reincorporating the Company or such
Subsidiary Guarantor in another jurisdiction;
(iii) any Guarantor may be merged, amalgamated, consolidated or
combined with or into the Company or any Guarantor or be liquidated, wound
up or dissolved, or all or substantially all of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or in a series of transactions, to the Company or to any
Guarantor; provided, however, that (A) no Default or Event of Default shall
have occurred and be continuing or would result therefrom, (B) in the case
of such a merger, amalgamation, consolidation or combination of the Company
and a Guarantor, the Company shall be the continuing or surviving
corporation, and (C) the surviving entity (I) continues to be bound as such
under this Agreement or the
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Guarantee of such Guarantor, as the case may be, and (II) executes and
delivers to the Agent immediately upon consummation of such transaction a
written confirmation or acknowledgment to such effect, in form and
substance satisfactory to the Agent, together with evidence of appropriate
corporate power, authority and action and a written legal opinion in form
and substance satisfactory to the Agent to the effect that this Agreement
and such Guarantee continue to be a legal, valid and binding obligation of
such entity, enforceable against such entity in accordance with its terms
(subject to customary exceptions in respect of bankruptcy, insolvency and
other equitable remedies), and with respect to such other matters as the
Agents may reasonably request; and
(iv) the Company or any Restricted Subsidiary may make an Asset
Acquisition so long as the total consideration for such acquisition
pursuant to this Section 6.5(a)(iv) shall not exceed $1.0 million
(including Acquired Indebtedness) and the total consideration for all of
such acquisitions pursuant to this Section 6.5(a)(iv) shall not exceed $2.5
million (including Acquired Indebtedness) in the aggregate.
(b) After the Conversion Date, the Company will not, in a single
transaction or series of related transactions, consolidate or merge with or into
any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or
cause or permit any Restricted Subsidiary of the Company to sell, assign,
transfer, lease, convey or otherwise dispose of) all or substantially all of the
Company's assets (determined on a consolidated basis for the Company and the
Company's Restricted Subsidiaries) whether as an entirety or substantially as an
entirety to any Person unless:
(1) either:
(a) the Company shall be the surviving or continuing corporation;
or
(b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company and of the
Company's Restricted Subsidiaries substantially as an entirety (the
"Surviving Entity"):
(x) shall be a corporation organized and validly existing
under the laws of the United States or any State thereof or the
District of Columbia; and
(y) shall expressly assume, by supplemental agreement (in
form and substance satisfactory to the Agent), executed and
delivered to the Agent, the due and punctual payment of the
principal of, and
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premium, if any, and interest on all of the Notes and the
performance of every covenant of the Notes, this Agreement and
the Registration Rights Agreement on the part of the Company to
be performed or observed;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(b)(y) above (including giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Company
or such Surviving Entity, as the case may be, (a) shall have a Consolidated
Net Worth equal to or greater than the Consolidated Net Worth of the
Company immediately prior to such transaction and (b) shall be able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 6.1;
(3) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (1)(b)(y) above
(including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and
(4) the Company or the Surviving Entity shall have delivered to the
Agent an officers' certificate and an opinion of counsel, each stating that
such consolidation, merger, sale, assignment, transfer, lease, conveyance
or other disposition and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with
the applicable provisions of this Agreement and that all conditions
precedent in this Agreement relating to such transaction have been
satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
(c) After the Conversion Date, no Guarantor (other than any Guarantor
whose Guarantee is to be released in accordance with the terms of the Guarantee
and this Agreement in connection with any sale of such Guarantor in a
transaction complying with Section 6.12) will, and the Company will not cause or
permit any Guarantor to, consolidate with or merge with or into any Person other
than the Company or any other Guarantor unless:
(1) the entity formed by or surviving any such consolidation or merger
(if other than the Guarantor) or to which such sale, lease, conveyance or
other disposition
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shall have been made is a corporation organized and existing under the laws
of the United States or any State thereof or the District of Columbia;
(2) such entity assumes by supplemental agreement all of the
obligations of the Guarantor on the Guarantee;
(3) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(4) immediately after giving effect to such transaction and the use of
any net proceeds therefrom on a pro forma basis, the Company could satisfy
the provisions of clause (2) of the first paragraph of this covenant.
Any merger or consolidation of a Guarantor with and into the Company
(with the Company being the surviving entity) or another Guarantor that is a
Wholly Owned Restricted Subsidiary of the Company need only comply with clause
(b)(4) of this covenant.
(d) Upon any consolidation, combination or merger or any transfer of
all or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Agreement and the Notes with the same effect as if such surviving entity
had been named as such and the Company shall be released from the obligations
under the Notes and this Agreement except in the case of a lease of the
Company's assets and except with respect to any obligations under the Notes and
this Agreement that arise from, or related to, such transaction.
6.6 Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to:
(1) pay dividends or make any other distributions on or in respect of
its Capital Stock;
(2) make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary of the
Company; or
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(3) transfer any of its property or assets to the Company or any other
Restricted Subsidiary of the Company, except for such encumbrances or
restrictions existing under or by reason of:
(a) applicable law, including restrictions imposed by applicable
gaming laws or any applicable Gaming Authority;
(b) the Loan Documents;
(c) customary non-assignment provisions of any contract or any
lease governing a leasehold interest of any Restricted Subsidiary of
the Company;
(d) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person and its
Subsidiaries or the properties or assets of the Person so acquired;
(e) agreements existing on the Closing Date to the extent and in
the manner such agreements are in effect on the Closing Date,
including the Credit Agreement;
(f) the provisions of security or pledge agreements or mortgages
(or similar agreements) granting a Permitted Lien or restricting
transfers of the assets secured thereby;
(g) FF&E Financing, Purchase Money Indebtedness or Capitalized
Lease Obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause
(3) above on the property so acquired; or
(h) an agreement governing Indebtedness incurred to Refinance the
Indebtedness issued, assumed or incurred pursuant to an agreement
referred to in clause (b), (d), (e), (f) or (g) above; provided,
however, that the provisions relating to such encumbrance or
restriction contained in any such Indebtedness are no less favorable
to the Company in any material respect as determined by the Board of
Directors of the Company in their reasonable and good faith judgment
than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (b), (d), (e), (f)
or (g).
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6.7 Limitations on Transactions with Affiliates
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(c) below and (y) Affiliate Transactions on terms that are no less favorable
than those that might reasonably have been obtained in a comparable transaction
at such time on an arm's-length basis from a Person that is not an Affiliate of
the Company or such Restricted Subsidiary.
(b) All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $2.0 million
shall be approved by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined in its good faith
judgment that such transaction complies with the foregoing provisions. If the
Company or any Restricted Subsidiary of the Company enters into an Affiliate
Transaction (or a series of related Affiliate Transactions related to a common
plan) that involves an aggregate fair market value of more than $10.0 million,
the Company or such Restricted Subsidiary, as the case may be, shall, prior to
the consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to the Company or the relevant
Restricted Subsidiary, as the case may be, from a financial point of view, from
an Independent Financial Advisor and file the same with the Agent.
(c) The restrictions set forth in the paragraphs (a) and (b) of this
Section 6.7 shall not apply to:
(1) reasonable fees and compensation paid to, indemnity provided on
behalf of, and any benefits provided pursuant to any employee benefit plan
or any similar arrangement (including any option or stock purchase plan) on
behalf of, officers, directors, employees or consultants of the Company or
any Restricted Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management;
(2) transactions exclusively between or among the Company and any of
its Restricted Subsidiaries or exclusively between or among such Restricted
Subsidiaries; provided that such transactions are not otherwise prohibited
by this Agreement and; provided, further, in each case, that no Affiliate
of the Company (other than another Restricted Subsidiary or a director
owning qualifying shares) owns Capital Stock of any such Restricted
Subsidiary;
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(3) any agreement as in effect as of the Closing Date or any amendment
thereto or any transaction contemplated thereby (including pursuant to any
amendment thereto) in any replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to the
Holders in any material respect than the original agreement as in effect on
the Closing Date;
(4) loans or advances to officers or employees of the Company or any
Restricted Subsidiary made in the ordinary course of business of the
Company or such Restricted Subsidiary in accordance with the past practice
of the Company; provided that any such loan in excess of $250,000 must be
approved by a majority of the members of the Board of Directors who are
disinterested in the transaction;
(5) Restricted Payments permitted by this Agreement; and
(6) the issuance of Qualified Capital Stock.
6.8 Subsidiary Stock
Except for any sale of 100% of the Capital Stock or other equity
securities of any of the Company's Restricted Subsidiaries in compliance with
the provisions of Section 6.6, the Company will not and will not permit any of
its Restricted Subsidiaries to directly or indirectly sell or dispose of any
shares of Capital Stock or other equity securities of any of its Restricted
Subsidiaries, except (i) to qualify directors if required by applicable law,
(ii) to the Company or to a Wholly-Owned Restricted Subsidiary of the Company or
(iii) Asset Sales made in compliance with this Agreement.
6.9 Conduct of Business
The Company and its Restricted Subsidiaries will not engage in any
businesses other than Permitted Lines of Business.
6.10 Amendments or Waivers of Certain Documents
The Company shall not, nor shall it cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into any amendment,
modification, supplement or waiver with respect to the Credit Agreement as in
effect on the Closing Date that would modify any of the provisions thereof in
respect of issuances of Take-Out Securities, the Term Notes or the Exchange
Notes in a manner materially adverse to the Lenders.
