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EXHIBIT (b)
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LOAN AGREEMENT
DATED AS OF
NOVEMBER 22, 1999
BY AND BETWEEN
FAIR GROUNDS CORPORATION
AND
FIRST BANK AND TRUST
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LOAN AGREEMENT
THIS LOAN AGREEMENT dated as of November 22, 1999, by and between FAIR
GROUNDS CORPORATION, a Louisiana corporation (the "Debtor"), and FIRST BANK AND
TRUST, a Louisiana banking association ("Bank").
W I T N E S S E T H:
WHEREAS, the Debtor has applied to Bank for a working capital line of
credit in an amount not to exceed $2,500,000.00; and,
WHEREAS, Bank has agreed to provide such requested credit facility to
Debtor pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereunder set
forth, Debtor and Bank do hereby covenant and agree as follows, to-wit:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"AGREEMENT" shall mean this Loan Agreement, as the same may from time
to time be amended, modified or supplemented and in effect.
"BANK" shall mean First Bank and Trust, a Louisiana banking
association.
"BASE RATE" shall mean the rate of interest established from time to
time by the Board of Directors or management of Citibank, N.A., New
York, New York, as its "prime" or "base" lending rate, whether or not
that rate is published, and which is not necessarily the lowest rate
charged by Citibank, N.A., or by Bank, such rate to be adjusted
automatically on and as of the effective date of any change in such
Base Rate.
"BASE RATE LOAN" shall mean the portion of any of the Revolving Loans
bearing interest calculated on the basis of the Base Rate.
"BASE RATE TRANCHE" shall mean, with respect to outstanding Revolving
Loans of Debtor, all or any portion of the Revolving Loans that
constitutes a Base Rate Loan.
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"BUSINESS DAY" means a day other than (i) a Saturday, Sunday or legal
holiday for commercial banks under the laws of the State of Louisiana;
(ii) a day on which national banks are authorized to be closed in New
Orleans, Louisiana; and (iii) if such Business Day relates to a
conversion to, or continuation of, a LIBOR Rate Loan, also a day on
which dealings in Dollar deposits are carried out in the interbank
market selected by Bank for purposes of setting the LIBOR Rate.
"COLLATERAL" shall mean any interest in any kind of property or assets
pledged, mortgaged or otherwise subject to an Encumbrance in favor of
Bank pursuant to the Collateral Documents.
"COLLATERAL DOCUMENTS" shall collectively refer to the Collateral
Mortgage Note, the Pledge of Collateral Mortgage Note, the Mortgage and
any and all other documents in which an Encumbrance is created on any
property of the Debtor or of any third person to secure payment of the
Indebtedness of the Debtor or any part thereof.
"COLLATERAL MORTGAGE NOTE" shall mean that certain Collateral Mortgage
Note made by Debtor dated November 30, 1995, payable to the order of
bearer on demand in the principal amount of $17,500,000.00, which is
secured by and paraphed for identification with the Mortgage.
"COMMITMENT AMOUNT" shall mean $2,500,000.00.
"COMMITMENT" means the agreement by Bank to the Debtor to make
Revolving Loans in accordance with the provisions of Article II hereof.
"CONTINUE", "CONTINUATION" AND "CONTINUED" shall mean the continuation
pursuant to Section 3.3 hereof of a LIBOR Rate-based interest rate
accruing on the Note from one Interest Period to the next Interest
Period.
"CONTRACT RATE" shall mean, at any time, the rate of interest then
borne by the Note after giving effect to any fluctuations in the Base
Rate or LIBOR Rate, but without giving any effect to the application of
any default rate of interest imposed by Bank under the terms of the
Note. The Contract Rate shall be as follows:
a) With respect to Base Rate Loans, the Base Rate from time to
time in effect minus one-half of one percent (0.5%) per annum.
b) With respect to LIBOR Rate Loans, the LIBOR Rate applicable to
each such LIBOR Rate Loan or LIBOR Rate Tranche plus two
percent (2.0%) per annum.
"CONVERT", "CONVERSION" AND "CONVERTED" shall mean a conversion
pursuant to Section 3.3 hereof of the interest rate then accruing on
the Note or any Tranche thereof to a LIBOR Rate-based interest rate or
to a Base Rate-based interest rate.
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"DEBT" shall mean any and all amounts and/or liabilities owing from
time to time by the Debtor to any Person, including the Bank, direct or
indirect, liquidated or contingent, now existing or hereafter arising,
including without limitation (i) indebtedness for borrowed money; (ii)
unfunded portions of commitments for money to be borrowed; (iii) the
amounts of all standby and commercial letters of credit and bankers
acceptances, matured or unmatured, issued on behalf of the Debtor; (iv)
guaranties of the obligations of any other Person, whether direct or
indirect, whether by agreement to purchase the indebtedness of any
other Person or by agreement for the furnishing of funds to any other
Person through the purchase or lease of goods, supplies or services (or
by way of stock purchase, capital contribution; advance or loan) for
the purpose of paying or discharging the indebtedness of any other
Person, or otherwise; (v) the present value of all obligations for the
payment of rent or hire of property of any kind (real or personal)
under leases or lease agreements required to be capitalized under GAAP,
and (vi) trade payables and operating leases incurred in the ordinary
course of business or otherwise.
"DEBTOR" shall mean Fair Grounds Corporation, a Louisiana corporation,
together with its successors and assigns.
"DEFAULT" shall mean an event which with the giving of notice or the
lapse of time (or both) would constitute an Event of Default hereunder.
"DOLLARS" AND "$" shall mean lawful money of the United States of
America.
"ENCUMBRANCES" shall mean individually, collectively and
interchangeably any and all presently existing and/or future mortgages,
liens, privileges, servitudes, rights-of-way and other contractual
and/or statutory security interests and rights of every nature and
kind that, now and/or in the future may affect the property of the
Debtor or any part or parts thereof.
"ENVIRONMENTAL LAWS" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499 ("XXXX"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et
seq., the Louisiana Environmental Affairs Act, La. R.S. 30:2001, et
seq., or other applicable Governmental Requirements or regulations
adopted pursuant to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EVENT OF DEFAULT" shall mean individually, collectively and
interchangeably any of the Events of Default set forth below in Section
10.1 hereof.
"FUNDING LOSSES" shall mean, with respect to (a) the Debtor's payment
or prepayment of principal of a LIBOR Rate Loan or LIBOR Rate Tranche
on a day other than the last day of the applicable Interest Period; (b)
the Debtor's failure to borrow a LIBOR Rate Loan
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or a LIBOR Rate Tranche on the date specified by the Debtor; (c) the
Debtor's failure to make any prepayment of any LIBOR Rate Loans or
LIBOR Rate Tranches on the date specified by the Debtor, or (d) any
cessation of a LIBOR Rate to apply to the Revolving Loans or any
Tranche thereof pursuant to Section 4.4 or Section 4.5 hereof, in each
case whether voluntary or involuntary, any loss, expense, penalty,
premium or liability incurred by Bank (including but not limited to any
loss or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by Bank to fiend or maintain a
Revolving Loan).
"GAAP" shall mean, at any time, accounting principles generally
accepted in the United States as then in effect.
"GOVERNMENTAL REQUIREMENT" shall mean any applicable state, federal or
local law, statute, ordinance, code, rule, regulation, order or decree.
"INDEBTEDNESS" shall mean, at any time, the indebtedness of the Debtor
evidenced by the Note executed by the Debtor pursuant to this
Agreement, in principal, interest, costs, expenses and reasonable
attorneys' fees and all other fees and charges, together with all
commitment fees and other indebtedness and costs and expenses for which
the Debtor is responsible under this Agreement or under any of the
Related Documents. In addition, the word "Indebtedness" also includes
any and all other loans, extensions of credit, obligations, debts and
liabilities, including without limitation any indebtedness owed by the
Debtor to Bank or its agents on account of any interest rate protection
or swap or hedging agreements or arrangements entered into between the
Debtor and the Bank or any agent of the Bank, plus interest thereon, of
the Debtor that may now and in the future be owed to or incurred in
favor of Bank, as well as all claims by Bank against the Debtor,
whether existing now or later; whether they are voluntary or
involuntary, due or to become due, direct or indirect or by way of
assignment, determined or undetermined, absolute or contingent,
liquidated or unliquidated; whether the Debtor may be liable
individually or jointly with others, of every nature and kind
whatsoever, in principal, interest, costs, expenses and reasonable
attorneys' fees and all other fees and charges; whether the Debtor may
be obligated as principal obligor, guarantor, surety, accommodation
party or otherwise.
