Exhibit 10.3
REVOLVING LINE OF CREDIT AGREEMENT
THIS REVOLVING LINE OF CREDIT AGREEMENT (the "Agreement"), is entered
into as of June 26, 1997, between COLONIAL DOWNS, L.P., a Virginia limited
partnership (the "Borrower"), and PNC BANK, NATIONAL ASSOCIATION, a national
banking association (the "Bank").
The Borrower and the Bank, with the intent to be legally bound, agree
as follows:
1. Loan. The Bank hereby agrees to make available to the Borrower a
$5,000,000 line of credit (the "Line of Credit"). The availability of the Line
of Credit is subject to the following terms and conditions:
1.1 Commitment. The Bank hereby agrees to make advances
("Loans") to the Borrower under the Line of Credit in an aggregate amount not to
exceed $5,000,000 at any one time outstanding, subject to reduction as set forth
in Section 1.15 hereof. The Line of Credit shall be available for a period of
three (3) years from the date hereof to June 30, 2000, subject to the Borrower's
extension options as set forth in Section 1.15 hereof (such date, as the same
may be extended in accordance with the provisions hereof, being hereinafter
called the "Expiration Date"). Subject to the terms and conditions hereof, the
Borrower shall have the right to borrow, repay and reborrow amounts hereunder
during the period of the Line of Credit; provided that principal amounts
outstanding and all accrued unpaid interest under the Line of Credit shall be
repaid in full on or before the Expiration Date. Notwithstanding anything
contained herein to the contrary, a portion of the Line of Credit, in the amount
of $300,000 (the "Restricted Amount") shall not be available for disbursement
until such time as the Borrower shall have been released from its obligations
under the Amended and Restated Performance Guaranty Agreement dated February 27,
1997 (the "Performance Guaranty") between the Borrower and the Virginia Racing
Commission (the "Commission"), provided that the Restricted Amount shall be
available for disbursement to Borrower, subject to the other terms and
conditions hereof, for the purpose of reimbursing Borrower for any amount paid
by Borrower to the Commission pursuant to the Performance Guaranty.
1.2 Note. The Borrower's obligation to repay the Loans shall
be evidenced by a promissory note substantially in the form of Exhibit "A"
hereto (the "Note").
1.3 Use of Proceeds. The proceeds of the Loans shall be used
by the Borrower as direct extensions of credit from the Bank to fund working
capital needs of the Borrower and other general partnership purposes.
1.4 Advance Procedures. The Borrower may request Loans
hereunder upon giving written notice to the Bank by 11:00 A.M. (Pittsburgh,
Pennsylvania time) (i) on the
Business Day prior to the proposed advance, in the case of Loans bearing
interest at the Base Rate and (ii) two (2) Business Days (as hereinafter
defined) prior to the proposed Loan, in the case of Loans bearing interest at
the Euro-Based Rate (as hereinafter defined).
1.5 Interest Rate Options. All amounts outstanding under the
Note shall bear interest at a rate per annum selected by the Borrower from the
interest rate options set forth below; it being understood that the Borrower may
select different options (each such option to which the Euro-Based Rate shall
apply shall be hereinafter called a "Euro-Rate Option" and the option to which
the Base Rate shall apply shall be hereinafter called the "Base Rate Option") to
apply simultaneously to different portions of the Loans and may select up to six
(6) different interest periods to apply simultaneously to different portions of
the Loans bearing interest at the Base Rate or the Euro-Based Rate as set forth
below provided, however, that no more than five (5) Borrowing Tranches subject
to a Euro-Rate Option, shall be permitted.
(i) Base Rate. A rate per annum (computed on the basis of a
year of 365 or 366 days, as applicable), equal to the sum
of one and one-half percent (1.5%) plus the rate of
interest announced from time to time by the Bank at its
principal office as its prime rate, which rate may not be
the lowest interest rate then being charged commercial
borrowers by the Bank (the "Prime Rate"). If and when the
Prime Rate changes, the rate of interest on the Base Rate
Loan will change automatically without notice to the
Borrower, effective on the date of any such change.
(ii) Euro-Based Rate. A rate per annum (computed on the basis
of a year of 360 days and the actual number of days
elapsed) (the "Euro-Based Rate") equal to the sum of (A)
the Euro-Rate plus (B) three percent (3.0%) per annum,
for the Euro-Rate Interest Period in an amount equal to
the advance and having a comparable maturity as
determined at or about 9:30 a.m. Eastern time two (2)
Business Days prior to the commencement of the Euro-Rate
Interest Period. For the purpose hereof, the following
terms shall have the following meanings:
"Borrowing Tranche" shall mean (i) portions of
the Loans to which a Euro-Rate Option applies by reason
of the selection of, conversion to or renewal of such
Interest Rate Option on the same day and having the same
Interest Period, and (ii) the portion of the Loans to
which the Base Rate Option applies by reason of the
selection of or conversion to such interest rate option.
