AGREEMENT FOR CONSENT AND WAIVER UNDER
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
THIS AGREEMENT FOR CONSENT AND WAIVER UNDER SECOND AMENDED AND
RESTATED CREDIT AGREEMENT (this Agreement) is made this 31st day of March,
2000 by and among PENN NATIONAL GAMING, INC., a Pennsylvania corporation
(Borrower); PENN NATIONAL GAMING OF WEST VIRGINIA, INC., a West Virginia
corporation (PNGIWV); FIRST UNION NATIONAL BANK, a national banking
association (for itself and in its capacity as agent hereunder, Agent); the
banks signatory to this Agreement (together with the Agent, each
individually a Bank and individually and collectively, the Banks) and PNGI
XXXXXXX TOWN GAMING LIMITED LIABILITY COMPANY, a West Virginia limited
liability company (Xxxxxxx Town).
BACKGROUND
Borrower and Banks entered into a Second Amended and Restated Credit
Agreement dated January 28, 1999, as amended by Amendment No. 1 to Second
Amended and Restated Credit Agreement and Joinder of Subsidiary Guarantor
dated July 22, 1999, Amendment No. 2 to and Consent under Second Amended
and Restated Credit Agreement dated July 29, 1999 and Amendment No. 3 to
and Consent and Waiver under Second Amended and Restated Credit Agreement
(Amendment No. 3) dated December 13, 1999 (and as may be further amended
from time to time, the Credit Agreement) for the purposes of providing a
revolving credit facility, for the financing of a loan from Borrower to FR
Park Racing L.P., the refinancing of certain then- existing indebtedness of
Borrower, the issuance of letters of credit for the benefit of Borrower,
and for the working capital needs and general corporate purposes of the
Borrower.
PNGIWV, a wholly-owned Subsidiary of Borrower and a Subsidiary
Guarantor, will acquire the eleven percent (11%) Minority Interest of
Xxxxxxx Town for a purchase price of Six Million Dollars ($6,000,000) in
cash (the Purchase), after which Xxxxxxx Town will become a wholly-owned
Subsidiary of PNGIWV.
In consideration of the foregoing and the premises and the agreements
hereinafter set forth, and intending to be legally bound hereby, the
parties hereto agree as follows:
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1. Consent and Waiver.
a. Section 8.02 of the Credit Agreement prohibits the Borrower and the
Credit Parties from acquiring any part of the property or assets of any
Person. Section 8.05 of the Credit Agreement prohibits the Borrower from
making Investments; however Section 8.05(ix) of the Credit Agreement allows
the Borrower and the Credit Parties to invest up to $47,566,077 plus
accrued interest in Xxxxxxx Town. After the Purchase, PNGIWVs Investment
in Xxxxxxx Town will exceed $47,566,077 plus accrued interest. Therefore,
the Purchase is not permitted by Sections 8.02 and 8.05 of the Credit
Agreement. Banks hereby consent to the Purchase and waive any Default or
Event of Default resulting thereby.
b. Section 8.17(iii) of the Credit Agreement prohibits the Borrower or
a Wholly-Owned Subsidiary from establishing, creating or acquiring any
Subsidiary unless such Subsidiary executes a counterpart to the
Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement.
Section 8.17(x) of the Credit Agreement requires any new Wholly-Owned
Subsidiary to execute and deliver all documentation such Wholly-Owned
Subsidiary would have had to deliver if it were a Credit Party on the
Restatement Effective Date. Section 8.17(y) requires the Borrower, at such
time as Xxxxxxx Town becomes a Wholly-Owned Subsidiary of Borrower, to
cause Xxxxxxx Town to execute the Subsidiaries Guaranty, the Pledge
Agreement and Security Agreement, to execute and deliver all documentation
required by Section 8.17(x) of the Credit Agreement and deliver all
additional collateral required by Agent or Required Banks. Banks hereby
consent to the establishment of Xxxxxxx Town as a Wholly-Owned Subsidiary
of a Subsidiary and waive the requirements of Sections 8.17(iii), 8.17(x)
and 8.17(y) with respect thereto; provided, however, that such waiver shall
cease to be effective on or after June 30, 2000, on which date Borrower
agrees to comply with the terms of Paragraph 3 hereof.
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2. Acknowledgments.
a. PNGIWV, as evidenced by its signature below, hereby acknowledges
and agrees that the interests it owns of Xxxxxxx Town constitute Collateral
(as defined in the Pledge Agreement) and are pledged to Agent, for the
benefit of Banks, under the Pledge Agreement. Annex G to the Pledge
Agreement, which lists the pledged limited liability company interests, is
hereby amended and restated in its entirety as set forth on Exhibit A
attached hereto.
b. Section 8.12(ii) prohibits modifications of the Xxxxxxx Town Joint
Venture Agreement, other than modifications that could reasonably be
expected to be adverse to the interests of the Banks in any material
respect. Banks hereby acknowledge the Purchase for purposes of Section
8.12(ii) of the Credit Agreement.
