WAIVER AND FIFTH AMENDMENT
to
$250,000,000 REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
XXXXXXXXX XXXXX INCORPORATED, as the Borrower,
and
THE GUARANTORS PARTY HERETO
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, As Agent,
and
CIBC XXXXXXXXXXX CORP., As Syndication Agent.
and
BANK ONE, KENTUCKY, N.A., As Documentation Agent
Dated as of June 19, 2000
37
THIS WAIVER AND FIFTH AMENDMENT TO $250,000,000 REVOLVING CREDIT
FACILITY CREDIT AGREEMENT (the "Fifth Amendment") dated as of June 19, 2000, by
and among XXXXXXXXX XXXXX INCORPORATED, as the Borrower (the "Borrower"), the
GUARANTORS party to the Credit Agreement (as hereinafter defined), the BANKS
party to the Credit Agreement (as hereinafter defined) and PNC BANK, NATIONAL
ASSOCIATION, as the Agent (the "Agent"), and CIBC XXXXXXXXXXX CORP., As
Syndication Agent. and BANK ONE, KENTUCKY, N.A., As Documentation Agent.
WHEREAS, reference is made to the Credit Agreement dated April 23, 1999
as amended prior to the date hereof (the "Credit Agreement") described above;
WHEREAS, capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement;
WHEREAS, the Borrower has entered into that certain Agreement and Plan
Merger (the "Arlington Acquisition Agreement"), dated as of June 23, 2000,
between Duchossois Industries, Inc. ("Duchossois"), the Borrower and Arlington
International Racecourse, Inc., Arlington Management Services, Inc., Turf Club
of Illinois, Inc., and three Borrower wholly owned acquisition Subsidiaries, ,
pursuant to which three Subsidiaries of the Borrower shall merge into the
following three Subsidiaries of Duchossois:
Arlington International Racecourse, Inc. ("AIRI"), an Illinois
corporation
Arlington Management Services, Inc. ("AMSI") , an Illinois corporation
Turf Club of Illinois, Inc. ("Turf Club") , an Illinois corporation
On the effective date of the above-referenced mergers (the "Acquisition Closing
Date"), the Borrower shall receive, by virtue of the mergers, stock of AIRI,
AMSI and Turf Club (collectively, together with the Subsidiaries of AIRI, AMSI
and Turf Club, the "Arlington Companies to be Acquired") and the Borrower shall
issue to Duchossois, by virtue of the mergers, 3,150,000 shares of its stock on
the Acquisition Closing Date and up to 1,250,000 additional shares of such stock
after the Acquisition Closing Date (collectively, the acquisition of the
Arlington Companies to be Acquired, by the Borrower pursuant to the Arlington
Acquisition Agreement shall be referred to as the "Arlington Park Acquisition"),
as more fully set forth in the Arlington Acquisition Agreement;
WHEREAS, the Arlington Companies to be Acquired own the Arlington Park
racetrack located in Arlington Heights, Illinois ("Arlington Park Facility") and
two-off track betting facilities (the "Arlington Owned OTB Facilities"), and
lease two-off track betting facilities (collectively all leased facilities shall
be referred to as the "Arlington Leased Facilities") as more fully described in
the Arlington Acquisition Agreement and subject to the exceptions described
therein;
WHEREAS, Section 7.2.5 of the Credit Agreement further provides in part
that the Loan Parties shall elect to treat each Person in which they acquire
ownership interests in connection with a Permitted Acquisition either as a Loan
Party or as an Excluded Entity. The Loan Parties desire to elect to treat each
38
of the Arlington Companies to be Acquired as a Loan Party (and not as an
Excluded Entity) on and after the Acquisition Closing Date;
WHEREAS, Section 7.2.5 of the Credit Agreement further provides in part
that the Loan Parties may not become a party to any merger or consolidation
unless they satisfy certain conditions which include delivering an Acquisition
Compliance Certificate evidencing that the Loan Parties shall be in compliance
with the financial covenants contained in Sections 7.2.1, 7.2.4 or 7.2.17
through 7.2.21 after making such acquisition;
WHEREAS, Section 7.2.17 (Maximum Total Leverage Ratio), 7.2.18 (Maximum
Senior Leverage Ratio) and Section 7.2.21 (Minimum Fixed Charge Coverage Ratio)
each provide in part as follows: "For purposes of this covenant, EBITDA shall
include the rolling four quarter results of any entity being acquired by the
Loan Parties if such entity will become a Loan Party hereunder;" and
WHEREAS, the Loan Parties request that the Banks waive the requirement
that the Loan Parties shall include the results of the Arlington Companies to be
Acquired for periods prior to the Acquisition Closing Date in their rolling four
quarter computations of EBITDA for purposes of Section 7.2.17 (Maximum Total
Leverage Ratio), Section 7.2.18 (Maximum Senior Leverage Ratio) and Section
7.2.21 (Minimum Fixed Charge Coverage Ratio) so that the computations of EBITDA
for purposes of the covenants contained in such Sections shall include, for
periods prior to the Acquisition Closing Date, the EBITDA of the Loan Parties
but shall not include the EBITDA of the Arlington Companies to be Acquired.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. Waiver and Amendment Under Credit Agreement.
