EX 4(24)
AMENDMENT NO.1 TO AMENDED
AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO.1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is entered into as of December 7, 1998 with reference to the
Amended and Restated Credit Agreement (the "Credit Agreement") dated as of
February 24, 1998 among Rio Properties, Inc., a Nevada corporation ("Rio
Properties"), Rio Leasing, Inc., a Nevada corporation ("Rio Leasing" and
collectively with Rio Properties, the "Borrowers"), the Banks party thereto, and
Bank of America National Trust and Savings Association (the "Agent"), as agent
for the Banks. Capitalized terms used but not defined herein are used with the
meanings set forth for those terms in the Credit Agreement.
RECITALS
A. The Borrowers have notified the Lenders that their corporate
parent, Rio Hotel & Casino, Inc. ("Parent"), has agreed to be acquired by
Xxxxxx'x Entertainment, Inc. (the "Xxxxxx'x Acquisition").
B. The Xxxxxx'x Acquisition constitutes a "Change of Control" as
defined in the Indentures governing the Parent's 10 5/8% Senior
Subordinated Notes due July 15, 2005 (the "10 5/8% Notes") and the
Parent's 9 1/2% Senior Subordinated Notes due April 15, 2007 (the "9 1/2%
Notes"), and requires, under Section 4.08 of each such Indenture, that the
Parent offer to repurchase such Parent Senior Subordinated Notes.
C. Parent proposes to call the 10 5/8% Notes for redemption and to
offer to redeem the 9 1/2% Notes .
D. The Borrowers propose to obtain financing in the amount of
$125,000,000 pursuant to a secured credit facility (the "Supplemental Bank
Facility"), the proceeds of which shall be loaned to Parent to redeem all
of the 10 5/8% Notes and used to redeem any of the 9 1/2% Notes tendered
to Parent, and for related transactional expenses.
E. By this Amendment, and subject to the terms and conditions set
forth herein, the Banks consent to the Xxxxxx'x Acquisition, to the
incurrence of the Supplemental Bank Facility and associated liens and
guarantees, and to the redemption of the Parent Senior Subordinated Notes
as described above.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrowers and the Agent, acting with
the consent of the Majority Banks, hereby agree as follows:
1. Definitions. The definition of "EBITDA" is hereby amended to read in
full as set forth below, the definition of "Unrestricted Subsidiaries" is hereby
amended to read in full as set forth below, and the following new definitions
are inserted in proper alphabetical order in Section 1.01 of the Credit
Agreement:
"EBITDA" means, for any period, for the Borrowers and their
respective Restricted Subsidiaries on a combined basis, determined in
accordance with GAAP, the sum of (a) net income (or net loss) plus (b) all
amounts treated as expenses for depreciation and interest and the
amortization of intangibles of any kind to the extent included in the
determination of such net income (or loss), plus (c) all accrued taxes on
or measured by income to the extent included in the determination of such
net income (or loss), plus (d) all transactional expenses incurred during
that period by reason of the Xxxxxx'x Acquisition, plus (e) any
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Pre-Opening Expenses attributable to any New Venture, plus (f) severance
expenses associated with the termination prior to January 1, 1999, of
senior executive employees of the Company; provided, however, that net
income (or loss) shall be computed for these purposes without giving
effect to extraordinary losses or extraordinary gains.
"Xxxxxx'x" means Xxxxxx'x Entertainment, Inc., and its successors.
"Xxxxxx'x Acquisition" means the acquisition of Parent by Xxxxxx'x
Entertainment, Inc. pursuant to the terms of the Xxxxxx'x Acquisition
Agreement.
"Xxxxxx'x Acquisition Agreement" means the Agreement and Plan of
Merger between Parent and Xxxxxx'x, as amended.
"Intercreditor Agreement" means an Intercreditor Agreement
substantially in the form of Exhibit A hereto, entered into between the
Agent and the lenders party to the Supplemental Bank Facility.