6.11 Refinancing of the Loans in Part
The Company shall not, nor shall the Company cause or permit any of
its Restricted Subsidiaries to, Incur any Indebtedness to Refinance the Loans in
part other than the Take-Out Securities or the Demand Take-Out Notes, unless the
terms, conditions, covenants,
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events of default and other provisions in respect of the instruments evidencing
the Indebtedness Incurred to Refinance the Loans in part shall have been
approved in writing by the Agent (which approval shall not be unreasonably
delayed or withheld) prior to the Incurrence of any such Indebtedness.
6.12 Limitation on Asset Sales
(a) Prior to the Conversion Date, the Company shall not, nor shall it
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
consummate any Asset Sale other than the Disposition; provided, that all of the
Net Cash Proceeds in respect thereof are applied by the Company or a Restricted
Subsidiary of the Company in accordance with Section 2.5A(ii)(a).
(b) After the Conversion Date, the Company shall not, nor shall it
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
consummate any Asset Sale unless
(1) the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or Capital Stock sold or
issued or otherwise disposed of (as determined in good faith by the
Company's Board of Directors),
(2) at least 75% of the consideration received by the Company or such
Restricted Subsidiary, as the case may be, from such Asset Sale shall be in
the form of cash or Cash Equivalents, and is received at the time of such
disposition (provided that, for purposes of this clause (2) the following
will be considered "cash" or "Cash Equivalents"):
(i) any Senior Debt or Guarantor Senior Debt that is assumed by the
transferee of any such assets, to the extent the Company or such Restricted
Subsidiary is released from any further liability; and
(ii) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash or Cash
Equivalents (to the extent of the cash or Cash Equivalents received) within
30 days after receipt,
(3) all of the Net Cash Proceeds in respect thereof are applied by the
Company or a Restricted Subsidiary of the Company in accordance with
Section 2.5A(ii)(a),
(4) the Net Cash Proceeds from any single Asset Sale under this
Section 6.12(b) do not exceed $5.0 million; and
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(5) the Net Cash Proceeds from all such Asset Sales permitted under
this Section 6.12(b) do not exceed $25.0 million.
6.13 Additional Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Restricted Subsidiary that is not a Guarantor,
or if the Company or any of its Restricted Subsidiaries shall organize, acquire
or otherwise invest in another Restricted Subsidiary having total assets with a
book value in excess of $500,000, then such transferee or acquired or other
Restricted Subsidiary shall:
(1) unconditionally guarantee all of the Company's obligations under
this Agreement; and
(2) deliver to the Lenders an opinion of counsel that such guarantee
has been duly authorized, executed and delivered by such Restricted
Subsidiary and constitutes a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary. Thereafter, such Restricted
Subsidiary shall be a Guarantor for all purposes of this Agreement.
It is understood and agreed that in the event the Disposition has not
occurred on or prior to March 31, 2001, on such date, and subject to receipt of
approval from the applicable Gaming Authority, the Company shall cause ACLVI to
enter into a guarantee substantially similar to the Guarantee; provided, that
ACLVI has been required to similarly guarantee the Credit Agreement to the
extent the Credit Agreement is then in effect.
6.14 Limitation on Preferred Stock of Restricted Subsidiaries
The Company will not permit any of its Restricted Subsidiaries that
are not Guarantors to issue any Preferred Stock (other than to the Company or to
a Wholly Owned Restricted Subsidiary of the Company) or permit any Person (other
than the Company or a Wholly Owned Restricted Subsidiary of the Company) to own
any Preferred Stock of any Restricted Subsidiary of the Company that is not a
Guarantor.
SECTION 7 EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur and be continuing:
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7.1 Failure To Make Payments When Due
Failure to pay (i) any installment of principal of the Loans when due
and payable, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise (whether or not such payment is prohibited by Section 8
or Section 11), or (ii) any interest on the Loans when due and payable and such
failure continues for a period of 30 days (whether or not such payment is
prohibited by Section 8 or Section 11).
7.2 Default in Other Agreements
Failure of the Company or any of its Restricted Subsidiaries to pay at
final maturity (giving effect to any applicable grace period and extensions
thereof) the principal of any Indebtedness of the Company or of any of its
Restricted Subsidiaries (other than Indebt edness referred to in Section 7.1) or
the acceleration of the final stated maturity of any such Indebtedness (which
acceleration is not rescinded, annulled or otherwise cured within 30 days of
receipt by the Company or such Restricted Subsidiary of notice of any such
acceleration) if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for failure
to pay principal at final maturity or which has been accelerated (in each case
with respect to which the 30-day period described above has elapsed), aggregates
$10,000,000 or more at any time.
7.3 Breach of Certain Covenants
Failure of the Company to perform or comply with any covenant, term or
condition contained in Section 2.5A(ii), 2.5A(iv) or 6.5.
7.4 Breach of Warranty
Any representation or warranty in this Agreement or certification made
by the Company pursuant to this Agreement or in any statement or certificate at
any time given by the Company in writing pursuant hereto or thereto or in
connection herewith shall be false or incorrect in any material respect on the
date as of which made or deemed made.
7.5 Other Defaults Under Agreement or Loan Documents
The Company shall default in the performance of or compliance with any
covenant, term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Section 7.1, 7.3, 7.4, or 7.10) and such
default shall not have been remedied or waived in accordance with this Agreement
within 30 days after the date of written notice specifying the default (and
demanding that such default be remedied) from the holder or holders of not less
than 25% in aggregate principal amount of the Loans then outstanding.
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7.6 Involuntary Bankruptcy; Appointment of Custodian, etc.
A court of competent jurisdiction enters a Bankruptcy Order under any
Bankruptcy Law that:
(A) is for relief against the Company or any Material Subsidiary in an
involuntary case or proceeding, or
(B) appoints a Custodian of the Company or any Material Subsidiary for
all or substantially all of its properties, or
(C) orders the liquidation of the Company or any Material Subsidiary,
and in each case the order or decree remains unstayed and in effect for 60
consecutive days.
7.7 Voluntary Bankruptcy; Appointment of Custodian, etc.
The Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of a Bankruptcy Order for relief against it
in an involuntary case or proceeding, or
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors or
files a proposal or scheme of arrangement involving the rescheduling or
composition of its indebtedness, or
(E) consents to the filing of a petition in bankruptcy against it.
7.8 Judgments and Attachments
Any money judgment, writ or warrant of attachment, or similar process
involving in any individual case or in the aggregate at any time an amount in
excess of $10,000,000 (to the extent not covered by third-party insurance as to
which the insurance company has acknowledged coverage) shall be entered or filed
against the Company or any of its Restricted Subsidiaries and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 consecutive
days.
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7.9 Guarantee
(i) Any Guarantee of a Material Subsidiary shall cease to be in full
force or effect (other than by reason of release in accordance with its express
terms), shall be declared to be null and void and unenforceable or shall be
found to be invalid, or (ii) any Guarantor that is a Material Subsidiary shall
deny or disaffirm such Guarantor's obligations under its Guarantee (other than
by reason of release in accordance with the terms of this Agreement.)
7.10 Foreclosure
At any time prior to the Conversion Date, the agent under the Credit
Agreement or any other party entitled to act thereunder commences judicial
proceedings to foreclose on the collateral securing the Credit Agreement or
exercises any right under applicable law or any instrument evidencing a security
interest or other encumbrance in respect of such collateral to take ownership or
effect the transfer of such collateral in lieu of foreclosure.
7.11 Gaming Licenses
Any gaming license of the Company or any of its Restricted
Subsidiaries is revoked, terminated or suspended or otherwise ceases to be
effective, resulting in the cessation or suspension of operation for a period of
more than 90 days of the casino business of any casino-hotel owned, leased or
operated directly or indirectly by the Company or any of its Significant
Subsidiaries (other than any voluntary relinquishment of a gaming license if
such relinquishment is, in the reasonable, good faith judgment of the Board of
Directors of the Company, evidenced by a resolution of such Board, both
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and not disadvantageous in any material respect
to the Lender).
THEN (i) upon the occurrence and during the continuation of any Event
of Default described in the foregoing Section 7.6 or 7.7 with respect to the
Company, all of the unpaid principal amount of and accrued interest on the Loans
and all other outstanding Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by the Company, and the
commitments of the Lenders hereunder shall thereupon terminate, and (ii) upon
the occurrence and during the continuation of any Event of Default not referred
to in clause (i), the Agent shall, upon written notice of the holder or holders
of at least 25% in aggregate principal amount of the Loans then outstanding, by
written notice to the Company and the Representative under the Credit Agreement
specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), declare all of the unpaid principal
amount of and accrued interest on the Loans and all other outstanding
Obligations to be, and the same (x) shall forthwith become, due and payable, or
(y) if there are any amounts outstanding under the Credit Agreement, shall
become immediately due and payable upon the first to occur of an acceleration
under the Credit Agreement or five business days after receipt
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by the Company and the Representative under the Credit Agreement of such
Acceleration Notice but only if such Event of Default is then continuing, and
the obligations of the Lenders hereunder shall thereupon terminate.
Nevertheless, if at any time after acceleration of the maturity of the Loans,
the Company shall pay all arrears of interest and all payments on account of the
principal thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on overdue
interest, at the rates specified in this Agreement or the Notes) and all
Defaults and Events of Default (other than non-payment of principal of and
accrued interest on the Loans and the Notes due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 12.6, then the
Agent shall, upon written notice of the holders of at least a majority in
aggregate principal amount of the Loans then outstanding, by written notice to
the Company rescind and annul the acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Default or impair any
right consequent thereon.