Subject to the conditions contained in this Fifth Amendment, the Banks
hereby waive the requirement that the Loan Parties shall include the results of
the Arlington Companies to be Acquired for periods prior to the Acquisition
Closing Date in their rolling four quarter computations of EBITDA performed
after the Acquisition Closing Date for purposes of Section 7.2.17 (Maximum Total
Leverage Ratio), Section 7.2.18 (Maximum Senior Leverage Ratio) and Section
7.2.21 (Minimum Fixed Charge Coverage Ratio) of the Credit Agreement. The
computations of EBITDA performed after the Acquisition Closing Date for purposes
of such Sections shall include, (i) for periods prior to the Acquisition Closing
Date, the EBITDA of the Loan Parties but not the EBITDA of the Arlington
Companies to be Acquired, and (ii) for periods after the Acquisition Closing
Date, the EBITDA of the Loan Parties including the Arlington Companies to be
Acquired.
2. Warranties
The Loan Parties, jointly and severally, represent and warrant as
follows:
39
A. Recitals.
---------------
The recitals hereto are true and correct in all material
respects.
B. Incorporation into Credit Agreement.
The representations and warranties in this Section 2 are
incorporated in Section 5 of the Credit Agreement and any breach of such
representations or warranties is a breach under Section 5 of the Credit
Agreement.
C. Other Warranties Under the Credit Agreement
The other representations and warranties of Loan Parties
contained in the Credit Agreement, after giving effect to the amendments thereto
on the date hereof, are true and correct on and as of the date hereof with the
same force and effect as though made by the Loan Parties on such date, except to
the extent that any such representation or warranty expressly relates solely to
a previous date. The Loan Parties are in compliance with all terms, conditions,
provisions, and covenants contained in the Credit Agreement.
3. Conditions to Effectiveness.
This Fifth Amendment shall become effective provided that each of
the following conditions is satisfied as of the date set forth in such
condition:
A. Representations and Warranties.
-------------------------------------
Each of the Borrower's representations and warranties
under Section 2 hereof shall be true and correct on the Fifth Amendment
Effective Date, as that term is defined herein.
B. Opinion of Counsel.
-------------------------
On or before the Fifth Amendment Effective Date, there
shall be delivered to the Agent for the benefit of each Bank written opinions of
Xxxxx, Xxxxxxx & Xxxxx (which may include reliance on applicable local counsel
of the Loan Parties) and Xxxxxxx X. Xxxx, counsel for the Loan Parties, in each
case dated the Fifth Amendment Effective Date as to the warranties listed in
Exhibit 3(B) hereto as such warranties relate to this Fifth Amendment and the
documents executed in connection herewith and the consents required for this
Fifth Amendment and such other documents.
C. Execution by Required Banks, Agent and Loan Parties.
----------------------------------------------------------
40
On or before the Fifth Amendment Effective Date, this
Fifth Amendment shall have been executed by the Required Banks, the Agent and
the Loan Parties.
D. Acknowledgments Regarding Closing Conditions.
---------------------------------------------------
At least five (5) Business Days before the Acquisition
Closing Date, the Loan Parties shall acknowledge and agree that they shall
execute and deliver the following to the Agent for the benefit of the Banks:
(a) Acquisition Compliance Certificate.