"Supplemental Bank Facility" means senior secured financing in a
principal amount not to exceed $125,000,000 incurred by Borrowers during
the period between November 15, 1998 and June 30, 1999 to refinance Parent
Senior Subordinated Notes tendered to Parent and associated transactional
expenses pursuant to terms which are substantially consistent with the
terms described on Exhibit B.
"Unrestricted Subsidiaries" means Rio Development, Rio Resorts and
each other Subsidiary of Parent which is not a Subsidiary of either
Borrower formed following the Closing Date which is designated as such at
the time of its formation pursuant to Section 6.13, provided that no
Subsidiaries owning portions of the Cinderlane Property may be
Unrestricted Subsidiaries at any time when the aggregate Investments made
pursuant to Section 7.04(f) are in excess of the limitations set forth
therein.
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2. Consent to Xxxxxx'x Acquisition. The Banks hereby consent to the
Xxxxxx'x Acquisition and waive Section 8.01(o)(ii) (as in effect prior to the
effectiveness of this Amendment) to the extent that such Section is violated by
the Xxxxxx'x Acquisition. This is a one time waiver only, and the Banks shall be
entitled to require full compliance with such Section (as amended hereby).
3. Consent to Supplemental Bank Facility and Intercreditor Agreement. The
Banks hereby consent to the incurrence of the Supplemental Bank Facility and the
repayment of the 10 5/8% Notes and the 9 1/2% Notes at any time prior to June
30, 1999. The Banks further consent to the granting of the liens contemplated by
the Supplemental Facility and authorize the Agent to enter into the
Intercreditor Agreement with the lenders under the Supplemental Bank Facility,
substantially in the form of Exhibit A hereto.
4. Amendment to Financial Statement Reporting Requirements. Section 6.01
of the Credit Agreement is hereby amended so that clauses (a) and (b) read in
full as follows:
"(a) As soon as available, but not later than 120 days after the end
of each fiscal year, a copy of the Form 10-K of Xxxxxx'x (and, for the
fiscal year ending December 31, 1998, of Parent) as filed with the SEC for
such fiscal year, which shall include, or be accompanied by, the opinion
of Xxxxxx Xxxxxxxx or another nationally recognized independent public
accounting firm which report shall state that such consolidated and
consolidating financial statements present fairly the financial position
of Xxxxxx'x (and/or Parent) for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years. Such opinion shall
not be qualified or limited for any reason, including without limitation
because of a restricted or limited examination by such accountant of any
material portion of Xxxxxx'x, the Parent's, the Company's or any
Subsidiary's records and shall be delivered to the Agent pursuant to a
reliance agreement between the Agent and Banks and such accounting firm in
form and substance satisfactory to the Agent;
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(b) As soon as available, but not later than 45 days after the end
of each of the first three fiscal quarters of each fiscal year a copy of
the Form 10-Q of Xxxxxx'x as filed with the SEC for such fiscal quarter
accompanied by a certificate of a Responsible Officer certifying the
financial statements appearing therein as being complete and correct and
fairly presenting, in accordance with GAAP, the financial position and the
results of operations of the Parent, the Borrowers and their respective
Subsidiaries;"
5. Amendment to Certificate/Other Information Reporting Requirements.
Section 6.02 of the Credit Agreement is hereby amended by deleting subsection
(g) thereof in its entirety.
6. Amendment to Negative Pledge. Section 7.01 of the Credit Agreement is
hereby amended to add a new clause (m) thereto, to read in full as follows:
"(m) pari passu Liens in favor of the agent and the lenders under
the Supplemental Facility in Property of the Parent, Borrowers and their
Restricted Subsidiaries which are not more extensive than the Liens in
favor of the Agent and the Lenders under this Agreement, and which are
subject to the Intercreditor Agreement described in Amendment No. 1
hereto."