"INTEREST PAYMENT DATE" shall mean, with respect to a LIBOR Rate Loan
or a LIBOR Rate Tranche, the last day of each Interest Period
applicable to such LIBOR Rate Loan or LIBOR Rate Tranche, the last day
of the third month of any six-month LIBOR Interest Period applicable to
such LIBOR Rate Loan or LIBOR Rate Tranche, and the Termination Date.
"INTEREST PERIOD" shall mean, with respect to a LIBOR Rate Loan or a
LIBOR Rate Tranche, each period commencing on (1) the date any such
LIBOR Rate Loan or LIBOR Rate Tranche of any new Loan is made, (2) the
date the interest rate on any Revolving Loan or Tranche thereof is
Converted by a Debtor from a Base Rate Loan to a LIBOR Rate Loan, or
(3) the day following the last day of the immediately preceding
Interest Period for which a LIBOR Rate-based rate for the LIBOR Rate
Loan or LIBOR Rate
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Tranche is applicable and is Continued, and, in each case, ending on
the numerically corresponding day in the first, second, third or sixth
calendar month thereafter (as selected by Debtor in accordance with the
terms hereof); except that each Interest Period which commences on the
last Business Day of a calendar month or on any day for which there is
no numerically corresponding day in the appropriate subsequent calendar
month shall end on the last Business Day of the appropriate subsequent
calendar month. Notwithstanding the foregoing: (i) if any Interest
Period would otherwise commence before and end after the Termination
Date, such Interest Period shall end on the Termination Date; (ii) each
Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day, unless such
next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding Business Day.
"LIBOR RATE" shall mean, with respect to the applicable Interest Period
in effect, an interest rate per annum equal to the quotient (converted
to a percentage) of (i) the rate per annum of interest equal to the
annual rate of interest (rounded upward to the nearest whole multiple
of 1/100 of 1%, if such average is not such a multiple) determined by
Bank, at or before 11:00 a.m. New Orleans, Louisiana time on the first
day of such Interest Period, to be the annual rate of interest at which
deposits of Dollars are offered by prime banks in whatever London
interbank market may be selected by Bank in its sole discretion, acting
in good faith, at the time of determination and in accordance with the
then existing practice in such market for delivery on the first day of
such Interest Period in immediately available funds and having a
maturity equal to such Interest Period in an amount equal (or as nearly
equal as may be) to the applicable LIBOR Rate Loan, divided by (ii)
1.00 minus the LIBOR Reserve Requirement (as defined below), expressed
as a decimal, for such Interest Period. "LIBOR Reserve Requirement"
shall mean for any day during an Interest Period, that percentage which
is specified by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
(including, but not limited to, any marginal reserve requirement) for
the Bank with respect to liabilities consisting of or including
"Eurocurrency liabilities" (as defined in Regulation D of the Board of
Governors of the Federal Reserve System) with a maturity equal to such
Interest Period. In determining the percentage, the Bank may use any
reasonable averaging and attribution methods. Each determination by
Bank of a LIBOR Rate or of the LIBOR Reserve Requirement used in
determining same shall be conclusive and binding, absent manifest
error.
"LIBOR RATE LOAN" shall mean any of the Revolving Loans (or any portion
thereof) bearing interest calculated on the basis of a LIBOR Rate.
"LIBOR RATE TRANCHE" shall mean the amount of the outstanding Revolving
Loans of the Debtor that constitutes a LIBOR Rate Loan for a specific
Interest Period.
"LOAN DOCUMENTS" shall mean this Agreement, the Note, the Collateral
Documents and any other Related Documents.
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"MATERIAL ADVERSE CHANGE" shall mean an event which causes a material
adverse effect on the business, assets, operations or condition
(financial or otherwise) of Debtor, or which otherwise changes in a
materially adverse way any other facts, circumstances or conditions
which Bank has relied upon or utilized in making its Commitment
hereunder.
"MORTGAGE" shall mean that certain Collateral Mortgage dated November
30, 1995, executed by Debtor in favor of First National Bank of
Commerce and any future holder or holders of the Collateral Mortgage
Note, recorded at MOB 3138, Folio 35, Entry No. 341417 of the mortgage
records of Orleans Parish, Louisiana, as amended by that certain Act of
Amendment and Correction to Collateral Mortgage dated December 18,
1995, executed by Fair Grounds Corporation in favor of First National
Bank of Commerce and any future holder or holders of the Collateral
Mortgage Note, recorded at MOB 3144, Folio 53, Entry No. 343761 of the
mortgage records of Orleans Parish, Louisiana, as said Collateral
Mortgage may hereafter be amended from time to time.
"NOTE" shall mean that certain promissory note dated November 22, 1999,
made by Debtor payable to the order of Bank in the principal amount of
$2,500,000.00, and given in evidence of the Revolving Loans to be made
pursuant to the terms hereof, together with all other promissory note
or notes given in renewal, substitution or as a refinancing of any part
of the Indebtedness evidenced thereby.
"PERMITTED ENCUMBRANCES" shall have the meaning ascribed to such term
in Section 9.3 hereof.
"PERSON" shall mean an individual or a corporation, partnership, trust,
joint venture, incorporated or unincorporated association, joint stock
company, government, or an agency or political subdivision thereof, or
other entity of any kind.
"PLEDGE OF COLLATERAL MORTGAGE NOTE" shall the mean that certain Pledge
of Collateral Mortgage Note dated November 30, 1995, by Debtor in favor
of First National Bank and any future holder or holders of the
Collateral Mortgage Note, as said agreement may be further amended and
from time to time in effect.
"RELATED DOCUMENTS" shall mean and include individually, collectively,
interchangeably and without limitation all promissory notes, credit
agreements, loan agreements, guaranties, security agreements,
mortgages, collateral mortgages, deeds of trust, and all other
instruments and documents, whether now or hereafter existing, executed
in connection with the Indebtedness.
"REVOLVING LOANS" shall mean loans made by Bank under the Note to
Debtor in accordance with and subject to the terms of the Commitment.
"SUBSIDIARIES" shall mean at any date with respect to any Person all
the corporations of which such Person at such date, directly or
indirectly, owns 50% or more of the outstanding capital stock
(excluding directors' qualifying shares), and "Subsidiary" means any
one of the Subsidiaries.
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"TERMINATION DATE" shall mean the earlier to occur of (i) November 22,
2000, or (ii) the date of termination of the Commitment pursuant to
Article X hereof.
"TRANCHE" shall mean a portion of the Revolving Loans outstanding to
the Debtor that bears interest at either a particular LIBOR Rate-based
rate or at the Base Rate-based rate then in effect.
"UCC" shall mean the Uniform Commercial Code, Commercial Laws-Secured
Transactions (La. R.S. 10:9-101, et seq.) in the State of Louisiana, as
amended from time to time; provided, however, that if by reason of
mandatory provisions of law, the perfection or effect of perfection or
non-perfection of the Bank's Encumbrances against the Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction
other than the State of Louisiana, then "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction.
SECTION 1.2. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data submitted pursuant to this Agreement shall be prepared in accordance with
GAAP.
ARTICLE II
REVOLVING LOANS
SECTION 2.1. REVOLVING LOANS. Subject to the terms and conditions of
this Agreement, Bank agrees to make Revolving Loans to the Debtor from time to
time during the period from the date hereof to and including the Termination
Date; provided, however, that no such Revolving Loan shall exceed an amount
which, when added to the aggregate principal amount of all Revolving Loans at
such time outstanding, exceeds the Commitment Amount. Within the limits set
forth herein, the Debtor may borrow from Bank hereunder, repay any and all such
Revolving Loans as hereinafter provided and reborrow hereunder. Debtor's
obligation to repay the Revolving Loans made by Bank shall be evidenced by the
Note, which shall bear interest prior to maturity at the Contract Rate or
Contract Rates from time to time in effect pursuant to the terms of Article III
hereof.