Each Loan subject to a Euro-Rate Option shall be in the
minimum amount of $500,000, and each Loan subject to the
Base Rate Option shall be in the minimum amount of
$100,000.
"Business Day" shall mean any day other than a
Saturday or Sunday or a legal holiday on which commercial
banks are authorized or required to be closed for
business in Pittsburgh, Pennsylvania.
"Conditional Default" shall mean an event or
condition which, with the passage of time, the giving of
notice, or a determination by the Bank, as provided
herein, or any combination of the foregoing, would
constitute an Event of Default [as defined in the
Construction Loan Agreement of even date herewith between
the Borrower and the Bank (the "Construction Loan
Agreement")].
"Consequential Loss" shall mean an amount equal
to the present value (as determined by Bank) of the
product of (a) the positive difference resulting from
subtracting the interest rate for a portion of the Loans
subject to the Euro-Rate Option which would be applicable
to a similarly sized Borrowing Tranche determined on the
day of prepayment for a period of time commencing on the
date of prepayment and terminating on the last day of the
Euro-Rate Interest Period for the Borrowing Tranche being
prepaid from the interest rate for the Euro-Rate Option
actually in effect for the Borrowing Tranche being
prepaid; and (b) the amount of the Borrowing Tranche; and
(c) a fraction with a numerator equal to the number of
days remaining in the Euro-Rate Interest Period of the
Borrowing Tranche being prepaid and a denominator of 360.
Any certificate of Bank delivered to Borrower setting
forth the amount of Consequential Loss as provided herein
shall show the calculations required to determine such
Consequential Loss and shall be conclusive and binding,
absent manifest error, as to such amount and
determination.
"Euro-Rate" shall mean, with respect to any Loan
for any Euro-Rate Interest Period, the interest rate per
annum determined by the Bank by dividing (the resulting
quotient rounded upward to the nearest 1/16th of 1% per
annum) (i) the rate of interest determined by the Bank in
accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the
"offered" eurodollar rate evidenced by Telerate display
page 4756 as quoted by Exco Xxxxxx, Inc. or such other
display page on the Telerate System as may replace such
page (or appropriate successor or, if Exco Xxxxxx, Inc.
or its successor ceases to provide such quotes, a
comparable replacement as determined by the Bank) two (2)
Business Days prior to the first day of such Euro-Rate
Interest Period for an amount comparable to such Loan and
having a borrowing date and a maturity comparable to such
Euro-Rate Interest Period by (ii) a number equal to 1.00
minus the Euro-Rate Reserve Percentage. The Euro-Rate may
also be expressed by the following formula:
Telerate display page 4756 as quoted by Exco
Xxxxxx, Euro-Rate = Inc. or appropriate successor 1.00 -
Euro-Rate Reserve Percentage
"Euro-Rate Interest Period" shall mean the
period of one, two, three, four, six or twelve months
selected by the Borrower commencing on the date of
disbursement of a Loan and each successive period
selected by the Borrower thereafter; provided, that if a
Euro-Rate Interest Period would end on a day which is not
a Business Day, it shall end on the next succeeding
Business Day, unless such day falls in the succeeding
calendar month in which case the Euro-Rate Interest
Period shall end on the next preceding Business Day. In
no event shall any Euro-Rate Interest Period end on a day
after the Expiration Date.
"Euro-Rate Reserve Percentage" shall mean the
maximum effective percentage (expressed as a decimal
rounded upward to the nearest 1/100th of 1%) applicable
to the Bank, which is in effect during any relevant
period, as specified by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the reserve requirements (including, without limitation,
supplemental, marginal and emergency reserves) with
respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities") of a member bank in such
system with deposits exceeding Five Billion Dollars
($5,000,000,000). Each determination by the Bank of a
Euro-Rate Reserve Percentage, in the absence of manifest
error, shall be conclusive and binding.
"Law" shall mean any law (including common law),
or constitution, statute, treaty, regulation, rule,
ordinance, or order, applicable to Borrower or the Bank,
as the context so indicates, or any injunction, writ,
decree or award of any Official Body having jurisdiction
over or otherwise applicable to the Borrower, or the Bank
as the context so indicates, or applicable to any of the
security for the Loans.