SECTION 8 SUBORDINATION
8.1 Securities Subordinated to Senior Debt
Anything herein to the contrary notwithstanding, the Company, for
itself and its successors, and each Lender agrees that the payment of all Loan
Obligations owing to the Lenders is subordinated, to the extent and in the
manner provided in this Section 8, to the prior payment in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of Senior Debt, of all Senior Debt Obligations (including the Senior
Debt Obligations with respect to the Credit Agreement, whether outstanding on
the Closing Date or thereafter incurred).
This Section 8 shall constitute a continuing offer to all Persons who
become holders of, or continue to hold, Senior Debt, and such provisions are
made for the benefit of the holders of Senior Debt and such holders are made
obligees hereunder and any one or more of them may enforce such provisions.
8.2 Suspension of Payment When Senior Debt Is in Default
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Senior Debt
(including, without limitation, guarantees of the foregoing items which
constitute Senior Debt) (a "Payment Default"), then no payment or distribution
of any kind or character shall be made by or on behalf of the Company or any
other Person on its or their behalf with respect to any Loan Obligations or to
acquire any of the Loans for cash or property or otherwise until such Payment
Default (and all other Payment Defaults) shall have
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been cured or waived in accordance with the terms of the documentation governing
the respective Senior Debt or ceased to exist or all Senior Debt with respect to
which any Payment Default has occurred and is continuing shall have been
discharged or paid in full in cash or Cash Equivalents.
(b) If any event of default (other than a Payment Default) occurs and
is continuing with respect to any Designated Senior Debt (as such event of
default is defined in the instrument creating or evidencing such Designated
Senior Debt) permitting the holders of such Designated Senior Debt then
outstanding to accelerate the maturity thereof (a "Non- payment Default"), and
if the Representative for the respective issue of Designated Senior Debt gives
notice of the event of default to the Agent stating that such notice is a
payment blockage notice (a "Payment Blockage Notice"), then during the period
(the "Payment Blockage Period") beginning upon the delivery of such Payment
Blockage Notice and ending on the earlier of the 180th day after such delivery
and the date on which (x) all events of default with respect to all Designated
Senior Debt have been cured or waived or cease to exist, (y) all Designated
Senior Debt with respect to which any such event of default has occurred and is
continuing is discharged or paid in full in cash or Cash Equivalents, or (z) the
Agent receives notice thereof from the Representative for the respective issue
of Designated Senior Debt terminating the Payment Blockage Period, neither the
Company nor any other Person on its behalf shall (i) make any payment of any
kind or character with respect to any Loan Obligations or (ii) acquire any of
the Loans for cash or property or otherwise. Notwithstanding anything herein to
the contrary, (x) in no event will a Payment Blockage Period extend beyond 180
days from the date the applicable Payment Blockage Notice is received by the
Agent and (y) only one such Payment Blockage Period may be commenced within any
360 consecutive days. For all purposes of this Section 8.2(b), no event of
default which existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior Debt shall be, or
be made, the basis for the commencement of a second Payment Blockage Period by
the Representative of such Designated Senior Debt whether or not within a period
of 360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a
period ending after the date of commencement of such Payment Blockage Period
that, in either case, would give rise to an event of default pursuant to any
provisions under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose).
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Agent or the Lender when such payment is prohibited by
the foregoing provisions of this Section 8.2, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt (pro rata to such holders on the basis of the respective amount of
Senior Debt held by such holders) or their respective Representatives, as their
respective interests may appear. The Agent shall be entitled to rely on
information regarding amounts then due and owing on the Senior Debt, if any,
received from the
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holders of Senior Debt (or their Representatives) or, if such information is not
received from such holders or their Representatives, from the Company and only
amounts included in the information provided to the Agent shall be paid to the
holders of Senior Debt.
Nothing contained in this Section 8 shall limit the right of the Agent
or the Lenders to take any action to accelerate the maturity of the Loans and
all other Obligations pursuant to Section 7 or to pursue any rights or remedies
hereunder; provided that all Senior Debt thereafter due or declared to be due
shall first be paid in full in cash or Cash Equivalents before the Lenders are
entitled to receive any payment of any kind or character with respect to Loan
Obligations.
8.3 Loan Obligations Subordinated to Prior Payment of All Senior Debt
on Dissolution, Liquidation or Reorganization of Company
(a) Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets and liabilities
of the Company or in a bankruptcy, reorganization, insolvency, receivership or
other similar proceeding relating to the Company or its assets, whether
voluntary or involuntary, all Senior Debt Obligations due or to become due shall
first be paid in full in cash or Cash Equivalents, or such payment duly provided
for to the satisfaction of the holders of Senior Debt, before any payment or
distribution of any kind or character is made on account of any Obligations or
for the acquisition of any of the Loans for cash or property or otherwise. Upon
any such dissolution, winding-up, liquidation, reorganization, receivership or
similar proceeding, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the Lenders
or the Agent would be entitled, except for the provisions hereof, shall be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Lenders or
by the Agent if received by it, directly to the holders of Senior Debt or
creditors of the Company whose obligations are not subordinated to Senior Debt
(pro rata to such holders on the basis of the respective amounts of Senior Debt
held by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of Senior Debt remaining unpaid until all such Senior Debt has been paid
in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Debt.
(b) To the extent any payment of Senior Debt (whether by or on behalf
of the Company, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trus-
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tee in bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Debt or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.
It is further agreed that any diminution (whether pursuant to court
decree or otherwise, including without limitation for any of the reasons
described in the preceding sentence) of the Company's obligation to make any
distribution or payment pursuant to any Senior Debt, except to the extent such
diminution occurs by reason of the repayment (which has not been disgorged or
returned) of such Senior Debt in cash or Cash Equivalents, shall have no force
or effect for purposes of the subordination provisions contained in this Section
8, with any turnover of payments as otherwise calculated pursuant to this
Section 8 to be made as if no such diminution had occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any Lender when such payment or
distribution is prohibited by this Section 8.3, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Debt (pro rata to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another corporation, partnership, trust or limited
liability company or the liquidation or dissolution of the Company following the
conveyance or transfer of all or substantially all of its assets, to another
corporation, partnership, trust or limited liability company upon the terms and
conditions provided in Section 6.5 and as long as permitted under the terms of
the Senior Debt shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, assume the
Company's obligations hereunder in accordance with Section 6.5.
8.4 Payments May Be Paid Prior to Dissolution
Nothing contained in this Section 8 or elsewhere in this Agreement
shall prevent (i) the Company, except under the conditions described in Sections
8.2 and 8.3, from making payments at any time for the purpose of making payments
of principal of and interest on the Loan Obligations, or from depositing with
the Agent, any monies for such payments, or
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(ii) in the absence of actual knowledge by the Agent that a given payment would
be prohibited by Section 8.2 or 8.3, the application by the Agent of any monies
deposited with it for the purpose of making such payments of principal of, and
interest on, the Loan Obligations to the Lenders entitled thereto unless at
least one Business Day prior to the date upon which such payment would otherwise
become due and payable the Agent shall have actually received the written notice
provided for in the first sentence of Section 8.2(b) (provided that,
notwithstanding the foregoing, the Lenders receiving any payments made in
contravention of Section 8.2 and/or 8.3 (and the respective such payments) shall
otherwise be subject to the provisions of Section 8.2 and Section 8.3). The
Company shall give prompt written notice to the Agent of any dissolution,
winding-up, liquidation or reorganization of the Company, although any delay or
failure to give any such notice shall have no effect on the subordination
provisions contained herein.
8.5 Lenders To Be Subrogated to Rights of Holders of Senior Debt
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt, the Lenders shall be subrogated to the rights of the holders of
Senior Debt to receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Debt until the Loan Obligations shall be
paid in full; and, for the purposes of such subrogation, no such payments or
distributions to the holders of the Senior Debt by or on behalf of the Company,
or by or on behalf of the Lenders by virtue of this Section 8, which otherwise
would have been made to the Lenders shall, as between the Company and the
Lenders, be deemed to be a payment by the Company to or on account of the Senior
Debt, it being understood that the provisions of this Section 8 are and are
intended solely for the purpose of defining the relative rights of the Lenders,
on the one hand, and the holders of Senior Debt, on the other hand.
8.6 Loan Obligations of the Company Unconditional
Nothing contained in this Section 8 or elsewhere in this Agreement is
intended to or shall impair, as among the Company, its creditors other than the
holders of Senior Debt, and the Lenders, the obligation of the Company, which is
absolute and unconditional, to pay to the Lenders the principal of and any
interest on the Loan Obligations as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Lenders and creditors of the Company other than the
holders of the Senior Debt, nor shall anything herein or therein prevent any
Lender or the Agent on its behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Agreement, subject to the
rights, if any, under this Section 8, of the holders of Senior Debt in respect
of cash, property or securities of the Company received upon the exercise of any
such remedy.
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8.7 Reliance on Judicial Order or Certificate of Liquidating Agent
Upon any payment or distribution of assets of the Company referred to
in this Section 8, the Agent, subject to the provisions of Section 9, and the
Lenders shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any insolvency, bankruptcy, receivership,
dissolution, winding-up, liquidation, reorganization or similar case or
proceeding is pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Agent or the
Lenders, for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of the Senior Debt and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Section 8.
