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EXHIBIT 4.3
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CREDIT AGREEMENT
among
ALLIANCE GAMING CORPORATION,
BALLY XXXXX VERTRIEBS GMBH,
BALLY XXXXX AUTOMATEN GMBH,
VARIOUS LENDERS,
and
CREDIT SUISSE FIRST BOSTON,
as ADMINISTRATIVE AGENT
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Dated as of August 8, 1997
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TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit................................................................ 1
1.01 The Commitments........................................................................... 1
1.02 Minimum Amount of Each Borrowing.......................................................... 11
1.03 Notice of Borrowing....................................................................... 11
1.04 Disbursement of Funds..................................................................... 12
1.05 Notes..................................................................................... 13
1.06 Conversions............................................................................... 18
1.07 Pro Rata Borrowings....................................................................... 19
1.08 Interest.................................................................................. 19
1.09 Interest Periods.......................................................................... 21
1.10 Increased Costs, Illegality, etc.......................................................... 22
1.11 Compensation.............................................................................. 26
1.12 Lending Offices; Changes Thereto.......................................................... 26
1.13 Replacement of Lenders.................................................................... 27
SECTION 2. Letters of Credit......................................................................... 29
2.01 Letters of Credit......................................................................... 29
2.02 Maximum Letter of Credit Outstandings; Final
Maturities............................................................................. 31
2.03 Letter of Credit Requests; Notices of Issuance;
Minimum Stated Amount.................................................................. 32
2.04 Letter of Credit Participations........................................................... 33
2.05 Agreement to Repay Letter of Credit Drawings.............................................. 36
2.06 Increased Costs........................................................................... 37
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment............................................................................. 38
3.01 Fees...................................................................................... 38
3.02 Voluntary Termination of Unutilized Commitments........................................... 39
3.03 Mandatory Reduction of Commitments........................................................ 40
SECTION 4. Prepayments; Payments; Taxes.............................................................. 43
4.01 Voluntary Prepayments..................................................................... 43
4.02 Mandatory Repayments and Commitment Reductions............................................ 44
4.03 Method and Place of Payment............................................................... 55
(i)
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4.04 Net Payments.............................................................................. 56
4.05 Waivable Repayments....................................................................... 59
SECTION 5A. Conditions Precedent to Initial Credit Events............................................. 61
5A.01 Execution of Agreement; Notes............................................................. 61
5A.02 Opinions of Counsel....................................................................... 61
5A.03 Corporate Documents; Proceedings; etc..................................................... 62
5A.04 Fees, etc................................................................................. 62
5A.05 Issuance of New Senior Subordinated Notes................................................. 62
5A.06 Existing Senior Secured Notes Tender Offer/Consent
Solicitation; etc...................................................................... 63
5A.07 Notice of Existing PIK Preferred Stock Redemption......................................... 63
5A.08 Indebtedness to be Refinanced............................................................. 64
5A.09 Outstanding Indebtedness and Preferred Stock.............................................. 65
5A.10 Adverse Change, etc....................................................................... 65
5A.11 Litigation................................................................................ 65
5A.12 Subsidiary Guaranties..................................................................... 66
5A.13 U.S. Pledge Agreement..................................................................... 66
5A.14 U.S. Security Agreement................................................................... 66
5A.15 German Security Documents................................................................. 67
5A.16 Mortgages; Title Insurance; Survey........................................................ 68
5A.17 Pro Forma Balance Sheet................................................................... 69
5A.18 Borrowing Base Certificates............................................................... 69
5A.19 Solvency Certificate; Environmental Analyses; Insurance
Analyses............................................................................... 69
SECTION 5B. Conditions Precedent to Initial Delayed Draw Term Loans................................... 70
5B.01 Occurrence of Initial Borrowing Date...................................................... 70
5B.02 Purchase of Rainbow Royalty Payments; Rainbow
Mortgage Debt.......................................................................... 70
5B.03 Execution of Guaranty and Security Documents by RCVP...................................... 70
5B.04 Opinions of Counsel....................................................................... 71
SECTION 6. Conditions Precedent to All Credit Events................................................. 71
6.01 No Default; Representations and Warranties................................................ 71
6.02 Notice of Borrowing; Letter of Credit Request............................................. 71
6.03 Regulations U and G..................................................................................... 71
SECTION 7. Representations, Warranties and Agreements................................................ 72
(ii)
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7.01 Corporate and Other Status................................................................ 72
7.02 Corporate and Other Power and Authority................................................... 73
7.03 No Violation.............................................................................. 73
7.04 Governmental Approvals.................................................................... 73
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc.......................................................... 73
7.06 Litigation................................................................................ 75
7.07 True and Complete Disclosure.............................................................. 75
7.08 Use of Proceeds; Margin Regulations....................................................... 76
7.09 Tax Returns and Payments.................................................................. 76
7.10 Compliance with ERISA..................................................................... 77
7.11 The Security Documents.................................................................... 79
7.12 Representations and Warranties in Other Documents......................................... 81
7.13 Properties................................................................................ 81
7.14 Capitalization............................................................................ 81
7.15 Subsidiaries.............................................................................. 81
7.16 Compliance with Statutes, etc............................................................. 82
7.17 Investment Company Act.................................................................... 82
7.18 Public Utility Holding Company Act........................................................ 82
7.19 Environmental Matters..................................................................... 82
7.20 Labor Relations........................................................................... 83
7.21 Patents, Licenses, Franchises and Formulas................................................ 84
7.22 Indebtedness.............................................................................. 84
7.23 Transaction............................................................................... 84
7.24 Existing Senior Secured Notes............................................................. 84
7.25 Specified Inactive Subsidiaries and Specified Non-
Material Subsidiaries.................................................................. 85
7.26 Existing Senior Secured Notes Collateral.................................................. 85
7.27 Margin Stock.............................................................................. 85
SECTION 8. Affirmative Covenants..................................................................... 85
8.01 Information Covenants..................................................................... 86
8.02 Books, Records and Inspections............................................................ 91
8.03 Maintenance of Property; Insurance........................................................ 91
8.04 Corporate Franchises...................................................................... 92
8.05 Compliance with Statutes, etc............................................................. 92
8.06 Compliance with Environmental Laws........................................................ 93
8.07 ERISA..................................................................................... 94
8.08 End of Fiscal Years; Fiscal Quarters...................................................... 95
(iii)
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8.09 Obtaining Approvals....................................................................... 95
8.10 Payment of Taxes.......................................................................... 96
8.11 Additional Security; Further Assurances; etc.............................................. 96
8.12 Foreign Subsidiaries Security............................................................. 98
8.13 Permitted Acquisitions.................................................................... 99
8.14 Actions With Respect to Certain Subsidiaries..............................................100
8.15 Margin Stock..............................................................................102
8.16 Existing Senior Secured Notes Collateral..................................................103
8.17 Covenant Defeasance of Existing Senior Secured Notes......................................103
SECTION 9. Negative Covenants........................................................................104
9.01 Liens.....................................................................................104
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc....................................107
9.03 Restricted Payments.......................................................................111
9.04 Indebtedness..............................................................................112
9.05 Advances, Investments and Loans...........................................................114
9.06 Transactions with Affiliates..............................................................119
9.07 Capital Expenditures......................................................................120
9.08 Consolidated Fixed Charge Coverage Ratio..................................................121
9.09 Consolidated Interest Coverage Ratio......................................................122
9.10 Maximum Leverage Ratio....................................................................122
9.11 Minimum Consolidated EBITDA...............................................................123
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other
Agreements; etc........................................................................123
9.13 Limitation on Certain Restrictions on Subsidiaries........................................124
9.14 Limitation on Issuance of Capital Stock...................................................124
9.15 Business..................................................................................125
9.16 Limitation on Creation of Subsidiaries....................................................125
SECTION 10. Events of Default.........................................................................126
10.01 Payments..................................................................................126
10.02 Representations, etc......................................................................126
10.03 Covenants.................................................................................126
10.04 Default Under Other Agreements............................................................127
10.05 Bankruptcy, etc...........................................................................127
10.06 ERISA.....................................................................................128
10.07 Security Documents........................................................................129
(iv)
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10.08 Guaranties................................................................................129
10.09 Judgments.................................................................................129
10.10 Change of Control.........................................................................129
10.11 Gaming Licenses...........................................................................129
10.12 Bailee Agreement..........................................................................129
10.13 Subsidiary Stock Restrictions.............................................................130
SECTION 11. Definitions and Accounting Terms..........................................................131
11.01 Defined Terms.............................................................................131
SECTION 12. The Administrative Agent..................................................................187
12.01 Appointment...............................................................................187
12.02 Nature of Duties..........................................................................187
12.03 Lack of Reliance on the Administrative Agent..............................................188
12.04 Certain Rights of the Administrative Agent................................................188
12.05 Reliance..................................................................................188
12.06 Indemnification...........................................................................189
12.07 The Administrative Agent in its Individual Capacity.......................................189
12.08 Holders...................................................................................189
12.09 Resignation by the Administrative Agent...................................................189
SECTION 13. Miscellaneous.............................................................................190
13.01 Payment of Expenses, etc..................................................................190
13.02 Right of Setoff...........................................................................192
13.03 Notices...................................................................................192
13.04 Benefit of Agreement; Assignments; Participations.........................................192
13.05 No Waiver; Remedies Cumulative............................................................197
13.06 Payments Pro Rata.........................................................................197
13.07 Calculations; Computations................................................................198
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL....................199
13.09 Counterparts..............................................................................200
13.10 Effectiveness.............................................................................200
13.11 Headings Descriptive......................................................................201
13.12 Amendment or Waiver; etc..................................................................201
13.13 Survival..................................................................................202
13.14 Domicile of Loans.........................................................................203
13.15 Register..................................................................................203
(v)
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13.16 Judgment Currency.........................................................................204
13.17 Confidentiality...........................................................................204
13.18 Applicable Gaming Laws; Requisite Gaming Approvals........................................205
13.19 Gaming Authorities........................................................................208
13.20 Nevada Gaming Collateral..................................................................208
13.21 Limitation on Additional Amounts, etc.....................................................208
13.22 Power of Attorney.........................................................................209
13.23 Post Closing Actions......................................................................209
13.24 Specific Provisions Regarding German Borrowers............................................211
13.25 Specific Provisions Regarding BGI Chattel Paper...........................................211
13.26 Special Provisions Regarding United Coin Machine Notes....................................212
13.27 Override Provisions Regarding Margin Stock................................................212
SECTION 14. Parent Guaranty...........................................................................212
14.01 The Parent Guaranty.......................................................................212
14.02 Bankruptcy................................................................................213
14.03 Nature of Liability.......................................................................213
14.04 Independent Obligation....................................................................214
14.05 Authorization.............................................................................214
14.06 Reliance..................................................................................215
14.07 Subordination.............................................................................215
14.08 Waiver....................................................................................216
14.09 Limitation on Enforcement.................................................................217
SCHEDULE I-A Commitments
SCHEDULE I-B German Revolving Loan Sub-Commitments
SCHEDULE II Lender Addresses and Applicable Lending Offices
SCHEDULE III Real Property
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Insurance
SCHEDULE VII Existing Liens
SCHEDULE VIII Existing Investments
SCHEDULE IX ERISA Matters
SCHEDULE X Approvals
SCHEDULE XI Exceptions to Capitalization Representation
SCHEDULE XIII Existing Senior Secured Notes Collateral
(vi)
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EXHIBIT A Notice of Borrowing
EXHIBIT B-1 U.S. Borrower Tranche A Term Note
EXHIBIT B-2 German Borrower Tranche A Term Note
EXHIBIT B-3 Delayed Draw Term Note
EXHIBIT B-4 Tranche B Term Note
EXHIBIT X-0 Xxxxxxx X Xxxx Xxxx
XXXXXXX X-0 Dollar Revolving Note
EXHIBIT B-7 Deutsche Xxxx Revolving Note
EXHIBIT B-8 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Opinion of Milbank, Tweed, Xxxxxx & XxXxxx, special U.S. counsel to the Credit Parties
EXHIBIT E-2 Opinion of Bruckhaus Xxxxxxxx Xxxxxxxx, special German counsel to the Credit Parties
EXHIBIT E-3 Opinion of Xxxxxxx Xxxxxx, special Nevada counsel to the Credit Parties
EXHIBIT E-4 Opinion of Xxxxxxx Xxxxxx & Xxxxxxx, P.A., special Mississippi counsel to the Credit Parties
EXHIBIT E-5 Opinion of Xxxxxxx Xxxxxxxxxxx Xxxxxxx, special Louisiana counsel to the Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G Bailee Agreement
EXHIBIT H-1 U.S. Subsidiaries Guaranty
EXHIBIT H-2 German Subsidiaries Guaranty
EXHIBIT I U.S. Pledge Agreement
EXHIBIT J U.S. Security Agreement
EXHIBIT K German Security Agreement
EXHIBIT L German Pledge Agreement
EXHIBIT M Solvency Certificate
EXHIBIT N-1 U.S. Borrower Borrowing Base Certificate
EXHIBIT N-2 German Borrowers Borrowing Base Certificate
EXHIBIT O Intercompany Loan Subordination Provisions
EXHIBIT P Assignment and Assumption Agreement
(vii)
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CREDIT AGREEMENT, dated as of August 8, 1997, among ALLIANCE
GAMING CORPORATION, a Nevada corporation (the "U.S. Borrower"), BALLY XXXXX
VERTRIEBS GMBH, a company with limited liability organized under the laws of the
Federal Republic of Germany ("Bally Xxxxx Vertriebs"), BALLY XXXXX AUTOMATEN
GMBH, a company with limited liability organized under the laws of the Federal
Republic of Germany ("Bally Xxxxx Automaten" and, together with Bally Xxxxx
Vertriebs, the "German Borrowers," and each a "German Borrower" and the German
Borrowers, together with the U.S. Borrower, the "Borrowers," and each a
"Borrower"), the LENDERS party hereto from time to time and CREDIT SUISSE FIRST
BOSTON, as Administrative Agent (all capitalized terms used herein and defined
in Section 11 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make available to the U.S. Borrower and the
German Borrowers the respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Lender with a U.S. Borrower Tranche A Term
Loan Commitment severally agrees to make, on the Initial Borrowing Date and on
the PIK Preferred Drawdown Date, a term loan or term loans (each a "U.S.
Borrower Tranche A Term Loan" and, collectively, the "U.S. Borrower Tranche A
Term Loans") to the U.S. Borrower, which U.S. Borrower Tranche A Term Loans (i)
shall be made and maintained in Dollars, (ii) shall, in the case of U.S.
Borrower Tranche A Term Loans made on the Initial Borrowing Date, be made by
each Lender with a U.S. Borrower Tranche A Term Loan Commitment in that
principal amount as is equal to the U.S. Borrower Tranche A Term Loan Commitment
of such Lender on such date (before giving effect to any reductions thereto on
such date pursuant to Section 3.03(b)(i) but after giving effect to any
reductions thereto on or prior to such date pursuant to 3.03(b)(iii)) less such
Lender's A Share of the A PIK Preferred Holdback Amount as in effect on the
Initial Borrowing Date, (iii) shall, in the case of the U.S. Borrower Tranche A
Term Loans made on the PIK Preferred Drawdown Date, be made by each Lender with
a U.S. Borrower Tranche A Term Loan Commitment in an amount equal to the U.S.
Borrower Tranche A Term Loan Commitment of such Lender as in effect on such date
(before giving effect to any reductions thereto on such date pursuant to Section
3.03(b)(ii) but after giving effect to any reductions thereto on or prior to
such date pursuant to Section 3.03(b)(i) and (iii)) and
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(iv) shall, at the option of the U.S. Borrower, be incurred and/or maintained
as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that
(A) except as otherwise specifically provided in Section 1.10(b), all U.S.
Borrower Tranche A Term Loans comprising the same Borrowing shall at all times
be of the same Type and (B) except as expressly provided in the immediately
succeeding sentence, no more than three Borrowings of U.S. Borrower Tranche A
Term Loans maintained as Eurodollar Loans may be incurred or maintained prior to
the earlier of (1) the 90th day after the Initial Borrowing Date or, if an
Interest Period relating to any then outstanding U.S. Borrower Tranche A Term
Loans beginning before such 90th day extends thereafter, the last day of such
Interest Period, and (2) that date (the "Syndication Date") upon which the
Administrative Agent shall have determined in its sole discretion (and shall
have notified the U.S. Borrower) that the primary syndication (and resultant
addition of institutions as Lenders pursuant to Section 13.04(b)) has been
completed (each of which Borrowings of Eurodollar Loans may only have an
Interest Period of one month, and the first of which Borrowings may only be made
on a single date on or after the Initial Borrowing Date and on or prior to the
sixth Business Day following the Initial Borrowing Date, and the second and
third of which Borrowings may only be made on the last day of the immediately
preceding Interest Period). Notwithstanding the foregoing, to the extent that
U.S. Borrower Tranche A Term Loans are incurred after the Initial Borrowing Date
and at a time when the proviso to clause (iv) of the immediately preceding
sentence is applicable, then if the respective U.S. Borrower Tranche A Term Loan
is incurred during an Interest Period referenced in the proviso to clause (iv)
of the immediately preceding sentence, and to the extent that one or more
Interest Periods of less than one month's duration are then available to all of
the Lenders (which are making such U.S. Borrower Tranche A Term Loan) which end
on or prior to the last day of the Interest Period then in effect pursuant to
the proviso to clause (iv) of the immediately preceding sentence, such shorter
interest period shall be permitted to be selected, in each case so long as on
the last day of each Interest Period referenced in the proviso to clause (iv) of
the immediately preceding sentence no interest periods remain in effect pursuant
to this sentence which will end after such last day. Once repaid, U.S. Borrower
Tranche A Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Lender with a German Borrower Tranche A Term Loan Commitment severally
agrees to make, on the Initial Borrowing Date, a term loan or term loans (each a
"German Borrower Tranche A Term Loan" and, collectively, the "German Borrower
Tranche A Term Loans") to the German Borrowers, which German Borrower Tranche A
Term Loans (i) shall be made and maintained in Deutsche Marks, (ii) shall be
made by each such Lender in that initial aggregate principal amount as is equal
to the German Borrower Tranche A Term Loan Commitment of such Lender on the
Initial Borrowing Date (before giving effect to any reductions thereto on such
date pursuant to Section 3.03(c)(i) but after giving effect to any reductions
thereto on or prior to such date pursuant to Section 3.03(c)(ii)) and (iii)
shall, at the option of the German Borrowers, be incurred and/or
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maintained as, and/or converted into, one or more Borrowings of Deutsche Xxxx
Loans, provided that no more than three Borrowings of German Borrower Tranche A
Term Loans may be incurred or maintained prior to the earlier of (1) the 90th
day after the Initial Borrowing Date or, if an Interest Period relating to any
then outstanding German Borrower Tranche A Term Loans beginning before such 90th
day extends thereafter, the last day of such Interest Period, and (2) the
Syndication Date (each of which Borrowings may only have an Interest Period of
one month, and the first of which Borrowings must begin on or after the Initial
Borrowing Date and on or prior to the sixth Business Day following the Initial
Borrowing Date, and which must be the first day of the first Interest Period, if
any, selected pursuant to the proviso to clause (iv) of the first sentence of
Section 1.01(a), and the second and third of which Borrowings may only be made
on the last day of the immediately preceding Interest Period). The proceeds of
each German Borrower Tranche A Term Loan shall be made available to the German
Borrowers as directed by them (with the proceeds to be used by the German
Borrowers as agreed by them), it being understood and agreed that the German
Borrowers shall be jointly and severally obligated with respect to each German
Borrower Tranche A Term Loan for the repayment thereof and all amounts owing
with respect thereto. Once repaid, German Borrower Tranche A Term Loans incurred
hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth herein,
each Lender with a Delayed Draw Term Loan Commitment severally agrees to make,
on any Delayed Draw Term Loan Borrowing Date occurring on or prior to the
Delayed Draw Term Loan Commitment Termination Date, a term loan or term loans
(each a "Delayed Draw Term Loan" and, collectively, the "Delayed Draw Term
Loans") to the U.S. Borrower, which Delayed Draw Term Loans (i) shall be made
and maintained in Dollars, (ii) shall, in the case of the Delayed Draw Term
Loans being made on any Delayed Draw Term Loan Borrowing Date, be made by each
Lender with a Delayed Draw Term Loan Commitment in such principal amount (as
requested by the U.S. Borrower) as does not exceed the Delayed Draw Term Loan
Commitment of such Lender on such date (before giving effect to any reductions
thereto on such date pursuant to Sections 3.03(d)(i) and (ii), but after giving
effect to any reductions prior to such date pursuant to Sections 3.03(d)(i) and
(ii) and giving effect to any reductions thereto on or prior to such date
pursuant Section 3.03(d)(iii)) and (iii) shall, at the option of the U.S.
Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans
or Eurodollar Loans, provided that (A) except as otherwise specifically provided
in Section 1.10(b), all Delayed Draw Term Loans comprising the same Borrowing
shall at all times be of the same Type and (B) except as expressly provided in
the immediately succeeding sentence, no more than three Borrowings of Delayed
Draw Term Loans maintained as Eurodollar Loans may be incurred or maintained
prior to the earlier of (1) the 90th day after the Initial Borrowing Date or, if
an Interest Period relating to any then outstanding Delayed Draw Term Loans
beginning before such 90th day extends thereafter, the last day of such Interest
Period, and (2) the Syndication Date (each of which Borrowings of Eurodollar
Loans may only have an Interest Period of one month, and each of which Interest
Periods
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must begin and end on the same day as an Interest Period selected pursuant to
clause (B) of the proviso to clause (iv) of the first sentence of Section
1.01(a)). Notwithstanding the foregoing, to the extent that Delayed Draw Term
Loans are incurred after the Initial Borrowing Date and at a time when the
proviso to clause (iv) of the first sentence of Section 1.01(a) is applicable,
then if the respective Delayed Draw Term Loan is incurred during an Interest
Period referenced in the proviso to clause (iv) the first sentence of Section
1.01(a), and to the extent that one or more Interest Periods of less than one
month's duration are then available to all of the Lenders (which are making such
Delayed Draw Term Loan) which end on or prior to the last day of the Interest
Period then in effect pursuant to the proviso to clause (iv) of the first
sentence of Section 1.01(a), such shorter interest period shall be permitted to
be selected, in each case so long as on the last day of each Interest Period
referenced in the proviso to clause (iv) of the first sentence of Section
1.01(a) no interest periods remain in effect pursuant to this sentence which
will end after such last day. Once repaid, Delayed Draw Term Loans incurred
hereunder may not be reborrowed.
(d) Subject to and upon the terms and conditions set forth herein,
each Lender with a Tranche B Term Loan Commitment severally agrees to make, on
the Initial Borrowing Date and on the PIK Preferred Drawdown Date, a term loan
or term loans (each a "Tranche B Term Loan" and, collectively, the "Tranche B
Term Loans") to the U.S. Borrower, which Tranche B Term Loans (i) shall be made
and maintained in Dollars, (ii) shall, in the case of Tranche B Term Loans made
on the Initial Borrowing Date, be made by each Lender with a Tranche B Term Loan
Commitment in that principal amount as is equal to the Tranche B Term Loan
Commitment of such Lender on such date (before giving effect to any reductions
thereto on such date pursuant to Section 3.03(e)(i) but after giving effect to
any reductions thereto on or prior to such date pursuant to 3.03(e)(iii)) less
such Lender's B Share of the B PIK Preferred Holdback Amount as in effect on the
Initial Borrowing Date, (iii) shall, in the case of the Tranche B Term Loans
made on the PIK Preferred Drawdown Date, be made by each Lender with a Tranche B
Term Loan Commitment in an amount equal to the Tranche B Term Loan Commitment of
such Lender as in effect on such date (before giving effect to any reductions
thereto on such date pursuant to Section 3.03(e)(ii) but after giving effect to
any reductions thereto on or prior to such date pursuant to Section
3.03(e)(iii)) and (iv) shall, at the option of the U.S. Borrower, be incurred
and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that (A) except as otherwise specifically provided in Section 1.10(b),
all Tranche B Term Loans comprising the same Borrowing shall at all times be of
the same Type and (B) except as expressly provided in the immediately succeeding
sentence, no more than three Borrowings of Tranche B Term Loans maintained as
Eurodollar Loans may be incurred or maintained prior to the earlier of (1) the
90th day after the Initial Borrowing Date or, if an Interest Period relating to
any then outstanding Tranche B Term Loans beginning before such 90th day extends
thereafter, the last day of such Interest Period, and (2) the Syndication Date
(each of which Borrowings of Eurodollar Loans may only have an Interest Period
of one month, and each of which
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Interest Periods must begin and end on the same day as an Interest Period
selected pursuant to clause (B) of the proviso to clause (iv) of the first
sentence of Section 1.01(a)). Notwithstanding the foregoing, to the extent that
Tranche B Term Loans are incurred after the Initial Borrowing Date and at a time
when the proviso to clause (iv) of the first sentence of Section 1.01(a) is
applicable, then if the respective Tranche B Term Loan is incurred during an
Interest Period referenced in the proviso to clause (iv) the first sentence of
Section 1.01(a), and to the extent that one or more Interest Periods of less
than one month's duration are then available to all of the Lenders (which are
making such Tranche B Term Loan) which end on or prior to the last day of the
Interest Period then in effect pursuant to the proviso to clause (iv) of the
first sentence of Section 1.01(a), such shorter interest period shall be
permitted to be selected, in each case so long as on the last day of each
Interest Period referenced in the proviso to clause (iv) of the first sentence
of Section 1.01(a) no interest periods remain in effect pursuant to this
sentence which will end after such last day. Once repaid, Tranche B Term Loans
incurred hereunder may not be reborrowed.
(e) Subject to and upon the terms and conditions set forth herein,
each Lender with a Tranche C Term Loan Commitment severally agrees to make, on
the Initial Borrowing Date and on the PIK Preferred Drawdown Date, a term loan
or term loans (each a "Tranche C Term Loan" and, collectively, the "Tranche C
Term Loans") to the U.S. Borrower, which Tranche C Term Loans (i) shall be made
and maintained in Dollars, (ii) shall, in the case of Tranche C Term Loans made
on the Initial Borrowing Date, be made by each Lender with a Tranche C Term Loan
Commitment in that principal amount as is equal to the Tranche C Term Loan
Commitment of such Lender on such date (before giving effect to any reductions
thereto on such date pursuant to Section 3.03(f)(i) but after giving effect to
any reductions thereto on or prior to such date pursuant to 3.03(f)(iii)) less
such Lender's C Share of the C PIK Preferred Holdback Amount as in effect on the
Initial Borrowing Date, (iii) shall, in the case of the Tranche C Term Loans
made on the PIK Preferred Drawdown Date, be made by each Lender with a Tranche C
Term Loan Commitment in an amount equal to the Tranche C Term Loan Commitment of
such Lender as in effect on such date (before giving effect to any reductions
thereto on such date pursuant to Section 3.03(f)(ii) but after giving effect to
any reductions thereto on or prior to such date pursuant to Section
3.03(f)(iii)) and (iv) shall, at the option of the U.S. Borrower, be incurred
and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that (A) except as otherwise specifically provided in Section 1.10(b),
all Tranche C Term Loans comprising the same Borrowing shall at all times be of
the same Type and (B) except as expressly provided in the immediately succeeding
sentence, no more than three Borrowings of Tranche C Term Loans maintained as
Eurodollar Loans may be incurred prior to the earlier of (1) the 90th day after
the Initial Borrowing Date or, if an Interest Period relating to any then
outstanding Tranche C Term Loans beginning before such 90th day extends
thereafter, the last day of such Interest Period, and (2) the Syndication Date
(each of which Borrowings of Eurodollar Loans may only have an Interest Period
of one month, and each of which Interest Periods must begin
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and end on the same day as an Interest Period selected pursuant to clause (B) of
the proviso to clause (iv) of the first sentence of Section 1.01(a)).
Notwithstanding the foregoing, to the extent that Tranche C Term Loans are
incurred after the Initial Borrowing Date and at a time when the proviso to
clause (iv) of the first sentence of Section 1.01(a) is applicable, then if the
respective Tranche C Term Loan is incurred during an Interest Period referenced
in the proviso to clause (iv) the first sentence of Section 1.01(a), and to the
extent that one or more Interest Periods of less than one month's duration are
then available to all of the Lenders (which are making such Tranche C Term Loan)
which end on or prior to the last day of the Interest Period then in effect
pursuant to the proviso to clause (iv) of the first sentence of Section 1.01(a),
such shorter interest period shall be permitted to be selected, in each case so
long as on the last day of each Interest Period referenced in the proviso to
clause (iv) of the first sentence of Section 1.01(a) no interest periods remain
in effect pursuant to this sentence which will end after such last day. Once
repaid, Tranche C Term Loans incurred hereunder may not be reborrowed.
(f) Subject to and upon the terms and conditions set forth herein,
each Lender with a Revolving Loan Commitment severally agrees, at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, to make a revolving loan or revolving loans to the
U.S. Borrower (individually), and each German Revolving Lender severally agrees,
at any time and from time to time on and after the Initial Borrowing Date and
prior to the Revolving Loan Maturity Date, to make a revolving loan or revolving
loans to the German Borrowers (on a joint and several basis) (with the revolving
loans made to the U.S. Borrower (individually) or the German Borrowers (on a
joint and several basis) pursuant to this Section 1.01(f) being each called a
"Revolving Loan" and, collectively, the "Revolving Loans"), which Revolving
Loans (i) shall, in the case of Revolving Loans made to the U.S. Borrower, be
made and maintained in Dollars (each a "Dollar Revolving Loan" and,
collectively, the "Dollar Revolving Loans"), which Dollar Revolving Loans shall,
at the option of the U.S. Borrower, be incurred and maintained as, and/or
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converted into, Base Rate Loans and Eurodollar Loans, provided that (A) except
as otherwise specifically provided in Section 1.10(b), all Dollar Revolving
Loans comprising the same Borrowing shall at all times be of the same Type and
(B) except as expressly provided in the immediately succeeding sentence, no more
than three Borrowings of Revolving Loans maintained as Eurodollar Loans may be
incurred or maintained prior to the earlier of (1) the 90th day after the
Initial Borrowing Date and (2) the Syndication Date (each of which Borrowings of
Eurodollar Loans may only have an Interest Period of one month, and each of
which Interest Periods must begin and end on the same day as an Interest Period
selected pursuant to clause (B) of the proviso to clause (iv) of the first
sentence of Section 1.01(a)), (ii) shall, in the case of Revolving Loans made to
the German Borrowers, be made and maintained in Deutsche Marks (each a "Deutsche
Xxxx Revolving Loan" and, collectively, the "Deutsche Xxxx Revolving Loans"),
which Deutsche Xxxx Revolving Loans shall, at the option of the German
Borrowers, be incurred and/or maintained as, and/or converted into, one or more
Borrowings of Deutsche Xxxx Revolving Loans, provided that no more than three
Borrowings of Deutsche Xxxx Revolving Loans may be incurred or maintained prior
to the earlier of (1) the 90th day after the Initial Borrowing Date or, if an
Interest Period relating to any then outstanding Loans beginning before such
90th day extends thereafter, the last day of such Interest Period and (2) the
Syndication Date (each of which Borrowings may only have an Interest Period of
one month, and each of which Interest Periods must begin and end on the same day
as an Interest Period selected pursuant to clause (B) of the proviso to clause
(iv) of the first sentence of Section 1.01(a)), (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not exceed for
any Lender at the time of the making of any such Revolving Loans, and after
giving effect thereto, that aggregate principal amount (for this purpose, using
the Dollar Equivalent of each outstanding Deutsche Xxxx Revolving Loan of such
Lender or any Affiliate thereof acting as a German Revolving Lender) which, when
added to the sum of (I) the aggregate principal amount of all other Revolving
Loans then outstanding from such Lender (for this purpose, using the Dollar
Equivalent of each Deutsche Xxxx Revolving Loan then outstanding from such
Lender or any Affiliate thereof acting as a German Revolving Lender) and (II)
the product of (A) such Lender's RL Percentage and (B) the sum of (x) the
aggregate amount of all U.S. Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) at such time and
(y) the aggregate principal
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amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding and (III) the product of (A)
such Lender's (or its respective Affiliate's) German RL Percentage and (B) the
aggregate amount of all German Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) at such time,
equals the Revolving Loan Commitment of such Lender at such time, (v) shall not,
in the case of Deutsche Xxxx Revolving Loans, exceed for any German Revolving
Lender at the time of the making of any such Deutsche Xxxx Revolving Loans, and
after giving effect thereto, that aggregate principal amount (for this purpose,
using the Dollar Equivalent thereof) which, when added to the sum of (I) the
aggregate principal amount of all other Deutsche Xxxx Revolving Loans then
outstanding from such German Revolving Lender (for this purpose, using the
Dollar Equivalent thereof) and (II) the product of (A) such German Revolving
Lender's German RL Percentage and (B) the aggregate amount of all German Letter
of Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective Deutsche
Xxxx Revolving Loans) at such time, equals the German Revolving Loan
Sub-Commitment of such German Revolving Lender at such time, (vi) shall not, in
the case of Dollar Revolving Loans, at any time exceed in aggregate outstanding
principal amount, when added to (x) the aggregate amount of all U.S. Letter of
Credit Outstandings (exclusive of any Unpaid Drawings with respect thereto which
are repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Dollar Revolving Loans) and (y) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of Dollar Revolving
Loans), the U.S. Borrowing Base at such time, (vii) shall not, in the case of
Deutsche Xxxx Revolving Loans (expressed in Deutsche Marks), at any time exceed
in aggregate outstanding principal amount, when added to the aggregate amount of
all German Letter of Credit Outstandings (expressed in Deutsche Marks (and
taking the Deutsche Xxxx Equivalent of the Stated Amount of any German Letter of
Credit denominated in a currency other than Deutsche Marks)) (exclusive of any
Unpaid Drawings with respect thereto which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective Deutsche Xxxx Revolving
Loans), the German Borrowing Base at such time and (viii) shall not, in the case
of all Deutsche Xxxx Revolving Loans, at any time exceed in aggregate
outstanding principal amount (for this purpose, using the Dollar Equivalent of
each outstanding Deutsche Xxxx Revolving Loan), when added to the aggregate
amount of all German Letter of Credit Outstandings (exclusive of any Unpaid
Drawings with respect thereto which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective Deutsche Xxxx Revolving
Loans), the lesser of (x) the Total German Revolving Loan Sub-Commitment at such
time and (y) $55,000,000. Notwithstanding the foregoing, to the extent that
Dollar Revolving Loans are incurred after the Initial Borrowing Date and at a
time when the proviso to clause (iv) of the first sentence of Section 1.01(a) is
applicable, then if the respective Dollar Revolving Loan is incurred during an
Interest Period referenced in the proviso to clause (iv) the first sentence of
Section 1.01(a), and to the extent that one or more Interest Periods of less
than one month's duration are then available to all of the Lenders (which are
making such Dollar Revolving Loan) which end on or prior to the last day of the
Interest Period then in effect pursuant to the proviso to clause (iv) of the
first sentence of Section 1.01(a), such shorter interest period shall be
permitted to be selected, in each case so long as on the last day of each
Interest Period referenced in the proviso to clause (iv) of the first sentence
of Section 1.01(a) no interest periods remain in effect pursuant to this
sentence which will end after such last day. The proceeds of each Deutsche Xxxx
Revolving Loan shall be made available to the German Borrowers as directed by
them (with the proceeds to be used by the German Borrowers as agreed by them),
it being understood and agreed that the German Borrowers shall be jointly and
severally obligated with respect to each Deutsche Xxxx Revolving Loan for the
repayment thereof and all amounts owing with respect thereto. The German
Borrowers shall have no liability with respect to any Dollar Revolving Loans,
which shall be extended to, and shall constitute obligations of, the U.S.
Borrower.
(g) Subject to and upon the terms and conditions set forth herein,
CSFB in its individual capacity agrees to make, from time to time after the
Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving loan
or revolving loans (each a "Swingline Loan" and, collectively, the "Swingline
Loans") to the U.S. Borrower, which Swingline Loans (i) shall be made and
maintained in Dollars, (ii) shall be made and maintained as Base Rate Loans,
(iii) may be repaid and reborrowed in accordance with the
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provisions hereof, (iv) shall not exceed in aggregate principal amount at any
time outstanding, when combined with the aggregate principal amount of all
Revolving Loans (for this purpose, using the Dollar Equivalent of each
outstanding Deutsche Xxxx Revolving Loan) then outstanding and the Letter of
Credit Outstandings at such time, an amount equal to the Total Revolving Loan
Commitment at such time (after giving effect to any reductions to the Total
Revolving Loan Commitment on such date), (v) shall not exceed in the aggregate
principal amount at any time outstanding, when combined with the aggregate
principal amount of all Dollar Revolving Loans then outstanding and the U.S.
Letter of Credit Outstandings at such time, an amount equal to the U.S.
Borrowing Base at such time and (vi) shall not exceed in aggregate principal
amount at any time outstanding, the Maximum Swingline Amount. CSFB shall not be
obligated to make any Swingline Loans at a time when a Lender Default exists
unless CSFB has entered into arrangements satisfactory to it to eliminate CSFB's
risk with respect to the Defaulting Lender's or Lenders' participation in such
Swingline Loans, including by cash collateralizing such Defaulting Lender's or
Lenders' RL Percentage of the outstanding Swingline Loans. Notwithstanding
anything to the contrary contained in this Section 1.01(g), CSFB shall not make
any Swingline Loan after it has received written notice from the U.S. Borrower,
any German Borrower or the Required Lenders stating that a Default or an Event
of Default exists and is continuing until such time as CSFB shall have received
written notice (i) of rescission of all such notices from the party or parties
originally delivering such notice, (ii) of the waiver of such Default or Event
of Default by the Required Lenders or (iii) that the Administrative Agent in
good faith believes such Default or Event of Default has ceased to exist.
(h) On any Business Day, CSFB may, in its sole discretion, give
notice to the Lenders that its outstanding Swingline Loans shall be funded with
a Borrowing of Dollar Revolving Loans (provided that such notice shall be deemed
to have been automatically given upon the occurrence of a Default or an Event of
Default under Section 10.05 or upon the exercise of any of the remedies provided
in the last paragraph of Section 10), in which case a Borrowing of Dollar
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Lenders with a Revolving Loan Commitment (without giving effect to any
reductions thereto pursuant to the last paragraph of Section 10) pro rata based
on each Lender's RL Percentage (determined on such date, but before giving
effect to any termination of the Revolving Loan Commitments pursuant to the last
paragraph of Section 10) and the proceeds thereof shall be applied directly to
CSFB to repay CSFB for such outstanding Swingline Loans. All Dollar Revolving
Loans made pursuant to each Mandatory Borrowing shall constitute obligations of
the U.S. Borrower, and not of the German Borrowers. Each such Lender hereby
irrevocably agrees to make Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by CSFB
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply
with the minimum amount for Borrowings otherwise required
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hereunder, (ii) whether any conditions specified in Section 6 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the
date of such Mandatory Borrowing and (v) the amount of the Total Revolving Loan
Commitment or the U.S. Borrowing Base at such time. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the U.S. Borrower), then
each such Lender hereby agrees that it shall forthwith purchase (as of the date
the Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the U.S. Borrower on or after such date and prior to such
purchase) from CSFB such participations in the outstanding Swingline Loans as
shall be necessary to cause such Lenders to share in such Swingline Loans
ratably based upon their respective RL Percentages (determined before giving
effect to any termination of the Revolving Loan Commitments pursuant to the last
paragraph of Section 10), provided that (x) all interest payable on the
Swingline Loans shall be for the account of CSFB until the date as of which the
respective participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the participant
from and after such date and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay CSFB interest on the principal amount of the participation
purchased for each day from and including the day upon which the Mandatory
Borrowing would otherwise have occurred to but excluding the date of payment for
such participation, at the overnight Federal Funds Rate for the first three days
and at the rate otherwise applicable to Revolving Loans maintained as Base Rate
Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of Loans shall not be less than the respective Minimum
Borrowing Amount for the respective Type and Tranche of Loans to be made or
maintained pursuant to the respective Borrowing. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than
three (or ten in the case of Revolving Loans only) Borrowings of Euro Rate Loans
of a single Tranche.