"Official Body" shall mean any national,
federal, state, local or other government or political
subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of
either, or any court, tribunal, grand jury or arbitrator,
in each case whether foreign or domestic.
1.6 Payment of Interest. The Borrower shall pay accrued
interest on the unpaid principal balance of the Note in arrears at the
applicable rate or rates on (i) the first day of each month during the term
hereof, (ii) at maturity, whether by acceleration or otherwise of the Note,
and (iii) after maturity, on demand until paid in full.
1.7 Interest Rate Election. The Borrower shall notify the Bank
of each election of an interest rate option, each conversion from one interest
rate option to another, the
amount of the Loans then outstanding to be allocated to each interest rate
option and where relevant the Euro-Rate Interest Periods. Any election of or
conversion to a Euro-Rate Option shall be made by oral or written notice by the
Borrower to the Bank by 11:00 A.M. (Pittsburgh, Pennsylvania time) two (2)
Business Days prior to the commencement of the applicable Euro-Rate Interest
Period followed promptly thereafter by the Borrower's written confirmation to
the Bank of any oral notice. Any such election shall be promptly confirmed in
writing by such method as the Bank may require.
1.8 Default Rate and Late Payment Charge. After the principal
amount of all or any part of the Loans shall have become due and payable,
whether by acceleration or otherwise, all the Loans shall thereafter bear
interest at a rate per annum which shall be four percent (4%) per annum above
the Prime Rate. In addition, Borrower shall pay upon demand by Bank a late
payment charge equal to five percent (5%) of the amount of any payment due under
the Line of Credit, which is not received by the Bank within ten (10) days after
the date such payment is due. The Borrower acknowledges that the increased
interest rate and the late payment charge provided for herein reflect, among
other things, the fact that the Line of Credit has become a substantially
greater risk given its default status and that the Bank is entitled to
additional compensation for such risk.
1.9 Fees.
(a) On even date herewith, the Borrower shall pay to the Bank
a commitment fee in the amount of $75,000.
(b) Upon the exercise of each Extension Option, the Borrower
shall pay to the Bank an extension fee (each being herein called an "Extension
Fee") in an amount equal to one-half of one percent (0.5%) of the maximum
principal amount of the Line of Credit outstanding and available to the Borrower
during the applicable Extension Period.
1.10 Euro-Rate Unascertainable.
(a) If, on any date on which a Euro-Rate would otherwise be
determined, the Bank shall have determined (which determination shall be
conclusive absent manifest error) that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
(ii) an event or condition has occurred which materially and
adversely affects the applicable U.S. eurodollar
markets, or
(b) If, at any time, Bank shall have determined (which
determination shall be conclusive absent manifest error) that:
(i) the making, maintenance or funding of any portion of the
Loans to which a Euro-Rate Option applies has been made
impracticable or
unlawful if Bank complies in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate will not adequately and fairly reflect
the cost to the Bank of the establishment or maintenance
of any portion of the Loans to which a Euro-Rate Option
applies, or
(iii) after making all reasonable efforts, deposits of the
relevant amount in U.S. dollars for the relevant
Interest Period for any portion of the Loans to which a
Euro-Rate Option applies are not available to Bank in
the applicable U.S. eurodollar markets, hen, in the case
of any event specified in subsection (a) or (b) above,
the Bank shall promptly so notify the Borrower thereof.
Upon such date as shall be specified in any such notice
(which shall not be earlier than the date such notice is
given) the obligation of the Bank to allow the Borrower
to select, convert to or renew a Euro-Rate Option or, in
the case of an existing Euro-Rate Option which shall be
unlawful for the Bank to maintain, to continue such
Euro-Rate Option, shall be suspended until the Bank
shall have later notified the Borrower of the Bank's
determination (which determination shall be conclusive
absent manifest error) that the circumstances giving
rise to such previous determination no longer exist. If
at any time the Borrower receives notice from the Bank
as provided for in this Section 1.10 whether or not any
Euro-Rate Option has gone into effect, such notification
shall, subject to the Borrower's indemnification
obligations under Section 1.14, be deemed to provide for
selection of, conversion to or renewal of the Base-Rate
Option.
1.11 Selection of Interest Rate Options. If the Borrower fails
to select a Euro-Rate Interest Period in accordance with the provisions of
Section 1.7 in the case of a portion of the Loans to which a Euro-Rate Option
applies, the Borrower shall be deemed to have converted such portion of the
Loans to the Base Rate Option. If an Event of Default shall occur and be
continuing, the Bank may in its discretion limit the Borrower to the Default
Rate.