SECTION 2.2. MANNER AND NOTICE OF BORROWING UNDER THE COMMITMENT. All
requests for Revolving Loans must be made during a Business Day between the
hours of 9:00 a.m. and 4:00 p.m. Central Time. If Bank receives Debtor's proper
request for a loan under the Revolving Loans by no later than 11:00 a.m. Central
Time and if Bank is able to honor such request, then Bank shall credit Debtor's
account with the proceeds of such Revolving Loan on the same day (if such
Revolving Loan is to be a Base Rate Loan), or, if such Revolving Loan is to be a
LIBOR Rate Loan, Bank shall credit Debtor's account with the proceeds of such
Revolving Loan within two (2) Business Days of such request. If Bank receives
Debtor's proper request for such a Revolving Loan later than 11:00 a.m. Central
Time and if Bank is able to honor such request, then Bank shall credit Debtor's
account with the proceeds of such Revolving Loan on the next Business Day (if
such Revolving Loan is to be a Base Rate Loan), or, if such Revolving Loan is
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to be a LIBOR Rate Loan, Bank shall credit Debtor's account with the proceeds of
such Revolving Loan within three (3) Business Days of such request. Requests for
Revolving Loans may be made by Debtor in person, in writing or through telephone
calls to Bank, and such requests shall be fully authorized by Debtor if made by
any one of the persons designated hereinbelow; provided, however, that any
request for a Revolving Loan which is to be a LIBOR Rate Loan shall be made in
writing and shall specify the requested Interest Period which is to initially
apply to such Revolving Loan. Bank shall have the right, but not the obligation,
to verify the telephone requests by calling the person who made the request at
the telephone number hereinafter set forth opposite his name. The persons who
are authorized by Debtor to make personal, written or telephone requests for a
loan as provided in this paragraph are:
Name Title Telephone Number
Xxxxx X. Xxxxxx President (000) 000-0000
Where Bank honors any request for Revolving Loans, the amount thereof
shall be credited to such demand deposit account maintained by Debtor with Bank
as Debtor may request and the credit advice resulting therefrom shall be mailed
to Debtor. Bank's copy of such credit advice shall be deemed conclusive evidence
of Debtor's indebtedness to Bank in connection therewith, absent manifest error.
The aggregate outstanding amount of principal and interest due by the Debtor at
any given time under the Commitment shall be and constitute the Indebtedness of
the Debtor to Bank under the Note. When each advance is made by Bank to the
Debtor hereunder, the Debtor shall be deemed to have renewed and reissued the
Note for the amount of the advance plus all amounts due by the Debtor to Bank
under the Commitment immediately prior to such advance.
SECTION 2.3. BORROWINGS UNDER THE COMMITMENT. Within the limits of the
Commitment to the Debtor hereunder and subject to the terms and conditions of
this Agreement, Bank shall only be obligated to lend the Debtor an amount which
will not cause all Revolving Loans outstanding to the Debtor to exceed
$2,500,000.00. During the period of the Commitment, the Debtor may use the
Commitment by borrowing, prepaying and reborrowing, all in accordance with the
terms and conditions of this Agreement.
SECTION 2.4. PAYMENT OF THE NOTE UNDER THE COMMITMENT. Interest on the
unpaid principal balance of the Note shall be payable in accordance with the
terms of Section 3.2 hereof. Principal shall be payable on the Termination Date.
The Debtor hereby authorizes Bank to debit its checking account maintained with
Bank to pay interest due on the Note on each payment date.
SECTION 2.5. USE OF PROCEEDS. Debtor shall use the proceeds of the
Revolving Loans solely for its own business and commercial purposes, including
the payment of existing indebtedness of Debtor to Bank One, Louisiana, N.A.
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SECTION 2.6. OVERLINES AND OVERADVANCES. Notwithstanding the provisions
of Section 2.1 hereof, in the event that at any time the aggregate unpaid
principal amount of the Revolving Loans ever exceeds $2,500,000.00, Debtor
agrees to pay the excess amount (an "overline") immediately upon demand by Bank.
Overlines shall bear interest prior to maturity of the Note at the Contract Rate
for Base Rate Loans. Upon request of Bank, Debtor shall execute a promissory
note, payable to the order of Bank, to represent the amount of any overline;
however, Debtor acknowledges and agrees that the records of Bank and this
Agreement shall constitute conclusive evidence of any overline and the
obligation of Debtor to repay any overline, with interest. All overlines for
which Bank has not demanded payment earlier, and all unpaid and accrued interest
on overlines not due and payable earlier, shall be due and payable on the
Termination Date. Debtor acknowledges and agrees that Bank is not obligated to
Debtor to fund any advance which would create an overline.
SECTION 2.7. OPTIONAL EXTENSION OF TERMINATION DATE. Bank agrees,
assuming no Default or Event of Default has occurred and is continuing under
this Agreement, to consider, at its sole discretion, extending the Termination
Date on an annual basis for additional one-year terms, upon the written request
of the Debtor. The Debtor shall submit a written request for extension of the
Termination Date not more than ninety (90) Business Days prior to the then
current Termination Date and not less than thirty (30) Business Days prior to
the then current Termination Date if it desires to request such an extension.
Bank shall advise the Debtor whether it agrees to so extend the Termination Date
within fourteen (14) Business Days prior to then current Termination Date
following receipt of a timely submitted request for an extension. The Debtor
acknowledges that Bank shall have no obligation to extend the Termination Date,
and that any extension of the Termination Date granted hereunder shall not in
any way be construed as an agreement to grant additional future extensions. If
any such extension is requested, and granted by Bank in its sole discretion,
this Agreement and all Collateral Documents shall remain in full force and
effect, and shall continue to apply to and secure payment of such extended
Indebtedness; provided, however, that to the extent deemed necessary by Bank,
the Debtor agrees to execute an appropriate amendment to this Agreement, a
promissory note renewing the Note (or a modification to the Note which extends
the Termination Date, as Bank may reasonably require), and to provide amendments
and/or confirmations and ratifications of all Collateral Documents, and to pay
all reasonable out-of-pocket expenses and reasonable attorney's fees incurred by
Bank in connection therewith.
ARTICLE III
INTEREST PAYABLE ON THE REVOLVING LOANS
SECTION 3.1. INTEREST ON THE REVOLVING LOANS.
(a) Subject to the terms and conditions hereof, the Revolving
Loans may from time to time be split into (1) LIBOR Rate Tranches, (2) Base Rate
Tranches, or (3) any combination thereof subject to the limitation set forth in
Section 3.3(c) of this Article, as determined pursuant to the terms of this
Article III.
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(b) The unpaid principal amounts of all Revolving Loans and
Revolving Loan Tranches shall bear interest at one or more of the following
Contract Rates, at Debtor's option: (i) the Base Rate from time to time in
effect, adjusted daily, minus one-half of one percent (0.5%) per annum, or (ii)
the LIBOR Rate then in effect for such Revolving Loans as determined by Bank at
the time such LIBOR Rate is determined for any of the Revolving Loans or
Revolving Loan Tranches, plus two percent (2.0%) per annum. Debtor shall select
the interest rate option applicable to each Revolving Loan or Revolving Loan
Tranche upon the funding of each such Revolving Loan or Tranche thereof, and the
selected interest rate option shall continue as to said Loan or Tranche until
changed in accordance with the following provisions hereof. If Debtor requests
that a Revolving Loan be funded as a LIBOR Rate Loan, Debtor shall give two (2)
Business Days' prior irrevocable written notice of such election prior to the
proposed funding date, and such notice shall specify the length of the desired
initial Interest Period to be applicable to such Revolving Loan. Debtor shall
notify Bank of its desire to change the interest rate on any of its Revolving
Loans or Revolving Loan Tranches not less than two (2) Business Days prior to
the date on which such change shall be effective. The Debtor may change a
Revolving Loan or Revolving Loan Tranche from a Base Rate Loan to a LIBOR Rate
Loan at any time without payment of premium or penalty, but the Debtor may
change a Revolving Loan or Revolving Loan Tranche from a LIBOR Rate Loan to a
Base Rate Loan only as of the last day of an Interest Period without payment of
premium or penalty. In the absence of any specific rate election by the Debtor,
all Revolving Loans and Tranches thereof shall bear interest at the Contract
Rate for Base Rate Loans.
SECTION 3.2. PAYMENT OF INTEREST ON THE REVOLVING LOANS. Interest on
all Base Rate Loans shall be payable on the last Business Day of each month and
on the Termination Date, and interest on LIBOR Rate Loans shall be payable on
each Interest Payment Date.
SECTION 3.3. CONVERSIONS AND CONTINUATIONS; MAXIMUM AMOUNT OF TRANCHES.
(a) The Debtor may elect from time to time to convert a LIBOR Rate
Loan or Tranche to a Base Rate Loan, or a Base Rate Loan to a LIBOR Rate Loan,
by giving the Bank at least two (2) Business Days' prior irrevocable written
notice of such election, provided that any such conversion of a LIBOR Rate Loan
shall only be made on the last day of a Interest Period with respect thereto.
All or any part of an outstanding LIBOR Rate Loan and a Base Rate Loan may be
converted as provided herein, provided that (1) no Base Rate Loan may be
converted into a LIBOR Rate Loan when any Default or Event of Default has
occurred and is continuing, (2) no Loan may be converted into a LIBOR Rate Loan
after the date that is one month prior to the Termination Date, and (3) any such
conversion may only be made if, after giving effect thereto, the provisions of
Section 3.3(c) hereof shall not have been contravened.