1.03 Notice of Borrowing. (a) Whenever the U.S. Borrower or the
German Borrowers desire to incur Loans hereunder (excluding Borrowings (x) of
Swingline Loans and (y) Revolving Loans incurred pursuant to a Mandatory
Borrowing), it (or they) shall give the Administrative Agent at its Notice
Office at least one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) of each Base Rate Loan and at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each Euro Rate Loan to be incurred hereunder, provided that any such
notice shall be deemed to have been given on a certain day only if given before
12:00 Noon (New York time) on such day. Each such written notice or written
confirmation of telephonic notice (each a "Notice of Borrowing"), except as
otherwise expressly provided in Section 1.10, shall be irrevocable and shall be
given by the U.S. Borrower or the German Borrowers, as the case may be, in the
form of Exhibit A,
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appropriately completed to specify (i) the name of such Borrower or Borrowers,
(ii) the aggregate principal amount of the Loans to be incurred pursuant to such
Borrowing (stated in the Applicable Currency), (iii) the date of such Borrowing
(which shall be a Business Day), (iv) whether the Loans being incurred pursuant
to such Borrowing shall constitute U.S. Borrower Tranche A Term Loans, German
Borrower Tranche A Term Loans, Delayed Draw Term Loans, Tranche B Term Loans,
Tranche C Term Loans or Revolving Loans, (v) in the case of Dollar Loans,
whether the Loans being incurred pursuant to such Borrowing are to be initially
maintained as Base Rate Loans or Eurodollar Loans and (vi) in the case of Euro
Rate Loans, the initial Interest Period to be applicable thereto. The
Administrative Agent shall promptly give each Lender which is required to make
Loans of the Tranche specified in the respective Notice of Borrowing, notice of
such proposed Borrowing, of such Lender's proportionate share thereof and of the
other matters required by the immediately preceding sentence to be specified in
the Notice of Borrowing.
(b)(i) Whenever the U.S. Borrower desires to incur Swingline
Loans hereunder, it shall give CSFB not later than 2:00 P.M. (New York time) on
the date that a Swingline Loan is to be incurred, written notice or telephonic
notice promptly confirmed in writing of each Swingline Loan to be incurred
hereunder. Each such notice shall be irrevocable and specify in each case (A)
the date of Borrowing (which shall be a Business Day) and (B) the aggregate
principal amount of the Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified
in Section 1.01(h), with the U.S. Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as
set forth in Section 1.01(h).
(c) Without in any way limiting the obligation of any Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent, CSFB (in the case of a Borrowing of Swingline Loans) or
the Issuing Bank (in the case of issuances of Letters of Credit), as the case
may be, may act without liability upon the basis of such telephonic notice,
believed by the Administrative Agent, CSFB or the Issuing Bank, as the case may
be, in good faith to be from an Authorized Telephone Officer of the U.S.
Borrower (or, in the case of any Loan to the German Borrowers, such notice shall
be given by an Authorized Telephone Officer of either the U.S. Borrower or
either German Borrower) prior to receipt of written confirmation. In each such
case, each Borrower hereby waives the right to dispute the Administrative
Agent's, CSFB's or Issuing Bank's record of the terms of such telephonic notice.
1.04 Disbursement of Funds. Not later than 12:00 Noon (New York
time or, in the case of any Deutsche Xxxx Loan to be made available in
Frankfurt, 12:00 Noon
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Frankfurt time, if so requested by a German Borrower) on the date specified in
each Notice of Borrowing (or (x) in the case of Swingline Loans, not later than
4:00 P.M. (New York time) on the date specified in Section 1.03(b)(i) or (y) in
the case of Mandatory Borrowings, not later than 12:00 Noon (New York time) on
the date specified in Section 1.01(h)), each Lender with a Commitment of the
respective Tranche will make available its pro rata portion (determined in
accordance with Section 1.07) of each such Borrowing requested to be made on
such date (or in the case of Swingline Loans, CSFB shall make available the full
amount thereof) in the manner provided below. All such amounts will be made
available in Dollars (in the case of Dollar Loans) or Deutsche Marks (in the
case of Deutsche Xxxx Loans), as the case may be, and in immediately available
funds at the appropriate Payment Office of the Administrative Agent, and the
Administrative Agent will make available to the U.S. Borrower or German
Borrowers, as the case may be, by depositing to its, or their, relevant account
as directed by the respective Borrower or Borrowers the aggregate of the amounts
so made available by the Lenders in the type of funds received. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the relevant Borrower a corresponding amount. If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the U.S. Borrower or, in the case of German Loans,
the German Borrowers and the respective Borrower or Borrowers shall immediately
pay such corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover on demand from such Lender or the U.S.
Borrower or German Borrowers, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the respective Borrower or Borrowers
until the date such corresponding amount is recovered by the Administrative
Agent, at a rate per annum equal to (i) if recovered from such Lender, the
overnight Federal Funds Rate as in effect from time to time and (ii) if
recovered from the respective Borrower or Borrowers, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 1.08.
Nothing in this Section 1.04 shall be deemed to relieve any Lender from its
obligation to make Loans hereunder or to prejudice any rights which the relevant
Borrower or Borrowers may have against any Lender as a result of any failure by
such Lender to make Loans required to be made by it hereunder.
1.05 Notes. (a) The U.S. Borrower's or, in the case of Deutsche
Xxxx Loans, the German Borrowers' obligation to pay the principal of, and
interest on, the Loans made by each Lender shall be evidenced (i) if U.S.
Borrower Tranche A Term
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Loans, by a promissory note duly executed and delivered by the U.S. Borrower
substantially in the form of Exhibit B-1, with blanks appropriately completed in
conformity herewith (each a "U.S. Borrower Tranche A Term Note" and,
collectively, the "U.S. Borrower Tranche A Term Notes"), (ii) if German Borrower
Tranche A Term Loans, by a promissory note duly executed and delivered by the
German Borrowers substantially in the form of Exhibit B-2, with blanks
appropriately completed in conformity herewith (each a "German Borrower Tranche
A Term Note" and collectively, the "German Borrower Tranche A Term Notes"),
(iii) if Delayed Draw Term Loans, by a promissory note to be executed and
delivered by the U.S. Borrower substantially in the form of Exhibit B-3, with
blanks appropriately completed in conformity herewith (each a "Delayed Draw Term
Note" and, collectively, the "Delayed Draw Term Notes"), (iv) if Tranche B Term
Loans, by a promissory note duly executed and delivered by the U.S. Borrower
substantially in the form of Exhibit B-4, with blanks appropriately completed in
conformity herewith (each a "Tranche B Term Note" and, collectively, the
"Tranche B Term Notes"), (v) if Tranche C Term Loans, by a promissory note duly
executed and delivered by the U.S. Borrower substantially in the form of Exhibit
B-5, with blanks appropriately completed in conformity herewith (each a "Tranche
C Term Note" and, collectively, the "Tranche C Term Notes"), (vi) if Dollar
Revolving Loans, by a promissory note duly executed and delivered by the U.S.
Borrower substantially in the form of Exhibit B-6, with blanks appropriately
completed in conformity herewith (each a "Dollar Revolving Note" and,
collectively, the "Dollar Revolving Notes"), (vii) if Deutsche Xxxx Revolving
Loans, by a promissory note duly executed and delivered by the German Borrowers
substantially in the form of Exhibit B-7, with blanks appropriately completed in
conformity herewith (each a "Deutsche Xxxx Revolving Note" and, collectively,
the "Deutsche Xxxx Revolving Notes") and (viii) if Swingline Loans, by a
promissory note duly executed and delivered by the U.S. Borrower substantially
in the form of Exhibit B-8, with blanks appropriately completed in conformity
herewith (the "Swingline Note").
(b) The U.S. Borrower Tranche A Term Note issued to each Lender
that has a U.S. Borrower Tranche A Term Loan Commitment or outstanding U.S.
Borrower Tranche A Term Loans shall (i) be executed by the U.S. Borrower, (ii)
be payable to the order of such Lender and be dated the Initial Borrowing Date
(or if issued thereafter, the date of issuance), (iii) be in a stated principal
amount equal to the U.S. Borrower Tranche A Term Loans of such Lender plus, if
the respective U.S. Borrower Tranche A Term Note is issued at any time when the
U.S. Borrower Tranche A Term Loan Commitment of such Lender remains in effect,
the amount of such Lender's U.S. Borrower Tranche A Term Loan Commitment on the
date of such issuance, and be payable in Dollars in the outstanding principal
amount of U.S. Borrower Tranche A Term Loans evidenced thereby, (iv) mature on
the Tranche A Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
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provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(c) The German Borrower Tranche A Term Note issued to each Lender
that has a German Borrower Tranche A Term Loan Commitment or outstanding German
Borrower Tranche A Term Loans shall be (i) executed by the German Borrowers, on
a joint and several basis (with each of the German Borrowers being jointly and
severally liable for all amounts owing under, or evidenced by, each German
Borrower Tranche A Term Note), (ii) be payable to the order of such Lender and
be dated the Initial Borrowing Date (or if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the German Borrower
Tranche A Term Loans of such Lender and payable in Deutsche Marks in the
outstanding principal amount of German Borrower Tranche A Term Loans evidenced
thereby, (iv) mature on the Tranche A Term Loan Maturity Date, (v) bear interest
as provided in the appropriate clause of Section 1.08 in respect of the Deutsche
Xxxx Loans evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and other Credit
Documents.
(d) The Delayed Draw Term Note issued to each Lender that has a
Delayed Draw Term Loan Commitment or outstanding Delayed Draw Term Loans shall
(i) be executed by the U.S. Borrower, (ii) be payable to the order of such
Lender and be dated the Initial Borrowing Date (or if issued thereafter, the
date of issuance), (iii) be in a stated principal amount equal to the Delayed
Draw Term Loans, if any, of such Lender plus, if the respective Delayed Draw
Term Note is issued at any time when the Delayed Draw Term Loan Commitment of
such Lender remains in effect, the amount of such Lender's Delayed Draw Term
Loan Commitment on the date of such issuance, and be payable in Dollars in the
outstanding principal amount of Delayed Draw Term Loans evidenced thereby, (iv)
mature on the Delayed Draw Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of Base Rate Loans
and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(e) The Tranche B Term Note issued to each Lender that has a
Tranche B Term Loan Commitment or outstanding Tranche B Term Loans shall (i) be
executed by the U.S. Borrower, (ii) be payable to the order of such Lender and
be dated the Initial Borrowing Date (or if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the Tranche B Term
Loans of such Lender plus, if the respective Tranche B Term Note is issued at
any time when the Tranche B Term Loan Commitment of such Lender remains in
effect, the amount of such Lender's Tranche B Term Loan Commitment on the date
of such issuance, and be payable in Dollars in the outstanding principal amount
of Tranche B Term Loans evidenced thereby, (iv) mature on
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the Tranche B Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(f) The Tranche C Term Note issued to each Lender that has a
Tranche C Term Loan Commitment or outstanding Tranche C Term Loans shall (i) be
executed by the U.S. Borrower, (ii) be payable to the order of such Lender and
be dated the Initial Borrowing Date (or if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the Tranche C Term
Loans of such Lender plus, if the respective Tranche C Term Note is issued at
any time when the Tranche C Term Loan Commitment of such Lender remains in
effect, the amount of such Lender's Tranche C Term Loan Commitment on the date
of such issuance, and be payable in Dollars in the outstanding principal amount
of Tranche C Term Loans evidenced thereby, (iv) mature on the Tranche C Term
Loan Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(g) The Dollar Revolving Note issued to each Lender that has a
Revolving Loan Commitment or outstanding Dollar Revolving Loans shall (i) be
executed by the U.S. Borrower, (ii) be payable to the order of such Lender and
be dated the Initial Borrowing Date (or if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the Revolving Loan
Commitment of such Lender and be payable in Dollars in the outstanding principal
amount of Dollar Revolving Loans evidenced thereby, (iv) mature on the Revolving
Loan Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of Base Rate Loans and Eurodollar Loans, as the case may
be, evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(h) The Deutsche Xxxx Revolving Note issued to each Lender that
has a German Revolving Loan Sub-Commitment or outstanding Deutsche Xxxx
Revolving Loans shall (i) be executed by the German Borrowers, on a joint and
several basis (with each of the German Borrowers being jointly and severally
liable for all amounts owing under, or evidenced by, each Deutsche Xxxx
Revolving Note), (ii) be payable to the order of such Lender and be dated the
Initial Borrowing Date (or if issued thereafter, the date of issuance), (iii) be
in a stated principal amount (expressed in Deutsche Marks) equal to the Deutsche
Xxxx Equivalent (as of the date of issuance) of the Revolving Loan Commitment of
such Lender; provided that if, because of fluctuations in exchange rates after
the Initial Borrowing Date, the Deutsche Xxxx Revolving Note of any Lender would
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not be at least as great as the outstanding principal amount of Deutsche Xxxx
Revolving Loans made by such Lender at any time outstanding, the respective
Lender may request (and in such case the German Borrowers shall promptly execute
and deliver) a new Deutsche Xxxx Revolving Note in an amount equal to the
Deutsche Xxxx Equivalent of such Lender's Revolving Loan Commitment on the date
of the issuance of such new Deutsche Xxxx Revolving Note, (iv) be payable in
Deutsche Marks in the outstanding principal amount of the Deutsche Xxxx
Revolving Loans evidenced thereby, (v) mature on the Revolving Loan Maturity
Date, (vi) bear interest as provided in the appropriate clause of Section 1.08
in respect of the Deutsche Xxxx Revolving Loans evidenced thereby, (vii) be
subject to voluntary prepayment as provided in Section 4.01, and mandatory
repayment as provided in Section 4.02 and (viii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(i) The Swingline Note issued to CSFB shall (i) be executed by
the U.S. Borrower, (ii) be payable to the order of CSFB and be dated the Initial
Borrowing Date (or, if issued thereafter, the date of the issuance thereof),
(iii) be in a stated principal amount equal to the Maximum Swingline Amount and
be payable in Dollars in the principal amount of the outstanding Swingline Loans
evidenced thereby from time to time, (iv) mature on the Swingline Expiry Date,
(v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans evidenced thereby, (vi) be subject to voluntary
prepayment as provided in Section 4.01, and mandatory repayment as provided in
Section 4.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(j) Each Lender will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the U.S. Borrower's or, in the
case of Deutsche Xxxx Loans, the German Borrowers' obligations in respect of
such Loans.
(k) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement, Delayed Draw Term Notes, Tranche B Term Notes and
Tranche C Term Notes shall only be delivered to Lenders with Loans of the
respective Tranches which at any time specifically request the delivery of such
Notes. No failure of any Lender to request or obtain a Note evidencing its Loans
of any Tranche shall affect or in any manner impair the obligations of the
respective Borrower or Borrowers to pay the Loans (and all related Obligations)
which would otherwise be evidenced thereby in accordance with the requirements
of this Agreement, and shall not in any way affect the security or guaranties
therefor provided pursuant to the various Credit Documents. Any Lender which
does not have a Note evidencing its outstanding Loans shall in no event be
required to make the notations otherwise described in preceding clause (j). At
any time when any Lender requests the delivery of a Note to evidence its Loans
of any Tranche, the
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respective Borrower or Borrowers shall promptly execute and deliver to the
respective Lender the requested Note or Notes in the appropriate amount or
amounts to evidence such Loans.
1.06 Conversions. The U.S. Borrower (but not in respect of
Deutsche Xxxx Loans or Swingline Loans) shall have the option to convert, on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount
for Loans of the respective Type and Tranche into which the respective
conversion is being made, of the outstanding principal amount of Loans made to
the U.S. Borrower, pursuant to one or more Borrowings (so long as of the same
Tranche of Loans) of one or more Types of Loans into a Borrowing (of the same
Tranche of Loans) of either Type of Loan, provided that, (i) except as otherwise
provided in Section 1.10(b), Eurodollar Loans may be converted into Base Rate
Loans only on the last day of an Interest Period applicable to the Loans being
converted and no such partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount for Eurodollar Loans of the
respective Tranche, (ii) Base Rate Loans may not be converted into Eurodollar
Loans if any Default or Event of Default exists on the date of conversion
pursuant to Section 10.05, (iii) Base Rate Loans may not be converted into
Eurodollar Loans if any Default under Section 10.01 or any Event of Default is
in existence on the date of the conversion, if the Required Lenders have
previously advised the Administrative Agent that conversions will not be
permitted while said Default of Event of Default remains in existence, (iv)
unless the Administrative Agent otherwise shall have determined that the
Syndication Date has occurred, prior to the 90th day after the Initial Borrowing
Date, conversions of Base Rate Loans into Eurodollar Loans may only be made if
the conversion is effective on the first day of the first, second or third
Interest Period referred to in clause (B) of the proviso to the first sentence
of Section 1.01(a) and so long as such conversion does not result in a greater
number of Borrowings of Eurodollar Loans prior to the earlier of the 90th day
after the Initial Borrowing Date or the Syndication Date than are permitted
under the relevant provisions of Section 1.01 and (v) no conversion pursuant to
this Section 1.06 shall result in a greater number of Borrowings of Eurodollar
Loans than is permitted under Section 1.02. Each such conversion shall be
effected by the U.S. Borrower, by giving the Administrative Agent at its Notice
Office prior to 12:00 Noon at least three Business Days' prior notice (each a
"Notice of Conversion") specifying the Loans to be so converted, the Borrowing
or Borrowings pursuant to which such Loans were made and, if to be converted
into Eurodollar Loans, the Interest Period to be initially applicable thereto.
The Administrative Agent shall give each Lender prompt notice of any such
proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of U.S. Borrower Tranche
A Term Loans, German Borrower Tranche A Term Loans, Delayed Draw Term Loans,
Tranche B Term Loans and Tranche C Term Loans under this Agreement shall be
incurred from the Lenders pro rata on the basis of their U.S. Borrower Tranche A
Term
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Loan Commitments, German Borrower Tranche A Term Loan Commitments, Delayed Draw
Term Loan Commitments, Tranche B Term Loan Commitments, or Tranche C Term Loan
Commitments, as the case may be. All Borrowings of Dollar Revolving Loans under
this Agreement (including all Mandatory Borrowings) shall be incurred from the
Lenders pro rata on the basis of their RL Percentages. All Borrowings of
Deutsche Xxxx Revolving Loans under this Agreement shall be incurred from the
German Revolving Lenders pro rata on the basis of their German RL Percentages.
It is understood that no Lender shall be responsible for any default by any
other Lender of its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Loans hereunder.
1.08 Interest. (a) The U.S. Borrower hereby severally agrees to
pay interest in respect of the unpaid principal amount of each Base Rate Loan
made to it from the date the proceeds thereof are made available to the U.S.
Borrower until the earlier of (x) the maturity thereof (whether by acceleration,
prepayment or otherwise) and (y) the conversion of such Base Rate Loan to a
Eurodollar Loan pursuant to Section 1.06, at a rate per annum which shall be
equal to the sum of the Applicable Margin plus the Base Rate, each as in effect
from time to time.
(b) The U.S. Borrower hereby severally agrees to pay interest in
respect of the unpaid principal amount of each Eurodollar Loan made to it from
the date the proceeds thereof are made available to such Borrower until the
earlier of (x) the maturity thereof (whether by acceleration, prepayment or
otherwise) and (y) the conversion of such Eurodollar Loan to a Base Rate Loan
pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum which
shall, during each Interest Period applicable thereto, be equal to the sum of
the Applicable Margin as in effect from time to time plus the Eurodollar Rate
for such Interest Period.
(c) The German Borrowers hereby jointly and severally agree to
pay interest in respect of the unpaid principal amount of each Deutsche Xxxx
Loan from the date the proceeds thereof are made available to the German
Borrowers, until the maturity thereof (whether by acceleration, prepayment or
otherwise) at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin as in effect
from time to time plus the Deutsche Xxxx Euro Rate for such Interest Period;
provided that for the period from the Initial Borrowing Date until the first day
of the first Interest Period applicable to the German Borrower Tranche A Term
Loans pursuant to the relevant provisions of Section 1.01(b) (which in any event
shall occur within six Business Days after the Initial Borrowing Date), the rate
of interest applicable to all outstanding Deutsche Xxxx Loans shall be deemed to
be 5.75% per annum.