8.8 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Debt
No right of any present or future holders of any Senior Debt to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Agreement, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Agent, without incurring responsibility to the Agent
or the Lenders and without impairing or releasing the subordination provided in
this Section 8 or the obligations hereunder of the Lenders to the holders of the
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt, or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the payment or collection of Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.
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8.9 Lenders Authorize Agent To Effectuate Subordination of Loan
Obligations
Each Lender authorizes and expressly directs the Agent on its behalf
to take such action as may be necessary or appropriate to effectuate, as between
the holders of Senior Debt and the Lenders, the subordination provided in this
Section 8, and appoints the Agent its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
credits or otherwise) tending towards liquidation of the business and assets of
the Company, the filing of a claim for the unpaid balance of its Loan
Obligations and accrued interest in the form required in those proceedings.
If the Agent does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Debt or their
Representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Lenders. Nothing herein contained shall be deemed to authorize the Agent or the
holders of Senior Debt or their Representative to authorize or consent to or
accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Loan Obligations or the rights of any
Lender thereof, or to authorize the Agent or the holders of Senior Debt or their
Representative to vote in respect of the claim of any Lender in any such
proceeding.
8.10 This Section 8 Not To Prevent Events of Default
The failure to make a payment on account of principal of or interest
on the Loan Obligations by reason of any provision of this Section 8 will not be
construed as preventing the occurrence of an Event of Default.
8.11 Amendments or Modifications to Section 8
Notwithstanding anything to the contrary contained in this Agreement,
no amendment or modification to any provision of this Section 8 or the related
definitions used herein (other than to cure any ambiguity, defect, mistake or
inconsistency herein, so long as such amendment or modification does not
adversely affect the rights of the holders of any Senior Debt then outstanding)
shall be permitted without the consent of the "Required Lenders," as such term
is used in the Credit Agreement to the extent the Credit Agreement is then in
effect.
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SECTION 9 THE AGENT
9.1 Appointment
Each Lender hereby irrevocably designates and appoints BTCo as its
Agent to act as specified herein and in the other Loan Documents, and each
Lender hereby irrevocably authorizes BTCo as the Agent to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. The Agent
agrees to act as such upon the express conditions contained in this Section 9.
Notwithstanding any provision to the contrary elsewhere in this Agreement or in
any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Loan
Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent. The provisions
of this Section 9 are solely for the benefit of the Agent and the Lenders, and
neither the Company nor any of its Subsidiaries shall have any rights as a third
party beneficiary of any of the provisions hereof. In performing its functions
and duties under this Agreement, the Agent shall act solely as agent of the
Lenders and the Agent does not assume and shall not be deemed to have assumed
any obligation or relationship of agent or trust with or for the Company or any
of its Subsidiaries.
9.2 Delegation of Duties
The Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by them with reasonable care except to the
extent otherwise required by Section 9.3.
9.3 Exculpatory Provisions
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by them or such Person under or in
connection with this Agreement or the other Loan Documents (except for their or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by the Company, any of its Subsidiaries or any of their
respective officers contained in this Agreement, any other Loan Documents, or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for any failure of the Company, any of its Subsidiaries
or any of their respective officers to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender to ascer-
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tain or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or the other Loan Documents, or
to inspect the properties, books or records of the Company or any of its
Subsidiaries. The Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Agent to the Lenders or by or on behalf of
the Company or any of its Subsidiaries to the Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
9.4 Reliance by Agent
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company or any of its Subsidiaries), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
As between the Agent and the Lenders, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Majority Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.
9.5 Notice of Default
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
actually received notice from the Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by Lenders holding in the aggregate more than
50% of the outstanding principal amount of Notes; provided that, as between the
Agent and the Lenders unless and until
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the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 Non-Reliance on Agent
Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Company or any of
its Subsidiaries, shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Company and
its Subsidiaries and made its own decision to make the Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, assets, operations, property, financial and
other condition, prospects and creditworthiness of the Company and its
Subsidiaries. The Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
assets, property, financial and other condition, prospects or creditworthiness
of the Company or any of its Subsidiaries which may come into the possession of
the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
9.7 Indemnification
The Lenders agree to indemnify the Agent in its capacity as such
ratably according to their respective "percentages" as used in determining the
Majority Lenders at such time, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment in full
of the Obligations) be imposed on, incurred by or asserted against the Agent in
its capacity as such in any way relating to or arising out of this Agreement or
any other Loan Document, or any documents contemplated by or referred to herein
or the transactions contemplated hereby of any action taken or omitted to be
taken by the Agent under or in connection with any of the foregoing, but only to
the extent that any of the foregoing is not paid by the Company or any of its
Subsidiaries; provided that no Lender shall be liable to the Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence or willful miscon-
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duct of the Agent. If any indemnity furnished to the Agent for any purpose
shall, in the opinion of the Agent be insufficient or become impaired, the Agent
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished. The agreements
in this Section 9.7 shall survive the payment in full of all Obligations.
9.8 Agent in Its Individual Capacity
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company and its
Subsidiaries as though the Agent were not the Agent hereunder. With respect to
the Loans made by it and all Obligations owing to it, the Agent shall have the
same rights and powers under this Agreement as any Lender and may exercise the
same as though it were not the Agent and the term "Lender" and "Lenders" shall
include the Agent in its individual capacities.
9.9 Resignation of the Agent; Successor Agent
The Agent may resign as Agent upon 20 days' notice to the Lenders and
the Company. Upon the resignation of the Agent, Lenders holding in the aggregate
more than 50% of the outstanding principal amount of Notes shall appoint from
among the Lenders a successor Agent which shall be a Qualified Person and which
shall be a bank or a trust company for the Lenders subject to prior approval by
the Company (such approval not to be unreasonably withheld or delayed),
whereupon such successor Agent shall succeed to the rights, powers and duties of
the resigning Agent, and the term "Agent" shall include such successor Agent
effective upon its appointment, and the resigning Agent's rights, powers and
duties as the Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this Agreement.
After the resignation of the Agent hereunder, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
9.10 Documentation Agent
No Person listed on the signature pages hereto as a Documentation
Agent shall have any obligations hereunder in its capacity as such.
SECTION 10 GUARANTEE
10.1 Unconditional Guarantee
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "Guarantee"), subject
to Section 11, to each of the Lenders and to the Agent and their respective
successors and assigns that (i) the principal of
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and interest on the Loans will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise, and
interest on the overdue principal, if any, and interest on any interest, if any,
to the extent lawful, of the Loans and all other obligations of the Company to
the Lenders or the Agent hereunder or thereunder will be promptly paid in full
or performed, all in accordance with the terms hereof and thereof; and (ii) in
case of any extension of time of payment or renewal of any of the Loans or of
any such other obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 10.5. Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Loans or this Agreement, the absence of any
action to enforce the same, any waiver or consent by any of the Lenders with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Loans, this Agreement and in this Guarantee. If any Lender or
the Agent is required by any court or otherwise to return to the Company, any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Guarantor, any amount paid by the
Company or any Guarantor to the Agent or such Lender, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between each Guarantor, on the one hand,
and the Lenders and the Agent, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 7 for
the purposes of this Guarantee, and (y) in the event of any acceleration of such
obligations as provided in Section 7, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Guarantor for the
purpose of this Guarantee.
10.2 Subordination of Guarantee
The obligations of each Guarantor to the Lenders and to the Agent
pursuant to the Guarantee of such Guarantor and this Agreement are expressly
subordinate and subject in right of payment to the prior payment in full of all
Guarantor Senior Debt of such Guarantor, to the extent and in the manner
provided in Section 11.
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10.3 Severability
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
10.4 Release of a Guarantor
Upon (i) the release by the lenders under the Credit Agreement and
related documents of all guarantees of a Guarantor and all Liens on the property
and assets of such Guarantor relating to such Indebtedness, or (ii) the sale or
disposition (whether by merger, stock purchase, asset sale or otherwise) of a
Guarantor (or all or substantially all its assets) to an entity which is not a
Subsidiary of the Company and which sale or disposition is otherwise in
compliance with the terms of this Agreement (other than Section 2.5A), such
Guarantor shall be deemed released from all obligations under this Section 10
without any further action required on the part of the Agent or any Lender;
provided that any such termination shall occur only to the extent that all
obligations of such Guarantor under all of its guarantees of, and under all of
its pledges of assets or other security interests which secure, such
Indebtedness of the Company shall also terminate upon such release, sale or
transfer.
The Agent shall promptly deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 10.4.
Any Guarantor not so released remains liable for the full amount of principal of
and interest on the Loans as provided in this Section 10.
10.5 Limitation of Guarantor's Liability
Each Guarantor and by its acceptance hereof each of the Lenders hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Lenders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor (including, but not limited
to, the Guarantor Senior Debt of such Guarantor) and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 10.7, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
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10.6 Guarantors May Consolidate, etc., on Certain Terms
(a) Nothing contained in this Agreement or in the Loans shall prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety, to the Company or another
Guarantor. Upon any such consolidation, merger, sale or conveyance, the
Guarantee given by such Guarantor shall no longer have any force or effect.