-----------------------------------------
An Acquisition Compliance Certificate in accordance
with Section 7.2.5 of the Credit Agreement which shall be computed in accordance
with the terms of the Credit Agreement as amended by this Fifth Amendment and
using rolling four quarters tests through and including the most recent quarter
for which the applicable financial statements are available, provided that if
the Acquisition Closing Date occurs (i) on or after August 15, 2000 but within
the third quarter of 2000 such Certificate shall be computed using rolling four
quarters test through and including June 30, 2000, and (ii) in any quarter (the
"Acquisition Closing Quarter") ending after September 30, 2000 , such Compliance
Certificate shall be computed using rolling four quarters test (A) through and
including the last day of the immediately preceding fiscal quarter if the
Acquisition Closing Date occurs more than 45 days after the commencement of the
Acquisition Closing Quarter, and (B) through and including the last day
of the second preceding fiscal quarter if the Acquisition Closing Date occurs
within the first 45 days of the Acquisition Closing Quarter.
(b) Financial Statement Deliveries.
-------------------------------------
The (1) audited financial statements of the Arlington
Companies to be Acquired for the fiscal year ended December 31, 1999, (2)
unaudited financial statements of the Borrower through and including the date on
which the rolling four quarters test is to be measured as provided in Section
3(D)((a)) of this Fifth Amendment, (3) projections for the Borrower on a
consolidated basis for the period ending December 31, 2001, and (4) the
projected financial covenant ratios titled "Compliance Ratio Worksheet."
(c) Opinion of Counsel.
----------------------
A written opinion of Xxxxx, Xxxxxxx & Xxxxx and
Skadden, Arps, Slate, Meagher, & Xxxx (Illinois) and any other applicable local
counsel for the Loan Parties, dated as of the Acquisition Closing Date
addressing the representations and warranties covered in the opinions delivered
on the Closing Date of the Credit Agreement as such representations and
warranties relate to the Guarantor Joinders, other Loan Documents and other
documents to be delivered in connection with the Arlington Park Acquisition
(except that the opinion on capitalization may provide that it is based in part
on a certificate of an officer of the Arlington Companies to be Acquired).
41
(d) Other Documents.
----------------------
Each of the other documents required under the
Credit Agreement in connection with the Arlington Park Acquisition, including
Guarantor Joinders by any new Subsidiaries which shall become Loan Parties, a
Mortgage on the Arlington Park Facility, at the request of the Agent, Mortgages
on the Arlington Owned OTB Facilities and Borrower shall use its best efforts to
grant a leasehold mortgage in a form acceptable to the Agent (a "Leasehold
Mortgage") and an appropriate landlord waiver and estoppel on the Arlington
Leased Facility located in Chicago, Illinois and related title insurance
policies and surveys (except with respect to the Arlington Owned OTB Facilities,
the Borrower shall use its best efforts to deliver satisfactory title insurance
policies and surveys) and environmental reports (except with respect to the
Arlington Owned OTB Facilities, the Borrower shall use its best efforts to
deliver satisfactory environmental reports), the consents of the following
Persons as may be
required for the consummation of the transactions pursuant to the Arlington
Acquisition Agreement and the grant of Liens to the Agent for the benefit of the
Banks in the assets to be acquired in connection therewith, and the pledges to
the Agent of the stock of the Arlington Companies to be Acquired: (i) the
Illinois Racing Board (ii) the applicable state regulatory authorities in each
of the other states in which the Loan Parties conduct racing businesses to the
extent determined to be necessary, (iii) the shareholders of the Borrower and
(iv) any other Persons from whom consent for such transactions may be required.
E. Arlington Park Acquisition.
---------------------------------
The Loan Parties shall consummate the Arlington Park
Acquisition pursuant to the Arlington Acquisition Agreement on or before
December 31, 2000.
4. References to Credit Agreement, Loan Documents.
Any reference to the Credit Agreement or other Loan Documents in
any document, instrument, or agreement shall hereafter mean and include the
Credit Agreement or such Loan Document, including such schedules and exhibits,
as amended hereby. In the event of irreconcilable inconsistency between the
terms or provisions hereof and the terms or provisions of the Credit Agreement
or such Loan Document, including such schedules and exhibits, the terms and
provisions hereof shall control.
5. Force and Effect.
The Borrower reconfirms, restates, and ratifies the Credit
Agreement and all other documents executed in connection therewith except to the
extent any such documents are expressly modified by this Fifth Amendment and
Borrower confirms that all such documents have remained in full force and effect
since the date of their execution.
