EXHIBIT 10.22
AMENDMENT NO. 2 TO
CREDIT AGREEMENT
THIS AMENDMENT NO. 2 dated as of March 1, 2000 (this "Amendment") is
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entered into between The Santa Xxxxx Companies, Inc., a Delaware corporation
(the "Borrower"), and Xxxxx Fargo Bank, National Association (the "Bank"), and
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amends the Term Loan Credit Agreement dated as of November 15, 1999, as amended
by Amendment No. 1 thereto dated as of January 24, 2000 (as further amended
hereby and as the same may be further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), between the Borrower and
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the Bank. Terms defined in the Credit Agreement and not otherwise defined
herein are used herein as therein defined.
WHEREAS, the Borrower has requested that the Bank agree to amend certain
provisions of the Credit Agreement to, among other things, create a revolving
credit facility for the Borrower, and the Bank is willing to make such
amendments on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree as follows:
Section 1. Amendment to Section 1.1 of the Credit Agreement. Section 1.1
of the Credit Agreement is hereby amended as follows:
(a) by inserting the following definitions in the appropriate alphabetical
order:
" 'Borrowing' means a borrowing consisting of Loans of the same type
made on the same day.";
" 'Effective Date' means March 1, 2000.";
" 'Loan' means, until the Revolving Credit Termination Date, the
Revolving Loans and, on and after the Revolving Credit Termination Date,
the Term Loans.";
" 'Release Parcel' is defined in Section 5.13(d).";
" 'Remainder Parcel' is defined in Section 5.13(d).";
" 'Revolving Credit Obligations' means, at any particular time, the
outstanding principal amount of all Loans at such time.";
" 'Revolving Credit Termination Date' means March 1, 2001 (or such
later date to which the Bank, in the exercise of its sole and absolute
discretion, may agree to extend
the Commitment) or, if earlier, the date on which the Commitment terminates
in accordance with the terms hereof.";
" 'Revolving Loan' is defined in Section 2.1(a)."; and
" 'Term Loan' is defined in Section 2.1(f).
(b) by amending and restating in its entirety the definition of
"Commitment" to read as follows:
" 'Commitment' means the Bank's commitment to make Revolving Loans to
the Borrower in an aggregate principal amount not to exceed $63,000,000 at
any time outstanding.";
(c) by deleting the definition of "Commitment Termination Date" in its
entirety;
(d) by deleting from the definition of "Extension Date" the reference to
"Section 2.2(b)" and substituting therefor "Section 2.1(f)";
(e) by deleting from the definition of "Extension Notice" the reference to
"Section 2.2(b)" and substituting therefor "Section 2.1(f)";
(f) by deleting the definition of "Funding Date" in its entirety;
(g) by deleting from the definition of "Interest Period", in each instance
that they appear, the words "the Term Loan" and substituting therefor the words
"any Loan";
(h) by deleting from the definition of "LIBOR Loan" the words "a loan" and
substituting therefor the words "a Loan";
(i) by amending and restating in its entirety the definition of "Maturity
Date" to read as follows:
" 'Maturity Date' means (i) November 30, 2002 or (ii) if the
provisions of Section 2.1(f) have been satisfied, the Extended Maturity
Date.";
(j) by deleting from the definition of "Note" the words "Term Loan
Promissory Note" and substituting therefor the words "Revolving Credit Note";
(k) by amending and restating in its entirety the definition of "Parent"
to read as follows:
" 'Parent' means Magna Entertainment Corp., a Delaware corporation.";
(l) by deleting from the definition of "Prime Rate Loan" the words "a
loan" and substituting therefor the words "any Loan"; and
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(m) by deleting from the definition of "Subordinated Debt" the words "the
Term Loan" and substituting therefor the words "the Loans".
Section 2. Amendment to Article II of the Credit Agreement.
(a) The heading of Article II of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
"ARTICLE II
THE CREDIT".
(b) Sections 2.1 through 2.8 of the Credit Agreement are hereby amended
and restated in their entireties to read, respectively, as follows:
"SECTION 2.1. LOANS.
(a) Loans. Subject to the terms and conditions set forth herein, the
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Bank hereby agrees to make revolving loans, in Dollars (each individually,
a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower from time to time during the period from the Effective Date to the
Business Day next preceding the Revolving Credit Termination Date; provided
that the Revolving Credit Obligations shall not exceed, at any time, the
Commitment. Subject to the provisions hereof, the Borrower may repay any
outstanding Revolving Loan on any day which is a Business Day and any
amounts so repaid may be reborrowed, up to the amount available under this
Section at the time of such Borrowing, until the Business Day next
preceding the Revolving Credit Termination Date.
(b) Types of Loans and Minimum Amounts. Each Borrowing of Revolving
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Loans shall be in a minimum aggregate amount of $500,000 and integral
multiples of $100,000.
(c) Notice of Borrowing. When the Borrower desires to borrow
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Revolving Loans under this Section 2.1, it shall deliver to the Bank an
irrevocable Notice of Borrowing (a "Notice of Borrowing"), signed by it, no
later than 1:00 p.m. (Los Angeles time) (i) on the Business Day next
preceding the proposed funding date, in the case of a Borrowing of Prime
Rate Loans and (ii) at least three (3) Business Days in advance of the
proposed funding date, in the case of a Borrowing of LIBOR Loans. Such
Notice of Borrowing shall specify (i) the proposed funding date (which
shall be a Business Day), (ii) the aggregate amount of the proposed
Borrowing, (iii) whether the proposed Borrowing will be of Prime Rate Loans
or LIBOR Loans, (iv) in the case of LIBOR Loans, the length of the initial
Interest Period with respect to such Borrowing and (v) instructions for the
disbursement of the proceeds of the proposed Borrowing. In lieu of
delivering such a Notice of Borrowing, the Borrower shall give the Bank
irrevocable telephonic notice of any proposed Borrowing by 1:00 p.m. on the
day of the proposed Borrowing, and shall confirm such notice by delivery of
the Notice of
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Borrowing by telecopy to the Bank promptly, but in no event later than 3:00
p.m. (Los Angeles time) on the same day.