1.12 Optional Prepayments. The Borrower shall have the right
at its option from time to time to prepay the Loans in whole or part on the
dates set forth below without premium or penalty (except as provided below or in
Section 1.14(b) hereof):
(i) on any Business Day with respect to any portion of the
Loans to which the Base Rate Option applies;
(ii) on the last day of the applicable Euro-Rate Interest
Period with respect to any portion of the Loans to which
a Euro-Rate Option applies; or
(iii) with the Bank's prior approval, on any Business Day of a
Euro-Rate Interest Period with respect to any portion of
the Loans to which a Euro-Rate Option applies, provided
such prepayment is accompanied by an amount sufficient
to compensate the Bank for all Consequential Loss and
other costs and losses reimbursable under Section
1.14(b).
Whenever the Borrower desires to prepay any part of the Loans, it shall
provide a prepayment notice to the Bank at least five (5) Business Days prior to
the date of prepayment setting forth the date, which shall be a Business Day, on
which the proposed prepayment is to be made, and the total principal amount of
such prepayment, which shall not be less than $100,000. All prepayment notices
shall be irrevocable. The principal amount of the portion of the Loans for which
a prepayment notice is given shall be due and payable on the date specified in
such prepayment notice.
1.13 Application Among Interest Rate Options. All payments
permitted or required pursuant to Section 1.12 shall be applied among the
interest rate options first to the principal amount of the Loans subject to a
Base Rate Option, then to the principal amount of the Loans subject to a
Euro-Rate Option. In accordance with Section 1.14(b), the Borrower shall
indemnify the Bank for any loss or expense including loss of margin incurred
with respect to any such prepayments applied against any portion of the Loans
subject to a Euro-Rate Option on any day other than the last day of the
applicable Euro-Rate Interest Period, provided that, to the extent that the
outstanding principal balance which is subject to the Base Rate Option is less
than the amount of the applicable payment, then, at the election of Borrower so
long as no Event of Default or Conditional Default shall then exist, such
payment and any interest earned thereon, if applicable, shall be applied against
such Borrowing Tranches subject to the Euro-Rate Option as Borrower may choose,
to the extent of such insufficiency, subject to Borrower's obligation to
indemnify the Banks pursuant to Section 1.14(b), or shall be held by Bank in an
interest-bearing escrow account pending the termination of the next Borrowing
Tranche subject to a Euro-Rate Option.
1.14 Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return on Borrowing Tranches
Subject to a Euro-Rate Option Resulting From Taxes, Reserves, Capital Adequacy
Requirements, Expenses, Etc. With respect to Borrowing Tranches subject to the
Euro-Rate Option, if any future Law, guideline or interpretation or any change
in any Law, guideline or interpretation or application thereof by any Official
Body charged with the interpretation or administration thereof or compliance
with any request or directive (whether or not having the force of Law) of any
central bank or other Official Body:
(i) subjects Bank to any tax or charge with respect to this
Agreement, the Note, the Loans or payments by the
Borrower of principal, interest, or other amounts due
from the Borrower hereunder or under the Note (except
for taxes on the overall net income of the Bank, any
corporate franchise tax imposed on the Bank or any
withholding tax imposed by the United States of
America),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits
or commitments to extend credit extended by, or assets
(funded or contingent) of, deposits with or for the
account of, or other acquisition of funds by, any Bank,
or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets
(funded or contingent) of, or credits or commitments to
extend credit extended by, the Bank, or (B) otherwise
applicable to the obligations of the Bank under this
Agreement, and the result of any of the foregoing is to
increase the cost to, reduce the income receivable by,
or impose any expenses (including loss of margin) upon
the Bank with respect to this Agreement, the Note or the
making, maintenance or funding of any part of the Loans
(or, in the case of any capital adequacy or similar
requirement, to have the effect of reducing the rate of
return on the Bank's capital, taking into consideration
the Bank's customary policies with respect to capital
adequacy) by an amount which the Bank in its sole
discretion deems to be material, the Bank may from time
to time notify the Borrower of the amount determined in
good faith (using any averaging and attribution methods
employed in good faith) by the Bank (which determination
shall be conclusive absent manifest error) to be
necessary to compensate the Bank for such increase in
cost, reduction of income or additional expense. Such
notice shall set forth in reasonable detail the basis
for such determination. Such amount shall be due and
payable by Borrower to the Bank within ten (10) Business
Days after such notice is given; provided, however, that
if the Bank demands compensation under this Section
1.14, Borrower may at any time upon two (2) Business
Days' prior notice to the Bank (a) give notice to the
Bank that it is canceling such Borrowing Tranches
subject to a Euro-Rate Option, whereupon each such
Borrowing Tranche so canceled shall terminate and the
Borrower shall be obligated to compensate the Bank as
provided in this Section 1.14(a) above and to indemnify
the Bank as provided in subsection 1.14(b) below and to
pay the Bank upon demand an amount equal to all
Consequential Loss, if any, resulting therefrom, and (b)
convert such Borrowing Tranches subject to the Euro-Rate
Option to the Base Rate Option.