42
6. Governing Law.
This Fifth Amendment shall be deemed to be a contract under the
laws of the Commonwealth of Kentucky and for all purposes shall be governed by
and construed and enforced in accordance with the internal laws of the
Commonwealth of Kentucky without regard to its conflict of laws principles.
7. Counterparts; Effective Date.
This Fifth Amendment may be signed in any number of counterparts
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Fifth Amendment shall become
effective when it has been executed by the Agent, the Loan Parties and the
Required Banks and each of the other conditions set forth in Section 3 of this
Fifth Amendment has been satisfied (the "Fifth Amendment Effective Date").
[SIGNATURE PAGES TO FOLLOW]
43
[SIGNATURE PAGE 1 OF 4 TO WAIVER AND FIFTH AMENDMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Fifth Amendment as of the day and year above
written.
BORROWER:
XXXXXXXXX XXXXX INCORPORATED
By:
------------------------------------------
Title:
---------------------------------------
GUARANTORS:
XXXXXXXXX DOWNS MANAGEMENT COMPANY
By:
------------------------------------------
Title:
---------------------------------------
XXXXXXXXX XXXXX INVESTMENT COMPANY
By:
------------------------------------------
Title:
---------------------------------------
RACING CORPORATION OF AMERICA
By:
------------------------------------------
Title:
---------------------------------------
ELLIS PARK RACE COURSE, INC.
By:
------------------------------------------
Title:
---------------------------------------
44
[SIGNATURE PAGE 2 OF 4 TO WAIVER AND FIFTH AMENDMENT]
CALDER RACE COURSE, INC.
By:
------------------------------------------
Title:
---------------------------------------
TROPICAL PARK, INC.
By:
------------------------------------------
Title:
---------------------------------------
XXXXXXXXX XXXXX CALIFORNIA COMPANY
By:
------------------------------------------
Title:
---------------------------------------
XXXXXXXXX DOWNS CALIFORNIA FALL OPERATING
COMPANY
By:
------------------------------------------
Title:
---------------------------------------
XXXXXXXXX XXXXX CALIFORNIA FOOD SERVICES
COMPANY
By:
------------------------------------------
Title:
---------------------------------------
45
[SIGNATURE PAGE 3 OF 4 TO WAIVER AND FIFTH AMENDMENT]
BANKS AND AGENT
PNC BANK, NATIONAL ASSOCIATION, individually
and as Agent
By:
------------------------------------------
Title:
---------------------------------------
BANK ONE, KENTUCKY, NA
By:
------------------------------------------
Title:
---------------------------------------
CIBC INC.
By:
------------------------------------------
Title:
---------------------------------------
COMERICA BANK
By:
------------------------------------------
Title:
---------------------------------------
FIFTH THIRD BANK
By:
------------------------------------------
Title:
---------------------------------------
46
[SIGNATURE PAGE 4 OF 4 TO WAIVER AND FIFTH AMENDMENT]
NATIONAL CITY BANK OF KENTUCKY
By:
------------------------------------------
Title:
---------------------------------------
FIRSTAR BANK, N.A.
By:
------------------------------------------
Title:
---------------------------------------
BANK OF LOUISVILLE
By:
------------------------------------------
Title:
---------------------------------------
FIFTH THIRD BANK INDIANA
By:
------------------------------------------
Title:
---------------------------------------
XXXXX FARGO BANK
By:
------------------------------------------
Title:
---------------------------------------
47
EXHIBIT 3(B)
OPINION OF COUNSEL
The opinion of Xxxxxxx Xxxx shall confirm that the recitals
hereto are true and correct in all material respects and that the other matters
contained in the warranty in Section 2(B) hereto are true and the opinion of
Xxxxx, Tarrant & Xxxxx shall confirm that the following representations and
warranties in the Credit Agreement are true and correct as such warranties
relate to this Fifth Amendment and the Credit Agreement as amended by this Fifth
Amendment.
Credit Agreement Section
Warranty
5.1.1 Organization and Qualification
5.1.2 Capitalization and Ownership
5.1.4 Power and Authority
5.1.5 Validity and Binding Effect
5.1.6 No Conflict
5.1.12 Consents and Approvals
48