7. Amendment to Investments Covenant. Section 7.04(e) of the Credit
Agreement is hereby amended by replacing the amount "$30,000,000" therein with
the amount "$35,000,000". Section 7.04(f) of the Credit Agreement is hereby
amended by replacing the amount "$50,000,000" therein with the amount
"$60,000,000".
8. Amendment to Indebtedness Covenant. Section 7.05 of the Credit
Agreement is hereby amended so that clause (g) reads in full as follows and to
add new clauses (h) and (i) thereto, as follows:
"(g) Indebtedness incurred when no Default or Event of Default
exists having subordination and other terms substantially the
same as the Parent's outstanding 9-1/2% Senior Subordinated
Notes Due
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2007 (other than pricing, but in any event reasonably
satisfactory to the Agent and its counsel), providing in any
event for no payments of principal prior to the maturity of
such Senior Subordinated Notes;
(h) Indebtedness consisting of the Supplemental Bank Facility
incurred prior to June 30, 1999; and
(i) unsecured revolving Indebtedness of the Parent (but not of the
Borrowers or their Subsidiaries) to Xxxxxx'x in an aggregate
principal amount not to exceed $100,000,000 at any time."
9. Amendment to Contingent Obligations Covenant. Section 7.08 of the
Credit Agreement is hereby amended to add a new clause (g) thereto, to read in
full as follows:
"(g) Contingent Obligations consisting of guarantees of the
Supplemental Bank Facility issued by Parent and the Restricted
Subsidiaries which have guaranteed the obligations under this Agreement
and which are pari passu with those granted to the Agent and the Lenders."
10. Amendment to Restricted Payments. Section 7.12 of the Credit Agreement
is hereby amended so that clause (c) reads in full as follows, and to add a new
clause (d) thereto, as follows:
"(c) Dividends to the Parent made when no Default or Event of
Default exists or would result therefrom; and
(d) Payments of principal and interest with respect to the
Indebtedness described in Section 7.05(i) mad e when no Default or Event
of Default exists."
11. Amendment to Senior Leverage Ratio. Section 7.16 of the Credit
Agreement is hereby amended to read in full as follows:
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"7.16 Maximum Senior Leverage Ratio. The Borrowers shall not permit the
Senior Leverage Ratio, (a) as of the last day of any fiscal quarter ending
on or prior to December 31, 1999, to be greater than 3.50:1.00, (b) as of
the fiscal quarter ending March 31, 1999 through June 30, 2000, to be
greater than 3.25:1.00 and (c) as of the last day of any subsequent fiscal
quarter, to be greater than 3.00:1.00."
12. Change of Control Provision. Section 8.01(o) of the Credit Agreement
is hereby amended, effective concurrently with the consummation of the Xxxxxx'x
Acquisition, to read in full as follows:
"(o) Ownership Parent and Company.
(i) The Parent any time: (A) ceases to maintain in the aggregate a
direct or indirect beneficial equity interest in any Loan Party at least
equal to 100% of the beneficial equity interest directly or indirectly
held by it on the Closing Date; or (B) fails to own beneficially, directly
or indirectly, capital stock representing voting control of any Loan
Party; or
(ii) (A) Xxxxxx'x ceases to own or control beneficially, directly or
indirectly, at least 75% of the outstanding Voting Stock of the Parent, or
(B) or any Person or group of Persons (as defined in the Securities
Exchange Act of 1934 and regulations thereunder) shall hold or control a
greater amount of the Voting Stock of the Parent than the amount owned
directly or controlled by Xxxxxx'x; "
13. Representations and Warranties. The Borrowers represent and warrant to
the Agent and the Banks that:
(a) The Borrowers have all necessary power and have taken all
corporate action necessary to enter into this Amendment and to make this
Amendment and all other agreements and instruments to which they are a
party executed in connection herewith, the valid and enforceable
obligations they purport to be.
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(b) No Event of Default under the Credit Agreement has occurred and
remains continuing.