(b) Indemnity. In addition to the compensation required by
subsection (a) of this Section 1.14, the Borrower shall indemnify the Bank
against any loss or expense (including Consequential Loss, loss of margin, any
loss incurred in liquidating or employing deposits from third parties and any
loss or expense incurred in connection with funds acquired by the Bank to
fund or maintain a portion of the Loans subject to the Euro-Rate Option) which
the Bank sustains or incurs as a consequence of any
(i) payment, prepayment, conversion or renewal of any
portion of the Loans to which the Euro-Rate Option
applies on a day other than the last day of an Euro-Rate
Interest Period (whether or not such payment or
prepayment is mandatory or automatic and whether or not
such payment or prepayment is then due), or
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any
notice relating to the selection of the Euro-Rate Option
under Section 1.11 or prepayments under Section 1.12.
If the Bank sustains or incurs any such loss or expense it shall from time to
time notify the Borrower of the amount determined in good faith by the Bank
(which determination shall be conclusive absent manifest error and may include
such assumptions, allocations of costs and expenses and averaging or attribution
methods as the Bank shall deem reasonable) to be necessary to indemnify the Bank
for such loss or expense within three (3) months of the Bank becoming aware of
such loss or expense. Such notice shall set forth in reasonable detail the basis
for such determination. Such amount shall be due and payable by the Borrower to
the Bank ten (10) Business Days after such notice is given.
1.15 Extension Option.
If the Conditions for Extension (as hereinafter defined) are satisfied
on the date of exercise of the applicable Extension Option (as hereinafter
defined) and remain satisfied on the date of the commencement of the applicable
Extension Period (as hereinafter defined), the Borrower shall have the right to
extend the Expiration Date for two (2) successive periods of twelve (12) months
each (each such twelve (12) month period being hereinafter called an "Extension
Period" and each right to so extend being hereinafter called an "Extension
Option"). Borrower shall provide the Bank with written notice of its election to
extend the then-applicable Expiration Date in the form attached hereto as
Exhibit B not more than one-hundred eighty (180) days nor less than thirty (30)
days prior to the then-applicable Expiration Date. If Borrower desires to
exercise an Extension Option but Condition for Extension (h) is not satisfied,
the Borrower may satisfy the failure of such condition by making a permanent
principal payment with respect to the Construction Loan (as hereinafter
defined), within thirty (30) days following the Bank's determination of such
failure, but in no event later than the then-applicable Expiration Date, in the
amount required to reduce the outstanding principal balances of the Construction
Loan and the Line of Credit to the amount where such condition is satisfied (the
"Reduced Availability Limit"), subject to Borrower's simultaneous payment of any
Consequential Loss caused thereby. For the purposes hereof, the term "Conditions
for Extension" shall mean the following conditions: (a) no Remedies Event (as
defined in the Construction Loan Agreement), shall have occurred and be
continuing; (b) no Conditional Default shall have occurred which shall remain
uncured on the date of the commencement of the applicable Extension Period; (c)
the applicable Extension Fee shall be paid by the Borrower to the Bank
simultaneously with the exercise of the applicable Extension Option; (d) on or
before
the date of commencement of the applicable Extension Period, Borrower shall
reduce the outstanding principal balance to a maximum of (i) Four Million
Dollars ($4,000,000) following the exercise of the first Extension Option and
the aggregate principal amount available pursuant to the Line of Credit during
the first Extension Period shall be limited to such amount, and (ii) Three
Million Dollars ($3,000,000) following the exercise of the second Extension
Option, and the aggregate principal amount available pursuant to the Line of
Credit during the second Extension Period shall be limited to such amount; (e)
all licenses and permits of the Borrower shall remain in full force and effect;
(f) construction of the Improvements (as defined in the Construction Loan
Agreement) shall have been completed; (g) the Payment Guaranties (as defined in
the Construction Loan Agreement) shall remain in full force and effect, and
shall remain enforceable in accordance with their terms against the Guarantors
(as defined in the Construction Loan Agreement) and the Guarantors shall be in
compliance with their respective financial covenants, if any; and (h) the ratio
of EBITDA to Assumed Debt Service plus Capital Expenditures for Colonial Downs
Holdings, Inc., a Virginia corporation ("Holdings") shall be greater than 3.5 to
1. For the purposes hereof, the term "Assumed Debt Service" shall mean the sum
of all principal and interest payments for a twelve (12) month period with