(d) Making of Revolving Loans. Promptly after receipt of a Notice of
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Borrowing under Section 2.1(c) (or telephonic notice in lieu thereof), the
Bank, subject to the satisfaction of the conditions set forth in Section
4.2, shall make the amount of such Borrowing available to the Borrower on
the funding date proposed in the applicable Notice of Borrowing, in
immediately available funds, or shall disburse such proceeds in accordance
with the Borrower's disbursement instructions set forth in the applicable
Notice of Borrowing.
(e) Use of Proceeds of Revolving Loans. The proceeds of the
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Revolving Loans may be used solely for the following purposes: (i) to make
distributions to the Parent in respect of the Borrower's Capital Stock in
accordance with the terms hereof, (ii) to repay in whole or in part any
Indebtedness of the Borrower owed to the Parent on the Effective Date in
accordance with the terms hereof, (iii) to pay transaction costs, including
any Fees, of the Borrower incurred with respect to this Agreement and the
other Loan Documents, (iv) for working capital, and (v) for general
corporate purposes in the ordinary course of the Borrower's business
(including to make Permitted Acquisitions); provided that the aggregate
amount of (x) any distributions in respect of the Borrower's Capital Stock
permitted under clause (i) above and (y) any repayments of Indebtedness of
the Borrower to Parent pursuant to clause (ii) above shall not exceed the
amount thereof permitted under Section 6.3.
(f) Revolving Credit Termination Date and Maturity Date.
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(i) The Commitment shall terminate on the Revolving Credit
Termination Date and the Bank's obligation to make Revolving Loans shall
terminate on the Business Day next preceding the Revolving Credit
Termination Date. If on the Revolving Credit Termination Date, there exists
any outstanding Revolving Credit Obligations, the amount of such Revolving
Credit Obligations shall automatically, without further action by the
Borrower or the Bank, be converted into a term loan (the "Term Loan") in a
principal amount equal to the amount of such outstanding Revolving Credit
Obligations. From and after the Revolving Credit Termination Date, the Term
Loan shall continue to be outstanding hereunder in accordance with the
terms hereof; without limitation, the Term Loan shall continue to accrue
interest in accordance with the provisions of this Agreement and the
Borrower shall make principal repayments in accordance with Section 2.2(c)
below.
(ii) Extension of Maturity Date. The Maturity Date may be extended to
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the Extended Maturity Date at the election of the Borrower, subject to the
following conditions (the first date upon which all such conditions have
been satisfied being referred to herein as the "Extension Date"):
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(A) on any Business Day between March 1, 2001 and December 31, 2001,
the Borrower shall have delivered to the Bank a notice that the Borrower
wishes to extend the Maturity Date to the Extended Maturity Date (an
"Extension Notice");
(B) following the receipt of such Extension Notice, the Bank shall
conduct an appraisal of the Mortgaged Property and, if the Bank is
satisfied, in its reasonable judgment, that the Appraised Value of the
Mortgaged Property at such time is equal to or greater than 200% of the
outstanding principal amount of the Loans at such time, the Bank shall so
notify the Borrower;
(C) no Default or Event of Default shall have occurred and be
continuing at the time of the Borrower's Extension Notice or on the
Extension Date;
provided, however, that, notwithstanding the occurrence of the Extension
Date, the extension of the Maturity Date to the Extended Maturity Date
shall not be effective until the Borrower pays to the Bank the fee provided
in, and reimburses to the Bank its expenses required by, Section 2.5(b).
SECTION 2.2. EVIDENCE OF INDEBTEDNESS; REPAYMENT OF TERM LOAN.
(a) Note. The Borrower shall execute and deliver to the Bank on the
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Effective Date the Note evidencing the Loans.
(b) Loan Account. The Bank shall maintain in accordance with its
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usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of the Borrower to the Bank resulting from the Loans owing to
the Bank from time to time, including the amount of principal and interest
payable and paid to the Bank from time to time hereunder and under the
Note.
(c) Repayment of the Term Loan. If the Revolving Loans are converted
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into a Term Loan pursuant to Section 2.1(f)(i) above, the Borrower shall
make monthly principal payments in respect to the Term Loan on the last
Business Day in each calendar month, in monthly installments each of which
shall be equal in amount to the outstanding principal amount of the Term
Loan on the Revolving Credit Termination Date divided by 180, commencing on
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the last Business Day of the calendar month in which the Revolving Credit
Termination Date occurs, and continuing up to an including the last
Business Day in the calendar month immediately prior to the calendar month
in which the Maturity Date occurs, with a final installment consisting of
all the remaining unpaid principal and all accrued and unpaid interest due
and payable in full on the Maturity Date.
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(d) Prepayments. In addition to the scheduled payments on the Term
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Loan, the Borrower may make the voluntary prepayments of principal of the
Term Loan pursuant to Section 2.6 and shall make the mandatory prepayments
of principal of the Term Loan prescribed in the Deed of Trust. Any amount
paid in respect of the Term Loan may not be reborrowed.