(b) Any Revolving Loan which is LIBOR Rate Loan or a Tranche
thereof may be continued as such upon the expiration of a Interest Period with
respect thereto by the Debtor giving Bank at least two (2) Business Days' prior
irrevocable written notice of such continuance; provided, that no LIBOR Rate
Loan may be continued as such (1) when any Default or Event of Default has
occurred and is continuing and the Bank has determined that such a continuation
is not appropriate or (2) after the date that is one month prior to the
Termination Date, and provided, further, that if the Debtor shall fail to give
such written notice or if such continuation is
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not permitted, then the Debtor shall be deemed to have converted said LIBOR Rate
Loan to a Base Rate Loan upon the expiration of the then current Interest
Period.
(c) All borrowings, conversions and continuations of the Revolving
Loans hereunder and all selection of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto no more than four (4) LIBOR Rate Tranches shall be outstanding to Debtor
under its Revolving Loans.
ARTICLE IV
CERTAIN GENERAL PROVISIONS
SECTION 4.1. PAYMENTS TO BANK. All payments of principal, interest,
commitment fees and any other amounts due hereunder or under any of the other
Related Documents shall be made to the Bank at the Bank's office at 000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxx 00000, or at such other location that
the Bank may from time to time designate in writing to the Debtor, in each case
in immediately available funds.
SECTION 4.2. NO OFFSET, ETC. All payments by Debtor hereunder and under
any of the other Related Documents shall be made without setoff or counterclaim
and free and clear of and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans, restrictions
or conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other authority
therein unless the Debtor is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon Debtor with respect to any
amount payable by it hereunder or under any of the other Loan Documents, Debtor
will pay to the Bank, on the date on which such amount is due and payable
hereunder or under such other Related Document, such additional amount in
Dollars as shall be necessary to enable the Bank to receive the same net amount
which Bank would have received on such due date had no such obligation been
imposed upon Debtor. Debtor will deliver promptly to the Bank certificates or
other valid vouchers for all taxes or other charges deducted from or paid with
respect to payments made by Debtor hereunder or under such other Loan Documents.
SECTION 4.3. COMPUTATIONS. All computations of interest on the
Revolving Loans and of commitment or other fees shall be assessed utilizing a
360-day daily interest factor over the number of days in an actual calendar year
(365 days or 366 days in a leap year). Bank shall determine each interest rate
applicable to the Revolving Loans in accordance with this Agreement, and Bank's
determination of same shall be conclusive in the absence of manifest error.
Except as otherwise provided in the definition of the term "Interest Period",
whenever a payment hereunder or under any of the other Related Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Revolving Loans as reflected on
the Bank's books and records from time to time shall be prima facie evidence of
the amounts so outstanding.
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SECTION 4.4. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to
the commencement of any Interest Period, the Bank shall determine or be notified
that adequate and reasonable methods do not exist for ascertaining the LIBOR
Rate that would otherwise determine the rate of interest to be applicable to the
Revolving Loans during any Interest Period, the Bank shall forthwith give notice
of such determination (which shall be conclusive and binding on the Debtor) to
the Debtor. In such event the Revolving Loans (or any Tranches thereof) will
automatically, on the last day of the then current Interest Period applicable to
such Revolving Loans or Tranches, become a Base Rate Loan until the Bank
determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Bank shall so notify Debtor.
SECTION 4.5. ILLEGALITY. Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful for the Bank to
make available, or maintain in effect, the LIBOR Rate, the Bank shall forthwith
give notice of such circumstances to the Debtor and thereupon any Revolving
Loans bearing interest at a LIBOR Rate shall be converted automatically to Base
Rate Loans on the last day of the then current Interest Period applicable to
such Revolving Loans or within such earlier period as may be required by law.
Debtor hereby agrees promptly to pay the Bank, upon demand by Bank, any
additional amounts necessary to compensate the Bank for any costs incurred by
the Bank in making any conversion in accordance with this paragraph, including
any interest or fees payable by the Bank to lenders of funds obtained by it in
order to make available, or maintain in effect, the LIBOR Rate for the Revolving
Loans.
SECTION 4.6. ADDITIONAL COSTS, ETC. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to the Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(1) subject the Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement,
the other Related Documents or the Indebtedness (other than taxes based
upon or measured by the revenue, income or profits of the Bank), or
(2) materially change the basis of taxation (except for changes in
taxes on revenue, income or profits) of payments to the Bank of the
principal of or the interest on the Indebtedness of any other amounts
payable to the Bank under this Agreement or the other Related
Documents, or
(3) impose or increase or render applicable (other than to the
extent specifically, provided for elsewhere in this Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or commitments of an office of the Bank, or
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(4) impose on the Bank any other conditions or requirements with
respect to this Loan Agreement, the other Related Documents, the
Indebtedness, or any class of loans of which the Indebtedness forms a
part, and the result of any of the foregoing is
(i) to increase the cost to the Bank of making,
funding, issuing, renewing, extending or maintaining the
Indebtedness, or
(ii) to reduce the amount of principal, interest
or other amount payable to the Bank hereunder on account of
such the Indebtedness, or
(iii) to require the Bank to make any payment or
to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by the Bank from Debtor
hereunder, then, and in each such case, Debtor will, upon
demand made by the Bank at any time and from time to time and
as often as the occasion therefor may arise, pay to the Bank
such additional amounts as will be sufficient to compensate
the Bank for such additional cost, reduction, payment or
foregoing interest or others sum.
SECTION 4.7. CAPITAL ADEQUACY. If after the date hereof the Bank
determines that (a) the adoption of or change in any law, governmental rule,
regulations, policy guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by the Bank or any
corporation controlling the Bank with any law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) of any
such entity regarding capital adequacy, has the effect of reducing the return on
the Bank's Loans to a level below that which the Bank could have achieved but
for such adoption, change or compliance (taking into consideration the Bank's
then existing policies with respect to capital adequacy and assuming full
utilization of such entity's capital) by any amount deemed by the Bank to be
material, then the Bank may notify Debtor of such fact. Debtor agrees to pay the
Bank for the amount of such reduction in the return on capital as and when such
reduction is determined upon presentation by the Bank of a certification in
accordance with paragraph Section 4.8.
SECTION 4.8. CERTIFICATE; OPTIONAL RIGHT OF PREPAYMENT. Bank shall
provide Debtor with a certificate setting forth any additional amounts which it
declares to be payable pursuant to Sections 4.6 and 4.7 hereof, and a complete
explanation of such amounts which are due, and each such certificate shall be
conclusive, absent manifest error, that such amounts are due and owing. Debtor
shall have the right, at any time within 90 days of receipt of any such
certificate, to obligations to notify Bank that it desires to terminate the
Commitment and prepay all the Revolving Loans (subject to any and all prepayment
penalties and pay Funding Losses under the terms of this Agreement) without
being obligated to pay any such additional costs set forth in such certificate,
after which Bank shall promptly terminate, discharge and release of record (at
Debtor's expense) all of its Encumbrances affecting the Collateral and return
all Collateral to
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Debtor. After receipt of such notice from Debtor, Bank shall have no further
Commitment hereunder.
SECTION 4.9. INDEMNITY. Debtor agrees to indemnify the Bank and to hold
the Bank harmless from and against any and all Funding Losses or any other loss,
cost or expense that the Bank may sustain or incur as a consequence of (a)
default by Debtor in payment of the principal amount of or any interest on any
Indebtedness as and when due and payable, including any such loss or expense
arising from interest or fees payable by the Bank to lenders of funds obtained
by it in order to maintain its LIBOR Rate in effect for the Revolving Loans, or
(b) the making of any payment of Indebtedness on a day that is not the last day
of the applicable Interest Period, including interest or fees payable by the
Bank to lenders of funds obtained by it in order to maintain its LIBOR Rate in
effect for the Revolving Loans.
ARTICLE V
SECURITY FOR THE INDEBTEDNESS
SECTION 5.1. SECURITY. The Indebtedness shall be secured by the
following:
(a) the Pledge of the Collateral Mortgage Note;
(b) the Mortgage; and,
(c) the security interest granted pursuant to Section 11.5 herein
affecting certain deposit accounts and all other property of
the Debtor in the possession or control of the Bank.