(d) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in
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each case, bear interest at a rate per annum (1) in the case of overdue
principal of, and interest or other amounts owing with respect to, Deutsche Xxxx
Loans, equal to 2% per annum in excess of the Applicable Margin (without
reduction for any Interest Reduction Discount) plus the Deutsche Xxxx Euro Rate
for such successive periods not exceeding three months as the Administrative
Agent may determine from time to time in respect of amounts comparable to the
amount not paid and (2) in all other cases, equal to the greater of (x) 2% per
annum in excess of the rate otherwise applicable to Base Rate Loans of the
respective Tranche (or in the case of amounts which do not relate to a given
Tranche of outstanding Dollar Loans, 2% per annum in excess of the rate
otherwise applicable to Revolving Loans maintained as Base Rate Loans) from time
to time and (y) the rate which is 2% in excess of the rate then borne by such
Loans.
(e) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in the case of any Eurodollar Loan, on the date of any
conversion to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as
applicable (on the amount so converted), (iii) in respect of each Euro Rate
Loan, on the last day of each Interest Period applicable thereto and, in the
case of an Interest Period in excess of three months, on each date occurring at
three month intervals after the first day of such Interest Period and (iv) in
respect of each Loan, on any repayment or prepayment (on the amount repaid or
prepaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand; provided that, in the case of Dollar Revolving Loans
maintained as Base Rate Loans, interest shall not be payable pursuant to
preceding clause (iv) at the time of any repayment or prepayment thereof unless
the respective repayment or prepayment is made in conjunction with a termination
of the Total Revolving Loan Commitment.
(f) Upon each Interest Determination Date, the Administrative
Agent shall determine the respective Euro Rate for the respective Interest
Period or Interest Periods to be applicable to Euro Rate Loans and shall
promptly notify the respective Borrower and the Lenders thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Euro Rate Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Euro Rate Loan (in the case of any subsequent Interest
Period), the respective Borrower or Borrowers shall have the right to elect, by
giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Euro Rate Loan, which Interest Period
shall, at the option of such Borrower, be a one, two, three or six-month period,
provided that:
(i) all Euro Rate Loans comprising a single Borrowing shall at
all times have the same Interest Period;
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(ii) the initial Interest Period for any Borrowing of Euro Rate
Loans shall commence on the date of such Borrowing (including, in the
case of Dollar Loans, the date of any conversion thereto from a Dollar
Loan of a different Type) or, in the case of Deutsche Xxxx Loans
incurred on the Initial Borrowing Date (or thereafter but prior to the
first day of the first Interest Period pursuant to Section 1.01), the
date otherwise specified in the relevant provisions of Section 1.01, and
each Interest Period occurring thereafter in respect of such Euro Rate
Loans shall commence on the day on which the next preceding Interest
Period applicable thereto expires;
(iii) if any Interest Period for a Euro Rate Loan begins on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) if any Interest Period for a Euro Rate Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, however, that if
any Interest Period for a Euro Rate Loan would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time when a
Default or Event of Default under Section 10.05 is in existence;
(vi) no Interest Period may be selected if any Default or Event
of Default (other than a Default or Event of Default described in
preceding clause (v)) is in existence if the Required Lenders have
previously advised the Administrative Agent that the selection of new
Interest Periods will not be permitted while said Default or Event of
Default remains in existence;
(vii) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the respective
Maturity Date for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of Term Loans
of any Tranche shall be selected which extends beyond any date upon
which a mandatory repayment of such Tranche of Term Loans will be
required to be made under Section 4.02(b) if the aggregate principal
amount of Term Loans of such Tranche which have Interest Periods which
will expire after such date will be in excess of the aggregate principal
amount of Term Loans of such Tranche then outstanding less the aggregate
amount of such required repayment.
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Prior to the termination of any Interest Period applicable to
Deutsche Xxxx Loans, the German Borrowers may, at their option, designate that
the respective Borrowing subject thereto be split into more than one Borrowing
(for purposes of electing multiple Interest Periods to be subsequently
applicable thereto), so long as each such Borrowing resulting from the action
taken pursuant to this sentence meets the Minimum Borrowing Amount for Deutsche
Xxxx Loans of the respective Tranche. If upon the expiration of any Interest
Period applicable to a Borrowing of Euro Rate Loans, the U.S. Borrower has or,
in the case of Deutsche Xxxx Loans, the German Borrowers have failed to elect,
or is not permitted to elect, a new Interest Period to be applicable to such
Euro Rate Loans as provided above, such Borrower shall be deemed to have elected
(x) if Eurodollar Loans, to convert such Eurodollar Loans into Base Rate Loans
and (y) if Deutsche Xxxx Loans, to select a one-month Interest Period for such
Deutsche Xxxx Loans, in either case effective as of the expiration date of such
current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
Lender shall have determined in good faith (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto but,
with respect to clauses (i) and (iv) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the
applicable interbank market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of the respective Euro Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any Euro Rate Loan because of (x) any change arising after the date
of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the force
of law) or in the interpretation or administration thereof and including
the introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payment to any Lender of the
principal of or interest on the Notes or any other amounts payable
hereunder (except for changes in the rate of tax on, or determined by
reference to, the net income or profits or franchise taxes based on net
income of such Lender pursuant to the laws of the jurisdiction in which
it is organized or in which its principal office or applicable lending
office is located or any subdivision thereof or therein) or (B) a change
in official reserve requirements (except to the extent covered by
Section 1.10(d) in respect of Deutsche Xxxx Loans or included in the
computation of the Eurodollar Rate) or any special deposit, assessment
or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (or its applicable lending
office) and/or (y) other circumstances since the date of this
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Agreement affecting such Lender or the applicable interbank market or
the position of such Lender in such market; or
(iii) at any time after the date of this Agreement, that the
making or continuance of any Euro Rate Loan has been made (x) unlawful
by any law or governmental rule, regulation or order, (y) impossible by
compliance by any Lender in good faith with any governmental request
(whether or not having force of law) or (z) impracticable as a result of
a contingency occurring after the date of this Agreement which
materially and adversely affects the applicable interbank market; or
(iv) at any time that Deutsche Marks are not available in
sufficient amounts, as determined in good faith by the Administrative
Agent, to fund any Borrowing of Deutsche Xxxx Loans requested pursuant
to Section 1.01;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) or (iv) above) shall promptly give notice (by telephone
promptly confirmed in writing) to the respective Borrower or Borrowers and,
except in the case of clauses (i) and (iv) above, to the Administrative Agent of
such determination (which notice the Administrative Agent shall promptly
transmit to each of the other Lenders). Thereafter (w) in the case of clause (i)
above, (A) in the event that Eurodollar Loans are so affected, Eurodollar Loans
shall no longer be available until such time as the Administrative Agent
notifies the U.S. Borrower and the Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by the U.S. Borrower with respect to
Eurodollar Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded by the U.S. Borrower, and (B) in the event
that any Deutsche Xxxx Loan is so affected, the Deutsche Xxxx Euro Rate shall be
determined on the basis provided in the proviso to the definition of Deutsche
Xxxx Euro Rate, (x) in the case of clause (ii) above, the respective Borrower or
Borrowers shall, subject to the provisions of Section 13.21 (to the extent
applicable), pay to such Lender, upon its written request therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender shall determine) as shall
be required to compensate such Lender for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Lender, showing in reasonable detail the basis for the
calculation thereof, submitted to the respective Borrower or Borrowers by such
Lender shall, absent manifest error, be final and conclusive and binding on all
the parties hereto), (y) in the case of clause (iii) above, the respective
Borrower or Borrowers shall take one of the actions specified in Section 1.10(b)
as promptly as possible and, in any event, within the time period required by
law and (z) in the case of clause (iv) above, Deutsche Xxxx Loans (exclusive of
Deutsche Xxxx Loans which have theretofore been funded) shall no longer be
available until such time as the Administrative Agent notifies the German
Borrowers and the Lenders that the circumstances giving rise to
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such notice by the Administrative Agent no longer exists, and any Notice of
Borrowing given by the German Borrowers with respect to such Deutsche Xxxx Loans
which have not been incurred shall be deemed rescinded by the German Borrowers.
(b) At any time that any Euro Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the respective Borrower
or Borrowers may (and in the case of a Euro Rate Loan affected by the
circumstances described in Section 1.10(a)(iii) shall) either (x) if the
affected Euro Rate Loan is then being made initially or pursuant to a
conversion, cancel the respective Borrowing by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that such Borrower was
notified by the affected Lender or the Administrative Agent pursuant to Section
1.10(a)(ii) or (iii) or (y) if the affected Euro Rate Loan is then outstanding,
upon at least three Business Days' written notice to the Administrative Agent,
(A) in the case of a Eurodollar Loan, request the affected Lender to convert
such Eurodollar Loan into a Base Rate Loan and (B) in the case of a Deutsche
Xxxx Loan, repay such Deutsche Xxxx Loan in full, provided that, (i) if the
circumstances described in Section 1.10(a)(iii) apply to any Deutsche Xxxx Loan,
the German Borrowers may, in lieu of taking the actions described above,
maintain such Deutsche Xxxx Loan outstanding, in which case the Deutsche Xxxx
Euro Rate shall be determined on the basis provided in the proviso to the
definition of Deutsche Xxxx Euro Rate, unless the maintenance of such Deutsche
Xxxx Loan outstanding on such basis would not stop the conditions described in
Section 1.10(iii) from existing (in which case the actions described above,
without giving effect to the proviso, shall be required to be taken) and (ii) if
more than one Lender is affected at any time as described above in this clause
(b), then all affected Lenders must be treated the same pursuant to this Section
1.10(b).
(c) If at any time after the date of this Agreement any Lender
determines that the introduction of or any change (which introduction or change
shall have occurred after the date of this Agreement) in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Commitments
hereunder or its obligations hereunder, then the Borrowers jointly and severally
agree to pay, subject to the provisions of Section 13.21 (to the extent
applicable), to such Lender, upon its written demand therefor, such additional
amounts as shall be required to compensate such Lender or such other corporation
for the increased cost to such Lender or such other corporation or the reduction
in the rate of return to such Lender or such other corporation as a result of
such increase of capital. In determining such additional amounts, each Lender
will act reasonably and in good faith and will use averaging and attribution
methods which are reasonable, provided that such Lender's determination of
compensation owing under this Section 1.10(c) shall, absent manifest
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error, be final and conclusive and binding on all the parties hereto. Each
Lender, upon determining that any additional amounts will be payable pursuant to
this Section 1.10(c), will give prompt written notice thereof to the Borrowers,
which notice shall show in reasonable detail the basis for calculation of such
additional amounts.
(d) In the event that any Lender shall in good faith determine
(which determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto) at any time that such Lender is required to
maintain reserves (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) which have
been established by any Federal, state, local or foreign court or governmental
agency, authority, instrumentality or regulatory body with jurisdiction over
such Lender (including any branch, Affiliate or funding office thereof) in
respect of any Deutsche Xxxx Loans or any category of liabilities which includes
deposits by reference to which the interest rate on any Deutsche Xxxx Loan is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Lender to non-United States
residents, then, unless such reserves are included in the calculation of the
interest rate applicable to such Deutsche Xxxx Loans or in Section 1.10(a)(ii),
such Lender shall promptly notify the German Borrowers in writing specifying the
additional amounts required to indemnify such Lender against the cost of
maintaining such reserves (such written notice to provide in reasonable detail a
computation of such additional amounts) and the German Borrowers shall, and
shall be jointly and severally obligated to, pay to such Lender such specified
amounts as additional interest at the time that the German Borrowers are
otherwise required to pay interest in respect of such Deutsche Xxxx Loan or, if
later, on written demand therefor by such Lender.
1.11 Compensation. The respective Borrower or Borrowers shall,
subject to the provisions of Section 13.21 (to the extent applicable),
compensate each Lender, upon its written request (which request shall set forth
in reasonable detail the basis for requesting such compensation), for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund its Euro Rate Loans,
but excluding loss of anticipated profits) which such Lender may sustain: (i) if
for any reason (other than a default by such Lender or the Administrative Agent)
a Borrowing of, or conversion from or into, Euro Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.01 or 4.02
or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any Euro Rate Loans occurs on a date which is not the last day of
an Interest Period with respect thereto; (iii) if any prepayment of any Euro
Rate Loans is not made on any date specified in a notice of prepayment given by
the respective Borrower or Borrowers; or (iv) as a consequence of (x) any other
default by the respective Borrower or Borrowers to repay its Loans when re-
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quired by the terms of this Agreement or any Note held by such Lender or (y) any
election made pursuant to Section 1.10(b).
1.12 Lending Offices; Changes Thereto. (a) Each Lender may at any
time or from time to time designate, by written notice to the Administrative
Agent to the extent not already reflected on Schedule II, one or more lending
offices (which, for this purpose, may include Affiliates of the respective
Lender) for the various Loans made, and Letters of Credit participated in, by
such Lender (including by designating a separate lending office (or Affiliate)
to act as such with respect to Dollar Loans and U.S. Letter of Credit
Outstandings versus Deutsche Xxxx Loans and German Letter of Credit
Outstandings); provided that, for designations made after the Initial Borrowing
Date, to the extent such designation shall result in increased costs under
Section 1.10, 2.06 or 4.04 in excess of those which would be charged in the
absence of the designation of a different lending office (including a different
Affiliate of the respective Lender), then the Borrowers shall not be obligated
to pay such excess increased costs (although the Borrowers, in accordance with
and pursuant to the other provisions of this Agreement, shall be obligated to
pay the costs which would apply in the absence of such designation and any
subsequent increased costs of the type described above resulting from changes
after the date of the respective designation). Each lending office and Affiliate
of any Lender designated as provided above shall, for all purposes of this
Agreement, be treated in the same manner as the respective Lender (and shall be
entitled to all indemnities and similar provisions in respect of its acting as
such hereunder).
(b) Each Lender agrees that on the occurrence of any event giving
rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section
1.10(d), Section 2.06 or Section 4.04 with respect to such Lender, it will, if
requested by the applicable Borrower or Borrowers, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans or Letters of Credit affected by such event,
provided that such designation is made on such terms that such Lender and its
lending office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
such Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of any Borrower or the right of any Lender provided in Sections
1.10, 2.06 and 4.04.
1.13 Replacement of Lenders. (x) If any Lender becomes a
Defaulting Lender or otherwise defaults in its obligations to make Loans or fund
Unpaid Drawings, (y) upon the occurrence of an event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 1.10(d),
Section 2.06 or Section 4.04 with respect to any Lender which results in such
Lender charging to any Borrower increased costs in excess of those being
generally charged by the other Lenders or (z) in the case of the refusal by a
Lender to consent to proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Lenders as
(and to the
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extent) provided in Section 13.12 (b), the U.S. Borrower shall have the right,
if no Default or Event of Default will exist immediately after giving effect to
such replacement), to either (1) replace such Lender (the "Replaced Lender")
with one or more other Eligible Transferees, none of whom shall constitute a
Defaulting Lender at the time of such replacement (collectively, the
"Replacement Lender") and each of whom shall be required to be reasonably
acceptable to the Administrative Agent or (2) at the option of the U.S.
Borrower, replace only (a) the Revolving Loan Commitment (and outstandings
pursuant thereto and the related German Revolving Loan Sub- Commitment, if any,
of the respective Lender) of the Replaced Lender with an identical Revolving
Loan Commitment (and related outstandings and German Revolving Loan
Sub-Commitment, if any) provided by the Replacement Lender or (b) in the case of
a replacement as provided in Section 13.12(b) where the consent of the
respective Lender is required with respect to less than all Tranches of its
Loans or Commitments, the Commitments and/or outstanding Term Loans of such
Lender in respect of each Tranche where the consent of such Lender would
otherwise be individually required, with identical Commitments and/or Term Loans
of the respective Tranche provided by the Replacement Lender, provided that (i)
any replacement pursuant to this Section 1.13 shall be required to comply with
the requirements of Section 13.04(b) and at the time of any replacement pursuant
to this Section 1.13, the Replacement Lender shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with all
fees payable pursuant to said Section 13.04(b) to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Loans (or, in the case of the replacement of only
(a) the Revolving Loan Commitment, the Revolving Loan Commitment (and related
German Revolving Loan Sub-Commitment, if any) and outstanding Revolving Loans
and partici- pations in Letter of Credit Outstandings and/or (b) the outstanding
Term Loans and/or Term Loan Commitments of the respective Tranche or Tranches)
of, and in each case (except for the replacement of only the outstanding Term
Loans (and/or Term Loan Commitments, as the case may be) of one or more Tranches
of the respective Lender) participations in Letters of Credit by, the Replaced
Lender and, in connection therewith, shall pay to (x) the Replaced Lender in
respect thereof an amount equal to the sum of (I) the principal of, and all
accrued interest on, all outstanding Loans (or of the Loans of the respective
Tranche or Tranches being replaced) of the Replaced Lender, (II) all Unpaid
Drawings that have been funded by (and not reimbursed to) such Replaced Lender,
together with all then unpaid interest with respect thereto at such time and
(III) all accrued, but theretofore unpaid, Fees owing to the Replaced Lender
(but only with respect to the relevant Tranche, in the case of the replacement
of less than all Tranches of Loans then held by the respective Replaced Lender)
pursuant to Section 3.01 and (y) except in the case of the replacement of only
the outstanding Term Loans of one or more Tranches of a Replaced Lender, each
Issuing Bank an amount equal to such Replaced Lender's RL Percentage or German
RL Percentage, as the case may be, of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Lender to such Issuing Bank and (ii) all obligations of the
Borrowers due and owing to the Replaced Lender at such time (other
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than those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender concurrently with such replacement. Upon
the execution of the respective Assignment and Assumption Agreements, the
payment of amounts referred to in clauses (i) and (ii) above, recordation of the
assignment on the Register by the Administrative Agent pursuant to Section 13.15
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate Note or Notes executed by the respective Borrowers,
the Replacement Lender shall become a Lender hereunder and, unless the
respective Replaced Lender continues to have outstanding Term Loans or a
Commitment hereunder, the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06
and 13.01), which shall survive as to such Replaced Lender. In connection with
any replacement of Lenders pursuant to, and as contemplated by, this Section
1.13, each of the German Borrowers hereby irrevocably authorizes the U.S.
Borrower to take all necessary action, in the name of the German Borrowers, as
described above in this Section 1.13 in order to effect the replacement of the
respective Lender or Lenders in accordance with the preceding provisions of this
Section 1.13.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the U.S. Borrower or the German Borrowers may
request that any Issuing Bank issue, at any time and from time to time on and
after the Initial Borrowing Date and prior to the fifth Business Day prior to
the Revolving Loan Maturity Date (or the 30th day prior to the Revolving Loan
Maturity Date in the case of Trade Letters of Credit), (x) for the account of
the U.S. Borrower (in the case of requests made by it) or for the joint and
several account of the German Borrowers (in the case of requests made by them)
and for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable Obligations of the
respective such Account Party or any of its or their Subsidiaries, an
irrevocable sight standby letter of credit, in a form customarily used by such
Issuing Bank or in such other form as has been approved by such Issuing Bank
(each such standby letter of credit, a "Standby Letter of Credit") in support of
such L/C Supportable Obligations and (y) for the account of the respective such
Account Party and for the benefit of sellers of goods, materials and services
used in the ordinary course of business of the respective such Account Party or
any of its or their Subsidiaries an irrevocable sight commercial letter of
credit in a form customarily used by such Issuing Bank or in such other form as
has been approved by such Issuing Bank (each such commercial letter of credit, a
"Trade Letter of Credit", and each such Trade Letter of Credit and each Standby
Letter of Credit, a "Letter of Credit") in support of commercial transactions of
the respective such Account Party and its or their Subsidiaries.
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(b) All (x) U.S. Letters of Credit shall be issued, and
denominated, in Dollars, and shall be issued for the account of the U.S.
Borrower, and (y) German Letters of Credit shall be issued, and denominated, in
Deutsche Marks (or, in any specific instance, such other currency as is
acceptable to the Administrative Agent and the respective Issuing Bank), and
shall be issued for the joint and several account of each of the German
Borrowers. Notwithstanding anything to the contrary contained above, in no event
shall a German Letter of Credit denominated in a currency other than Deutsche
Marks be issued if, after giving effect to such issuance, the aggregate amount
of Letter of Credit Outstandings at such time in respect of German Letters of
Credit issued in currencies other than Deutsche Marks would exceed $5,000,000.