SECTION 2.3. INTEREST; INTEREST PAYMENTS.
(a) Interest. Each Loan shall bear interest on the unpaid principal
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amount thereof, from and including the date of the making of such Loan to
and excluding the due date or the date of any repayment in full thereof, at
the following rates per annum: (i) for so long as and to the extent that
such Loan is a Prime Rate Loan, at the Prime Rate (as in effect from time
to time) for each day on which all or any portion of a Loan is a Prime Rate
Loan; and (i) for so long as and to the extent that such Loan is a LIBOR
Loan, at the LIBOR for each day during each Interest Period applicable
thereto plus 2.20%. When interest is determined in relation to the Prime
Rate, each change in the rate of interest hereunder shall become effective
on the date each Prime Rate change is announced within the Bank.
(b) Interest Payments. Accrued interest shall be payable in arrears
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(i) on the last day each calendar month; (ii) in the case of any interest
accrued at the rate specified in Section 2.3(c) below, on demand; and (iii)
when the Loans shall become due (whether at maturity, by reason of
prepayment, acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest
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specified in Section 2.3(a) or elsewhere herein, if all or a portion of the
principal of any Loan or any interest thereon or any other amount that is
due and payable hereunder or under any other Loan Document is not paid when
due (whether at stated maturity, by acceleration or otherwise), the
Borrower shall pay interest on such overdue amount of the principal of such
Loan, interest or other amount owing to the Bank hereunder or under any
other Loan Document, on demand from time to time, to the extent permitted
by law, (i) in the case of overdue principal, at the rate otherwise
applicable to the Loans plus two percent (2%) per annum and (ii) in the
case of all other amounts owing to the Bank, at a rate per annum equal to
the Prime Rate plus two percent (2%), in each case, from and including such
date of non-payment to but excluding the date on which such amount is paid
in full (after as well as before judgment).
(d) Computation of Interest. Interest on all Obligations shall be
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computed on the basis of the actual number of days elapsed in the period
during which interest accrues and a year of 360 days. In computing interest
on any Loan, the first day of any applicable Interest Period shall be
included and the last day of such Interest Period shall be excluded.
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SECTION 2.4. CONVERSION/CONTINUATION; LIBOR PROVISIONS.
(a) Conversion or Continuation. (i) The Borrower shall have the
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option (A) at any time, to convert all or any part of outstanding Prime
Rate Loans to LIBOR Loans; (B) on the last day of the Interest Period
applicable thereto, (1) to convert all or any part of outstanding LIBOR
Loans to Prime Rate Loans, or (2) continue all or any part of outstanding
LIBOR Loans as LIBOR Loans, and the succeeding Interest Period of such
continued LIBOR Loans shall commence on last day of the then current
Interest Period; provided, however, no outstanding Loan may be continued
as, or be converted into, a LIBOR Loan if (x) the continuation of, or the
conversion into, would violate any of the provisions of this Section 2.4 or
(y) an Event of Default or Default has occurred and is continuing.
(ii) To convert or continue all or any part of any Loan under Section
2.4(a)(i), the Borrower shall deliver a Notice of Conversion/Continuation
(a "Notice of Conversion/Continuation") to the Bank no later than 11:00
a.m. (Los Angeles time) at least (x) one Business Day in the case of the
conversion into a Prime Rate Loan or (y) three (3) Business Days in the
case of conversion into or continuation as a LIBOR Loan, advance of the
proposed conversion/continuation date. A Notice of Conversion/Continuation
shall specify (A) the principal amount of the Loan to be converted or
continued, (B) the proposed conversion/continuation date (which shall be a
Business Day), (C) whether the Loan shall be converted or continued, and
(D) in the case of a conversion into, or continuation of, a LIBOR Loan, the
requested Interest Period. In lieu of delivering a Notice of
Conversion/Continuation, the Borrower may give the Bank telephonic notice
of any proposed conversion/continuation by the time required under this
Section, and such notice shall be confirmed in writing delivered to the
Bank promptly (but in no event later than 3:00 p.m. (Los Angeles time) on
the same day). Any Notice of Conversion/Continuation for conversion to, or
continuation of, any Loan (or telephonic notice in lieu thereof) shall be
irrevocable, and the Borrower shall be bound to convert or continue in
accordance therewith.
(b) Changes; Legal Restrictions. If after the date hereof the Bank
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determines that the adoption or implementation of or any change in or in
the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority
or quasi-governmental authority exercising jurisdiction, power or control
over the Bank or over banks or financial institutions generally (whether or
not having the force of law), compliance with which, in each case after the
date hereof:
(i) subjects the Bank to charges (other than Taxes) in respect of
the Loans or in respect of the Bank's Commitment or changes the basis of
taxation of payments to the Bank of principal, fees, interest, or any other
amount payable hereunder with respect to LIBOR Loans; or
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(ii) imposes, modifies, or holds applicable, any reserve (other than
reserves taken into account in calculating the LIBOR), special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held
by, or deposits or other liabilities in or for the account of, advances or
loans by, commitments made, or other credit extended by, or any other
acquisition of funds by, the Bank;
and the result of any of the foregoing is to increase the cost to the Bank
of making, converting or continuing any Loan as a LIBOR Loan, or reduce any
amount receivable thereunder; then, in such case, the Borrower shall,
within fourteen (14) days after written demand by the Bank, pay to the Bank
from time to time as specified by the Bank, such amount or amounts as may
be necessary to compensate the Bank (in the form of an increased rate of,
or different method of calculating, interest or otherwise) for any such
additional cost incurred or reduced amount received. Such demand shall be
accompanied by a statement as to the amount of such compensation and
include a summary of the basis for such demand (it being agreed that such
summary, showing in reasonable detail the basis for the calculation of such
compensation, shall, absent clearly demonstrable error, be final and
conclusive and binding on the Borrower).