SECTION 5.2. AGREEMENT NOT TO ENFORCE MORTGAGE UNDER CERTAIN
CIRCUMSTANCES. Notwithstanding any provision contained in this Agreement, the
Mortgage or any of the other Related Documents to the contrary, Bank agrees that
if, based upon the audited financial statements of the Debtor for its fiscal
year ended on November 31, 1999 to be submitted to Bank pursuant to the
requirements of Section 8.1 (b) hereof, the Debtor has achieved a Debt Service
Coverage Ratio of not less than 1.25 to 1.00 for the preceding 12-month period,
Bank shall not thereafter enforce the Mortgage upon the occurrence of an Event
of Default hereunder so long as Debtor thereafter maintains a Debt Service
Coverage Ratio of not less than 1.25 to 1.00 for each 12-month period ending on
the last day of each fiscal quarter of Debtor. If at any time following the end
of any fiscal quarter when Debtor has failed to maintain a Debt Service Coverage
Ratio of not less than 1.25 to 1.00 for the immediately preceding 12-month
period, this provision shall no longer apply and Bank shall have the right to
exercise any and all rights available to it under the Mortgage following the
occurrence of any Event of Default hereunder. Each of the financial reports
submitted by Debtor to Bank under the provisions of Section 8.1 (a) and (b)
hereof shall contain a calculation of the Debt Service Coverage Ratio of Debtor
for the 12-month period ending on the effective date of each such financial
statement of Debtor. For purposes of this Section, "Debt Service Coverage Ratio"
shall mean, for each 12-month period for which it is to be determined, the ratio
of (a) the sum of Debtor's net income plus depreciation and interest expense for
such period, less any payments in cash, property, or other assets upon or in
respect of
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any shares of any class of capital stock of Debtor, including payments as
dividends and payments for the purpose of purchasing, retiring or redeeming any
such shares of stock of Debtor, made during such period, to (b) the sum of all
interest and principal payments made on the Revolving Loans and on all other
Debt for the same period.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. CONDITIONS PRECEDENT TO THE REVOLVING LOANS. The
obligation of Bank to make any Revolving Loan shall be subject to the
satisfaction and the continued satisfaction of the following conditions
precedent:
(a) Debtor shall have executed and delivered (or caused to have
been executed and delivered) to Bank this Agreement, an Acknowledgment of and
Amendment to the Pledge of the Collateral Mortgage Note (contemporaneously with
the taking of possession of the Collateral Note from Bank One, Louisiana, N.A.
upon the funding of such initial advance to purchase the outstanding loans due
by Debtor to Bank One, Louisiana, N.A.), UCC-3 assignments from Bank One,
Louisiana, N.A., of the existing UCC-1 financing statements in favor of First
National Bank of Commerce (which shall thereafter be partially released by Bank
to the extent that they affect equipment and furniture of the Debtor, but
retained insofar as they affect fixtures and other rights of Debtor related to
the real estate affected by the Mortgage), and the Note, all in form and
substance and in such number of counterparts as may be required by Bank;
(b) The representations and warranties of the Debtor as set forth
herein, or any Related Document furnished to Bank in connection herewith, shall
be and remain true and correct;
(c) Bank shall have received a favorable legal opinion of counsel
to the Debtor, in form, scope and substance satisfactory to Bank;
(d) Bank shall have received certified resolutions of the Debtor's
board of directors authorizing the execution of all documents contemplated
hereby;
(e) Bank shall have received all fees, charges and expenses which
are due and payable as specified in this Agreement or any Related Document;
(f) No Default or Event of Default shall exist or shall result
from the making of a Revolving Loan;
(g) Debtor shall have each provided Bank with all financial
statements, reports and certificates required by this Agreement;
(h) Bank shall have received the financial statements of the
Debtor as of July 31, 1999, and shall have found such statement satisfactory in
its sole discretion;
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(i) Bank's counsel shall have reviewed the corporate structure and
articles of incorporation of the Debtor, and shall be satisfied with the
validity, due authorization and enforceability of all Related Documents;
(j) There shall have been no change to the corporate structure,
ownership or management of the Debtor than from what has been previously
represented to Bank;
(k) Bank shall have received evidence acceptable to Bank and its
counsel that its Encumbrances affecting the Collateral shall have a first
priority position, subject only to Permitted Encumbrances;
(1) Bank shall have reached an agreement with Bank One, Louisiana,
N.A., for the purchase of Debtor's outstanding loans due to Bank One, Louisiana,
N.A. on terms satisfactory to Bank in its sole discretion, and Debtor shall have
paid any and all fees charged by Bank One, Louisiana, N.A. for the sale of its
loans to Bank;
(m) Debtor and/or its officers shall have made such
representations and warranties to Bank regarding the outstanding balances due by
Debtor to Bank One, Louisiana, N.A. and as to such other matters regarding the
status of the collateral securing such loans as Bank may reasonably request;
and,
(n) There shall have occurred no Material Adverse Change.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES.
Debtor represents and warrants to Bank as follows:
SECTION 7.1. CORPORATE AUTHORITY. Debtor is a Louisiana
corporation duly created, validly existing and in good standing under the laws
of the State of Louisiana, and is duly qualified and in good standing as a
foreign corporation in all other jurisdictions where the failure to qualify
would have an adverse effect upon its ability to perform its obligations under
this Agreement and all Related Documents. Debtor has the power to enter into
this Agreement, issue the Note, mortgage and grant security interests in the
Collateral in the manner and for the purpose contemplated by the Collateral
Documents. Debtor has the corporate power to perform its obligations hereunder
and under the Related Documents. The making and performance by Debtor of the
Related Documents have all been duly authorized by all necessary corporate
action (including all necessary shareholder action), and do not and will not
violate any provision of any law, rule, regulation, order, writ, judgment,
decree, determination or award presently in effect having applicability to
Debtor or the articles of incorporation of Debtor. The making and performance by
Debtor of the Related Documents do not and will not result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement or instrument to which Debtor is a party or by which it may be
bound or affected, or result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature (other than as contemplated by the Related
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Documents) upon or with respect to any of the properties now owned or hereafter
acquired by Debtor, and Debtor is not in default under or in violation of any
such order, writ, judgment, decree, determination, award, indenture, agreement
or instrument. Each of the Related Documents to which Debtor is a party
constitutes legal, valid and binding obligations of the Debtor, enforceable in
accordance with its terms.
SECTION 7.2. FINANCIAL STATEMENTS. The balance sheet of the Debtor
and the related statements of income and retained earnings for the year then
ended, copies of which have been delivered to Bank, are complete and correct and
fairly present the financial condition of the Debtor as of the date or dates
thereof. Each of said financial statements were prepared in conformity with GAAP
applied on a basis consistent with the preceding year. No Material Adverse
Change has occurred since said dates in the financial position or in the results
of operations of Debtor in its business taken as a whole.
SECTION 7.3. TITLE TO COLLATERAL. Debtor has good and marketable
title to the Collateral, free and clear of all Encumbrances other than Permitted
Encumbrances. The Collateral Documents constitute legal, valid and perfected
first Encumbrances on the property interests covered thereby, subject only to
Permitted Encumbrances.
SECTION 7.4. LITIGATION. Other than as has been disclosed
previously to Bank in writing, there are no legal actions, suits or proceedings
pending or threatened against or affecting Debtor or any of its properties
before any court or administrative agency (federal, state or local), which, if
determined adversely to the Debtor, would constitute a Material Adverse Change,
and there are no judgments or decrees affecting Debtor or any of its properties
(including, without limitation, the Collateral) which are or may become an
Encumbrance against such properties.
SECTION 7.5. APPROVALS. No authorization, consent, approval or
formal exemption of, nor any filing or registration with, any governmental body
or regulatory authority (federal, state or local), and no vote, consent or
approval of the shareholders of Debtor is or will be required in connection with
the execution and delivery by the Debtor of the Related Documents or the
performance by the Debtor of its obligations hereunder and under the other
Related Documents.
SECTION 7.6. LICENSES. Debtor possesses adequate franchises,
licenses and permits to own its properties and to carry on its business as
presently conducted.
SECTION 7.7. ADVERSE AGREEMENTS. Debtor is not a party to any
agreement or instrument, or subject to any charter or other restriction,
materially and adversely affecting the respective business, properties, assets,
or operations of any of them or their condition (financial or otherwise), and
Debtor is not in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party, which default would constitute a Material
Adverse Change.
SECTION 7.8. DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default hereunder has occurred or is continuing or will occur as a result of the
giving effect hereto.
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SECTION 7.9. EMPLOYEE BENEFIT PLANS. Each employee benefit plan as
to which Debtor may have any liability complies in all material respects with
all applicable requirements of law and regulations, and (i) no Reportable Event
(as defined in ERISA) has occurred with respect to any such plan, (ii) Debtor
has not withdrawn from any such plan or initiated steps to do so, and (iii) no
steps have been taken to terminate any such plan.