respect to a loan equal to the sum of the maximum amount available under the
Line of Credit during the applicable Extension Period and the outstanding
principal balance of the Construction Loan on the date of exercise of the
applicable Extension Option which payments are based upon a twenty (20) year
mortgage-style amortization schedule of such sum, assuming an interest rate per
annum equal to two and one-half percent (2.5%) above the "weekly average yield"
on United States Treasury Securities adjusted to a constant maturity of ten (10)
years, as published in the Release five (5) Business Days prior to the date of
determination (in the event that the Release is no longer published, a
reasonable equivalent substitute therefor as may be selected by the Bank in its
reasonable discretion shall be utilized and further in the event that if the
Release is not published five (5) Business Days prior to the date of
determination, then the Release as published on the most recent date prior
thereto shall be utilized). For the purposes hereof, the term "Release" shall
mean the Federal Reserve Statistical Release H.15(519) titled "Selected Interest
Rates." For the purposes hereof, the term "Capital Expenditures" shall mean all
recurring capital expenditures in the ordinary course of business made by the
Borrower during the four (4) calendar quarters preceding the exercise of the
applicable Extension Option determined in accordance with GAAP and limited to
the amount of the annual capital expenditure budget prepared by Borrower and
approved by the Bank in accordance with Section 4.4 hereof.
2. Security. The security for repayment of the Loans shall include but
not be limited to the collateral, guaranties and other documents heretofore,
contemporaneously or hereafter executed and delivered to the Bank (the "Security
Documents"), which shall secure repayment of the Loans, and the Note and the
Construction Loan Agreement providing for the $10,000,000 Construction Loan made
by the Bank to the Borrower ( the "Construction Loan") as evidenced by that
certain Deed of Trust Note of even date herewith from Borrower to the Bank in
the principal amount of $10,000,000 the ("Deed of Trust Note"), and any
amendments, extensions, renewals or increases and all costs and expenses of the
Bank incurred in the documentation, negotiation, modification, enforcement,
collection or otherwise in connection with any of the foregoing, including but
not limited to reasonable attorneys' fees and expenses (hereinafter referred to
collectively as the "Obligations"). The Security Documents shall include,
without limitation, the following documents as defined in the Construction Loan
Agreement:
(a) the Deed of Trust;
(b) the Assignment of Leases and Rents;
(c) the Assignment of Construction and Development Documents;
(d) the Assignment of Development Agreement;
(e) the Pledge Agreements;
(f) the Environmental Indemnity;
(g) the Financing Statements;
(h) the Guaranties; and
(i) the Assignment of Management Agreement.
This Agreement, the Note and the Security Documents are collectively referred to
as the "Loan Documents."
3. Representations and Warranties. The Borrower hereby makes the
representations and warranties set forth in Article 8 of the Construction Loan
Agreement, which shall be continuing in nature and remain in full force and
effect until the Obligations are paid in full, and which shall be true and
correct.
4. Affirmative Covenants. The Borrower agrees that from the date of
execution of this Agreement until all Obligations have been fully paid and any
commitments of the Bank to the Borrower with respect to the Loans or
Construction Loan have been terminated, the Borrower will comply at all times
with the Affirmative Covenants set forth in Article 4 of the Construction Loan
Agreement.
5. Negative Covenants. The Borrower covenants and agrees that from the
date of execution of this Agreement until all Obligations have been fully paid
and any commitments of the Bank to the Borrower with respect to the Loans or the
Construction Loan have been terminated, the Borrower will comply at all times
with the Negative Covenants set forth in Article 5 of the Construction Loan
Agreement.
6. Remedies Event. For the purposes hereof, the term "Event of Default"
shall have the meaning ascribed thereto in the Construction Loan Agreement. Upon
the occurrence of a Remedies Event, the Bank will have all rights and remedies
specified in the Loan Documents and all rights and remedies (which are
cumulative and not exclusive) available under applicable law or in equity.
7. Conditions. The Bank's obligation to make any advance under the Loans
is subject to the conditions that as of the date of the advance:
7.1 No Remedies Event. No Remedies Event or Conditional
Default shall have occurred and be continuing.
7.2 Receipt and Remedies of Loan Documents. The Bank shall
have received the Loan Documents and such other instruments and documents which
the Bank may reasonably request in connection with the transactions provided for
in this Agreement, duly executed by the appropriate parties, and, where
applicable, such documents shall have been recorded or filed in the appropriate
offices.