3. Affirmative Covenant. Borrower, PNGIWV and Xxxxxxx Town each hereby
covenant and agree that if: (i) any Banks Commitment under the Credit
Agreement remains effective or (ii) any Indebtedness under the Credit
Agreement remains outstanding, in each case on June 30, 2000, then Xxxxxxx
Town will (and Borrower and PNGIWV hereby agree to cause Xxxxxxx Town to)
deliver on or before June 30, 2000 the following documents to Agent:
a. a duly executed joinder to the Subsidiaries Guaranty, Security
Agreement and Pledge Agreement, in form and substance satisfactory to
Banks; b. executed UCC-1 financing statement to be filed against Xxxxxxx
Town in those jurisdictions required by Agent;
c. any and all pledged intercompany notes from or for the benefit of
Xxxxxxx Town;
d. a duly executed mortgage or deed of trust, in favor of Agent for
the benefit of Banks, on each parcel of real property owned by Xxxxxxx
Town;
e. a marked-up title report of a title insurance company satisfactory
to Agent, representing such title insurance companys commitment to issue
in favor of Agent for the benefit of Banks, at Borrowers expense, a
standard form title insurance policy insuring the lien of each mortgage
delivered pursuant to subparagraph (e) above, subject to no other liens
except as listed therein and acceptable to Agent;
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f. a Phase I environmental report with respect to each property for
which a mortgage is delivered pursuant to subparagraph (e) above, in form
and substance satisfactory to Agent and prepared by a qualified
environmental professional acceptable to Agent;
g. an opinion of counsel to Xxxxxxx Town, in form and substance
satisfactory to Agent;
h. a certificate of good standing dated as of a recent date for
Xxxxxxx Town in the jurisdiction of its formation;
i. a certificate from the secretary of Xxxxxxx Town: (i) attaching the
operating agreement of Xxxxxxx Town or certifying that the operating
agreement has not been modified since it was last delivered to Banks; (ii)
attaching resolutions from the [board of managers] of Xxxxxxx Town
authorizing the execution by Xxxxxxx Town of each mortgage and the joinder
to the Security Agreement and Pledge Agreement; and (iii) attaching an
incumbency certificate; and
j. such additional documents as Agent shall reasonably request.
4. Negative Covenants. Xxxxxxx Town hereby covenants and agrees to
comply with the terms of the negative covenants set forth in Section 8 of
the Credit Agreement as if Xxxxxxx Town were a Subsidiary Guarantor. PNGIWV
hereby covenants and agrees to cause Xxxxxxx Town to comply with the terms
of the negative covenants set forth in Section 8 of the Credit Agreement as
if Xxxxxxx Town were a Subsidiary Guarantor.
5. Representations and Warranties. Borrower and each Subsidiary
Guarantor hereby represents and warrants to Banks as follows:
a. Representations. The representations and warranties set forth in
Section 6 of the Credit Agreement are true and correct in all material
respects as of the date hereof, including as applied to Xxxxxxx Town as a
Subsidiary; there is no Event of Default or Default under the Credit
Agreement, as amended hereby; and there has been no material adverse change
in the financial condition or business of Borrower or any Subsidiary from
the date on which Borrower last delivered financial statements to Banks.
b. Power and Authority. Borrower, PNGIWV and Xxxxxxx Town each has the
power and authority under the laws of each of their states of incorporation
or formation and under their articles or certificates of incorporation and
bylaws or other formation documents or other formation documents to enter
into and perform this Agreement and the other documents and agreements
required hereunder (collectively, the Agreement Documents); all actions
(corporate or otherwise) necessary or appropriate for the execution and
performance by each of Borrower, PNGIWV and Xxxxxxx Town of the Agreement
Documents have been taken; and that each of the Agreement Documents and the
Credit Agreement constitute the valid and binding obligations of Borrower,
PNGIWV, Xxxxxxx Town and each other Subsidiary, enforceable in accordance
with their respective terms.
c. No Violations of Law or Agreements. The making and performance of
the Agreement Documents by Borrower, PNGIWV and Xxxxxxx Town will not (i)
violate any provisions of any law or regulation, federal, state or local,
or the articles or certificates of incorporation or bylaws or other
formation documents of any of Borrower, PNGIWV or Xxxxxxx Town or (ii)
result in any breach or violation of, or constitute a default or require
the obtaining of any consent under, any agreement or instrument by which
any of Borrower, PNGIWV or Xxxxxxx Town or any of their property may be
bound.