(c) Confirmation of LIBOR. Upon the reasonable request of the
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Borrower from time to time, the Bank shall promptly provide to the Borrower
such information with respect to the applicable LIBOR as may be so
requested.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In the
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event that at least one (1) Business Day before any Interest Period in
which any Loan is to be converted into, or made or continued as, a LIBOR
Loan:
(i) the Bank determines that adequate and fair means do not exist
for ascertaining the applicable interest rates by reference to which the
LIBOR then being determined is to be fixed; or
(ii) the Bank determines that Dollar deposits in the outstanding
principal amount of any Loan at such time are not generally available in
the London interbank market for a period equal to such proposed Interest
Period;
then the Bank shall forthwith give written notice thereof to the Borrower,
whereupon (until the Bank notifies the Borrower that the circumstances
giving rise to such suspension no longer exist) the right of the Borrower
to elect to have such Loan bear interest based upon the LIBOR shall be
suspended and any LIBOR Loan shall be converted into a Prime Rate Loan on
the last day of the then current Interest Period therefor.
(e) Illegality. (i) If at any time the Bank determines (which
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determination shall, absent manifest error, be final and conclusive and
binding upon all parties) that the conversion into, or the making or
continuation of, a
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LIBOR Loan has become unlawful or impermissible by compliance by the Bank
with any law, governmental rule, regulation or order of any Governmental
Authority (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful or would result in costs or
penalties), then, and in any such event, the Bank may give notice of that
determination, in writing, to the Borrower.
(ii) When notice is given by the Bank under this Section, the
Borrower's right to request from the Bank and the Bank's obligation, if
any, to make, convert or continue any Loan as a LIBOR Loan shall be
immediately suspended, and the Borrower shall immediately, or if permitted
by applicable law, no later than the date permitted thereby, upon at least
one (1) Business Day's prior written notice to the Bank, convert any LIBOR
Loan into a Prime Rate Loan.
(iii) If at any time after the Bank gives notice under this Section
the Bank determines that it may lawfully make LIBOR Loans, the Bank shall
promptly give notice of that determination, in writing, to the Borrower.
The Borrower's right to request, and the Bank's obligation, if any, to
convert to or make or continue a LIBOR Loan shall thereupon be restored.
(f) Compensation. In addition to all amounts required to be paid by
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the Borrower pursuant to this Agreement, the Borrower shall compensate the
Bank, within fourteen (14) days after written demand by the Bank, for all
losses, expenses and liabilities (including, without limitation, any loss
or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Bank to fund or maintain the LIBOR
Loans to the Borrower) which the Bank may sustain (i) if for any reason a
Borrowing, conversion into, or continuation of LIBOR Loans does not occur
on a date specified therefor in a Notice of Borrowing or a Notice of
Conversion/Continuation given by the Borrower or in a telephonic request by
it for borrowing or conversion/continuation or a successive Interest Period
does not commence after notice therefor is given pursuant to this Section
2.4, including, without limitation, pursuant to Section 2.4(d), (ii) if for
any reason a LIBOR Loan is prepaid (including, without limitation,
mandatorily pursuant to Section 2.6) on a date which is not the last day of
the applicable Interest Period, (iii) as a consequence of a required
conversion of a LIBOR Loan to a Prime Rate Loan as a result of any of the
events indicated in Section 2.4(d) or (e), or (iv) as a consequence of any
failure by the Borrower to repay the any LIBOR Loan when required by the
terms hereof. The Bank shall deliver to the Borrower concurrently with such
demand a written statement in reasonable detail as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to the Bank, absent manifest error.
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SECTION 2.5. FEES.
(a) Commitment Fee. The Borrower shall pay to the Bank, in arrears
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on the last Business Day of each March, June, September and December in
each year and on the day the Commitment expires or is terminated as
provided herein, a commitment fee (the "Commitment Fee") of 0.25% per annum
on the average daily unused amount of the Commitment during the calendar
quarter then ending (or other period commencing with Effective Date or
ending with the date the Commitment expires or is terminated as provided
herein).
(b) Maturity Date Extension Fee. In the event that the Maturity Date
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is extended to the Extended Maturity Date pursuant to Section 2.1(f), the
Borrower shall pay to the Bank on the Extension Date, a maturity extension
fee equal to fifteen one-hundredths of one percent (0.15%) of the Revolving
Credit Obligations at such time plus any and all out-of-pocket costs and
expenses of the Bank (including, without limitation, (i) disbursements and
reasonable legal fees of outside legal counsel to the Bank and (ii)
expenses incurred by the Bank in connection with any appraisal of the
Mortgaged Property initiated pursuant to such extension of the Maturity
Date, provided that such appraisal costs shall not exceed $5,000) incurred
by the Bank in connection with the extension of the Maturity Date.
(c) Calculation and Payment of Fees. The Fees shall be calculated on
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the basis of the actual number of days elapsed in a 360-day year. All Fees
shall be payable in addition to, and not in lieu of, interest, expense
reimbursements, indemnification and other Obligations. Fees shall be
payable to the Bank's Account in accordance with Section 2.7 except as
otherwise provided by the Bank in writing.