(c) Each Issuing Bank hereby agrees that it will (subject to the
terms and conditions contained herein), at any time and from time to time on and
after the Initial Borrowing Date and prior to the fifth Business Day prior to
the Revolving Loan Maturity Date (or the 30th day prior to the Revolving Loan
Maturity Date in the case of Trade Letters of Credit), following its receipt of
the respective Letter of Credit Request, issue for the account of the respective
Account Party, subject to the terms and conditions of this Agreement, one or
more Letters of Credit (x) in the case of Standby Letters of Credit, in support
of such L/C Supportable Obligations of the respective Account Party or any of
its or their Subsidiaries as are permitted to remain outstanding without giving
rise to a Default or an Event of Default and (y) in the case of Trade Letters of
Credit, in support of sellers of goods or materials used in the ordinary course
of business of the respective Account Party or any of its or their Subsidiaries
as referenced in Section 2.01(a), provided that the respective Issuing Bank
shall be under no obligation to issue any Letter of Credit of the types
described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain such
Issuing Bank from issuing such Letter of Credit or any requirement of
law applicable to such Issuing Bank or any request or directive (whether
or not having the force of law) from any governmental authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon such Issuing
Bank with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Bank is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable, in effect or known to such
Issuing Bank as of the date hereof and which such Issuing Bank
reasonably and in good xxxxx xxxxx material to it; or
(ii) such Issuing Bank shall have received notice from the
Administrative Agent at the direction of the Required Lenders prior to
the issuance of such Letter of Credit of the type described in the
second sentence of Section 2.03(b).
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2.02 Maximum Letter of Credit Outstandings; Final Maturities. (a)
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time, would exceed either (x) $25,000,000 or (y) when added to the
aggregate principal amount of all Revolving Loans (for this purpose, using the
Dollar Equivalent of each outstanding Deutsche Xxxx Revolving Loan) then
outstanding and the aggregate amount of all Swingline Loans then outstanding,
the Total Revolving Loan Commitment at such time, (ii) no U.S. Letter of Credit
shall be issued the Stated Amount (expressed in Dollars) of which, when added to
the U.S. Letter of Credit Outstandings (expressed in Dollars) (exclusive of
Unpaid Drawings with respect thereto which are repaid on the date of, and prior
to the issuance of, the respective U.S. Letter of Credit) at such time would
exceed, when added to the aggregate principal of all Dollar Revolving Loans
(expressed in Dollars) then outstanding and the aggregate amount of all
Swingline Loans then outstanding, the U.S. Borrowing Base, (iii) no German
Letter of Credit shall be issued the Stated Amount (expressed in Deutsche Marks
(taking the Deutsche Xxxx Equivalent of any amount expressed in currencies other
than Deutsche Marks)) of which, when added to the German Letter of Credit
Outstandings (expressed in Deutsche Marks) (exclusive of Unpaid Drawings with
respect thereto which are repaid on the date of, and prior to the issuance of,
the respective German Letter of Credit) at such time and the aggregate principal
of all Deutsche Xxxx Revolving Loans (expressed in Deutsche Marks) then
outstanding, would exceed the German Borrowing Base at such time, (iv) no German
Letter of Credit shall be issued the Stated Amount of which, when added to the
German Letter of Credit Outstandings (exclusive of Unpaid Drawings with respect
thereto which are repaid on the date, and prior to the issuance of, the
respective German Letter of Credit) at such time and the aggregate principal
amount of all Deutsche Xxxx Revolving Loans (taking the Dollar Equivalent
thereof) then outstanding, would exceed the lesser of (x) the Total German
Revolving Loan Sub-Commitment at such time, and (y) $15,000,000, and (v) each
Letter of Credit shall by its terms terminate (A) in the case of Standby Letters
of Credit, on or before the earlier of (x) the date which occurs 12 months after
the date of the issuance thereof (although any such Standby Letter of Credit may
be extendable for successive periods of up to 12 months (which period may be
increased by not more than one month to the extent needed to permit the
effectiveness of any extension to occur up to one month prior to the then
scheduled termination of the respective Standby Letter of Credit), but not
beyond the fifth Business Day prior to the Revolving Loan Maturity Date, on
terms acceptable to the Issuing Bank thereof) and (y) the fifth Business Day
prior to the Revolving Loan Maturity Date and (B) in the case of Trade Letters
of Credit, on or before the earlier of (x) the date which occurs 180 days after
the date of issuance thereof and (y) 30 days prior to the Revolving Loan
Maturity Date.
(b) Notwithstanding the foregoing, in the event a Lender Default
exists, the Issuing Bank shall not be required to issue any Letter of Credit
unless the Issuing Bank
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has entered into arrangements satisfactory to it and the respective Account
Party to eliminate the Issuing Bank's risk with respect to the participation in
Letters of Credit of the Defaulting Lender or Lenders, including by cash
collateralizing (in Dollars or Deutsche Marks, as appropriate) such Defaulting
Lender's or Lenders' RL Percentage of the Letter of Credit Outstandings.
2.03 Letter of Credit Requests; Notices of Issuance; Minimum
Stated Amount. (a) Whenever the U.S. Borrower or the German Borrowers, as the
case may be, desire that a Letter of Credit be issued for its or their account,
the respective such Account Party shall give the Administrative Agent (at the
appropriate Notice Office) and the respective Issuing Bank at least five
Business Days' (or such shorter period as is acceptable to the respective
Issuing Bank) written notice thereof. Each notice shall be in the form of
Exhibit C (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed
to be a representation and warranty by the U.S. Borrower or the German
Borrowers, as the case may be, that (i) such Letter of Credit may be issued in
accordance with, and will not violate the requirements of, Section 2.02 and (ii)
all of the applicable conditions set forth in Section 5 and 6 shall be met at
the time of such issuance. Unless the respective Issuing Bank has received
notice from the Administrative Agent at the direction of the Required Lenders
before it issues a Letter of Credit that one or more of the conditions specified
in Section 5 are not satisfied on the Initial Borrowing Date or Section 6 are
not then satisfied, or that the issuance of such Letter of Credit would violate
Section 2.02, then such Issuing Bank may issue the requested Letter of Credit
for the account of the respective Account Party in accordance with such Issuing
Bank's usual and customary practices. Upon the issuance of or amendment or
modification to any Standby Letter of Credit, the respective Issuing Bank shall
promptly notify the Administrative Agent (and the Administrative Agent shall
promptly forward such notice to the Lenders) of such issuance, amendment or
modification and such notification shall be accompanied by a copy of the issued
Standby Letter of Credit or amendment or modification. For Trade Letters of
Credit, the Issuing Bank will send to the Administrative Agent by facsimile
transmission, promptly on the first Business Day of each week and on each
Quarterly Payment Date, the daily aggregate Stated Amount of Trade Letters of
Credit issued by such Issuing Bank and outstanding during the preceding week or
quarterly period, as the case may be. The Administrative Agent shall deliver to
each Lender, after each calendar month end and upon each payment of the Letter
of Credit Fee, a report setting forth for the relevant period the daily
aggregate Stated Amount of all outstanding Trade Letters of Credit during such
period.
(c) Each Issuing Bank shall, on the date of issuance of a Letter
of Credit by it, give the Administrative Agent and the respective Account Party
written notice of the issuance of such Letter of Credit, accompanied by a copy
to the Administrative Agent of the Letter of Credit or Letters of Credit issued
by it.
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(d) The initial Stated Amount of each Letter of Credit shall not
be less than (x) in the case of U.S. Letters of Credit, $10,000 and (y) in the
case of German Letters of Credit, DM20,000, or in each case such lesser amount
as is acceptable to the respective Issuing Bank.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the respective Issuing Bank of any Letter of Credit, such Issuing
Bank shall be deemed to have sold and transferred to (x) in the case of a U.S.
Letter of Credit, each Lender (other than such Issuing Bank) with a Revolving
Loan Commitment and (y) in the case of a German Letter of Credit, each Lender
(other than such Issuing Bank) with a German Revolving Loan Sub-Commitment (each
such Lender with respect to any Letter of Credit, in its capacity under this
Section 2.04, a "Participant"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received from such Issuing
Bank, without recourse or warranty, an undivided interest and participation, in
a percentage equal to such Participant's RL Percentage, in the case of a U.S.
Letter of Credit, or German RL Percentage, in the case of a German Letter of
Credit, in such Letter of Credit, each drawing or payment made thereunder and
the obligations of the respective Account Party under this Agreement with
respect thereto, and any security therefor or guaranty pertaining thereto
(although Letter of Credit Fees shall be paid directly to the Administrative
Agent for the ratable account of the Lenders based on their RL Percentages or
German RL Percentages, as the case may be, as provided in Section 3.01(c) and
the Participants shall have no right to receive any portion of any Facing Fees).
Upon any change in the Revolving Loan Commitments or RL Percentages or German RL
Percentages of the Lenders pursuant to this Agreement, it is hereby agreed that,
with respect to all outstanding Letters of Credit and Unpaid Drawings, there
shall be an automatic adjustment to the participations pursuant to this Section
2.04 to reflect the new RL Percentages or German RL Percentages, as the case may
be, of the various Lenders.
(b) In determining whether to pay under any Letter of Credit, the
respective Issuing Bank shall have no obligation relative to the other Lenders
other than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Issuing Bank any
resulting liability to any Account Party, any other Credit Party, any Lender or
any other Person.
(c) In the event that any Issuing Bank makes any payment under
any Letter of Credit and the respective Account Party shall not have reimbursed
such amount in full to such Issuing Bank pursuant to Section 2.05(a), such
Issuing Bank shall promptly notify the Administrative Agent, which shall
promptly notify each Participant of such failure, and each Participant shall
promptly and unconditionally pay to such Issuing Bank
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the amount of such Participant's RL Percentage (in the case of a U.S. Letter of
Credit) or German RL Percentage (in the case of a German Letter of Credit) of
such unreimbursed payment (in the case of payments made in any currency other
than Dollars, taking the Dollar Equivalent thereof) in Dollars and in same day
funds. If the Administrative Agent so notifies, prior to 11:00 A.M. (New York
time) on any Business Day, any Participant required to fund a payment under a
Letter of Credit, such Participant shall make available to the Administrative
Agent for the benefit of such Issuing Bank, in Dollars, such Participant's RL
Percentage (in the case of a U.S. Letter of Credit) or German RL Percentage (in
the case of a German Letter of Credit) of the amount of such payment (or, in the
case of payments made in any currency other than Dollars, the Dollar Equivalent
thereof) on such Business Day in same day funds. If and to the extent such
Participant shall not have so made its RL Percentage or German RL Percentage, as
the case may be, of the amount of such payment available to the Administrative
Agent for the benefit of such Issuing Bank, such Participant agrees to pay to
the Administrative Agent for the benefit of such Issuing Bank, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Administrative Agent for the benefit
of such Issuing Bank at the overnight Federal Funds Rate for the first three
days and at the interest rate applicable to Dollar Revolving Loans maintained as
Base Rate Loans hereunder for each day thereafter. The failure of any
Participant to make available to such Issuing Bank its RL Percentage or German
RL Percentage, as the case may be, of any payment under any Letter of Credit
shall not relieve any other Participant of its obligation hereunder to make
available to such Issuing Bank its RL Percentage or German RL Percentage, as the
case may be, of any unreimbursed payment with respect to a Letter of Credit on
the date required, as specified above, but no Participant shall be responsible
for the failure of any other Participant to make available to the Administrative
Agent for the benefit of such Issuing Bank such other Participant's RL
Percentage or German RL Percentage, as the case may be, of any such payment.
(d) Whenever any Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Bank shall pay to the
Administrative Agent for the benefit of each Participant which has paid its RL
Percentage or German RL Percentage, as the case may be, thereof, in Dollars and
in same day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.
(e) Upon the request of any Participant, each Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
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(f) The obligations of the Participants to make payments to the
Administrative Agent for the benefit of each Issuing Bank with respect to
Letters of Credit issued by it shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the respective Revolving Loan Borrower or any of its Subsidiaries
or Affiliates may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Administrative Agent,
any Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
the respective Account Party or any Subsidiary or Affiliate of the
respective Account Party and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The U.S.
Borrower hereby agrees, in the case of all U.S. Letters of Credit, and the
German Borrowers hereby jointly and severally agree, in the case of all German
Letters of Credit, to reimburse the respective Issuing Bank, by making payment
in Dollars directly to the Administrative Agent for the benefit of such Issuing
Bank, for any payment or disbursement (or, in the case of payments or
disbursements made in any currency other than Dollars, the Dollar Equivalent
thereof) made by such Issuing Bank under any Letter of Credit issued for the
account of the respective Account Party (with each such amount so paid, until
reimbursed, an "Unpaid Drawing"), immediately after, and in any event on the
date of, such payment or disbursement, with interest on the amount so paid or
disbursed by such Issuing Bank, to the extent not reimbursed prior to 2:00 P.M.
(New York time or, in the case of German Letters of Credit, Frankfurt time) on
the date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date
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such Issuing Bank was reimbursed by the U.S. Borrower or the respective German
Borrower, as the case may be, therefor at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Margin for Revolving
Loans maintained as Base Rate Loans; provided, however, to the extent such
amounts are not reimbursed prior to 12:00 Noon (New York time or, in the case of
German Letters of Credit, Frankfurt time) on the third Business Day following
the receipt by the respective Account Party of notice of such payment or
disbursement or upon the occurrence of a Default or an Event of Default under
Section 10.05, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Bank (and until reimbursed by the respective Account
Party at a rate per annum which shall be the Base Rate in effect from time to
time plus the Applicable Margin for Revolving Loans maintained as Base Rate
Loans plus 2%, in each such case, with interest to be payable on demand. The
respective Issuing Bank shall give the respective Account Party prompt written
notice of each Drawing under any Letter of Credit, provided that the failure to
give any such notice shall in no way affect, impair or diminish the respective
Account Party's obligations hereunder.
(b) The obligations of the U.S. Borrower (with respect to U.S.
Letters of Credit) and the joint and several obligations of the German Borrowers
(with respect to German Letters of Credit) under this Section 2.05 to reimburse
the respective Issuing Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the respective Account Party may have or have had against any Lender
(including in its capacity as issuer of the Letter of Credit or as Participant),
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit (each a "Drawing") to conform to the terms of the
Letter of Credit or any nonapplication or misapplication by the beneficiary of
the proceeds of such Drawing; provided that any reimbursement made by the
respective Account Party, shall be without prejudice to any claim it may have
against such Issuing Bank as a result of such Issuing Bank's gross negligence or
willful misconduct in determining whether any documents required to be delivered
under the respective Letter of Credit appear to have been delivered and that
they appear to substantially comply on their face with the requirements of the
respective Letter of Credit.
2.06 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Issuing Bank or
any Participant with any request or directive by any such authority (whether or
not having the force of law), shall either (i) impose, modify or make applicable
any reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by any Issuing Bank or participated in by any Participant, or (ii)
impose on any Issuing Bank or any Participant any other conditions relating,
directly or indirectly, to this Agreement; and the result of any of the
foregoing is to increase the cost to any Issuing Bank or any
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Participant of issuing, maintaining or participating in any Letter of Credit, or
reduce the amount of any sum received or receivable by any Issuing Bank or any
Participant hereunder or reduce the rate of return on its capital with respect
to Letters of Credit (except for changes in the rate of tax on, or determined by
reference to, the net income or profits or franchise taxes based on net income
of such Issuing Bank or such Participant pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, upon written demand to the U.S. Borrower or the German Borrowers, as the
case may be, by such Issuing Bank or any Participant (a copy of which
certificate shall be sent by such Issuing Bank or such Participant to the
Administrative Agent), the U.S. Borrower or the German Borrowers, as the case
may be, shall, subject to the provisions of Section 13.21 (to the extent
applicable), pay to such Issuing Bank or such Participant such additional amount
or amounts as will compensate such Lender for such increased cost or reduction
in the amount receivable or reduction on the rate of return on its capital. Any
Issuing Bank or any Participant, upon determining that any additional amounts
will be payable pursuant to this Section 2.06, will give prompt written notice
thereof to the U.S. Borrower or the German Borrowers, as the case may be, which
notice shall include a certificate submitted to the U.S. Borrower or the German
Borrowers, as the case may be, by such Issuing Bank or such Participant (a copy
of which certificate shall be sent by such Issuing Bank or such Participant to
the Administrative Agent), setting forth in reasonable detail the basis for the
calculation of such additional amount or amounts necessary to compensate such
Issuing Bank or such Participant. The certificate required to be delivered
pursuant to this Section 2.06 shall, absent manifest error, be final and
conclusive and binding on the U.S. Borrower or the German Borrowers, as the case
may be.
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.
3.01 Fees. (a) The U.S. Borrower agrees to pay to the
Administrative Agent for distribution to each Non-Defaulting Lender with a Term
Loan Commitment, a commitment commission (the "Term Loan Commitment Commission")
for the period from and including the Effective Date to but excluding the date
on which the Total Term Loan Commitment shall have been terminated, computed at
a rate for each day equal to the Applicable Commitment Commission Percentage on
the daily average sum of the Term Loan Commitments of such Lender. Accrued Term
Loan Commitment Commission shall be due and payable on the Initial Borrowing
Date, quarterly in arrears on each Quarterly Payment Date and on the date on
which the Total Term Loan Commitments shall have been terminated.
(b) The Revolving Loan Borrowers jointly and severally agree to
pay to the Administrative Agent in Dollars for distribution to each
Non-Defaulting Lender with a Revolving Loan Commitment a commitment commission
(the "Revolving Loan Commitment Commission") for the period from and including
the Effective Date to but
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excluding the Revolving Loan Maturity Date (or such earlier date as the Total
Revolving Loan Commitment shall have been terminated), computed at a rate for
each day equal to the Applicable Commitment Commission Percentage on the daily
average Unutilized Revolving Loan Commitment of such Lender. Accrued Revolving
Loan Commitment Commission shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the Revolving Loan Maturity Date or such earlier
date upon which the Total Revolving Loan Commitment is terminated.
(c) The U.S. Borrower agrees to pay to the Administrative Agent
for distribution to each Lender with a Revolving Loan Commitment (based on their
respective RL Percentages) in Dollars a fee in respect of each U.S. Letter of
Credit issued hereunder, and the German Borrowers jointly and severally agree to
pay to the Administrative Agent for distribution to each Lender with a German
Revolving Loan Sub-Commitment (based on their respective German RL Percentages)
in Dollars a fee in respect of each German Letter of Credit issued hereunder
(with all fees payable as described in this clause (c) being herein referred to
as "Letter of Credit Fees"), in each case for the period from and including the
date of issuance of the respective Letter of Credit to and including the date of
termination of such Letter of Credit (or, in the case of a Trade Letter of
Credit, the date of the stated expiration thereof), computed at a rate per annum
equal to the Applicable Margin for Revolving Loans maintained as Eurodollar
Loans on the daily average Stated Amount of such Letter of Credit. Accrued
Letter of Credit Fees shall be due and payable by the respective Account Party
quarterly in arrears on each Quarterly Payment Date and on the first day after
the termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(d) The U.S. Borrower agrees, and the German Borrowers jointly
and severally agree, to pay to each Issuing Bank, for its own account, in
Dollars, a facing fee in respect of each Letter of Credit issued by such Issuing
Bank for the account of such Account Party (the "Facing Fee"), for the period
from and including the date of issuance of such Letter of Credit to and
including the date of the termination of such Letter of Credit, computed at a
rate equal to 1/4 of 1% per annum of the daily average Stated Amount of such
Letter of Credit. Accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day after the
termination of the Total Revolving Loan Commitment upon which no Letter of
Credit remains outstanding.
(e) The respective Account Party shall pay, upon each payment
under, issuance of, or amendment to, any Letter of Credit, such amount as shall
at the time of such event be the administrative charge and the reasonable
expenses which the applicable Issuing Bank is generally imposing in connection
with such occurrence with respect to letters of credit denominated in the
respective Applicable Currency.
(f) The Borrowers shall pay to the Administrative Agent, for its
own
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account, such other fees as have been agreed to in writing by the Borrowers and
the Administrative Agent.