14. Conditions; Effectiveness. The effectiveness of this Amendment shall
be subject to the conditions precedent that:
(a) Borrowers shall have paid to the Agent for the account of each
Bank an amendment fee of 15 basis points times the amount of each Bank's
Commitment under the Credit Agreement.
(b) Borrowers shall have delivered to the Agent a copy of a
resolution or resolutions passed by the Board of Directors of each
Borrower, certified by the Secretary or an Assistant Secretary of each
Borrower as being in full force and effect on the date hereof, authorizing
the execution, delivery and performance of this Amendment.
(c) The Agent shall have received written consents hereto from the
Majority Banks substantially in the form of Exhibit C hereto.
(d) Each of Parent, Cinderlane, Inc. and HLG, Inc. shall have
executed this Amendment to acknowledge their consent hereto.
15. Conditions Subsequent. There shall be conditions subsequent to the
waivers and amendments contained herein that:
(a) Borrowers shall have concurrently entered into the Supplemental
Credit Facility and the Xxxxxx'x Acquisition shall have been concurrently
consummated.
(b) Cinderlane and\or Rio Properties shall have executed Deeds of
Trust in form and substance satisfactory to the Agent encumbering that
portion of the Cinderlane Property underlying the "Rio Convention Center"
and the "Palazzo Suites" by a pari passu first priority Lien in favor of
the Administrative Agent, and such Deeds of Trust shall have been duly
recorded with the County Recorder's Office of Xxxxx County, Nevada.
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16. No Waiver. This Amendment is specific in time and in intent and does
not constitute, nor should it be construed as, a waiver of any other right,
power or privilege under the Loan Documents, or under any agreement, contract,
indenture, document or instrument mentioned in the Loan Documents; nor does it
preclude any exercise thereof or the exercise of any other right, power or
privilege, nor shall any future waiver of any right, power or privilege or
default hereunder, or under any agreement, contract, indenture, document or
instrument mentioned in the Loan Documents, constitute a waiver of any other
default of the same or of any other term or provision.
17. Effectiveness of the Credit Agreement. Except as hereby expressly
amended, the Credit Agreement remains in full force and effect, and is hereby
ratified and confirmed in all respects.
18. Counterparts. This Amendment may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument. This Amendment shall not become
effective until the Borrowers, the Banks and the Agent shall have signed a copy
hereof, and the Parent shall have consented hereto, whether the same instrument
or counterparts, and the same shall have been delivered to the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first written above.
RIO PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Treasurer
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RIO LEASING, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Secretary
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ Xxxxxx Xxxxxxx
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Title: Vice President
Agency Specialist
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[Attach Exhibit A - Intercreditor Agreement and
Exhibit B - Supplemental Bank Facility Term Sheet.]
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[Exhibit C to Amendment No. 1]
CONSENT OF BANK
This Consent of Bank is delivered with reference to the Amended and
Restated Credit Agreement (the "Credit Agreement") dated as of February 24, 1998
among Rio Properties, Inc., a Nevada corporation ("Rio Properties"), Rio
Leasing, Inc., a Nevada corporation ("Rio Leasing" and collectively with Rio
Properties, the "Borrowers"), the Banks party thereto, and Bank of America
National Trust and Savings Association (the "Agent"), as agent for the Banks.
Capitalized terms used but not defined herein are used with the meanings set
forth for those terms in the Credit Agreement.
The undersigned Bank hereby consents to the execution, delivery and
performance of the proposed Amendment No. 1 to the Credit Agreement,
substantially in the form provided to the undersigned as a draft, and without
limitation on the foregoing, specifically to (a) the acquisition of Parent by
Xxxxxx'x Entertainment, Inc., and (b) to the Supplemental Bank Facility
described therein.
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[Name of Bank]
By: ---------------------------
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[Printed Name and Title]
By: ---------------------------
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[Printed Name and Title]
Date: -------------------------
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