(b) Except as set forth in Section 6.5, nothing contained in this
Agreement or in the Loans shall prevent any consolidation or merger of a
Guarantor with or into a corporation or corporations other than the Company or
another Guarantor (whether or not affiliated with the Guarantor); provided that,
subject to Sections 10.4 and 10.6(a), (i) immediately after such transaction,
and giving effect thereto, no Default or Event of Default shall have occurred as
a result of such transaction and be continuing, and (ii) upon any such
consolidation, merger, sale or conveyance, the Guarantee of such Guarantor set
forth in this Section 10, and the due and punctual performance and observance of
all of the covenants and conditions of this Agreement to be performed by such
Guarantor, shall be expressly assumed (in the event that the Guarantor is not
the surviving corporation in the merger), by an agreement or supplemental
indenture reasonably satisfactory in form to the Agent, executed and delivered
to the Agent, by the corporation formed by such consolidation, or into which the
Guarantor shall have merged, or by the corporation that shall have acquired such
property. In the case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor corporation, by an agreement or
supplemental indenture executed and delivered to the Agent and satisfactory in
form and substance to the Agent of the due and punctual performance of all of
the covenants and conditions of this Agreement to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor.
10.7 Contribution
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Obligations. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of (x) the amount by which the fair
value of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date
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(other than liabilities of such Guarantor under Subordinated Indebtedness)), but
excluding liabilities under the Guarantee, of such Guarantor at such date and
(y) the amount by which the present fair salable value of the assets of such
Guarantor at such date exceeds the amount that will be required to pay the
probable liabilities of such Guarantor on its debts including, without
limitation, Guarantor Senior Debt (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date and after giving effect
to any collection from any Subsidiary of such Guarantor in respect of the
obligations of such Subsidiary under the Guarantee), excluding debt in respect
of the Guarantee of such Guarantor, as they become absolute and matured.
10.8 Waiver of Subrogation
Each Guarantor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Guarantor's
obligations under its Guarantee and this Agreement, including, without
limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Lender against the Company, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including, without limitation,
the right to take or receive from the Company, directly or indirectly, in cash
or other property or by setoff or in any other manner, payment or security on
account of such claim or other rights. If any amount shall be paid to any
Guarantor in violation of the preceding sentence and the Loans shall not have
been paid in full, such amount shall be deemed to have been paid to such
Guarantor for the benefit of, and held in trust for the benefit of, the Lenders,
and shall, subject to the provisions of Section 8, Section 10.2 and Section 11,
forthwith be paid to the Agent for the benefit of such Lenders to be credited
and applied upon the Loans, whether matured or unmatured, in accordance with the
terms of this Agreement. Each Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by this
Agreement and that the waiver set forth in this Section 10.8 is knowingly made
in contemplation of such benefits.
10.9 Evidence of Guarantee
To evidence their guarantees to the Lenders set forth in this Section
10, each of the Guarantors hereby agrees to execute the notation of Guarantee in
substantially the form included in Exhibit VIII. Each such notation of Guarantee
shall be signed on behalf of each Guarantor by an Officer or an assistant
Secretary.
10.10 Waiver of Stay, Extension or Usury Laws
Each Guarantor covenants that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would prohibit or
forgive such Guarantor from performing its
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Guarantee as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this
Agreement; and each Guarantor hereby expressly waives all benefit or advantage
of any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Agent, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 11 SUBORDINATION OF GUARANTEE OBLIGATIONS
11.1 Guarantee Obligations Subordinated to Guarantor Senior Debt
Anything herein to the contrary notwithstanding, each of the
Guarantors, for itself and its successors, and each Lender agrees that the
payment of all Guarantee Obligations of such Guarantor are subordinated, to the
extent and in the manner provided in this Section 11, to the prior payment in
full in cash or Cash Equivalents, or such payment duly provided for to the
satisfaction of the holders of Guarantor Senior Debt, of all Guarantor Senior
Debt Obligations of such Guarantor (including Guarantor Senior Debt Obligations
with respect to the Credit Agreement, whether outstanding on the Closing Date or
thereafter incurred).
This Section 11 shall constitute a continuing offer to all Persons who
become holders of, or continue to hold, Guarantor Senior Debt, and such
provisions are made for the benefit of the holders of Guarantor Senior Debt and
such holders are made obligees hereunder and any one or more of them may enforce
such provisions.
11.2 Suspension of Guarantee Obligations When Guarantor Senior Debt Is
in Default
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Guarantor Senior
Debt (including, without limitation, guarantees of the foregoing items which
constitute Guarantor Senior Debt), then no payment or distribution of any kind
or character shall be made by or on behalf of such Guarantor or any other Person
on its or their behalf with respect to any Guarantee Obligations or to acquire
any of the Loans for cash or property or otherwise until such Payment Default
(and all other Payment Defaults) shall have been cured or waived in accordance
with the terms of the documentation governing the respective Guarantor Senior
Debt or ceased to exist or all Guarantor Senior Debt with respect to which any
Payment Default has occurred and is continuing shall have been discharged or
paid in full in cash or Cash Equivalents.
(b) During any Payment Blockage Period (as determined in accordance
with Section 8.2(b), including the limitations set forth therein), neither any
Guarantor nor any
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other Person on any Guarantor's behalf shall (i) make any payment of any kind or
character with respect to any Guarantee Obligations or (ii) acquire any of the
Loans for cash or property or otherwise.
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Agent or any Lender when such payment is prohibited by
the foregoing provisions of this Section 11.2, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Guarantor Senior Debt (pro rata to such holders on the basis of the respective
amount of Guarantor Senior Debt held by such holders) or their respective
Representatives, as their respective interests may appear. The Agent shall be
entitled to rely on information regarding amounts then due and owing on the
Guarantor Senior Debt, if any, received from the holders of Guarantor Senior
Debt (or their Representatives) or, if such information is not received from
such holders or their Representatives, from a Guarantor and only amounts
included in the information provided to the Agent shall be paid to the holders
of Guarantor Senior Debt.
11.3 Guarantee Obligations Subordinated to Prior Payment of All
Guarantor Senior Debt on Dissolution, Liquidation or Reorganization of Such
Guarantor
(a) Upon any payment or distribution of assets of any Guarantor of any
kind or character, whether in cash, property or securities, to creditors upon
any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to such Guarantor or its property, whether voluntary
or involuntary, all Guarantor Senior Debt Obligations due or to become due shall
first be paid in full in cash or Cash Equivalents, or such payment duly provided
for to the satisfaction of the holders of Guarantor Senior Debt, before the
Lenders shall be entitled to receive any payment or distribution of any kind or
character on account of any Guarantee Obligations or for the acquisition of any
of the Loans for cash or property or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of such Guarantor of any kind or character,
whether in cash, property or securities, to which the Lenders or the Agent would
be entitled, except for the provisions hereof, shall be paid by such Guarantor
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the Lenders or by the Agent if
received by them, directly to the holders of Guarantor Senior Debt (pro rata to
such holders on the basis of the respective amounts of Guarantor Senior Debt
held by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of Guarantor Senior Debt remaining unpaid until all such
Guarantor Senior Debt has been paid in full in cash or Cash
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Equivalents after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of Guarantor Senior Debt.
(b) To the extent any payment of Guarantor Senior Debt (whether by or
on behalf of a Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Guarantor Senior Debt or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
It is further agreed that any diminution (whether pursuant to court
decree or otherwise, including without limitation for any of the reasons
described in the preceding sentence) of any Guarantor's obligation to make any
distribution or payment pursuant to any Guarantor Senior Debt, except to the
extent such diminution occurs by reason of the repayment (which has not been
disgorged or returned) of such Guarantor Senior Debt in cash or Cash
Equivalents, shall have no force or effect for purposes of the subordination
provisions contained in this Section 11, with any turnover of payments as
otherwise calculated pursuant to this Section 11 to be made as if no such
diminution had occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, shall be received by any Lender when such payment
or distribution is prohibited by this Section 11.3, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Guarantor Senior Debt (pro rata to such holders on the basis
of the respective amount of Guarantor Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Guarantor Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of
Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has
been paid in full in cash or Cash Equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Guarantor Senior Debt.
(d) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
a Guarantor following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Section 6.5 and as long as permitted under the terms of the Guarantor Senior
Debt shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of
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such consolidation, merger, conveyance or transfer, assume the Guarantee of such
Guarantor hereunder in accordance with Section 6.5.
11.4 Payments May Be Paid Prior to Dissolution
Nothing contained in this Section 11 or elsewhere in this Agreement
shall prevent (i) any Guarantor, except under the conditions described in
Sections 11.2 and 11.3, from making payments at any time for the purpose of
making payments on Guarantee Obligations, or from depositing with the Agent any
monies for such payments, or (ii) in the absence of actual knowledge by the
Agent that a given payment would be prohibited by Section 11.2 or 11.3, the
application by the Agent of any monies deposited with it for the purpose of
making such payments on Guarantee Obligations to the Lenders entitled thereto
unless at least one Business Day prior to the date upon which such payment would
otherwise become due and payable the Agent shall have actually received the
written notice provided for in the first sentence of Section 8.2(b) (provided
that, notwithstanding the foregoing, the Lenders receiving any payments made in
contravention of Sections 11.2 and/or 11.3 (and the respective such payments)
shall otherwise be subject to the provisions of Section 11.2 and Section 11.3).
Each Guarantor shall give prompt written notice to the Agent of any dissolution,
winding-up, liquidation or reorganization of such Guarantor, although any delay
or failure to give any such notice shall have no effect on the subordination
provisions contained herein.