7.3 Additional Materials. The Borrower shall have furnished to
the Bank at the Borrower's sole cost and expense the items set forth on Exhibit
E to the Construction Loan Agreement, all of which shall be in form and content
reasonably satisfactory to the Bank and its legal counsel.
7.4 Closing on Construction Loan. The Borrower and the Bank
shall have executed and delivered the Construction Loan Agreement and all
conditions to the disbursement of funds thereunder shall have been satisfied.
8. Expenses. The Borrower agrees to pay the Bank, upon the closing of
this Agreement, and otherwise on demand, all reasonable costs and expenses
incurred by the Bank in connection with the (i) preparation, negotiation and
delivery of this Agreement and the other Loan Documents, and any modifications
thereto, and (ii) collecting the loan or instituting, maintaining, preserving,
enforcing and foreclosing the security interest in any of the collateral
securing the Loan, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions or proceedings arising out of or relating
to this Agreement, including reasonable fees and expenses of counsel (which may
include costs of in-house counsel), expenses for auditors, appraisers and
environmental consultants, lien searches, recording and filing fees and taxes.
9. [Intentionally Omitted]
10. Miscellaneous.
10.1 Notices. All notices, demands, requests, consents,
approvals and other communications required or permitted hereunder must be given
in the manner set forth in Section 11.6 of the Construction Loan Agreement.
10.2 Preservation of Rights. No delay or omission on the part
of the Bank to exercise any right or power arising hereunder will impair any
such right or power or be considered a waiver of any such right or power or any
acquiescence therein, nor will the action or inaction of the Bank impair any
right or power arising hereunder. The Bank's rights and
remedies hereunder are cumulative and not exclusive of any other rights or
remedies which the Bank may have under other agreements, at law or in equity.
10.3 Illegality. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
10.4 Changes in Writing. No modification, amendment or waiver
of any provision of this Agreement nor consent to any departure by the Borrower
therefrom, will in any event be effective unless the same is in writing and
signed by the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on the Borrower in any case will entitle the Borrower to any other or
further notice or demand in the same, similar or other circumstance.
10.5 Entire Agreement. This Agreement (including the documents
and instruments referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
10.6 Counterparts. This Agreement may be signed in any number
of counterpart copies and by the parties hereto on separate counterparts, but
all such copies shall constitute one and the same instrument.
10.7 Successors and Assigns. This Agreement will be binding
upon and inure to the benefit of the Borrower and the Bank and their respective
heirs, executors, administrators, successors and assigns; provided, however,
that the Borrower may not assign this Agreement in whole or in part without the
prior written consent of the Bank and the Bank at any time may assign this
Agreement in whole or in part upon the terms and conditions set forth in Section
11.11 of the Construction Loan Agreement.
10.8 Interpretation. In this Agreement, unless the Bank and
the Borrower otherwise agree in writing, the singular includes the plural and
the plural the singular; words importing any gender include the other genders;
references to statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; the word "or"
shall be deemed to include "and/or," the words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections) or exhibits are
to those of this Agreement unless otherwise indicated; and references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications to such instruments, but only to
the extent such amendments and other modifications are not prohibited by the
terms of this Agreement. Whenever the Bank is granted the right herein to act in
its sole discretion or to grant or withhold consent or approval, such right
shall be exercised in good faith. Section headings in this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose. Unless otherwise specified in this
Agreement, all accounting terms shall be interpreted and all accounting
determinations shall be
made in accordance with GAAP. If this Agreement is executed by more than one
party as Borrower, the obligations of such persons or entities will be joint and
several.
10.9 Governing Law. This Agreement shall be deemed to be a
contract under the Laws of the Commonwealth of Pennsylvania and for all purposes
shall be governed by and construed and enforced in accordance with the Laws of
the Commonwealth of Pennsylvania without regard to its conflicts of laws
principles.