3.02 Voluntary Termination of Unutilized Commitments. Upon at
least three Business Days' prior notice to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), the U.S. Borrower shall have the right, at any time or
from time to time, without premium or penalty, to terminate the Total Unutilized
Revolving Loan Commitment, in whole or in part, in integral multiples of
$500,000 in the case of partial reductions to the Total Unutilized Revolving
Loan Commitment. Each reduction to the Total Unutilized Revolving Loan
Commitment pursuant to this Section 3.02 shall apply (i) first, in an amount
equal to the lesser of the reduction to the Total Unutilized Revolving Loan
Commitment then being effected or the Total Non-German Revolving Loan Sub-
Commitment then in effect, to reduce the Revolving Loan Commitment (and the Non-
German Revolving Loan Sub-Commitment) of each Lender, pro rata based on the
relative Non-German Revolving Loan Sub-Commitments of the various Lenders (or
their respective Affiliates) and (ii) to the extent in excess of the amount to
be applied pursuant to preceding clause (i), to reduce the remaining Revolving
Loan Commitments (and the German Revolving Loan Sub-Commitments) of the various
Lenders pro rata based on the German Revolving Loan Sub-Commitments of the
various Lenders. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, at the time of any reduction to the Total
Unutilized Revolving Loan Commitment pursuant to this Section 3.02, the U.S.
Borrower may, but shall not be required to, elect that all or portion of such
reduction first be applied as provided in clause (ii) of the immediately
preceding sentence, with any excess over the amount of the Total German
Revolving Loan Sub-Commitment as then in effect to be applied as provided in
clause (i) of the immediately preceding sentence.
3.03 Mandatory Reduction of Commitments. (a) The Total
Commitments (and the U.S. Borrower Tranche A Term Loan Commitment, the German
Borrower Tranche A Term Loan Commitment, the Delayed Draw Term Loan Commitment,
the Tranche B Term Loan Commitment, the Tranche C Term Loan Commitment, the
Revolving Loan Commitment, the German Revolving Loans Sub-Commitment and the
Non-German Revolving Loans Sub-Commitment of each Lender) shall terminate in
their entirety on September 30, 1997 unless the Initial Borrowing Date has
occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total U.S. Borrower Tranche A Term Loan
Commitment shall (i) be reduced on the Initial Borrowing Date (after giving
effect to the making of U.S. Borrower Tranche A Term Loans on such date), in an
amount equal to the aggregate principal amount of U.S. Borrower Tranche A Term
Loans incurred on such date, (ii) terminate in its entirety (to the extent not
theretofore terminated) at 5:00 P.M. (New York
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time) on the earlier to occur of the PIK Preferred Drawdown Date (after giving
effect to the making of U.S. Borrower Tranche A Term Loans on such date) or the
U.S. Borrower Tranche A Term Loan Commitment Termination Date, whether or not
any U.S. Borrower Tranche A Term Loans are incurred on such date and (iii) prior
to the termination of the Total U.S. Borrower Tranche A Term Loan Commitment, be
reduced from time to time to the extent required by Section 4.02.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total German Borrower Tranche A Term Loan
Commitment shall (i) terminate in its entirety (to the extent not theretofore
terminated) at 5:00 P.M. (New York time) on the Initial Borrowing Date (after
giving effect to the making of German Borrower Tranche A Term Loans on such
date) and (ii) prior to the termination of the Total German Borrower Tranche A
Term Loan Commitment, be reduced from time to time to the extent required by
Section 4.02.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Delayed Draw Term Loan Commitment shall
(i) be reduced on each Delayed Draw Term Loan Borrowing Date (after giving
effect to the making of Delayed Draw Term Loans on such date), in the amount
equal to the aggregate principal amount of Delayed Draw Term Loans incurred on
such date, (ii) terminate in its entirety (to the extent not theretofore
terminated) at 5:00 P.M. (New York time) on the Delayed Draw Term Loan
Commitment Termination Date, whether or not any Delayed Draw Term Loans are
incurred on such date and (iii) prior to the termination of the Total Delayed
Draw Term Loan Commitment, be reduced from time to time to the extent required
by Section 4.02.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche B Term Loan Commitment shall
(i) be reduced on the Initial Borrowing Date (after giving effect to the making
of Tranche B Term Loans on such date), in an amount equal to the aggregate
principal amount of Tranche B Term Loans incurred on such date, (ii) terminate
in its entirety (to the extent not theretofore terminated) at 5:00 P.M. (New
York time) on the earlier to occur of the PIK Preferred Drawdown Date (after
giving effect to the making of Tranche B Term Loans on such date) or the Tranche
B Term Loan Commitment Termination Date, whether or not any Tranche B Term Loans
are incurred on such date and (iii) prior to the termination of the Total
Tranche B Term Loan Commitment, be reduced from time to time to the extent
required by Section 4.02.
(f) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche C Term Loan Commitment shall
(i) be reduced on the Initial Borrowing Date (after giving effect to the making
of Tranche C Term Loans on such date), in an amount equal to the aggregate
principal amount of Tranche C Term Loans incurred on such date, (ii) terminate
in its entirety (to the extent not theretofore
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terminated) at 5:00 P.M. (New York time) on the earlier to occur of the PIK
Preferred Drawdown Date (after giving effect to the making of Tranche C Term
Loans on such date) or the Tranche C Term Loan Commitment Termination Date,
whether or not any Tranche C Term Loans are incurred on such date and (iii)
prior to the termination of the Total Tranche C Term Loan Commitment, be reduced
from time to time to the extent required by Section 4.02.
(g) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment, the German Revolving Loan Sub-Commitment and the
Non-German Revolving Loan Sub-Commitment of each Lender) shall terminate in its
entirety on the earlier to occur of (x) the date (if any) after the Initial
Borrowing Date and occurring on or prior to the Subsidiary Stock Restrictions
Approval Date, upon which any Lien is created with respect to, or any
disposition occurs with respect to, any capital stock of any Subsidiary of the
U.S. Borrower identified in the definition of "Subsidiary Stock Restrictions"
contained herein if such Lien or disposition, as the case may be, would not be
permitted if the Subsidiary Stock Restrictions contained in this Agreement were
then effective in accordance with the terms thereof had the Subsidiary Stock
Restrictions Approval Date theretofore occurred and (y) the Revolving Loan
Maturity Date.
(h) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on the Initial Borrowing Date (but immediately
before the making of any Loans pursuant to this Agreement) to the extent that
any of the U.S. Borrower's Existing Senior Secured Notes have not been accepted
for purchase pursuant to the Existing Senior Secured Notes Tender Offer, an
amount equal to the amount which would have been paid to repurchase all such
Existing Senior Secured Notes not tendered pursuant to the Existing Senior
Secured Notes Tender Offer (if same had been tendered pursuant thereto), but
only if such amount exceeds $250,000, shall be applied to reduce the Total U.S.
Borrower Tranche A Term Loan Commitment, the Total Tranche B Term Loan
Commitment and the Total Tranche C Term Loan Commitment on a pro rata basis
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(based upon the relative amounts of such Commitments before giving effect to the
reduction thereto pursuant to this sentence) (with the aggregate amount of
commitment reductions pursuant to this sentence being herein called the
"Existing Senior Secured Notes Reduction Amount"). Furthermore, on the Initial
Borrowing Date (but immediately before the making of any Loans pursuant to this
Agreement) (i) to the extent that less than an amount equal to $275 million less
the Existing Senior Secured Notes Reduction Amount is to be used, on the Initial
Borrowing Date or within 45 days thereafter, to effect the Refinancing
(excluding (i) the uses made or to be made with proceeds available under the
Delayed Draw Term Loan Facility and (ii) payments of fees in connection herewith
and in connection with the Refinancing, but including amounts to be used to
redeem the Existing PIK Preferred Stock), an amount equal to such difference
shall be applied to reduce the Total U.S. Borrower Tranche A Term Loan
Commitment, the Total Tranche B Term Loan Commitment and the Total Tranche C
Term Loan Commitment on a pro rata basis (based upon the relative amounts of
such Commitments before giving effect to any reductions thereto pursuant to this
sentence) and (ii) to the extent the net cash proceeds from the issuance of the
New Senior Subordinated Notes will exceed $150 million, the amount of such
excess shall apply to reduce the Total U.S. Borrower Tranche A Term Loan
Commitment, the Total Tranche B Term Loan Commitment and the Total Tranche C
Term Loan Commitment on a pro rata basis (based upon the relative amounts of
such Commitments before giving effect to any reductions thereto pursuant to this
sentence).
(i) Each reduction to the Total U.S. Borrower Tranche A Term Loan
Commitment, the Total German Borrower Tranche A Term Loan Commitment, the Total
Delayed Draw Term Loan Commitment, the Total Tranche B Term Loan Commitment, the
Total Tranche C Term Loan Commitment and the Total Revolving Loan Commitment
pursuant to this Section 3.03 (or pursuant to Section 4.02) shall be applied
proportionately to reduce the U.S. Borrower Tranche A Term Loan Commitment, the
German Borrower Tranche A Term Loan Commitment, the Delayed Draw Term Loan
Commitment, the Tranche B Term Loan Commitment, the Tranche C Term Loan
Commitment or the Revolving Loan Commitment, as the case may be, of each Lender
with such a Commitment.
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SECTION 4. Prepayments; Payments; Taxes.
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4.01 Voluntary Prepayments. Each Borrower shall have the right to
prepay the Loans made to such Borrower, without premium or penalty, in whole or
in part at any time and from time to time on the following terms and conditions:
(i) such Borrower shall give the Administrative Agent prior to 2:00 P.M. (New
York time) at its Notice Office (x) in the case of Base Rate Loans, at least one
Business Day's prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay such Base Rate Loans (or same day notice in the
case of Swingline Loans, provided such notice is given prior to 12:00 Noon (New
York time)) and (y) in all other cases, at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of its
intent to prepay Euro Rate Loans, whether U.S. Borrower Tranche A Term Loans,
German Borrower Tranche A Term Loans, Delayed Draw Term Loans, Tranche B Term
Loans, Tranche C Term Loans, Dollar Revolving Loans or Deutsche Xxxx Revolving
Loans shall be prepaid, the amount of such prepayment and the Types of Loans to
be prepaid and, in the case of Euro Rate Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Administrative Agent shall
promptly transmit to each of the Lenders with Loans of the respective Tranche;
(ii) each prepayment shall be in an aggregate principal amount of at least (x)
in the case of Base Rate Loans, $1,000,000 (or $100,000 in the case of Swingline
Loans) and (y) in the case of Euro Rate Loans, at least $2,000,000 (or the
Deutsche Xxxx Equivalent thereof in the case of Deutsche Xxxx Loans), provided
that if any partial prepayment of Euro Rate Loans made pursuant to any Borrowing
shall reduce the outstanding Euro Rate Loans made pursuant to such Borrowing to
an amount less than the respective Minimum Borrowing Amount for such Tranche and
Type of Loans, then such Borrowing (x) in the case of Dollar Loans, shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans and (y) in the case of Deutsche Xxxx Loans, shall be repaid in
full at the end of the then current Interest Period; (iii) each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans; (iv) subject to the immediately succeeding sentence, each
voluntary prepayment of Term Loans pursuant to this Section 4.01(a) shall be
applied pro rata to each Tranche of Term Loans (based upon the then outstanding
principal amount of U.S. Borrower Tranche A Term Loans, German Borrower Tranche
A Term Loans (taking the Dollar Equivalent thereof), Delayed Draw Term Loans,
Tranche B Term Loans and Tranche C Term Loans); and (v) subject to the
immediately succeeding sentence, each voluntary prepayment of any Tranche of
Term Loans (after giving effect to any applicable requirements set forth above)
shall apply to reduce the then remaining Scheduled Repayments of such Tranche of
Term Loans on a pro rata basis (based upon the then remaining principal amounts
of such Scheduled Repayments of the respective Tranche of Term Loans, after
giving effect to all prior reductions thereto). Notwithstanding clauses (iv) and
(v) of the immediately preceding sentence, the U.S. Borrower may direct that any
voluntary prepayment of Term Loans be applied (x) first, to Scheduled Repayments
of Term Loans which shall be due and payable within 12 months from the date of
the respective voluntary pre-payment, in direct order of maturity (which may
result in a disproportionate allocation to the various Tranches of Term Loans)
and (y) to the extent in excess of the amounts to be applied pursuant to the
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preceding clause (x), as provided in the immediately preceding sentence (without
giving regard to this sentence). The provisions of this Section 4.01 are further
subject to the provisions of Section 4.05.
4.02 Mandatory Repayments and Commitment Reductions. (a) (i) On
any day on which the sum of the aggregate outstanding principal amount of the
Swingline Loans, Revolving Loans (for this purpose, using the Dollar Equivalent
thereof in the case of outstanding Deutsche Xxxx Revolving Loans) and the Letter
of Credit Outstandings exceeds the Total Revolving Loan Commitment as then in
effect, the U.S. Borrower shall prepay on such day the principal of outstanding
Swingline Loans and, after the Swingline Loans have been repaid in full, the
U.S. Borrower shall repay the principal of outstanding Dollar Revolving Loans
and/or the German Borrowers shall repay the principal of outstanding Deutsche
Xxxx Revolving Loans (allocated between Dollar Revolving Loans and Deutsche Xxxx
Revolving Loans as the Revolving Loan Borrowers may elect) in an amount equal to
such excess. If, after giving effect to the prepayment in full of all
outstanding Swingline Loans and Revolving Loans, the aggregate amount of the
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as
then in effect, the respective Account Parties shall pay to the Administrative
Agent at the appropriate Payment Office on such day an amount of cash or Cash
Equivalents of such excess (up to a maximum amount equal to the Letter of Credit
Outstandings at such time), such cash or Cash Equivalents to be held as security
for all obligations of the respective Account Party hereunder in a cash
collateral account to be established by the Administrative Agent.
(ii) If on any date the sum of the aggregate outstanding
principal amount of Swingline Loans, Dollar Revolving Loans and the U.S. Letter
of Credit Out- standings exceeds the U.S. Borrowing Base as then in effect, the
U.S. Borrower shall prepay on such day principal of outstanding Swingline Loans
and, after the Swingline Loans have been repaid in full, Dollar Revolving Loans
in an amount equal to such excess. If, after giving effect to the prepayment in
full of all outstanding Swingline Loans and Dollar Revolving Loans, the
aggregate amount of the U.S. Letter of Credit Outstandings exceeds the U.S.
Borrowing Base as then in effect, the U.S. Borrower shall pay to the
Administrative Agent at the appropriate Payment Office on such day an amount of
cash or Cash Equivalents equal to the amount of such excess (up to a maximum
amount equal to the U.S. Letter of Credit Outstandings at such time), such cash
or Cash Equivalents to be held as security for all obligations of the U.S.
Borrower hereunder in a cash collateral account to be established by the
Administrative Agent.
(iii) If on any date the sum of the aggregate outstanding
principal amount of Deutsche Xxxx Revolving Loans and the German Letter of
Credit Outstand- ings (each expressed in Deutsche Marks for purposes of
following clause (x) and each expressed in Dollars, taking the Dollar Equivalent
of all Deutsche Xxxx Revolving Loans then outstanding, for purposes of following
clauses (y) and (z)) exceeds the least of (x) the German Borrowing Base as then
in effect, (y) $55,000,000 or (z) the Total German
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Revolving Loan Sub-Commitment as then in effect, then the German Borrowers shall
prepay (and shall be jointly and severally obligated to prepay) on such day
principal of outstanding Deutsche Xxxx Revolving Loans in an amount equal to
such excess. If, after giving effect to the prepayment in full of all
outstanding Deutsche Xxxx Revolving Loans, the aggregate amount of the German
Letter of Credit Outstandings (expressed in Deutsche Marks (and taking the
Deutsche Xxxx Equivalent of the Stated Amount of any German Letter of Credit
denominated in a currency other than Deutsche Marks) for purposes of following
clause (x) only) exceeds the least of (x) the German Borrowing Base as then in
effect, (y) $55,000,000 or (z) the Total German Revolving Loan Sub-Commitment as
then in effect, then the German Borrowers shall pay (and shall be jointly and
severally obligated to pay) to the Administrative Agent at the appropriate
Payment Office on such day an amount of cash or Cash Equivalents equal to the
amount of such excess (up to a maximum amount equal to the German Letter of
Credit Outstandings at such time), such cash or Cash Equivalents to be held as
security for all obligations of the German Borrowers hereunder in a cash
collateral account to be established by the Administrative Agent.
(b)(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, the U.S. Borrower shall be required to repay that principal amount of
U.S. Borrower Tranche A Term Loans, to the extent then outstanding, as is set
forth opposite such date (each such repayment, as the same may be reduced as
provided in Sections 4.01 and 4.02(h) through (j), inclusive, a "U.S. Borrower
Tranche A Scheduled Repayment," and each such date, a "U.S. Borrower Tranche A
Scheduled Repayment Date"):
U.S. Borrower Tranche A
Scheduled Repayment Date Amount
------------------------ ------
Tranche A Term Loan Maturity Date $0
(ii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
German Borrowers shall be required, and shall be jointly and severally
obligated, to repay that principal amount of German Borrower Tranche A Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(h) through (j), inclusive, a "German Borrower Tranche A Scheduled
Repayment," and each such date, a "German Borrower Tranche A Scheduled Repayment
Date"):
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German Borrower Tranche A
Scheduled Repayment Date Amount
------------------------ -------
Tranche A Term Loan Maturity Date DM 0
(iii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the U.S.
Borrower shall be required to repay that principal amount of Delayed Draw Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(h) through (j), inclusive, a "Delayed Draw Scheduled Repayment," and each
such date, a "Delayed Draw Scheduled Repayment Date"):
Delayed Draw
Scheduled Repayment Date Amount
------------------------ ------
October 31, 1998 $ 62,500
January 31, 1999 $ 62,500
April 30, 1999 $ 62,500
July 31, 1999 $ 62,500
October 31, 1999 $ 62,500
January 31, 2000 $ 62,500
April 30, 2000 $ 62,500
July 31, 2000 $ 62,500
October 31, 2000 $ 62,500
January 31, 2001 $ 62,500
April 30, 2001 $ 62,500
July 31, 2001 $ 62,500
October 31, 2001 $ 125,000
January 31, 2002 $ 125,000
April 30, 2002 $ 125,000
July 31, 2002 $ 125,000
October 31, 2002 $1,250,000
January 31, 2003 $1,250,000
April 30, 2003 $1,250,000
July 31, 2003 $1,250,000
October 31, 2003 $3,125,000
January 31, 2004 $3,125,000
April 30, 2004 $3,125,000
July 31, 2004 $3,125,000
October 31, 2004 $3,125,000
Delayed Draw Term Loan Maturity Date $3,125,000
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If at the time of the termination of the Total Delayed Draw Term
Loan Commitment (and after giving effect to the incurrence of any Delayed Draw
Term Loans at such time) the U.S. Borrower has not theretofore incurred at least
$25,000,000 of Delayed Draw Term Loans, then each of the Delayed Draw Scheduled
Repayments set forth in the table above shall be reduced on a pro rata basis
(based on the relative proportion that the amount of each such Delayed Draw
Scheduled Repayment bears to the aggregate amount of all such Delayed Draw
Scheduled Repayments as set forth in the table above.
(iv) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the U.S.
Borrower shall be required to repay that principal amount of Tranche B Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(h) through (j), inclusive, a "Tranche B Scheduled Repayment," and each such
date, a "Tranche B Scheduled Repayment Date"):
Tranche B
Scheduled Repayment Date Amount
------------------------ ------
October 31, 1997 $ 187,500
January 31, 1998 $ 187,500
April 30, 1998 $ 187,500
July 31, 1998 $ 187,500
October 31, 1998 $ 187,500
January 31, 1999 $ 187,500
April 30, 1999 $ 187,500
July 31, 1999 $ 187,500
October 31, 1999 $ 187,500
January 31, 2000 $ 187,500
April 30, 2000 $ 187,500
July 31, 2000 $ 187,500
October 31, 2000 $ 187,500
January 31, 2001 $ 187,500
April 30, 2001 $ 187,500
July 31, 2001 $ 187,500
October 31, 2001 $ 187,500
January 31, 2002 $ 187,500
April 30, 2002 $ 187,500
July 31, 2002 $ 187,500
October 31, 2002 $ 3,187,500
January 31, 2003 $ 3,187,500
April 30, 2003 $ 3,187,500
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July 31, 2003 $ 3,187,500
October 31, 2003 $ 9,375,000
January 31, 2004 $ 9,375,000
April 30, 2004 $ 9,375,000
July 31, 2004 $ 9,375,000
October 31, 2004 $10,500,000
Tranche B Term Loan Maturity Date $10,500,000
(v) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the U.S.