SECTION 7.10. INVESTMENT COMPANY ACT. The Debtor is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 7.11. PUBLIC UTILITY HOLDING COMPANY ACT. The Debtor is not
a "holding company," or a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 7.12. REGULATIONS G, T AND U. The Debtor is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T and U of the Board of Governors of the Federal
Reserve System), and none of the proceeds of the Revolving Loans will be used
for the purpose of purchasing or carrying such margin stock.
SECTION 7.13. LOCATION OF DEBTOR'S OFFICES AND RECORDS. The chief
place of businesses of Debtor, and the offices where Debtor its records
concerning the Collateral, are as follows:
Chief Place of Business Location Locations of Records regarding Collateral
-------------------------------- -----------------------------------------
0000 Xxxxxxxx Xxxxxxxxx 0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
SECTION 7.14. INFORMATION. All information heretofore or
contemporaneously herewith furnished by Debtor to Bank for the purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all information hereafter furnished by or on behalf of Debtor to Bank will be,
true and accurate in every material respect on the date as of which such
information is dated or certified; and none of such information is or will be
incomplete by omitting to state any material fact necessary to make such
information not misleading.
SECTION 7.15. ENVIRONMENTAL MATTERS. Except as may have been
disclosed in writing to Bank prior to the date hereof, no properties of the
Debtor has ever been, and ever will be so long as this Agreement remains in
effect, used for the generation, manufacture, storage, treatment, disposal,
release or threatened release of any hazardous waste or substance, as those
terms are defined in the Environmental Laws, except in compliance with such
Environmental Laws. Except as may have been disclosed in writing by the Debtor
to Bank, Debtor represents and warrants that it is in compliance with all
Environmental Laws affecting it and its properties.
SECTION 7.16. YEAR 2000 COMPLIANCE. The Debtor represents and
warrants that (i) as of the date of any request for an advance under the
Revolving Loans; (ii) as of the date of any
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renewal, extension or modification of the Revolving Loans; and (iii) at all
times the Revolving Loans or Bank's commitment to make Revolving Loans is
outstanding:
(1) Debtor has taken all reasonable efforts and shall continue,
prior to December 31, 2000, to take all reasonable efforts to assure that all
devices, systems, machinery, information technology, computer software and
hardware, and other date sensitive technology (collectively, the "Systems")
necessary for Debtor to carry on its business as presently conducted and as
contemplated to be conducted in the future are Year 2000 Compliant or will be
Year 2000 Compliant within a period of time calculated to result in no material
disruption of any of Debtor's business operations. For purposes of these
provisions, "Year 2000 Compliant" means that such Systems are designed to be
used prior to, during and after the Gregorian calendar year 2000 A.D. and will
operate during each such time period without error relating to date data,
specifically including any error relating to, or the product of, date data which
represents or references different centuries or more than one century.
(2) Debtor has: (i) undertaken a detailed inventory, review, and
assessment of all areas within its business and operations that could be
adversely affected by the failure of Debtor to be Year 2000 Compliant on a
timely basis; (ii) developed a detailed plan and time line for becoming Year
2000 Compliant on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable in all material respects.
(3) Debtor has made written inquiry of each of its key suppliers,
vendors, and customers, and has requested written confirmations from all such
persons, as to whether such persons have initiated programs to become Year 2000
Compliant. For purposes hereof, "key suppliers, vendors, and customers" refers
to those suppliers, vendors, and customers of Debtor whose business failure
would, with reasonable probability, result in a material adverse change in the
business, properties, condition (financial or otherwise), or prospects of
Debtor.
SECTION 7.17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Debtor
understands and agrees that Bank is relying upon the above representations and
warranties in making the Revolving Loans to Debtor. Debtor further agree that
the foregoing representations and warranties shall be continuing in nature and
shall remain in full force and effect until such time as the Indebtedness shall
be paid in full, or until this Agreement shall be terminated, whichever is the
last to occur.
ARTICLE VIII
AFFIRMATIVE COVENANTS
In addition to the covenants contained in the Collateral Documents,
which covenants are hereby ratified and confirmed by Debtor, Debtor covenants
and agrees as follows:
SECTION 8.1. FINANCIAL STATEMENTS. Debtor will furnish or cause to
be furnished to Bank:
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(a) within forty-five (45) days following the end of each fiscal
quarter, financial statements consisting of the balance sheet
of Debtor as of the end of such fiscal quarter, and statements
of income and statements of cash flow of Debtor for such
fiscal quarter and for the fiscal year through such fiscal
quarter, all certified by the chief financial officer of
Debtor as having been prepared in accordance with GAAP
consistently applied,
(b) as soon as available and in any event within ninety (90) days
following the close of fiscal year of Debtor, audited
financial statements of the Debtor consisting of a balance
sheet as at the end of such fiscal year and statements of
income, and statement of cash flow for such fiscal year,
setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, certified
by independent public accountants of recognized standing
acceptable to Bank,
(c) within forty-five (45) days after the end of each fiscal
quarter, a certificate signed by the president and by the
chief financial officer of the Debtor, certifying that they
have reviewed this Agreement and to the best of their
knowledge no Default or Event of Default has occurred, or if
such Default or Event of Default has occurred, specifying the
nature and extent thereof, and that all financial covenants in
this Agreement have been met, and providing a computation of
Debtor's Debt Service Coverage Ratio for the immediately
preceding 12-month period,
(d) within thirty (30) days of Debtor's filing of same, copies of
all federal and state income tax returns filed by Debtor with
the Internal Revenue Service and the Louisiana Department of
Revenue and Taxation, and,
(e) such other necessary financial information concerning Debtor
as Bank may reasonably request from time to time.
SECTION 8.2. NOTICE OF DEFAULT; LITIGATION; ERISA MATTERS. The
Debtor will give written notice to Bank as soon as reasonably possible and in no
event more than five (5) Business Days of (i) the occurrence of any Default or
Event of Default hereunder of which they have knowledge or should have
knowledge, (ii) the filing of any actions, suits or proceedings against the
Debtor in any court or before any governmental authority or tribunal of which
they have knowledge or should have knowledge which could cause a Material
Adverse Change, (iii) the occurrence of a reportable event under, or the
institution of steps by the Debtor to withdraw from, or the institution of any
steps to terminate, any employee benefit plan as to which the Debtor may have
liability, or (iv) the occurrence of any other action, event or condition of any
nature of which they have knowledge which may cause, or lead to, or result in,
any Material Adverse Change.
SECTION 8.3. MAINTENANCE OF CORPORATE EXISTENCE, PROPERTIES AND
LIENS. The Debtor will (i) continue to engage in the business presently being
operated by it; (ii) maintain its corporate existence and good standing in each
jurisdiction in which it is required to be qualified; (iii) keep and maintain
all franchises, licenses and properties necessary in the conduct of its business
in good order and condition; (iv) duly observe and conform to all material
requirements
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of any governmental authorities relative to the conduct of its business or the
operation of its properties or assets; and, (v) maintain in favor of Bank a
first perfected lien and security interest in the Collateral, subject only to
other Permitted Encumbrances.
SECTION 8.4. COLLATERAL SCHEDULES AND LOCATIONS. As often as Bank
shall reasonably require, Debtor shall deliver to Bank information regarding the
Collateral as Bank may reasonably require.
SECTION 8.5. TAXES. The Debtor shall each pay or cause to be paid
when due, all taxes, local and special assessments, and governmental and other
charges of every type and description, that may from time to time be imposed,
assessed and levied against it and its properties. Debtor further agrees to
furnish Bank with evidence that such taxes, assessments, and governmental and
other charges due by the Debtor have been paid in fill and in a timely manner.
The Debtor may withhold any such payment or elect to contest any lien if the
Debtor is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Bank's interest in the Collateral is not
jeopardized.
SECTION 8.6. REQUIRED INSURANCE. The Debtor shall maintain
insurance with insurance companies in such amounts and against such risks as is
usually carried by owners of similar businesses and properties in the same
general areas in which it operates, and as shall be reasonably satisfactory to
Bank. With respect to the Collateral of the Debtor, Debtor agrees to provide
Bank with the types of insurance coverages required by the Collateral Documents
affecting such Collateral.
The Debtor agrees to provide Bank with originals or certified copies of
such policies of insurance. The Debtor further agrees to promptly furnish Bank
with copies of all renewal notices and, if requested by Bank, with copies of
receipts for paid premium. The Debtor shall provide Bank with originals or
certified copies of all renewal or replacement policies of insurance no later
than fifteen (15) days before any such existing policy or policies should
expire. If the Debtor's insurance policies required hereunder and renewals
thereof are held by another person, the Debtor agrees to supply original or
certified copies of the same to Bank within the time periods required above.