10.10 Indemnity. The Borrower agrees to indemnify each of the
Bank, its directors, officers and employees and each legal entity, if any, who
controls the Bank (the "Indemnified Parties") and to hold each Indemnified Party
harmless from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, all fees of counsel with whom any
Indemnified Party may consult and all expenses of litigation or preparation
therefor) which any Indemnified Party may incur or which may be asserted against
any Indemnified Party in connection with or arising out of the matters referred
to in this Agreement or in the other Loan Documents by any person, entity or
governmental authority (including any person or entity claiming derivatively on
behalf of the Borrower), whether (a) arising from or incurred in connection with
any breach of a representation, warranty or covenant by the Borrower, or (b)
arising out of or resulting from any suit, action, claim, proceeding or
governmental investigation, pending or threatened, whether based on statute,
regulation or order, or tort, or contract or otherwise, before any court or
governmental authority, which arises out of or relates to this Agreement, any
other Loan Document, or the use of the proceeds of the Loan; provided, however,
that the foregoing indemnity agreement shall not apply to claims, damages,
losses, liabilities and expenses resulting from an Indemnified Party's gross
negligence or willful misconduct. The indemnity agreement contained in this
Section shall survive the termination of this Agreement, payment of any Loan and
assignment of any rights hereunder. The Borrower may participate at its expense
in the defense of any such action or claim.
10.11 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF THE COURT OF COMMON PLEAS OF
ALLEGHENY COUNTY AND THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT
OF PENNSYLVANIA, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
AGREES THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL
DIRECTED TO THE BORROWER AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6 OF THE
CONSTRUCTION LOAN AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
UPON ACTUAL RECEIPT THEREOF. THE BORROWER WAIVES ANY OBJECTION TO JURISDICTION
AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES TO
ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.
10.12 WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK EACH
WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR
RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS RELATED TO ANY OF THE LOAN DOCUMENTS. THIS
WAIVER IS KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY MADE BY BORROWER AND THE BANK AND EACH
ACKNOWLEDGES THAT NONE OF THE BORROWER OR THE BANK NOR ANY PERSON ACTING ON
BEHALF OF EITHER OF THEM HAS OR HAVE MADE ANY REPRESENTATIONS OF FACT TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE
BORROWER AND THE BANK EACH FURTHER ACKNOWLEDGES THAT EACH OF THEM HAS BEEN
REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED BY ITS OWN FREE WILL, AND THAT BORROWER AND THE BANK EACH HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. THE BORROWER AND THE BANK EACH
AGREES THAT THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT ARE EXEMPTED
TRANSACTIONS UNDER THE TRUTH-IN-LENDING ACT, 15 U.S.C. SECTION 1061, ET SEQ. THE
BORROWER AND THE BANK EACH FURTHER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS
THE MEANING OF THIS WAIVER PROVISION.
[REMAINDER OF PAGE
LEFT INTENTIONALLY BLANK]
WITNESS the due execution hereof as a document under seal, as of the
date first written above.
WITNESS / ATTEST: COLONIAL DOWNS, L.P., a Virginia limited
partnership
By: STANSLEY RACING CORP., a Virginia
corporation, its sole general partner.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: _____________________ Name: Xxxxxxx X. Xxxxxx
Title: _____________________ Title: CEO
[CORPORATE SEAL]
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxxxx
Title:
-----------------------
(SEAL)
EXHIBIT A
FORM OF REVOLVING LINE OF CREDIT NOTE
EXHIBIT B
REQUEST FOR EXTENSION
To: PNC Bank, National Association Borrower: Colonial Downs, L.P.
One PNC Plaza
000 Xxxxx Xxxxxx Project: Xxxxxxxx Xxxxx
X0-XXXX-00-0
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 Loan No. __________________
Attention: Real Estate Banking
The undersigned hereby requests that you extend the maturity date of the above
referenced loan ("Loan") to June 30, ____ pursuant to the provisions in the
Revolving Line of Credit ("Agreement") dated June 26, 1997, between COLONIAL
DOWNS, L.P. as "Borrower" and PNC BANK, NATIONAL ASSOCIATION as "Bank" (all
capitalized terms employed herein shall have the meanings ascribed thereto in
the Agreement unless defined to the contrary herein). This loan is evidenced
by a Revolving Line of Credit Note dated June 26, 1997 in the face amount of
$15,000,000, and other Loan Documents. The Borrower warrants and represents
that all Conditions for Extension have been satisfied and that the ratio of
EBITDA to Assumed Debt Service plus Capital Expenditures for Holdings as
calculated for the twelve (12) month period ending on the preceding December
31, is ____ to 1.
The undersigned agrees to execute whatever additional documents (including,
without limitation, an Extension Agreement) which may be required in order to
implement or to clarify the terms of this extension or to preserve and
maintain the security granted in connection with the Loan.
Pursuant to the terms of the Agreement, enclosed is the extension fee in the
amount of $______________.
Date: _______, 2000 COLONIAL DOWNS, L.P.,
a Virginia limited partnership
By: STANSLEY RACING CORP.,
a Virginia Corporation,
its sole general partner
ATTEST/WITNESS: By:
---------------------------
--------------------------- Title:
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