Borrower shall be required to repay that principal amount of Tranche C Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(h) through (j), inclusive, a "Tranche C Scheduled Repayment," and each such
date, a "Tranche C Scheduled Repayment Date"):
Tranche C
Scheduled Repayment Date Amount
------------------------ ------
October 31, 1997 $ 100,000
January 31, 1998 $ 100,000
April 30, 1998 $ 100,000
July 31, 1998 $ 100,000
October 31, 1998 $ 100,000
January 31, 1999 $ 100,000
April 30, 1999 $ 100,000
July 31, 1999 $ 100,000
October 31, 1999 $ 100,000
January 31, 2000 $ 100,000
April 30, 2000 $ 100,000
July 31, 2000 $ 100,000
October 31, 2000 $ 100,000
January 31, 2001 $ 100,000
April 30, 2001 $ 100,000
July 31, 2001 $ 100,000
October 31, 2001 $ 100,000
January 31, 2002 $ 100,000
April 30, 2002 $ 100,000
July 31, 2002 $ 100,000
October 31, 2002 $ 100,000
January 31, 2003 $ 100,000
April 30, 2003 $ 100,000
July 31, 2003 $ 100,000
October 31, 2003 $ 4,700,000
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January 31, 2004 $ 4,700,000
April 30, 2004 $ 4,700,000
July 31, 2004 $ 4,700,000
October 31, 2004 $ 4,700,000
January 31, 2005 $ 4,700,000
April 30, 2005 $ 4,700,000
Tranche C Term Loan Maturity Date $ 4,700,000
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the U.S. Borrower or any of its Subsidiaries receives any cash
proceeds from any capital contribution or any sale or issuance of its equity
(other than equity contributions to any Subsidiary of the U.S. Borrower made by
the U.S. Borrower or any other Subsidiary of the U.S. Borrower), an amount equal
to 50% of the cash proceeds of such capital contribution or sale or issuance
(net of underwriting or placement discounts and commissions and other costs and
expenses associated therewith) shall, subject to Section 4.02(k), be applied in
accordance with the requirements of Sections 4.02(h) and (i). Notwithstanding
anything to the contrary contained above, an amount equal to the Net Cash
Proceeds received by the U.S. Borrower or any of its Subsidiaries from any sale
or disposition as described in Section 9.02(ix) shall be applied in accordance
with the requirements of this clause (c).
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the U.S. Borrower or any of its Subsidiaries receives any cash
proceeds from any incurrence by the U.S. Borrower or any of its Subsidiaries of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 9.04 as such Section is in effect
on the Effective Date), an amount equal to 100% of the cash proceeds of the
respective incurrence of Indebtedness (net of underwriting or placement
discounts and commissions and other costs associated therewith) shall, subject
to Sections 4.02(j) and (k), be applied in accordance with the requirements of
Sections 4.02(h) and (i).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the U.S. Borrower or any of its Subsidiaries receives cash proceeds
from any sale of assets (including capital stock and securities held thereby,
but excluding sales of assets permitted by clauses (v), (vi), (viii), (ix)
(although all proceeds received as a result of any disposition pursuant to said
clause (ix) shall be applied in accordance with the requirements of preceding
Section 4.02(c), regardless of whether the transaction is structured as the sale
of equity interests by the owners thereof or an issuance by the German Parent or
other entity described in said clause (ix)) and (x) of Section 9.02, an amount
equal to 100% of the Net Sale Proceeds therefrom shall, subject to Sections
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4.02(j) and (k), be applied in accordance with the requirements of Sections
4.02(h) and (i); provided, however, that so long as no Default or Event of
Default then exists, the Net Sale Proceeds from any sale or disposition pursuant
to Section 9.02(vii) shall not be required to be so applied on such date to the
extent that such proceeds shall be used (and the U.S. Borrower notifies the
Administrative Agent in writing on the date the respective repayment would
otherwise be required that such proceeds are intended by it to be used,
specifying the amount of such proceeds) to purchase replacement or other assets
(excluding current assets) used or to be used in the business of U.S. Borrower
and its Subsidiaries as permitted by Section 9.15 within twelve months following
the date the respective such sale of assets, and, provided further, that (x) in
no event shall elections pursuant to the immediately preceding proviso apply to
more than $5,000,000 of Net Sale Proceeds in any fiscal year of the U.S.
Borrower and (y) if all or any portion of any such Net Sale Proceeds not
required to be so applied as a mandatory repayment as provided above are not so
reinvested within such twelve month period, such remaining portions shall be
applied on the last day of such twelve month period as a mandatory repayment in
accordance with the requirements of this Section 4.02(e).
(f) In addition to any other mandatory repayments pursuant to
this Section 4.02, on each Excess Cash Payment Date, an amount equal to 50% of
the Excess Cash Flow for the relevant Excess Cash Payment Period shall be
applied in accordance with the requirements of Sections 4.02(h) and (i).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 30 days following each date
after the Effective Date on which the U.S. Borrower or any of its Subsidiaries
receives any proceeds from any Recovery Event, an amount equal to 100% of the
proceeds of such Recovery Event (net of costs and taxes incurred in connection
with such Recovery Event) shall, subject to Section 4.02(j), be applied in
accordance with the requirements of Sections 4.02(h) and (i), provided that (x)
so long as no Default or Event of Default then exists pursuant to Section 10.05,
and if any other Default or Event of Default then exists so long as the Required
Lenders do not otherwise direct the Administrative Agent at any time, and so
long as such proceeds do not exceed $2,000,000, such proceeds shall not be
required to be so applied (and to the extent held or received by the
Administrative Agent or the Collateral Agent, shall be released to the U.S.
Borrower) on such date to the extent that the U.S. Borrower has delivered a
certificate to the Administrative Agent on or prior to such date stating that
such proceeds shall be used to replace or restore any properties or assets in
respect of which such proceeds were paid within 365 days (or 540 days, so long
as contractually committed to be so used within 365 days) following the date of
such Recovery Event (which certificate shall set forth the estimates of the
proceeds to be so expended) and (y) so long as no Default or Event of Default
then exists pursuant to Section 10.05, and if any other Default or Event of
Default then exists so long as the Required Lenders do not otherwise direct the
Administrative Agent at any time, and so long as to the extent that (a) the
amount of such proceeds exceeds $2,000,000, (b) the U.S. Borrower has delivered
to the Administrative Agent a certificate on or prior to the
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date the application would otherwise be required pursuant to this Section
4.02(g) in the form described in clause (x) above and also certifying the
sufficiency of business interruption insurance as required by succeeding clause
(c), and (c) the U.S. Borrower has delivered to the Administrative Agent such
evidence as the Administrative Agent may reasonably request in form and
substance reasonably satisfactory to the Administrative Agent establishing that
the U.S. Borrower and/or its relevant Subsidiaries have sufficient business
interruption insurance and that the U.S. Borrower and/or its relevant
Subsidiaries will be receiving regular payments thereunder in such amounts and
at such times as are necessary, in conjunction with any cash and Cash
Equivalents then held by the U.S. Borrower and its Subsidiaries or otherwise
available to them and cash flow reasonably expected to be generated in the
ordinary course of business (in each case which funds will be accessible and
permitted to be used for such purposes) to satisfy all obligations and expenses
of the U.S. Borrower and its Subsidiaries (including, without limitation, all
debt service requirements, including pursuant to this Agreement), without any
delay or extension thereof, for the period from the date of the respective
casualty, condemnation or other event giving rise to the Recovery Event and
continuing through the completion of the replacement or restoration of
respective properties or assets, then the entire amount and not just the portion
in excess of $2,000,000 shall be deposited as security for the Obligations with
the Administrative Agent for the benefit of the Secured Creditors pursuant to a
cash collateral arrangement reasonably satisfactory to the Administrative Agent
whereby such proceeds shall be disbursed to the U.S. Borrower or its respective
Subsidiary from time to time as needed to pay actual costs incurred by it in
connection with the replacement or restoration of the respective properties or
assets (pursuant to such reasonable certification requirements as may be
established by the Administrative Agent), provided further, that at any time
while an Event of Default has occurred and is continuing, the Required Lenders
may direct the Administrative Agent (in which case the Administrative Agent
shall, and is hereby authorized by the Borrowers to, follow said directions) to
apply any or all proceeds then on deposit in such collateral account to the
repayment of Obligations hereunder in the same manner as proceeds would be
applied pursuant to the U.S. Security Agreement, and, provided further, that if
all or any portion of such proceeds not required to be applied as a mandatory
repayment and/or commitment reduction pursuant to the second preceding proviso
are either (A) not so used within 365 days after the date of receipt of proceeds
from the respective Recovery Event or (B) if contractually committed to be used
within 365 days after the date of receipt of proceeds from the respective
Recovery Event and not so used within 540 days after the date of receipt of
proceeds from the respective Recovery Event, then, in either case, such
remaining portion not used or contractually committed to be used in the case of
the preceding clause (A) and not used in the case of preceding clause (B), shall
be applied on the date which is 365 days following the date of receipt of
proceeds from the respective Recovery Event in the case of clause (A) above, or
the date which is 540 days after the date of receipt of proceeds from the
respective Recovery Event in the case of clause (B) above, in accordance with
the requirements of Section 4.02(h), (i) and (j).
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(h) Each amount required to be applied to Term Loans pursuant to
this clause (h) as a result of the requirements of Sections 4.02(c), (d), (e),
(f) and (g), shall, subject to the relevant provisions of following clauses (j)
and (k) and Section 4.05, be applied (after any conversion by the respective
Borrower of any amounts received in a currency other than the relevant
Applicable Currency or Applicable Currencies, into the respective Applicable
Currency or Applicable Currencies) to repay the outstanding principal amount of
U.S. Borrower Tranche A Term Loans, German Borrower Tranche A Term Loans,
Delayed Draw Term Loans (to the extent then outstanding), Tranche B Term Loans
and Tranche C Term Loans (or, if the Initial Borrowing Date has not yet
occurred, to reduce the related Commitments) of the respective Tranches (with
each Tranche of Term Loans being allocated that percentage of the amount to be
so applied as is equal to a fraction (expressed as a percentage) the numerator
of which is equal to the outstanding principal amount of such Tranche of Term
Loans (or, if the Initial Borrowing Date has not yet occurred, the aggregate
Term Loan Commitments of the Lenders with respect to such Tranche) and the
denominator of which is equal to the then outstanding principal amount of all
Term Loans (or if the Initial Borrowing Date has not yet occurred, the Total
Term Loan Commitment at such time)). Any amount required to be applied to any
Tranche of Term Loans pursuant to the requirements of the immediately preceding
sentence, or pursuant to following clause (j), shall be applied to repay the
outstanding principal amount of Term Loans of the respective Tranche (or if the
Initial Borrowing Date has not yet occurred, to reduce the Total U.S. Borrower
Tranche A Term Loan Commitment, the Total German Borrower Tranche A Term Loan
Commitment, the Total Delayed Draw Term Loan Commitment, the Total Tranche B
Term Loan Commitment, or the Total Tranche C Term Loan Commitment, as the case
may be). The amount of each principal repayment of U.S. Borrower Tranche A Term
Loans, German Borrower Tranche A Term Loans, Delayed Draw Term Loans, Tranche B
Term Loans and Tranche C Term Loans (and the amount of each reduction to the
related Term Loan Commitments) made as required by this clause (h), or by
following clause (j), shall be applied pro rata to reduce the then remaining
Scheduled Repayments of the respective Tranche based upon the then remaining
amount of each Scheduled Repayment of the respective Tranche, after giving
effect to all prior reductions thereto.
(i) With respect to each repayment of Loans required by this
Section 4.02, the respective Borrower may designate the Types of Loans of the
respective Tranche which are to be repaid and, in the case of Euro Rate Loans,
the specific Borrowing or Borrowings of the respective Tranche pursuant to which
made, provided that: (i) in the case of repayments of Dollar Loans, repayments
of Eurodollar Loans of the respective Tranche pursuant to this Section 4.02 may
only be made on the last day of an Interest Period applicable thereto unless all
Eurodollar Loans of the respective Tranche with Interest Periods ending on such
date of required repayment and all Base Rate Loans of the respective Tranche
have been paid in full; (ii) if any repayment of Euro Rate Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the respective Minimum Borrowing Amount for the
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respective Tranche and Type of Loan, such Borrowing (x) in the case of Dollar
Loans, shall be converted at the end of the then current Interest Period into a
Borrowing of Base Rate Loans and (y) in the case of Deutsche Xxxx Loans, shall
be repaid in full at the end of the then current Interest Period (with the
amount of any such repayment to be applied pro rata to reduce the then remaining
Scheduled Repayments of the respective Tranche based upon the then remaining
amount of each Scheduled Repayment of the respective Tranche after giving effect
to all prior reductions thereto); and (iii) each repayment of any Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans. In the
absence of a designation by the respective Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its sole discretion.
(j) Notwithstanding anything to the contrary contained in this
Section 4.02, to the extent that any mandatory repayment after the Initial
Borrowing Date is required pursuant to any of Sections 4.02(d), (e) and (g), and
if the respective repayment is based on an event occurring with respect to
either of the German Borrowers or any of the German Subsidiaries, then, at the
time the respective repayment is otherwise required pursuant to this Section
4.02, the U.S. Borrower may designate that the amount of the respective such
repayment shall be applied (i) first, to the repayment of principal of German
Borrower Tranche A Term Loans then outstanding (to the extent of the amount
thereof), which amount shall be applied in accordance with the requirements of
the second and third sentences of Section 4.02(h) and the requirements of
Section 4.02(i), and (ii) second, to the extent the respective repayment exceeds
the aggregate principal amount of then outstanding German Borrower Tranche A
Term Loans, as otherwise required pursuant to preceding Sections 4.02(h) and (i)
(without regard to the provisions of this clause (j)).
(k) Notwithstanding anything to the contrary contained in this
Section 4.02, to the extent that mandatory repayments after the Initial
Borrowing Date would be required pursuant to one or more of Sections 4.02(c),
(d), (e) and/or (g), then (x) in each fiscal year of the U.S. Borrower, not more
than $1 million of cash proceeds otherwise required to be applied in accordance
with the requirements of said Sections may be excluded therefrom (in the
aggregate for all such Sections in any such fiscal year) and (y) to the extent
that proceeds (after giving effect to preceding clause (x)) at any time to be
applied pursuant to one or more of Sections 4.02(c), (d), (e) and/or (g)
aggregate less than $1,000,000, the required repayment may be deferred until the
first date upon which the amount of proceeds to be applied pursuant to said
Sections (taking into account any subsequent event of the type described in said
Sections and all pro- ceeds which would otherwise have been required to be
applied pursuant thereto but which have been deferred pursuant to this clause
(y)) equal or exceed $1,000,000.
(l) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, all then outstanding Loans of any
Xxxxxxx
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xxxxx xx repaid in full on the respective Maturity Date for such Tranche of
Loans or, if earlier, the date (if any) occurring after the Initial Borrowing
Date and on or prior to the Subsidiary Stock Restrictions Approval Date, upon
which any Lien is created with respect to, or any disposition occurs with
respect to, any capital stock of any Subsidiary of the U.S. Borrower identified
in the definition of "Subsidiary Stock Restrictions" contained herein if such
Lien or disposition, as the case may be, would not be permitted if the
Subsidiary Stock Restrictions contained in this Agreement were then effective in
accordance with the terms thereof had the Subsidiary Stock Restrictions Approval
Date theretofore occurred.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Lender or
Lenders entitled thereto not later than 2:00 P.M. (local time in the city in
which the Payment Office for the respective payments is located) on the date
when due and shall be made in (x) Dollars in immediately available funds at the
appropriate Payment Office of the Administrative Agent in respect of any
obligation of the Borrowers under this Agreement except as otherwise provided in
the immediately following clause (y) and (y) Deutsche Marks in immediately
available funds at the appropriate Payment Office of the Administrative Agent,
if such payment is made in respect of (i) principal of or interest on Deutsche
Xxxx Loans, or (ii) any increased costs, indemnities or other amounts owing with
respect to Deutsche Xxxx Loans (or Commitments relating thereto), in the case of
this clause (ii) to the extent the respective Lender which is charging same
denominates the amounts owing in Deutsche Marks. The Administrative Agent will
thereafter cause to be distributed on the same day (if payment was actually
received by the Administrative Agent prior to 2:00 P.M. local time in the city
in which such payments are to be made)) like funds relating to the payment of
principal, interest or Fees ratably to the Lenders entitled thereto. Any
payments under this Agreement which are made later than 2:00 P.M. (local time in
the city in which such payments are to be made) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest and fees shall
be payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by any Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Sections 4.04(b) and (c), all such payments will
be made free and clear of, and without deduction or withholding for, any present
or future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or profits or franchise taxes
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based on net income of a Lender pursuant to the laws of the jurisdiction in
which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the respective Borrower agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, the respective Borrower agrees to
reimburse each Lender, upon the written request of such Lender, for the net
additional amount of taxes imposed on or measured by the net income or profits
of such Lender (after taking into account the amount of any credits realized by
such Lender) pursuant to the laws of the jurisdiction in which the principal
office or applicable lending office of such Lender is located or under the laws
of any political subdivision or taxing authority of any such jurisdiction in
which the principal office or applicable lending office of such Lender is
located and for any withholding of taxes as such Lender shall determine are
payable by, or withheld from, such Lender in respect of such amounts so paid to
or on behalf of such Lender pursuant to the preceding sentence and in respect of
any amounts paid to or on behalf of such Lender pursuant to this sentence. The
respective Borrower will furnish to the Administrative Agent within 45 days
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the respective
Borrower. Each Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the U.S.
Borrower and the Administrative Agent on or prior to the Effective Date, or in
the case of a Lender that is an assignee or transferee of an interest under this
Agreement pursuant to Section 1.13 or 13.04 (unless the respective Lender was
already a Lender hereunder immediately prior to such assignment or transfer), on
the date of such assignment or transfer to such Lender, (i) two accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or successor forms) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments to be made
under this Agreement and under any Note, or (ii) if the Lender is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note.
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In addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the U.S. Borrower and the Administrative Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001, or Form
W-8 and a Section 4.04(b)(ii) Certificate, as the case may be, and such other
forms as may be required in order to confirm or establish the entitlement of
such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the U.S. Borrower and the Administrative Agent of
its inability to deliver any such Form or Certificate in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
Section 4.04(b). Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to Section 13.04(b) and the immediately succeeding
sentence, (x) the U.S. Borrower shall be entitled, to the extent it is required
to do so by law, to deduct or withhold income or similar taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein) from interest, fees or other amounts payable hereunder for the account
of any Lender which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the
extent that such Lender has not provided to the U.S. Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such deduction or
withholding and (y) the U.S. Borrower shall not be obligated pursuant to Section
4.04(a) hereof to gross-up payments to be made to a Lender in respect of income
or similar taxes imposed by the United States if (I) such Lender has not
provided to the U.S. Borrower the Internal Revenue Service Forms required to be
provided to the U.S. Borrower pursuant to this Section 4.04(b) or (II) in the
case of a payment, other than interest, to a Lender described in clause (ii)
above, to the extent that such forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 4.04 and except as set forth
in Section 13.04(b), the U.S. Borrower agrees to pay additional amounts and to
indemnify each Lender in the manner set forth in Section 4.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Effective
Date in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of income or similar Taxes.
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(c) Each Lender that is not a resident of the Federal Republic of
Germany for Federal Republic of Germany tax purposes agrees to (i) deliver to
the German Borrowers and the Administrative Agent such declaration of
non-residence or other similar certificate as shall be requested by the German
Borrowers (giving the Lender sufficient time to satisfy such requirement), as is
required by statute, treaty or regulation of the Federal Republic of Germany
existing on the date hereof or which are not substantially more onerous than
those existing on the date hereof and which do not impose an unreasonable burden
(in time, resources or otherwise) on the Lender, or (ii) within 45 days after
the date hereof, make the requisite filing with the taxing authority of the
Federal Republic of Germany in order to certify that such Lender is subject to
income tax on a net basis in the United States (and/or the taxing authority of
the jurisdiction in which such Lender's principal office is located) as required
to establish its entitlement to an exemption from Federal Republic of Germany
withholding under the double tax treaty currently in force between the United
States (or the jurisdiction in which such Lender's principal office is located)
and the Federal Republic of Germany. Notwithstanding anything to the contrary
contained in Section 4.04(a), but subject to Section 13.04(b) and the
immediately succeeding sentence, (x) the German Borrowers shall be entitled, to
the extent required to do so by law, to deduct and withhold income or similar
taxes imposed by the Federal Republic of Germany on interest, Fees or other
amounts payable hereunder for the account of any Lender which is not a resident
of the Federal Republic of Germany for Federal Republic of Germany tax purposes
to the extent that (I) such Lender has not provided forms, declarations or other
certification required to establish a complete exemption from such deduction or
withholding or (II) the German Borrowers are required to do so by any thin
capitalization laws or regulations in the Federal Republic of Germany which
recharacterize the interest payments as dividends and (y) the German Borrowers
shall not be obligated pursuant to Section 4.04(a) hereof to gross-up payments
to be made to a Lender in respect of income or similar taxes imposed by the
Federal Republic of Germany if such Lender has not provided to the German
Borrowers the forms or declarations required to be provided by such Lender
pursuant to the preceding sentence. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04, and
except as set forth in Section 13.04(b), the German Borrowers agree to pay any
additional amounts and to indemnify each Lender in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any Taxes deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of such Taxes. For the avoidance of doubt, nothing
herein shall require any Lender to disclose any information regarding its tax
affairs or computations to the German Borrowers or any of its Affiliates and no
Lender shall be obligated to disclose any of its tax returns to the German
Borrowers or any of its Affiliates or any agent of the foregoing.