11.5 Lenders To Be Subrogated to Rights of Holders of Guarantor Senior
Debt
Subject to the payment in full in cash or Cash Equivalents of all
Guarantor Senior Debt, the Lenders shall be subrogated to the rights of the
holders of Guarantor Senior Debt of such Guarantor to receive payments or
distributions of cash, property or securities of such Guarantor applicable to
such Guarantor Senior Debt until all amounts owing on or in respect of the
Guarantee Obligations shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of such Guarantor
Senior Debt by or on behalf of such Guarantor, or by or on behalf of the Lenders
by virtue of this Section 11, which otherwise would have been made to the
Lenders shall, as between such Guarantor and the Lenders, be deemed to be a
payment by such Guarantor to or on account of such Guarantor Senior Debt, it
being understood that the provisions of this Section 11 are and are intended
solely for the purpose of defining the relative rights of the Lenders, on the
one hand, and the holders of Guarantor Senior Debt, on the other hand.
11.6 Guarantee Obligations of the Guarantors Unconditional
Nothing contained in this Section 11 or elsewhere in this Agreement or
in the Guarantees is intended to or shall impair, as among the Guarantors, their
creditors other than the holders of Guarantor Senior Debt, and the Lenders, the
obligation of the Guarantors,
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which is absolute and unconditional, to pay to the Lenders all amounts due and
payable under the Guarantees as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Lenders and creditors of the Guarantors other than the holders of
the Guarantor Senior Debt, nor shall anything herein or therein prevent any
Lender or the Agent on its behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Agreement, subject to the
rights, if any, under this Section 11, of the holders of Guarantor Senior Debt
in respect of cash, property or securities of the Guarantors received upon the
exercise of any such remedy.
11.7 Reliance on Judicial Order or Certificate of Liquidating
Upon any payment or distribution of assets of a Guarantor referred to
in this Section 11, the Agent, subject to the provisions of Section 9 hereof,
and the Lenders shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which any insolvency, bankruptcy,
receivership, dissolution, winding-up, liquidation, reorganization or similar
case or proceeding is pending, or upon a certificate of the trustee in
bankruptcy, liquidating trustee, receiver, assignee for the benefit of
creditors, agent or other person making such payment or distribution, delivered
to the Agent or the Lenders, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Guarantor Senior Debt and other Indebtedness of such Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Section 11.
11.8 Subordination Rights Not Impaired by Acts or Omissions of the
Guarantors or Holders of Guarantor Senior Debt
No right of any present or future holders of any Guarantor Senior Debt
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by any Guarantor with the terms of this Agreement, regardless of
any knowledge thereof which any such holder may have or otherwise be charged
with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Debt may, at any time and from time to time,
without the consent of or notice to the Agent, without incurring responsibility
to the Agent or the Lenders and without impairing or releasing the subordination
provided in this Section 11 or the obligations hereunder of the Lenders to the
holders of Guarantor Senior Debt, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Guarantor Senior Debt, or otherwise amend or supplement in
any manner Guarantor Senior Debt, or any instrument evidencing the same or any
agreement under which
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Guarantor Senior Debt is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Guarantor Senior
Debt; (iii) release any Person liable in any manner for the payment or
collection of Guarantor Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Guarantors and any other Person.
11.9 Lenders Authorize Agent To Effectuate Subordination of Guarantee
Obligations
Each Lender, by its acceptance of the Guarantee Obligations,
authorizes and expressly directs the Agent on its behalf to take such action as
may be necessary or appropriate to effectuate, as between the holders of
Guarantor Senior Debt and the Lenders, the subordination provided in this
Section 11, and appoints the Agent its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of credits or otherwise) tending towards liquidation of the business
and assets of any Guarantor, the filing of a claim for the unpaid balance under
its Guarantee Obligations and accrued interest in the form required in those
proceedings.
If the Agent does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Guarantor Senior Debt or
their Representative are or is hereby authorized to have the right to file and
are or is hereby authorized to file an appropriate claim for and on behalf of
the Lenders. Nothing herein contained shall be deemed to authorize the Agent or
the holders of Guarantor Senior Debt or their Representative to authorize or
consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Guarantee
Obligations or the rights of any Lender, or to authorize the Agent or the
holders of Guarantor Senior Debt or their Representative to vote in respect of
the claim of any Lender in any such proceeding.
11.10 This Section 11 Not To Prevent Events of Default
The failure to make a payment on account of principal of or interest
on the Guarantee Obligations by reason of any provision of this Section 11 will
not be construed as preventing the occurrence of an Event of Default.
11.11 Amendments or Modifications to Section 11
Notwithstanding anything to the contrary contained in this Agreement,
no amendment or modification to any provision of this Section 11 or the related
definitions used herein (other than to cure any ambiguity, defect, mistake or
inconsistency herein, so long as such amendment or modification does not
adversely affect the rights of the holders of any
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Guarantor Senior Debt then outstanding) shall be permitted without the consent
of the "Required Lenders," as such term is used in the Credit Agreement to the
extent the Credit Agreement is then in effect.
SECTION 12 MISCELLANEOUS
12.1 Representation of the Lenders
Each Lender hereby represents that it is a commercial lender which
makes loans in the ordinary course of its business and that it will make the
Loans hereunder for its own account or the account of its affiliates in the
ordinary course of such business.
12.2 Participations in and Assignments of Loans and Notes
A. Each Lender shall have the right at any time to sell, assign,
transfer or negotiate (collectively, a "Syndication") all or any portion of its
Notes or its Loan Commitment in an aggregate amount of not less than $1,000,000
to any Eligible Assignee, other than to an Eligible Assignee which has, or has
an Affiliate which has, a principal line of business similar to any principal
line of business of the Company or any of its Subsidiaries. In the case of any
sale, transfer or negotiation of all or part of the Notes or any Loan Commitment
authorized under this Section 12.2A, the assignee, transferee or recipient shall
become a party to this Agreement as a Lender by execution of an assignment and
assumption agreement; provided that (i) at such time Section 2.1A or 2.2A, as
the case may be, shall be deemed modified to reflect the Loan Commitment of such
new Lender and of the existing Lenders, (ii) upon surrender of the Notes, new
Notes will be issued to such new Lender and to the assigning Lender, such new
Notes to be in conformity with the requirements of Section 2.1D or 2.2E, as the
case may be (with appropriate modifications), to the extent needed to reflect
the revised Loan Commitment, and (iii) the Agent shall receive at the time of
each such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500; and provided, further, that such
transfer or assignment will not be effective until recorded by the Agent on the
Register pursuant to Section 5.15. To the extent of any assignment pursuant to
this Section 12.2A, the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Loan Commitment, and the assignee,
transferee or recipient shall have, to the extent of such sale, assignment,
transfer or negotiation, the same rights, benefits and obligations as it would
if it were a Lender with respect to such Notes or Loan Commitment, including,
without limitation, the right to approve or disapprove actions which, in
accordance with the terms hereof, require the approval of a Lender. At the time
of each assignment pursuant to this Section 12.2A to an Eligible Assignee which
is not already a Lender hereunder and which is not a United States Person (as
such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for
Federal income tax purposes, the respective Eligible Assignee
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shall provide to the Company and the Agent the appropriate Internal Revenue
Service Forms (and, if applicable, a Section 12.2D(ii) Certificate) described in
Section 12.2D.
B. Each Lender may grant participations in all or any part of its
Notes or its Loan Commitment in an aggregate amount of not less than $1,000,000
to any Eligible Assignee.
C. Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loan and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
D. Each Lender that is an assignee or transferee of an interest under
this Agreement pursuant to Section 12.2A (unless the respective Lender was
already a Lender hereunder immediately prior to such assignment or transfer) and
that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) agrees to deliver to the Company and
the Agent, on the date of such assignment or transfer to such Lender, (i) two
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if the Lender is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code
and cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (i) above, two accurate and complete original signed copies of Internal
Revenue Service Form W-8 (or successor form) certifying to such Lender's
entitlement to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Lender agrees that, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Company and the Agent two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001, or Form W-8, as the case may be, and such other forms as may be required
in order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Company and the Agent of its inability to deliver any such Form or Certificate.
Subject to Section 12.2A and the immediately succeeding sentence, the Company
shall be entitled, to the extent it is required to do so by law, to deduct or
withhold income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder or made on any other Loan Document for the account of
any Lender which is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) for U.S. Federal income tax
purposes to the extent that such Lender has not provided to the Company U.S.
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 12.2D and except as
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set forth in Section 12.2A, the Company agrees to pay additional amounts and to
indemnify and hold harmless each Lender (without regard to the identity of the
jurisdiction requiring the deduction or withholding), and reimburse such Lender
upon its written request, in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the date of any assignment or transfer in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.
E. Subject to the last sentence of this Section 12.2E, each Lender
agrees that all participations and assignments made hereunder shall be subject
to, and made in compliance with, all Gaming Regulations applicable to lenders.