SECTION 2.6. REDUCTIONS OF THE COMMITMENT; PREPAYMENTS.
(a) Voluntary Reductions. The Borrower, upon at least three (3)
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Business Days' prior written notice to the Bank, shall have the right, from
time to time, to terminate in whole or permanently reduce in part the
Commitment, provided that the Borrower shall have made whatever payment may
be required to reduce the Revolving Credit Obligations to an amount less
than or equal to the Commitment as so reduced or terminated. Any partial
reduction of the Commitment shall be in an aggregate minimum amount of
$500,000 and integral multiples of $100,000 in excess of that amount. Any
notice of termination or reduction given to the Bank under this Section
shall specify the date (which shall be a Business Day) of such termination
or reduction and, with respect to a partial reduction, the aggregate
principal amount thereof. When notice of termination or reduction is
delivered as provided herein, the principal amount of the Loans specified
in the notice shall become due and payable on the date specified in such
notice.
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(b) Voluntary Prepayments. Subject to this Section, the Borrower
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may, at its option, at any time or from time to time, prepay the Loans in
whole or in part, without premium or penalty, provided that (a) any
prepayment shall be in an aggregate principal amount of at least $500,000
and in integral multiples of $100,000 in excess thereof (or, alternatively,
the whole amount of Loans then outstanding) and (b) any prepayment of a
LIBOR Loan shall be made only together with amounts payable pursuant to
Section 2.4(f).
(c) Mandatory Prepayments of Revolving Credit Obligations. In the
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event the Revolving Credit Obligations at any time are greater than the
Commitment, the Borrower shall immediately make a mandatory payment of the
Revolving Credit Obligations in an amount equal to the amount of such
excess, which payment shall be applied to the Revolving Credit Obligations
in accordance with Section 2.7. The prepayments in respect of reductions
and terminations described in this Section 2.6 shall be subject to Section
2.4(f).
SECTION 2.7. MANNER OF PAYMENT.
(a) Except as otherwise expressly provided, the Borrower shall make
each payment under the Loan Documents to the Bank in Dollars and in
immediately available funds, without any deduction whatsoever, including
any deduction for any setoff, recoupment, counterclaim or Taxes, by
depositing such payment in the account specified by the Bank from time to
time not later than 10:00 a.m. (Los Angeles time) on the due date thereof.
Any payments received after 10:00 a.m. (Los Angeles time) on any Business
Day shall be deemed received on the next succeeding Business Day.
(b) Payments on Non-Business Days. Whenever any payment to be made
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hereunder shall be due on a day that is not a Business Day, such payment
shall instead be made on the next succeeding Business Day, together with
interest accrued during the period of such extension.
(c) Application of Payments. (i) Subject to the provisions of
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paragraph (ii) below and except as otherwise provided herein, all payments
in respect of the Loans shall be applied first to outstanding Prime Rate
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Loans and then to outstanding LIBOR Loans, in each case, in the inverse
order of termination of Interest Periods applicable thereto.
(ii) After the occurrence and during the continuance of an Event of
Default, the Bank may, and shall upon the acceleration of the Obligations,
apply all payments in respect of any Obligations and all proceeds of
Collateral in the following order:
(A) first, to pay Obligations in respect of any expense
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reimbursements, indemnities and other similar amounts then due to the Bank,
including without limitation, any amounts in respect of cash management
services
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provided to the Borrower and its Subsidiaries by the Bank in connection
with this Agreement;
(B) second, to pay Obligations in respect of any Fees then due
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to the Bank;
(C) third, to pay interest due in respect of the Loans; and
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(D) fourth, to pay or prepay principal outstanding on Loans.
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The order of priority set forth above may at any time and from time to
time be changed by the Bank without necessity of notice to or consent of or
approval by the Borrower or any other Person.
(d) Payments Set Aside. To the extent the Bank receives payment of
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any amount under the Loan Documents, whether by way of payment by the
Borrower, setoff, as proceeds of Collateral or otherwise, which payment is
subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, other law or equitable cause, in whole or in
part, then, to the extent of such payment received, the Obligations or part
thereof intended to be satisfied thereby shall be revived and continue in
full force and effect, together with all Collateral security therefor, as
if such payment had not been received by the Bank.
(e) The Borrower authorizes the Bank to collect all principal,
interest and fees due under this Agreement and any other Loan Document by
charging Borrower's demand deposit account number 4375-672300 with the
Bank, or any other demand deposit account maintained by the Borrower with
the Bank, for the full amount thereof. Should there be insufficient funds
in any such demand deposit account to pay all such sums when due, the full
amount of such deficiency shall be immediately due and payable by the
Borrower.
SECTION 2.8. REGULATORY CHANGES.
(a) Capital Costs. If a Regulatory Change regarding capital adequacy
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(including the adoption or becoming effective of any treaty, law, rule,
regulation or guideline adopted pursuant to or arising out of the July 1988
report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and
Capital Standards") has or would have the effect of reducing the rate of
return on the capital of or maintained by the Bank or any company
controlling the Bank as a consequence of any Loan or other obligations
hereunder and other commitments of this type to a level below that which
the Bank or company could have achieved but for such Regulatory Change
(taking into account the Bank's or company's policies with respect to
capital adequacy), then the Borrower shall from time to time pay to the
12
Bank, within 10 days after request by the Bank, such additional amounts as
the Bank determines to be sufficient to compensate the Bank or company for
such reduction in return, to the extent the Bank or such company determines
such reduction to be attributable to the existence, issuance or maintenance
of any Loan or other obligations for the account of the Borrower. Such
demand shall be accompanied by a statement as to the amount of such
compensation and include a summary of the basis for such demand (it being
agreed that such summary, showing in reasonable detail the basis for the
calculation of such compensation, shall, absent clearly demonstrable error,
be final and conclusive and binding on the Borrower).