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6. Conditions to Effectiveness of Amendment. This Agreement shall be
effective upon Agents receipt of the following documents, each in form and
substance satisfactory to Agent:
a. Agreement. This Agreement duly executed by Borrower, PNGIWV,
Xxxxxxx Town, Agent and Banks.
b. Opinion of Counsel to Xxxxxxx Town. An opinion letter from counsel
to Xxxxxxx Town in form and substance satisfactory to Agent.
c. Purchase Agreement. A duly executed copy of the Agreement for Sale
of Membership Interest in PNGI Xxxxxxx Town Gaming Limited Liability
Company dated the ____ day of March, 2000 by and between Xxxxxx Xxxx Xxxxx,
Jr., Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Sun Mountain Development, LLC and
Timber Nation Limited Partnership, PNGIWV, or its affiliated designee,
Xxxxxxx Town and Borrower.
d. Consents and Approvals. Receipt by Borrower, PNGIWV and Xxxxxxx
Town of all necessary regulatory and other consents and approvals for the
Purchase. x. Xxxx Searches against Xxxxxxx Town. As soon as available,
updated lien searches against Xxxxxxx Town in such locations as Agent shall
reasonably request.
f. Certificates of Membership Interest. Any and all certificate(s) of
membership interest of
Xxxxxxx Town.
g. Other Documents. Such additional documents as Agent may reasonably
request.
7. Affirmations. Borrower, PNGIWV and Xxxxxxx Town hereby: (i)affirm
all the provisions of the Credit Agreement, Security Agreement, Pledge
Agreement and Contribution and Indemnification Agreement and (ii)agree
that the terms and conditions of the Credit Agreement, Security Agreement,
Pledge Agreement and Contribution and Indemnification Agreement shall
continue in full force and effect.
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8. Miscellaneous.
a. Borrower agrees to pay or reimburse Agent for all reasonable fees
and expenses (including without limitation reasonable fees and expenses of
counsel) incurred by Agent in connection with the preparation, execution
and delivery of this Agreement.
b. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania, without regard to
conflicts-of-law or choice-of-law rules.
c. All terms and provisions of this Agreement shall be for the benefit
of and be binding upon and enforceable by the respective successors and
assigns of the parties hereto.
d. This Agreement may be executed in any number of counterparts with
the same effect as if all the signatures on such counterparts appeared on
one document and each such counterpart shall be deemed an original.
e. Except as expressly set forth herein, neither the execution,
delivery and performance of this Agreement, nor anything contained herein
shall be construed as or shall operate as a consent to or waiver of any
provision of, or any right, power or remedy of Banks under the Credit
Agreement and the agreements and documents executed in connection
therewith.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the day and year first above written.
PENN NATIONAL GAMING, INC.
By: /s/Xxxxxx X. Ippolito_____
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary/Treasurer
PENN NATIONAL GAMING OF WEST
VIRGINIA, INC., as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
PNGI XXXXXXX TOWN GAMING LIMITED
LIABILITY COMPANY
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
[EXECUTIONS CONTINUED]
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FIRST UNION NATIONAL BANK, as Agent
By: /s/Xxxx X. Eagleson________
Name: Xxxx X. Xxxxxxxx
Title: Vice President
SUMMIT BANK
By: /s/Xxxx X. Balciar___________
Name: Xxxx X. Xxxxxxx
Title: Vice President
Accepted and Agreed:
MOUNTAINVIEW THOROUGHBRED
RACING ASSOCIATION, as a Subsidiary
Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
PENNSYLVANIA NATIONAL TURF
CLUB, INC., as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
[EXECUTIONS CONTINUED]
46
PENN NATIONAL SPEEDWAY,
INC., as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
STERLING AVIATION, INC.,
as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
PENN NATIONAL HOLDING
COMPANY, as a Subsidiary
Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
PNGI POCONO, INC.,
as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
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[EXECUTIONS CONTINUED]
TENNESSEE DOWNS, INC.,
as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
THE DOWNS RACING, INC.,
as a Subsidiary Guarantor
By: /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: President/Secretary/Treasurer
NORTHEAST CONCESSIONS, INC.,
as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President/Treasurer
BACKSIDE, INC.,
as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Secretary
MILL CREEK LAND, INC.,
as a Subsidiary Guarantor
By: /s/Xxxxxx X. Ippolito__
Name: Xxxxxx X. Xxxxxxxx
Title:Secretary/Treasurer
XXXXXX BARRE XXXXX, INC.,
as a Subsidiary Guarantor
By: /s/Xxxxxx X. Xxxxxxx
Name:Xxxxxx X. Xxxxxxx
Title:President/Secretary/Treasurer
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