SECTION 8.7. PERFORMANCE OF LOAN DOCUMENTS. The Debtor shall duly
and punctually pay and perform its obligations under the Note, under this
Agreement (as the same may at any time be amended or modified and in effect) and
under each of the Related Documents in accordance with the terms hereof and
thereof.
SECTION 8.8. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Debtor shall
comply with and shall cause all of its employees, agents, invitees or sublessees
to comply with all Environmental Laws with respect to the disposal of industrial
refuse or waste, and/or the discharge, procession, treatment, removal,
transportation, storage and handling of hazardous or toxic wastes and
substances, and pay immediately when due the cost of removal of any such waste
or substances from, and keep their properties free of any lien imposed pursuant
to any such laws, rules, regulations or orders.
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The Debtor shall give notice to Bank as soon as reasonably possible and
in no event more than five (5) days after it receives any compliance orders,
environmental citations, or other notices from any governmental entity relating
to any environmental condition relating to its properties or elsewhere for which
Debtor may have legal responsibility with a full description thereof; the Debtor
agrees to take any and all reasonable steps, and to perform any and all
reasonable actions necessary or appropriate to promptly comply with any such
citations, compliance orders or Environmental Laws requiring Debtor to remove,
treat or dispose of such hazardous materials, wastes or conditions at the sole
expense of Debtor, and to provide Bank with satisfactory evidence of such
compliance; provided, however, that nothing contained herein shall preclude
Debtor from contesting any such compliance orders or citations if such contest
is made in good faith, appropriate reserves are established for the payment for
the cost of compliance therewith, and Bank's security interest in any such
property affected thereby (or the priority thereof) is not jeopardized.
Regardless of whether any Event of Default hereunder shall have
occurred and be continuing, Debtor (i) releases and waives any present or future
claims against Bank for indemnity or contribution in the event the Debtor
becomes liable for remediation costs under and Environmental Laws, and (ii)
agrees to defend, indemnify and hold harmless Bank from any and all liabilities
(including strict liability), actions, demands, penalties, losses, costs or
expenses (including, without limitation, reasonable attorneys fees and remedial
costs), suits, administrative orders, agency demand letters, costs of any
settlement or judgment and claims of any and every kind whatsoever which may now
or in the future (whether before or after the termination of this Agreement) be
paid, incurred, or suffered by, or asserted against Bank by any person or entity
or governmental agency for, with respect to, or as a direct or indirect result
of, the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, or release from or onto the property of the Debtor or of
any hazardous materials, wastes or conditions regulated by any Environmental
Laws, contamination resulting therefrom, or arising out of, or resulting from,
the environmental condition of such property or the applicability of any
Environmental Laws relating to hazardous materials (including, without
limitation, CERCLA or any so called federal, state or local "super fund" or
"super lien" laws, statute, ordinance, code, rule, regulation, order or decree)
regardless of whether or not caused by or within the control of Bank. The
covenants and indemnities contained in this Section 8.8 shall survive
termination of this Agreement.
SECTION 8.9. FURTHER ASSURANCES. The Debtor will, at any time and
from time to time, execute and deliver such further instruments and take such
further action as may reasonably be requested by Bank, in order to cure any
defects in the execution and delivery of, or to comply with or accomplish the
covenants and agreements contained in this Agreement or the Collateral
Documents.
SECTION 8.10. OPERATIONS. The Debtor shall conduct its business
affairs in a reasonable and prudent manner and in compliance with all applicable
federal, state and municipal laws, ordinances, rules and regulations respecting
its properties, charters, businesses and operations, including compliance with
all minimum funding standards and other requirements of ERISA of 1974, and other
laws applicable to any employee benefit plans which it may have.
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SECTION 8.11. CHANGE OF LOCATION. The Debtor shall, within ten (10)
Business Days prior to any such addition or change, notify Bank in writing of
any proposed additions to or changes in the location of its business or of any
changes in the location of any of the Collateral.
SECTION 8.12. EMPLOYEE BENEFIT PLANS. So long as this Agreement
remains in effect, the Debtor will maintain each employee benefit plan as to
which it may have any liability, in compliance with all applicable requirements
of law and regulations.
SECTION 8.13. DEPOSIT ACCOUNTS. The Debtor will maintain all
corporate deposit and disbursement accounts with the Bank.
SECTION 8.14. ACCESS TO INFORMATION. The Debtor shall allow Bank's
employees and agents access to its books and records and properties during
normal business hours from time to time. The Debtor will provide Bank with such
other information as Bank may reasonably request from time to time.
ARTICLE IX
NEGATIVE COVENANTS
In addition to the negative covenants contained in the Collateral
Documents, which covenants are hereby ratified and confirmed by the Debtor, the
Debtor covenants and agrees as follows:
SECTION 9.1. LIMITATIONS ON FUNDAMENTAL CHANGES. The Debtor shall
not change the nature of its businesses, grant credit terms to its customers on
terms different than those presently granted to customers, or form any
subsidiary without the prior written consent of the Bank, nor shall it enter
into any transaction of merger or consolidation, or liquidate or dissolve itself
(or suffer any liquidation or dissolution).
SECTION 9.2. DISPOSITION OF ASSETS. The Debtor shall not convey,
sell, lease, assign, transfer or otherwise dispose of, any asset with a value in
excess of $750,000.00 without the prior written consent of Bank, which consent
shall not unreasonably withheld.
SECTION 9.3. ENCUMBRANCES. The Debtor shall not create, incur,
assume or permit to exist any Encumbrances on any of the Collateral now owned or
hereafter acquired, except for the following (hereinafter referred to as the
"Permitted Encumbrances"):
(a) Encumbrances for taxes, assessments, or other governmental
charges not yet due or which are being contested in good faith
by appropriate action promptly initiated and diligently
conducted, if such reserves as shall be required by GAAP shall
have been made therefor.
(b) Encumbrances of landlords, vendors, carriers, warehousemen,
mechanics, laborers and materialmen arising by law in the
ordinary course of business for sums either not yet due or
being contested in good faith by appropriate action promptly
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initiated and diligently conducted, if such reserve as shall
be required by generally accepted accounting principles shall
have been made therefor.
(c) Inchoate liens arising under ERISA to secure the contingent
liabilities, if any, permitted by this Agreement.
(d) The pledge of the Collateral and any other liens in favor of
the Bank to secure the Indebtedness of the Debtor to the Bank.
SECTION 9.4. CHANGES IN OWNERSHIP. The identity of the controlling
shareholders of the Debtor will not change without the prior written consent of
Bank.
SECTION 9.5. OTHER AGREEMENTS. The Debtor will not enter into any
agreement containing any provision which would be violated or breached by the
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection herewith.
SECTION 9.6. TRANSACTIONS WITH AFFILIATES. The Debtor will not
enter into any agreement with any affiliate of the Debtor except to the extent
that such agreements are commercially reasonable which provide for terms which
would normally be obtainable in an arm's length transaction with an unrelated
third party.
ARTICLE X
EVENTS OF DEFAULT
SECTION 10.1. EVENTS OF DEFAULT. The occurrence of any one or more
of the following shall constitute an Event of Default:
DEFAULT UNDER THE INDEBTEDNESS. Should the Debtor default in the
payment of principal or interest under the Indebtedness of the Debtor and such
default shall not be cured within ten days of the occurrence thereof.
DEFAULT UNDER THIS AGREEMENT. Should the Debtor violate or fail to
comply fully with any of the terms and conditions of, or default under, this
Agreement (provided, however, that no cure period shall be available for a
default in the obligation to maintain insurance coverages required hereby).
DEFAULT UNDER OTHER AGREEMENTS. Should any event of default occur or
exist under any of the Related Documents or should the Debtor violate, or fail
to comply fully with, any terms and conditions of any of the Collateral
Documents or Related Documents, or otherwise meet any of its obligations
contained in the Related Documents and such default not be cured within ten days
of the occurrence thereof (provided, however, that no cure period shall be
available for a default in the obligation to maintain insurance coverages
required thereby).
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OTHER DEFAULTS IN FAVOR OF BANK. Should the Debtor default under any
other loan, extension of credit, security agreement, or other obligation in
favor of Bank and fail to cure same in accordance with any applicable cure
periods.
DEFAULT IN FAVOR OF THIRD PARTIES. Should the Debtor default under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that involves a
claim against Debtor in excess of $50,000.00 or which may materially affect any
of the Collateral, or the Debtor's ability to perform its obligations under this
Agreement, or any Related Document, or pertaining to the Indebtedness and fail
to cure same in accordance with any applicable cure periods.