(b) Taxes. (i) If the Borrower is required by Applicable Law to make
-----
any deduction or withholding in respect of any Taxes (other than Excluded
Taxes) from any amount payable under any Loan Document to or for the
account of the Bank, the Borrower shall pay to or for the account of the
Bank, on the date such amount is payable, such additional amounts as the
Bank reasonably determines may be necessary so that the net amounts
received by it or for its account, in the aggregate, after all applicable
deductions or withholdings, shall equal the amount that the Bank would have
been entitled to receive if no deductions or withholdings were made.
"Excluded Taxes" means, with respect to any payment to the Bank, any taxes
imposed on or measured by the overall net income (including a franchise tax
based on net income) of the Bank by the jurisdiction in which it is
incorporated, maintains its principal executive office or in which its
agent's office is located.
(ii) If the Bank is required by law to make any payment on account of
Taxes (other than Excluded Taxes) on or in relation to any sum received or
receivable by it under any Loan Document, or any liability for Taxes (other
than Excluded Taxes) in respect of any such payment is imposed, levied or
assessed against the Bank, then the Borrower shall pay when due such
additional amounts as the Bank reasonably determines to be necessary so
that the amount received by it, less any such Taxes paid, imposed, levied
or assessed, including any Taxes (other than Excluded Taxes) imposed on
such additional amounts, shall equal the amount that the Bank would have
been entitled to retain in the absence of the payment, imposition, levy or
assessment of such Taxes."
Section 3. Amendments to Article IV of the Credit Agreement.
(a) The heading of Section 4.1 is hereby amended by deleting therefrom the
words "CONDITIONS OF MAKING THE TERM LOAN" and substituting therefor the words
"CLOSING CONDITIONS".
(b) Section 4.1 of the Credit Agreement is hereby amended as follows:
13
(i) by deleting the following words from the beginning thereof "The
obligation of the Bank to make the Term Loan is subject to" and substituting
therefor the words "The occurrence of the Closing Date is subject to"; and
(ii) by deleting therefrom, in each instance that they appear, the
words "the Term Loan" and substituting therefor the words "the Loans".
(c) Article IV of the Credit Agreement is hereby amended by adding the
following new Section 4.2:
"SECTION 4.2. CONDITIONS PRECEDENT TO REVOLVING LOANS.
The obligation of the Bank to make any Revolving Loan on any date
shall be subject to the following conditions precedent:
(a) Satisfaction of Closing Conditions. The conditions precedent set
----------------------------------
forth in Section 4.1 shall have been satisfied or waived in writing by the
Bank.
(b) Notice of Borrowing. The Borrower shall have delivered to the
-------------------
Bank, in accordance with the applicable provisions of this Agreement, a
Notice of Borrowing (or telephonic notice in lieu thereof).
(c) Representations and Warranties. All of the representations and
------------------------------
warranties of the Borrower and its Subsidiaries contained in the Loan
Documents shall be true and correct in all material respects on and as of
the Closing Date as though made on and as of that date (except to the
extent that such representations and warranties expressly were made only as
of a specific date).
(d) No Default. No Default or Event of Default shall exist or result
----------
from the making of the Revolving Loan or any other action contemplated by
this Agreement or any other Loan Document.
(e) No Material Adverse Change. No Material Adverse Change shall
--------------------------
have occurred since the date of the financial statements referred to in
Section 3.5 and no material adverse change shall have occurred in the
Applicable Laws affecting the Bank or the Borrower.
(f) Satisfaction of Conditions. Each Borrowing of a Revolving Loan
--------------------------
shall constitute a representation and warranty by the Borrower as of the
date of such Borrowing that the conditions contained in clauses (c) through
(e) above have been satisfied."
Section 4. Amendment to Article V of the Credit Agreement. Article V of
the Credit Agreement is hereby amended as follows:
14
(a) by deleting from the first clause thereof the words "the Term Loan"
and substituting therefor the words "any Loan"; and
(b) by adding at the end of Section 5.13 the following new subsection (d):
"(d) The Bank shall release one or more parcels of real estate
(collectively, the "Release Parcel") from the Lien of the Deed of Trust
upon the written request of the Borrower and upon satisfaction of all of
the following requirements:
(i) The Revolving Credit Termination Date shall have occurred;
(ii) At the sole cost and expense of the Borrower, the Bank
shall receive from Chicago Title Company (or if such company no longer
exists, from another title insurance company acceptable to the Bank) such
title insurance endorsements as are reasonably requested by the Bank to
insure the continued priority and validity of the Lien of the Deed of Trust
in respect of the remaining portion of the Mortgaged Property (the
"Remainder Parcel");
(iii) At the time of the requested release, no Default or Event
of Default shall have occurred and be continuing;
(iv) Prior to the release of the Release Parcel, the Borrower
shall have notified the Bank in writing of the Borrower's intended use for
the Release Parcel;
(v) The Release Parcel shall not be necessary, in the
reasonable determination of the Bank, for the conduct of horseracing
operations on the Remainder Parcel in the manner such operations
theretofore were conducted by Borrower and neither the release of the
Release Parcel nor the Borrower's intended use of the Release Parcel shall,
in the reasonable determination of the Bank, have a material adverse effect
on the horseracing operations conducted on the Remainder Parcel;
(vi) The Bank shall have received evidence satisfactory to the
Bank that: (x) the Release Parcel and the Remainder Parcel comply with all
applicable subdivision laws and ordinances and, at the Borrower's sole
cost, the Bank shall have received any title insurance endorsements to that
effect which the Bank deems necessary; and (y) the Remainder Parcel will
have or continue to have the benefit of all utilities, easements, public
and/or private streets, covenants, conditions and restrictions as may be
necessary, in the Bank's reasonable determination, for the continued
operation and maintenance thereof;
15
(vii) The Borrower shall, at its sole cost and expense, provide
the Bank with an appraisal of the Remainder Parcel in form and substance
reasonably satisfactory to the Bank and by an appraiser selected by the
Bank;
(viii) As a condition precedent to the Release Parcel, the
outstanding principal amount of the Term Loan shall not exceed 45% of the
value of the Remainder Parcel, as set forth in the appraisal performed
pursuant to clause (vii) above, provided that, in order to satisfy the
condition set forth in this clause (viii), the Borrower shall have the
right to prepay a portion of the Term Loan in connection with the release
of the Release Parcel; and
(ix) The Borrower shall pay all fees and costs in connection
with the release of the Release Parcel, including recording and
reconveyance fees and costs, and any fees and costs reasonably incurred by
the Bank."