The Company hereby acknowledges that unless the Company has provided the Lenders
with a written opinion of counsel as to the suitability standards applicable to
lenders of any relevant Gaming Authority with jurisdiction over the gaming
business of the Company and its Subsidiaries, no Lender shall have the
responsibility of determining whether or not a potential assignee of such Lender
would be a Qualified Person under the Gaming Regulations of any such
jurisdiction
12.3 Expenses
Whether or not the transactions contemplated hereby shall be
consummated (but other than with respect to the sale of Demand Take-Out
Securities, the fees and expenses in connection with which will be payable as is
customary in such transactions), the Company agrees to promptly pay (i) all the
actual and reasonable costs and expenses of preparation of the Loan Documents
and all the costs of furnishing all opinions by counsel for the Company
(including without limitation any opinions reasonably requested by the Lenders
as to any legal matters arising hereunder), all the actual reasonable costs and
expenses of the Agent (including, without limitation, the reasonable fees and
disbursements of Xxxxxx Xxxxxx & Xxxxxxx and local counsel) in connection with
its syndication efforts with respect to the Loan Docu ments and of the Company's
performance of and compliance with all agreements and conditions contained
herein on its part to be performed or complied with; (ii) the reasonable fees,
reasonable expenses and reasonable disbursements of counsel to the Lenders in
connection with the negotiation, preparation, execution and syndication of the
Loan Documents and the Loans hereunder, and any amendments, modifications and
waivers hereto or thereto and consents to departures from the terms hereof and
thereof; and (iii) after the occurrence of an Event of Default, all costs and
expenses (including actual and reasonable attorneys fees and costs of
settlement) incurred by the Lenders or the Agent in enforcing any Obligations of
or in collecting any payments due from the Company hereunder or under the Notes
by reason of such Event of Default or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or of any insolvency or bankruptcy proceedings.
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12.4 Indemnity
In addition to the payment of expenses pursuant to Section 12.3,
whether or not the transactions contemplated hereby shall be consummated, the
Company agrees to indemnify, pay and hold each of the Lenders, the Agent and any
holder of any of the Notes, and each of their respective officers, directors,
employees, agents, representatives and affiliates (collectively called the
"Indemnitees"), harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee shall be
designated as a party thereto), which may be suffered by, imposed on, incurred
by, or asserted against that Indemnitee, in any manner resulting from, connected
with, in respect of, relating to or arising out of this Agreement, the other
Loan Documents, the Commitment Letter, the Lenders' agreements to make the Loans
or the use or intended use of any of the proceeds of the Loans hereunder, the
issuance of the Exchange Notes or the Take-Out Securities or the Acquisitions
(the "Indemnified Liabilities"); provided that the Company shall have no
obligation to an Indemnitee hereunder with respect to Indemnified Liabilities
(i) to the extent such liabilities are finally judicially determined to have
resulted solely from (A) the gross negligence, bad faith or recklessness of that
Indemnitee or (B) the failure of such Indemnitee to perform its obligations
under any Loan Document or (C) such Indemnitee's violation of law or (ii) in
connection with the obligations of any Indemnitee under any Loan Document or for
any transfer fees. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
12.5 Setoff
Subject to Section 8, in addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Lender, each Agent and each
subsequent holder of any Note are hereby authorized by the Company at any time
or from time to time, without notice to the Company, or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured
but not including trust accounts or any other accounts held for the benefit of
another Person) and any other Indebtedness at any time held or owing by such
Person or any such subsequent holder to or for the credit or the account of the
Company against and on account of the obligations and liabilities of the Company
to such Person or such subsequent holder under this Agreement and the Notes,
including, but not limited to, all claims of any nature or description arising
out of
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or connected with this Agreement or the Notes, irrespective of whether or not
(a) such Person or such subsequent holder shall have made any demand hereunder
or (b) such Person or such subsequent holder shall have declared the principal
of or the interest on its portion of the Loans and its Notes and other amounts
due hereunder to be due and payable as permitted by Section 7 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
12.6 Amendments and Waivers
No amendment, modification, termination or waiver of any term or
provision of this Agreement, of the Notes, any Guarantee or, prior to the
execution and delivery thereof, of the form of the Registration Rights Agreement
or the form of the Senior Subordinated Indenture, or consent to any departure by
the Company or any Guarantor therefrom, shall in any event be effective without
the prior written concurrence of the Company or such Guarantor, as the case may
be, and the Majority Lenders; provided that without the prior written consent of
each Lender affected, an amendment, modification, termination or waiver of this
Agreement, any Notes, any Guarantee, and, prior to the execution and delivery
thereof, of the form of Registration Rights Agreement or the form of Senior
Subordinated Indenture or consent to departure from a term or provision hereof
or thereof may not: (i) reduce the principal amount of Notes whose holders must
consent to any such amendment, modification, termination, waiver or consent;
(ii) reduce the rate of or extend the time for payment of principal or interest
on any Note (other than an extension of the Conversion Date; provided that such
extension shall not be beyond the Maturity Date); (iii) reduce the principal
amount of any Note; (iv) make any Note payable in money other than that stated
in the Note; (v) make any change in Section 2.5A(iv) or in the definition of
Change of Control, in the last paragraph of Section 7 or in Section 8.5, 11.5 or
12.6; (vi) modify the provisions of Section 8 or Section 11 or any of the
defined terms related thereto in any manner adverse to the Lenders; or (vii)
waive per formance by the Company of its obligations under, or consent to any
departure from any of the terms and provisions of, Section 2.5A(iv); and
provided, further, that without the consent of the Agent, no such amendment,
modification, termination or waiver may amend, modify, terminate or waive any
provision of Section 9 as the same applies to the Agent or any other provision
of this Agreement as it relates to the rights or obligations of the Agent. No
amendment, modification or waiver of any provision of this Agreement, the Notes,
any Guarantee or the form of the Senior Subordinated Indenture shall adversely
affect the rights of the holders of Senior Debt or the holders of Guarantor
Senior Debt without their consent. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Company in any case shall entitle the Company to any
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 12.6 shall be binding upon each holder of the Notes at the time
outstanding, each further holder of the Notes, and, if signed by the Company or
a Guarantor, on the Company and such Guarantor. In addition to the provisions
contained in this Section 12.6, the provisions of Sections 8.10
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and 11.11 shall apply with respect to amendments or modifications of the
subordination provisions contained in Sections 8 and 11, respectively.
12.7 Independence of Covenants
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or be otherwise within the
limitation of, another covenant shall not avoid the occurrence of an Event of
Default or Default if such action is taken or condition exists.
12.8 Entirety
The Loan Documents and the Commitment Letter embody the entire
agreement of the parties and supersede all prior agreements and understandings,
if any, relating to the subject matter hereof and thereof.
12.9 Notices
Unless otherwise provided herein, any notice or other communications
herein required or permitted to be given shall be in writing and may be
personally served, telecopied, telexed or sent by mail and shall be deemed to
have been given when delivered in person, upon receipt of telecopy or telex
against receipt of answer back or four Business Days after depositing it in the
mail, registered or certified, with postage prepaid and properly addressed;
provided that notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 12.9 (at which time notice of a change
thereof shall also be delivered to the adminis trative agent under the Credit
Agreement and the Representative for any other Designated Senior Debt)) shall be
set forth under each party's name on the signature pages hereto.
12.10 Survival of Warranties and Certain Agreements
A. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the Commitment Letter,
the making of the Loans hereunder and the execution and delivery of the Notes
and, notwithstanding the making of the Loans, the execution and delivery of the
Notes or any investigation made by or on behalf of any party, shall continue in
full force and effect. The closing of the transactions herein contemplated shall
not prejudice any right of one party against any other party in respect of
anything done or omitted hereunder or in respect of any right to damages or
other remedies.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Company set forth in Sections 12.3, 12.4, 12.14,
12.15, 12.17,
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12.19 and 12.22 shall survive the payment of the Loans and the Notes and the
termination of this Agreement.
12.11 Failure or Indulgence Not Waiver; Remedies Cumulative
No failure or delay on the part of the Agent or any Lender or any
holder of any Note in the exercise of any power, right or privilege hereunder,
under a Guarantee or under the Notes shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under this Agreement, under a Guarantee or the
Notes are cumulative to and not exclusive of any rights or remedies otherwise
available.
12.12 Severability
In case any provision in or obligation under this Agreement, under a
Guarantee or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
12.13 Headings
Section and Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
12.14 Applicable Law
THIS AGREEMENT, EACH GUARANTEE AND THE NOTES SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
12.15 Successors and Assigns; Subsequent Holders of Notes
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Lenders. The terms and provisions
of this Agreement and each Guarantee shall inure to the benefit of any assignee
or transferee of the Notes pursuant to Section 12.2A, and in the event of such
transfer or assignment, the rights and privileges herein conferred upon the
Lenders shall automatically extend to and be vested in such transferee or
assignee,
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all subject to the terms and conditions hereof. In determining whether
the holders of a sufficient aggregate principal amount of the Loans shall have
consented to any action under this Agreement, any amount of the Loans owned or
held by the Company, any Guarantor or any of their respective Affiliates shall
be disregarded. The Company's rights or any interest therein hereunder may not
be assigned without the prior express written consent of each of the Lenders.
12.16 Counterparts; Effectiveness
This Agreement and any amendments, waivers, consents or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto, and delivery
thereof to the Agent or, in the case of the Lenders, written telex or facsimile
notice or telephonic notification (confirmed in writing) of such execution and
delivery. The Agent will give the Company and each Lender prompt notice of the
effectiveness of this Agreement.
12.17 Consent to Jurisdiction; Venue; Waiver of Jury Trial
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Guarantee may be brought in the courts of the State of New York or
of the United States for the Southern District of New York, and, by execution
and delivery of this Agreement, each of the parties to this Agreement hereby
irrevocably accepts for itself and in respect of its respective property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each of
the parties to this Agreement hereby further irrevocably waives any claim that
any such courts lack jurisdiction over such party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement, the
Notes or the Guarantees brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such party. Each of the parties to this Agreement
irrevocably consents to the service of process in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such party, at its respective address for notices pursuant to
Section 12.9, such service to become effective 30 days after such mailing. To
the extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any Note or any Guarantee that service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
any party to this Agreement to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against any party in
any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid
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actions or proceedings arising out of or in connection with this Agreement, the
Notes or the Guarantees brought in the courts referred to in clause A above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
C. Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement, the Notes or the Guarantees or the
transactions contemplated hereby or thereby.