INSOLVENCY. The following occurrences, in addition to the failure pr
suspension of the Debtor, shall constitute an Event of Default hereunder:
(a) Filing by the Debtor of a voluntary petition or any answer
seeking reorganization, arrangement, readjustment of its debts
or for any other relief under any applicable bankruptcy act or
law, or under any other insolvency act or law, now or
hereafter existing, or any action by the Debtor consenting to,
approving of, or acquiescing in, any such petition or
proceeding; the application by the Debtor for, or the
appointment by consent or acquiescence of, a receiver or
trustee of the Debtor for all or a substantial part of the
property of the Debtor; the making by the Debtor of an
assignment for the benefit of creditors; the inability of the
Debtor or the admission by the Debtor of its inability to pay
its debts as they mature (the term "acquiescence" means the
failure to file a petition or motion in opposition to such
petition or proceeding or to vacate or discharge any order,
judgment or decree providing for such appointment within sixty
(60) days after the appointment of a receiver or trustee); or
(b) Filing of an involuntary petition against the Debtor in
bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any
applicable bankruptcy act or law, or under any other
insolvency act or law, now or hereafter existing and such
petition remains undismissed or unanswered for a period of
sixty (60) days from such filing; or the insolvency
appointment of a receiver or trustee of the Debtor for all or
a substantial part of the property of Debtor and such
appointment remains unvacated or unopposed for a period of
sixty (60) days from such appointment, execution or similar
process against any substantial part of the property of the
Debtor and such warrant remains unbonded or undismissed for a
period of sixty (60) days from notice to the Debtor of its
issuance.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of the Debtor be commenced.
FALSE STATEMENTS. Should any representation or warranty of the Debtor
made in connection with the Indebtedness prove to be incorrect or misleading in
any material respect when made or reaffirmed.
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MATERIAL ADVERSE CHANGE. Should a Material Adverse Change with respect
to the Debtor occur at any time and not be cured within ten days of the
occurrence thereof.
Upon the occurrence of an Event of Default, all commitments of Bank
under this Agreement will terminate immediately (including the Commitment of
Bank to make any further Revolving Loans to the Debtor), and, at Bank's option,
the Note and all Indebtedness of the Debtor will become immediately due and
payable, all without notice of any kind to Debtor, except that in the case of an
Event of Default of the type described in the "Insolvency" subsection above,
such acceleration shall be automatic and not optional.
Upon the occurrence of an Event of Default, Bank may proceed .to
realize upon the Collateral under the terms of the Collateral Documents, impose
any default rate of interest allowed by the Note to all outstanding
Indebtedness, and exercise any other rights which it has by law or contract
(which rights shall be cumulative in nature).
SECTION 10.2. WAIVERS BY THE DEBTOR. Except as otherwise provided for in this
Agreement and by applicable law, the Debtor waives (i) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Bank on which Debtor may in any way be liable and Debtor
hereby ratifies and confirms whatever Bank may do in this regard, (ii) all
rights to notice and a hearing prior to Bank's taking possession or control of,
or to Bank's replevy, attachment or levy upon, the Collateral or any bond or
security which might be required by any court prior to allowing Bank to exercise
any of its remedies, and (iii) the benefit of all valuation, appraisal and
exemption laws. Debtor acknowledges that it has been advised by counsel of its
choice with respect to this Agreement, the other Collateral Documents, and the
transactions evidenced by this Agreement and other Collateral Documents.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. NO WAIVER; MODIFICATION IN WRITING. No failure or
delay on the part of Bank in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. No amendment,
modification or waiver of any provision of this Agreement or of the Note, nor
consent to any departure by the Debtor therefrom, shall in any event be
effective unless the same shall be in writing signed by or on behalf of Bank and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. No notice to or demand on the Debtor
in any case shall entitle the Debtor to any other or further notice or demand in
similar or other circumstances.
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SECTION 11.2. PAYMENT ON NON-BUSINESS DAY. Whenever any payment to
be made hereunder or on account of the Note shall be scheduled to become due on
a day which is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in computing interest and fees payable hereunder or on account of the
Note.
SECTION 11.3. ADDRESSES FOR NOTICES. All notices and communications
provided for hereunder shall be in writing and, shall be mailed, by certified
mail, return receipt requested, or delivered as set forth below unless any
person named below shall notify the others in writing of another address, in
which case notices and communications shall be mailed, by certified mail, return
receipt requested, or delivered to such other address.
If to Bank:
First Bank and Trust
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxx
with a copy to:
Wm. Xxxxx Xxxxxxx, Esq.
Liskow & Xxxxx
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
If to Debtor:
Fair Grounds Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxx, President
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Chehardy, Sherman, Ellis,
Xxxxxxx & Xxxxxx, L.L.P.
Xxxxx 0000
Xxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
SECTION 11.4. FEES AND EXPENSES. The Debtor agrees to pay all fees,
costs and expenses of Bank in connection with the preparation, execution and
delivery of this Agreement and all Related Documents to be executed in
connection herewith and subsequent modifications or amendments to any of the
foregoing, including without limitation, the costs of all surveys, title
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insurance policies, appraisals, recordation fees and the reasonable fees and
disbursements of counsel to Bank. The Debtor further agrees to pay all costs and
expenses of Bank in connection with the enforcement of this Agreement, the Note
or the other Related Documents, including reasonable legal fees and
disbursements arising in connection therewith. The Debtor also agrees to pay,
and to save Bank harmless from any delay in paying stamp and other similar
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of this Agreement, the Note, the other Related
Documents, or any modification thereof.
SECTION 11.5. SECURITY INTEREST AND RIGHT OF SET-OFF. Bank shall
have a continuing security interest in, as well as the right to set-off the
obligations of Debtor hereunder against, all funds which Debtor may maintain on
deposit with Bank (with the exception of funds deposited in Debtor's accounts in
trust for third parties or funds deposited in pension accounts, IRA's, Xxxxx
accounts and All Saver Certificates or funds which are in accounts which are
specifically dedicated to the payment of purses or payroll taxes), and Bank
shall have a lien upon and a security interest in all such property of Debtor in
Bank's possession or control, which shall secure the Indebtedness of the Debtor.
SECTION 11.6. WAIVER OF MARSHALING. Debtor shall not at any time
hereafter assert any right under any law pertaining to marshaling (whether of
assets or liens) and Debtor expressly agrees that Bank may execute or foreclose
upon the Collateral in such order and manner as Bank, in its sole discretion,
deems appropriate.
SECTION 11.7. GOVERNING LAW. This Agreement and the Note shall be
deemed to be contracts made under the laws of the State of Louisiana and for all
purposes shall be construed in accordance with the laws of said State.
SECTION 11.8. CONSENT TO LOAN PARTICIPATION. Debtor agrees and
consents to Bank's sale or transfer, whether now or later, of one or more
participation interests in the Indebtedness of the Debtor arising pursuant to
this Agreement to one or more purchasers, whether related or unrelated to Bank.
Bank may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Bank may have
about Debtor or about any other matter relating to such Indebtedness, and Debtor
hereby waives any rights to privacy it may have with respect to such matters.
Debtor additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such participation
interests. Debtor also agrees that the purchasers of any such participation
interest will be considered as the absolute owners of such interests in such
Indebtedness.
SECTION 11.9. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. (a)
DEBTOR AND BANK HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH
DEBTOR AND BANK MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (i)
THE NOTE, (ii) THIS AGREEMENT, (iii) THE COLLATERAL DOCUMENTS OR (iv) THE
COLLATERAL. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS,
INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
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MADE BY THE DEBTOR AND THE BANK, AND THE DEBTOR AND THE BANK HEREBY REPRESENT
THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS
EFFECT. THE DEBTOR AND THE BANK EACH FURTHER REPRESENTS THAT IT HAS BEEN
REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
(b) THE DEBTOR HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF
THE STATE COURTS OF LOUISIANA AND THE FEDERAL COURTS IN LOUISIANA AND AGREES
THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR BROUGHT TO ENFORCE THE
PROVISIONS OF THE NOTE, THIS AGREEMENT AND/OR THE COLLATERAL DOCUMENTS MAY BE
BROUGHT IN ANY COURT HAVING SUBJECT MATTER JURISDICTION.
SECTION 11.10. SEVERABILITY. If a court of competent jurisdiction
finds any provision of this Agreement to be invalid or unenforceable as to any
person or circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in all
other respects shall remain valid and enforceable.
SECTION 11.11. HEADINGS. Article and Section headings used in this
Agreement are for convenience only and shall not affect .the construction of
this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
FAIR GROUNDS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx, President
FIRST BANK AND TRUST
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx, Executive Vice President
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