Section 5. Amendment to Article VI of the Credit Agreement. Article VI of
the Credit Agreement is hereby amended as follows:
(a) by deleting from the first clause thereof the words "the Term Loan"
and substituting therefor the words "any Loan"; and
(b) by deleting from Section 6.16 the words "the Term Loan" and
substituting therefor the words "any Loan".
Section 6. Amendments to Article VII of the Credit Agreement.
(a) Section 7.1 of the Credit Agreement is hereby amended by deleting from
clause (a) thereof the words "the Term Loan" and substituting therefor the words
"the Loans".
(b) Section 7.2(b) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
" (b) Upon the occurrence of an Event of Default under 7.1 (other than
under Section 7.1(f) or (g)), then (i) the Bank may take either or both of
the following actions, at the same or at different times (A) declare all
indebtedness of the Borrower under each of the Loan Documents, any term
thereof to the contrary notwithstanding, to be immediately due and payable
without presentment, demand, protest or notice of dishonor, all of which
are hereby expressly waived by the Borrower and (B) terminate the
Commitment immediately upon which termination the obligation, if any, of
the Bank to extend any further credit under any of the Loan Documents shall
immediately cease and terminate; and (ii) the Bank shall have all rights,
powers and remedies available under each of the Loan Documents, or accorded
by law, including without limitation the right to resort to any or all
security for any credit accommodation from the Bank subject hereto and to
exercise any or all of the rights of a beneficiary or secured party
pursuant to applicable law.".
16
Section 7. Amendment to Section 8.4 of the Credit Agreement. Section 8.4
of the Credit Agreement is hereby amended by deleting therefrom, in each
instance that they appear, the words "the Term Loan" and substituting therefor
the words "the Loans".
Section 8. Amendment to Section 8.5 of the Credit Agreement. Section 8.5
of the Credit Agreement is hereby amended by deleting the second sentence
thereof in its entirety and substituting therefor the following sentence:
"The Bank reserves the right to sell, assign, transfer, negotiate or grant
participation in all or any part of, or any interest in, Bank's rights and
benefits under each of the Loan Documents; provided, however, that the Bank
agrees that, in the event that it assigns less than (i) prior to the
Termination Date, the full amount of the Commitment and the Loans or (ii)
following the Termination Date, the full amount of the Loans, in either
case, the Bank shall act as "Administrative Agent" for itself and any such
assignees."
Section 9. Amendment to Exhibit A to the Credit Agreement. Exhibit A to
the Credit Agreement is hereby amended and restated in its entirety to read as
set forth on Exhibit A hereto.
Section 10. Representations and Warranties. To induce the Bank to enter
into this Amendment, the Borrower represents and warrants to the Bank that (a)
as of the date hereof no Event of Default or Default has occurred and is
continuing and (b) except for representations and warranties which expressly
speak as of a different, specific date, all of the representations and
warranties of the Borrower contained in the Credit Agreement and each other Loan
Document to which the Borrower is a party continue to be true and correct in all
material respects as of the date of execution hereof as though made on such
date.
Section 11. Consent of LATC as Guarantor. The Los Angeles Turf Club,
Incorporated, a California corporation ("LATC"), hereby acknowledges and
----
consents to this Amendment, and affirms and acknowledges that the guaranty made
by LATC in favor of the Bank with respect to the obligations of the Borrower
under the Credit Agreement constitutes a continuing guaranty and remains in full
force and effect with respect to all of the Loans at any time outstanding and
LATC remains obligated thereunder without defense, offset or counterclaim of any
kind whatsoever, as if such guaranty were executed and delivered to the Bank on
the date hereof.
Section 12. Conditions to Effectiveness. This Amendment shall become
effective as of March 1, 2000 on the date when the following conditions
precedent have been satisfied (such date, the "Effective Date"):
--------------
(a) The Bank shall have received an executed counterpart of this Amendment
from each of the Borrower and LATC;
17
(b) The Bank shall have received from the Borrower an executed counterpart
(executed in recordable form) of the Master Modification and Re-Affirmation
Agreement dated as of March 1, 2000 between the Bank and the Borrower;
(c) The Bank shall have received from the Borrower an executed promissory
note in substantially the form of Exhibit A hereto;
(d) The Bank shall have received from the company that provided the ALTA
Title Policy of Title Insurance pursuant to Section 4.1(i) of the Credit
Agreement (the "Title Policy") such additional endorsements to the Title Policy
------------
as the Bank may reasonably require;
(e) No Event of Default or Default shall have occurred and be continuing
on the Effective Date; and
(f) The reasonable costs and expenses of the Bank in connection with the
preparation, negotiation and execution of this Amendment and the other Loan
Documents delivered pursuant hereto shall have been paid.