12.18 Payments by Agent
A. The Agent agrees that promptly after its receipt of each payment of
any interest or premium on or principal of the Notes from or on behalf of the
Company or any Guarantor, it shall, except as otherwise provided in this
Agreement, distribute such payment to the Lenders (other than any Lender that
has consented in writing to waive its pro rata share of such payment) pro rata
based upon their respective pro rata shares, if any, of such payment.
B. Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents, or otherwise)
which is applicable to the payment of the principal of, or interest on, the
Loans of a sum which with respect to the related sum or sums received by other
Lenders is in a greater proportion than the total of such Obligation then owed
and due to such Lender bears to the total of such Obligation then owed and due
to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the Company to
such Lenders in such amount as shall result in a proportional participation by
all of the Lenders in such amount; provided that, if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
12.19 Taxes
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without deduction or
withholding for any and all present or future Taxes, unless such Taxes are
required by law or the administration thereof to be deducted or withheld and
excluding (i) in the case of each Lender and the Agent, Taxes imposed on its net
income and franchise taxes imposed on it by the jurisdiction under the laws of
which such Person is organized or any political subdivision thereof, (ii) in the
case of each such Lender and the Agent, any Taxes that are in effect and that
would apply to a payment to such Person, as applicable, as of the Closing Date,
and (iii) if any Person acquires any interest in this Agreement (a
"Transferee"), any Taxes to the extent that they
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are in effect and would apply to a payment to such Transferee as of the date of
the acquisition of such interest, as the case may be (all such nonexcluded Taxes
being hereinafter referred to as "Covered Taxes"). If the Company shall be
required by Law or the administration thereof to deduct or withhold any Covered
Taxes from or in respect of any sum payable hereunder or under any other Loan
Document, (a) unless such requirement results from the failure of the payee to
perform its obligations under Section 12.2D, the sum payable shall be increased
as may be necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional amounts paid
under this paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made; (b) the Company
shall make such deductions or withholdings; and (c) the Company forthwith shall
pay the full amount deducted or withheld to the relevant taxation or other
authority in accordance with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes, charges or similar
levies (all such taxes, charges and levies being herein referred to as "Other
Taxes") imposed by any jurisdiction (or any political subdivision or taxing
authority thereof or therein) which arise from any payment made by the Company
hereunder or under any of the other Loan Documents or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Agent and each of the Lenders
for the full amount of Covered Taxes or Other Taxes not deducted or withheld and
paid by the Company in accordance with Sections 12.19A and 12.19B to the
relevant taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the Company under
this Section 12.19 paid by the Lender or the Agent and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not any such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days from the date
the Agent or such Lender makes written demand therefor. A certificate as to the
amount of such Taxes or Other Taxes and evidence of payment thereof submitted to
the Company shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Agent or such Lender.
D. The Company shall furnish to the Agent and each of the Lenders the
original or a certified copy of a receipt evidencing any payment of Taxes or
Other Taxes made by the Company as soon as such receipt becomes available.
E. The provisions of this Section 12.19 shall survive the termination
of the Agreement and repayment of all Obligations.
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12.20 Waiver of Stay, Extension or Usury Laws
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Loans as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Agreement; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Agent, but will suffer and permit
the execution of every such power as though no such law had been enacted.
12.21 Requirements of Law
If at any time after the Closing Date any Lender reasonably determines
that the introduction of or any change in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Loans hereunder
or its obligations hereunder, then the Company and each of its Subsidiaries
jointly and severally agree to pay to such Lender, upon its written demand
therefor, such additional amounts as shall be required to compensate such Lender
or such other corporation for the increased cost to such Lender or such other
corporation or the reduction in the rate of return to such Lender or such other
corporation as a result of such increase of capital. In determining such
additional amounts, each Lender will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable; provided that such
Lender's reasonable good faith determination of compensation owing under this
Section 12.21 shall, absent demonstrable error, be final and conclusive and
binding on all the parties hereto. Each Lender, upon determining that any
additional amounts will be payable pursuant to this Section 12.21, will give
written notice thereof to the Company (a copy of which shall be sent by such
Lender to the Agent), which notice shall show the basis for calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish any of the Company's or its Subsidiaries' obligations to pay
additional amounts pursuant to this Section 12.21 upon the subsequent receipt of
such notice.
12.22 Confidentiality
A. Subject to the provisions of clause B of this Section 12.22, each
Lender agrees that it will use its best efforts not to disclose without the
prior consent of the Company (other than to its Affiliates, employees, auditors,
advisors or counsel or to another Lender if
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the Lender or such Lender's holding or parent company in its sole discretion
determines that any such party should have access to such information, provided
such Persons shall be subject to the provisions of this Section 12.22 to the
same extent as such Lender) any information with respect to the Company or any
of its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Loan Document and which is designated by the Company or
any of the Guarantors to the Lenders in writing as confidential, provided that
any Lender may disclose any such information (a) as has become generally
available to the public, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal regulatory
body having or claiming to have jurisdiction over such Lender or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in respect to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Lender, (e) to the Agent and (f) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or any interest
therein by such Lender; provided that such prospective transferee agrees to
provisions substantially the same as those contained in this Section 12.22.
B. Each of the Company and the Guarantors hereby acknowledges and
agrees that each Lender may share with any of its affiliates any information
related to the Company or any of its Subsidiaries (including, without
limitation, any nonpublic customer information regarding the creditworthiness of
the Company and its Subsidiaries); provided such Persons shall be subject to the
provisions of this Section 12.22 to the same extent as such Lender.
12.23 Application of Gaming Regulations
This Agreement is subject to the Gaming Regulations and laws involving
the sale and distribution of liquor (the "Liquor Laws"). Without limiting the
foregoing, the Agent and the Lenders acknowledge that (i) they are subject to
being called forward by the Gaming Authorities or the government authorities
enforcing the Liquor Laws, in their discretion, for licensing or a finding of
suitability or to file or provide other information, and (ii) all rights,
remedies and powers in or under this Agreement may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
the Gaming Regulations and Liquor Laws and only to the extent that required
approvals (including prior approvals) are obtained from the requisite Gaming
Authorities. The Agent and the Lenders agree to cooperate with all Gaming
Authorities in connection with the provision of such documents or other
information as may be requested by such Gaming Authorities.
12.24 Post-Closing Actions
Notwithstanding anything to the contrary contained in this Agreement
or the other Loan Documents, the parties hereto acknowledge and agree that on
the Closing Date, (i)
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restrictions on transfers and agreements not to encumber stock of ACLVI and
Cactus Pete's Inc. shall be inapplicable, and (ii) ACLVI shall not be required
by this Agreement or any other Loan Document to become a Guarantor. The Company
hereby agrees that the Company shall use its commercially reasonable efforts to
obtain the necessary approvals from the applicable Gaming Authority in order to
cause the restrictions on transfers and agreements not to encumber stock of
ACLVI and Cactus Pete's Inc. to be applicable by no later than March 31, 2001.
In addition, the parties hereto acknowledge that certain notice
filings with respect to the Transactions need to be completed following the
Closing Date pursuant to the Gaming Regulations applicable to the Company and
its Subsidiaries. The Company agrees to complete all such filings in a timely
manner and to notify the Agent upon the completion thereof.
All provisions of this Agreement and the other Loan Documents
(including, without limitation, all conditions precedent, representations,
warranties, covenants, events of default and other agreements herein and
therein) shall be deemed modified to the extent necessary to effect the
foregoing (and to permit the taking of the actions and the satisfaction of the
conditions described above within the time periods required hereby (and, rather
than as otherwise provided in the Loan Documents)); provided, that to the extent
any representation and warranty would not be true because the foregoing actions
were not taken, or conditions were not satisfied, on the Closing Date, the
respective representation and warranty shall be required to be true and correct
in all material respects at the time the respective action is taken or condition
is satisfied (or was required to be taken or satisfied) in accordance with the
foregoing provisions of this Section 12.24.
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WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
AMERISTAR CASINOS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Notice Address:
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
130
SUBSIDIARY GUARANTORS:
AMERISTAR CASINO COUNCIL BLUFFS, INC.
AMERISTAR CASINO VICKSBURG, INC.
AMERISTAR CASINO ST. LOUIS, INC.
AMERISTAR CASINO KANSAS CITY, INC.
AMERISTAR CASINO ST. XXXXXXX, INC.
CACTUS PETE'S, INC.
A.C. FOOD SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
Notice Address for all Guarantors:
c/o Ameristar Casinos, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
131
AGENT:
BANKERS TRUST COMPANY
By: /s/ Xxxx Xxxxxxxxxx
----------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Managing Director
Notice Address for Agent:
One Bankers Trust Plaza
000 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
with a copy to:
Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Cicado
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
132
LENDER:
Commitment: $225,000,000 BANKERS TRUST CORPORATION
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Managing Director
Notice Address:
One Bankers Trust Plaza
000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
with a copy to:
Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
133
Commitment: $75,000,000 BEAR XXXXXXX CORPORATE LENDING, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
Notice Address:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