Section 13. Reference to and Effect on Loan Documents; Return of Term Loan
Note.
(a) Upon the effectiveness of this Amendment, on and after the date
hereof, each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import, and each reference in the other Loan Documents
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as amended hereby.
(b) Except as expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver of, or otherwise
affect the rights and remedies of the Bank or the Borrower under the Credit
Agreement or any other Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full force
and effect.
(c) Nothing herein shall be deemed to entitle the Borrower to a waiver,
amendment, modification or other change of any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document in similar or difference circumstances.
(d) This Amendment shall be a Loan Document for all purposes.
(e) On the Effective Date, or promptly thereafter, the Bank shall return
to the Borrower for cancellation the Term Loan Promissory Note dated November
15, 1999 made by the Borrower in favor of the Bank and delivered to the Bank on
the Closing Date.
Section 14. Benefits of Amendment. The terms and provisions of this
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns to the extent contemplated by the
Credit Agreement.
18
Section 15. Interpretation. The Article and Section headings used in this
Amendment are for convenience of reference only and shall not affect the
construction hereof.
Section 16. Execution in Counterparts. This Amendment may be executed in
any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Amendment. Faxed
signatures of this Amendment shall be binding for all purposes.
Section 17. Severability. If any provision of this Amendment shall be
held to be invalid, illegal or unenforceable under applicable law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality and enforceability of such provision
in any other jurisdiction.
Section 18. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN CALIFORNIA.
Section 19. Expenses. The Borrower agrees to pay the reasonable out-of-
pocket expenses of the Bank, including but not limited to the reasonable fees,
charges and disbursements, including but not limited to the fees, charges and
disbursements of Xxxxxx, Xxxx & Xxxxxxxx LLP, special counsel for the Bank,
incurred in connection with the preparation, negotiation, execution and delivery
of the Credit Agreement and this Amendment and any subsequent waiver, amendment
or modification of the Credit Agreement or any other Loan Document and the
security arrangements in connection herewith or therewith.
19
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first set forth above.
Borrower:
--------
THE SANTA XXXXX COMPANIES, INC.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
Bank:
----
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
By:___________________________
Name:
Title:
In agreement to be bound by Section 11 above only:
--------------------------------------------------
LATC:
----
LOS ANGELES TURF CLUB, INCORPORATED,
as a guarantor
By:___________________________
Name:
Title:
20
Exhibit A
REVOLVING CREDIT NOTE
$63,000,000 Los Angeles, California
March 1, 2000
This Revolving Credit Note (the "Note") is the Note referred to in, and is
issued pursuant to, that certain Credit Agreement dated as of November 15, 1999,
as amended by Amendment No. 1 thereto dated as of January 24, 2000, and as
further amended by Amendment No. 2 thereto dated as of March 1, 2000 (as same
may be further amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), between THE SANTA XXXXX COMPANIES, INC., a
Delaware corporation (the "Borrower"), and XXXXX FARGO BANK, NATIONAL
ASSOCIATION, a national banking association (the "Bank"). All of the terms,
covenants and conditions of the Credit Agreement and the Loan Documents (as
defined in the Credit Agreement) are hereby made a part of this Note and are
deemed incorporated herein in full. All capitalized terms used herein, unless
otherwise specifically defined in this Note, shall have the meanings ascribed to
them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay to the order of the
Bank in lawful money of the United States of America and in immediately
available funds, in accordance with the Credit Agreement, the principal amount
of (a) SIXTY THREE MILLION AND 00/100 DOLLARS ($63,000,000), or, if less, (b)
the unpaid principal amount of the Loans, in either event, together with
interest from and after the date hereof on the unpaid principal balance
outstanding at the applicable rates set forth in the Credit Agreement.
Subject to voluntary and mandatory prepayments pursuant to Section 2.6 of
the Credit Agreement, principal payments pursuant to Section 2.2 of the Credit
Agreement and/or acceleration upon the occurrence of an Event of Default under
the Credit Agreement or termination of the Credit Agreement, the principal
amount of this Note shall be due and payable on the Maturity Date.
Upon the occurrence of an Event of Default, the Bank shall have all of the
rights and remedies set forth in Article VII of the Credit Agreement.
Time is of the essence of this Note. To the fullest extent permitted by
applicable law, the Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or remaining provisions of this
Note. No delay or failure on the part of the Bank in the exercise of any right
or remedy hereunder shall operate as a waiver thereof, nor as an acquiescence in
any default, nor
shall any single or partial exercise by the Bank of any right or remedy preclude
any other right or remedy. The Bank, at its option, may enforce its rights
against any collateral securing this Note without enforcing its rights against
the Borrower, any guarantor of the indebtedness evidenced hereby or any other
property or indebtedness due or to become due to the Borrower. The Borrower
agrees that, without releasing or impairing the Borrower's liability hereunder,
the Bank may at any time release, surrender, substitute or exchange any
collateral securing this Note and may at any time release any party primarily or
secondarily liable for the indebtedness evidenced by this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered on the date first above written.
THE SANTA XXXXX COMPANIES, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
2