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(d) If any Borrower pays any additional amount under this Section
4.04 to a Lender and such Lender determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Lenders shall pay to
the Borrower an amount that the Lender shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Lender in such
year as a consequence of such refund, reduction or credit.
4.05 Waivable Repayments. Notwithstanding anything to the
contrary contained in Sections 4.01 and 4.02 or elsewhere in this Agreement, at
the time any voluntary or mandatory repayment of outstanding Term Loans is to be
made pursuant to any of Sections 4.01 or 4.02 (c), (d), (e), (f) or (g) (each a
"Waivable Repayment"), (x) to the extent that U.S. Borrower Tranche A Term Loans
and/or German Borrower Tranche A Term Loans (taking the Dollar Equivalent
thereof) are then outstanding and will be outstanding after giving effect to the
application of that portion of the respective Waivable Repayment which is
required to be applied to such Loans pursuant to Section 4.01 or 4.02, as the
case may be, before giving effect to the application of this Section 4.05 (with
the aggregate principal amount which will be so outstanding being herein called
the "Outstanding A Term Loan Amount"), the U.S. Borrower shall have the option,
in its sole discretion, to give the Lenders with outstanding Delayed Draw Term
Loans, Tranche B Term Loans and Tranche C Term Loans (collectively, the "Longer
Maturity Term Loans") the option to waive their pro rata shares of the
respective Waivable Repayment upon the terms and provisions set forth in this
Section 4.05; provided that the aggregate amount to which the option to waive
pursuant to this clause (x) shall apply shall in no event exceed the Outstanding
A Term Loan Amount at such time and (y) at such time as no U.S. Borrower Tranche
A Term Loans or German Borrower Tranche A Term Loans remain outstanding, the
U.S. Borrower shall have the option, in its sole discretion, to give the Lenders
with outstanding Tranche C Term Loans the option to waive their pro rata share
of any Waivable Repayment, so long as the amount they are permitted to waive
pursuant to this clause (y) does not exceed the amount of Delayed Draw Term
Loans and Tranche B Term Loans which will be outstanding immediately before the
application of the amounts waived as contemplated by this Section 4.05. If the
U.S. Borrower elects to exercise the option referred to in the immediately
preceding sentence, the U.S. Borrower shall give the Administrative Agent
written notice of its intention to give the Lenders holding Longer Maturity Term
Loans or Tranche C Term Loans, as the case may be, the right to waive the
respective Waivable Repayment (including in such notice the aggregate amount of
such proposed or required repayment) at least five Business Days prior to the
date of the proposed prepayment, in the case of prepayments pursuant to Section
4.01, or on the date the respective repayment would otherwise be required to be
made, in the case of repayments required pursuant to Section 4.02 (c), (d), (e),
(f) or (g), which notice the Administrative Agent shall promptly forward to all
Lenders (including in such notice the amount of such repayment to be applied to
such Lenders' outstanding Longer Maturity Term Loans or Tranche C Term Loans, as
the case may be). The U.S. Borrower's offer
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to permit the Lenders holding Longer Maturity Term Loans or Tranche C Term
Loans, as the case may be, to waive any such Waivable Repayment may apply to all
or part of such repayment, provided that any offer to waive part of such
repayment must be made ratably to the Lenders holding Longer Maturity Term Loans
or Tranche C Term Loans, as the case may be, on the basis of their outstanding
such Loans. In the event that any such Lender desires to waive its pro rata
share of such Lender's right to receive any such Waivable Repayment in whole or
in part, such Lender shall so advise the Administrative Agent no later than 4:00
P.M. (New York time) on the date which is two Business Days after the date of
such notice from the Administrative Agent, which notice shall also include the
amounts that Lender desires to receive in respect of such repayment. If any
Lender does not reply to the Administrative Agent within two Business Days, such
Lender shall be deemed not to have waived any part of such repayment. If any
Lender does not specify an amount it wishes to receive, such Lender will be
deemed to have accepted 100% of its share of such repayment. In the event that
any such Lender waives all or part of its share of any such Waivable Repayment,
the Administrative Agent shall apply 100% of the amount so waived by such Lender
(x) first, to outstanding U.S. Borrower Tranche A Term Loans and German Borrower
Tranche A Term Loans, if any, in accordance with Section 4.01 or 4.02(h) and
(i), as the case may be, in each case as if no Longer Maturity Term Loans are
then outstanding and (ii) next, to the extent in excess thereof, to repay
outstanding principal of Delayed Draw Term Loans and Tranche B Term Loans in
accordance with the requirements in Section 4.01 or 4.02(h) and (i), as the case
may be, in each case determined as if no Tranche C Term Loans were then
outstanding. To the extent that the U.S. Borrower exercises its option pursuant
to this Section 4.05, any repayment otherwise required to be made to the Longer
Maturity Term Loans or Tranche C Term Loans, as the case may be, pursuant to
Section 4.02 (c), (d), (e), (f) or (g) shall be deferred until the date which is
three Business Days after the date upon which such repayment would otherwise
have been made. To the extent that any waivers are at any time granted pursuant
to this Section 4.05, then all repayments of outstanding Borrowings within any
Tranche of outstanding Term Loans shall be made in such manner as is necessary
so that the various Lenders of such Tranche continue to participate in the
outstanding Borrowings of the respective Tranche in such manner so that their
percentage of each outstanding Borrowing will be the same (it being understood
that the percentages of the various Lenders in the total outstandings may
change, but that they will not have differing percentages in the various
outstanding Borrowings).
SECTION 5A. Conditions Precedent to Initial Credit Events. The
obligation of each Lender to make Loans, and the obligation of any Issuing Bank
to issue Letters of Credit, on the Initial Borrowing Date, is subject to the
satisfaction of the following conditions:
5A.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Lenders the appropriate U.S.
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Borrower Tranche A Term Note, German Borrower Tranche A Term Note, Delayed Draw
Term Note, Tranche B Term Note, Tranche C Term Note, Dollar Revolving Note
and/or Deutsche Xxxx Revolving Note executed by the appropriate Borrower or
Borrowers and to CSFB, the Swingline Note executed by the U.S. Borrower, in each
case in the amount, maturity and as otherwise provided herein.
5A.02 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received from (i) Milbank, Tweed, Xxxxxx &
XxXxxx, special U.S. counsel to the Credit Parties, an opinion addressed to the
Administrative Agent, the Collateral Agent and each of the Lenders and dated the
Initial Borrowing Date in the form set forth as Exhibit E-1, (ii) Bruckhaus
Xxxxxxxx Xxxxxxxxx, special German counsel to the Credit Parties, an opinion
addressed to the Administrative Agent, the Collateral Agent and each of the
Lenders and dated the Initial Borrowing Date in the form set forth as Exhibit
E-2, (iii) Xxxxxxx Xxxxxx, special Nevada counsel to the Credit Parties, an
opinion addressed to the Administrative Agent, the Collateral Agent and each of
the Lenders and dated the Initial Borrowing Date in the form set forth as
Exhibit E-3, (iv) Xxxxxxx Xxxxxx & Xxxxxxx, P.A., special Mississippi counsel to
the Credit Parties, an opinion addressed to the Administrative Agent, the
Collateral Agent and each of the Lenders and dated the Initial Borrowing Date in
the form set forth as Exhibit E-4 and (v) Xxxxxxx Xxxxxxxxxxx Xxxxxxx, special
Louisiana counsel to the Credit Parties, an opinion addressed to the
Administrative Agent, the Collateral Agent and each of the Lenders and dated the
Initial Borrowing Date in the form set forth as Exhibit E-5, and in each case
covering such other matters incident to the transactions contemplated herein as
the Administrative Agent may reasonably request.
5A.03 Corporate Documents; Proceedings; etc. (a) On the Initial
Borrowing Date, the Administrative Agent shall have received a certificate of
each Credit Party, dated the Initial Borrowing Date, signed by an Authorized
Officer of such Credit Party, and attested to by the Secretary or any Assistant
Secretary of such Credit Party, in the form of Exhibit F with appropriate
insertions, together with copies of the certificate of incorporation (or
equivalent organizational document) and by-laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Administrative Agent.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Administrative Agent and the Required Lenders, and the Administrative
Agent shall have received all information and copies of all documents and
papers, including records of corporate proceedings, governmental approvals and
good standing certificates if any, which the Administrative Agent reasonably may
have requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or governmental authorities.
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5A.04 Fees, etc. On the Initial Borrowing Date, all costs, fees
and expenses, and all other costs contemplated by this Agreement, due to the
Administrative Agent and the Lenders (including, without limitation, reasonable
legal fees and expenses) shall have been paid to the extent then due.
5A.05 Issuance of New Senior Subordinated Notes. (a) On or prior
to the Initial Borrowing Date, the U.S. Borrower shall have received gross cash
proceeds of at least $125 million from the issuance of the New Senior
Subordinated Notes.
(b) On or prior to the Initial Borrowing Date, there shall have
been delivered to the Administrative Agent true and correct copies of all of the
New Senior Subordinated Note Documents (other than copies of the New Senior
Subordinated Notes actually issued) and all of the terms and conditions of the
New Senior Subordinated Note Documents shall (x) be consistent with the New
Senior Subordinated Notes Offering Memorandum and (y) be in form and substance
satisfactory to the Administrative Agent and the Required Lenders. The issuance
of the New Senior Subordinated Notes shall have occurred in all material
respects in accordance with the terms and conditions of the New Senior
Subordinated Note Documents and applicable law.
5A.06 Existing Senior Secured Notes Tender Offer/Consent
Solicitation; etc. On or prior to the Initial Borrowing Date and concurrently
with the Credit Events then occurring, the U.S. Borrower shall have consummated
a tender offer/consent solicitation with respect to the outstanding Existing
Senior Secured Notes (the "Existing Senior Secured Notes Tender Offer/Consent
Solicitation"), pursuant to which (1) the U.S. Borrower shall offer, subject to
the terms and conditions contained in the Existing Senior Secured Notes Tender
Offer/Consent Solicitation, to purchase all of the outstanding Existing Senior
Secured Notes at the cash price set forth in the Existing Senior Secured Notes
Tender Offer/Consent Solicitation and (2) consents shall be solicited to
proposed amendments to the Existing Senior Secured Notes Indenture and other
Existing Senior Secured Notes Collateral Documents, on terms and conditions
satisfactory to the Administrative Agent and the Required Lenders, which
amendment shall provide for the substantial elimination of the financial and
certain operating covenants contained in the Existing Senior Secured Notes
Indenture and the amendment of certain other provisions in the Existing Senior
Secured Notes Collateral Documents. In connection with the requirements of this
Section 5A.06, it is acknowledged and agreed that the terms outlined in the
Offer to Purchase and Consent Solicitation Statement dated July 3, 1997 are
acceptable to the Administrative Agent and the Lenders. All terms and conditions
of the Existing Senior Secured Notes Tender Offer/Consent Solicitation shall be
satisfactory to the Administrative Agent and the Required Lenders, and the
period for tendering Existing Senior Secured Notes pursuant thereto shall
terminate on or prior to the Initial Borrowing Date. On or prior to the Initial
Borrowing Date, (x) the U.S. Borrower shall have received sufficient consents to
authorize the execution and delivery of the Existing Senior
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Secured Notes Indenture Supplement (which shall include the Existing Senior
Secured Notes Collateral Documents Amendments), (y) the U.S. Borrower and the
trustee under the Existing Senior Secured Notes Indenture shall have duly
executed and delivered the Existing Senior Secured Notes Indenture Supplement
and (z) the trustee pursuant to the Existing Senior Secured Notes Indenture, as
well as any other agent, sub-agent, collateral agent or custodian which holds
any of the collateral for the Existing Senior Secured Notes, shall have entered
into a bailee agreement for the benefit of the Secured Creditors in
substantially the form attached hereto as Exhibit G (the "Bailee Agreement"). On
the Initial Borrowing Date and concurrently with the Credit Events then
occurring, the U.S. Borrower shall have repurchased all Existing Senior Secured
Notes tendered, and not theretofore withdrawn, pursuant to the Existing Senior
Secured Notes Tender Offer/Consent Solicitation (the "Existing Senior Secured
Notes Tender Offer Repurchases") and, after giving effect thereto, not more than
$30 million aggregate principal amount of Existing Senior Secured Notes shall
remain outstanding.
5A.07 Notice of Existing PIK Preferred Stock Redemption. On the
Initial Borrowing Date, the U.S. Borrower shall, or shall cause the transfer
agent to, deliver notices of redemption, in accordance with and meeting the
requirements of the Existing PIK Preferred Stock Documents, notifying the
holders thereof that the Existing PIK Preferred Stock shall be redeemed in full,
in accordance with the terms thereof, on a date to occur not later than 45 days
after the Initial Borrowing Date.
5A.08 Indebtedness to be Refinanced. (a) On or prior to the
Initial Borrowing Date or concurrently with the Credit Events then occurring,
the total commitments in respect of the Indebtedness to be Refinanced shall have
been terminated, and all loans and notes issued thereunder shall have been
repaid in full, together with interest thereon, all letters of credit issued
thereunder shall have been terminated or collateralized by new back-to-back
letters of credit in form and substance, and issued by an issuer, satisfactory
to the respective letter of credit issuers or otherwise supported in a manner
satisfactory to the respective letter of credit issuers, and all other amounts
owing pursuant to Indebtedness to be Refinanced shall have been repaid in full
and all documents in respect of the Indebtedness to be Refinanced and all
guarantees with respect thereto shall have been terminated and be of no further
force or effect except for continuing indemnification obligations described
therein.
(b) On or prior to the Initial Borrowing Date or concurrently
with the Credit Events then occurring, the creditors in respect to the
Indebtedness to be Refinanced shall have terminated and released all security
interests and Liens on the assets owned or to be owned by the U.S. Borrower or
any of its Subsidiaries granted in connection with the Indebtedness to be
Refinanced. The Administrative Agent shall have received such releases of
security interests in and Liens on the assets owned or to be owned by the U.S.
Borrower and its Subsidiaries as may have been reasonably requested by the
Administrative Agent, which releases shall be in form and substance reasonably
satisfac-
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tory to the Administrative Agent. Without limiting the foregoing, there shall
have been delivered (i) proper termination statements (Form UCC-3 or the
appropriate equivalent) for filing under the UCC of each jurisdiction where a
financing statement (Form UCC-1 or the appropriate equivalent) was filed with
respect to the U.S. Borrower or any of its Subsidiaries, or their respective
predecessors in interest, in connection with the security interests created with
respect to the Indebtedness to be Refinanced and the documentation related
thereto, (ii) terminations or assignments of any security interest in, or Lien
on, any patents, trademarks, copyrights, or similar interests of the U.S.
Borrower or any of its Subsidiaries, on which filings have been made, (iii)
terminations of all mortgages, leasehold mortgages and deeds of trust created
with respect to property of the U.S. Borrower or any of its Subsidiaries, or
their respective predecessors in interest, in each case, to secure the
obligations in respect of the Indebtedness to be Refinanced, all of which shall
be in form and substance reasonably satisfactory to the Administrative Agent and
(iv) all collateral owned by the U.S. Borrower or any of its Subsidiaries in the
possession of any of the creditors in respect of the Indebtedness to be
Refinanced or any collateral agent or trustee under any related security
document shall have been returned to the U.S. Borrower or such Subsidiary, as
the case may be.
5A.09 Outstanding Indebtedness and Preferred Stock. On the
Initial Borrowing Date, and after giving effect to the transactions described
above, the U.S. Borrower and its Subsidiaries shall have no outstanding
Indebtedness or Preferred Stock other than (i) Indebtedness pursuant to this
Agreement, (ii) the New Senior Subordinated Notes, (iii) the U.S. Borrower's
Series E Preferred Stock with an aggregate liquidation preference not to exceed
$13 million, (iv) not more than $30 million aggregate principal amount of
Existing Senior Secured Notes not accepted for purchase pursuant to the Existing
Senior Secured Notes Tender Offer/Consent Solicitation, (v) the U.S. Borrower's
Existing PIK Preferred Stock and (vi) such Existing Indebtedness, if any, as is
identified in Schedule V hereto.
5A.10 Adverse Change, etc. (a) On or prior to the Initial
Borrowing Date, nothing shall have occurred (and neither the Administrative
Agent nor the Lenders shall have become aware of any facts, conditions or other
information not previously known) which the Administrative Agent or the Required
Lenders shall determine could reasonably be expected to have a material adverse
effect on the rights or remedies of the Administrative Agent or the Lenders, or
on the ability of any Credit Party to perform its obligations to the
Administrative Agent and the Lenders or which could reasonably be expected to
have a Material Adverse Effect.
(b) Except as set forth on Schedule X hereto, all necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with any Credit Event and the Transaction, the other transactions
contemplated by the Documents and otherwise referred to herein or therein shall
have been obtained and remain in effect, and all applicable waiting periods
shall have expired without any action
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being taken by any competent authority which restrains, prevents, or imposes
materially adverse conditions upon, the consummation of any Credit Event and the
Transaction or the other transactions contemplated by the Documents or otherwise
referred to herein or therein. Additionally, there shall not exist any judgment,
order, injunction or other restraint issued or filed or a hearing seeking
injunctive relief or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon any Credit Event or the Transaction or the
other transactions contemplated by the Documents.
5A.11 Litigation. On the Initial Borrowing Date, no litigation by
any entity (private or governmental) shall be pending or threatened with respect
to this Agreement, any other Document or any documentation executed in
connection herewith or therewith or the transactions contemplated hereby or
thereby, or which the Administrative Agent or the Required Lenders shall
determine could reasonably be expected to have a material adverse effect on the
Transaction or a Material Adverse Effect.
5A.12 Subsidiary Guaranties. (a) On the Initial Borrowing Date,
each Domestic Subsidiary of the U.S. Borrower (other than (w) the Specified
Inactive Subsidiaries, (x) RCVP unless any Delayed Draw Term Loan is to be
incurred on the Initial Borrowing Date, (y) VSI, SVS and VDSI and (z) the
Specified Non-Material Subsidiaries as same exist on the Initial Borrowing Date;
provided that no Subsidiary shall be excluded pursuant to preceding clauses (w)
through (z), inclusive, if the respective Subsidiary executes and delivers any
guaranty in respect of the New Senior Subordinated Notes) shall have duly
authorized, executed and delivered a guaranty in the form of Exhibit H-1 (as
amended, modified or supplemented from time to time, the "U.S. Subsidiaries
Guaranty"), guaranteeing all of the obligations of each of the Borrowers as more
fully provided therein, and the U.S. Subsidiaries Guaranty shall be in full
force and effect.
(b) On the Initial Borrowing Date, each German Subsidiary (other
than the German Borrowers) shall have duly authorized, and executed and
delivered a guaranty in the form of Exhibit H-2 (as amended, modified or
supplemented from time to time, the "German Subsidiaries Guaranty"),
guaranteeing all of the obligations of the German Borrowers as more fully
provided therein, and the German Subsidiaries Guaranty shall be in full force
and effect.
5A.13 U.S. Pledge Agreement. On the Initial Borrowing Date, the
U.S. Borrower and each U.S. Subsidiary Guarantor shall have duly authorized,
executed and delivered a Pledge Agreement in the form of Exhibit I (as amended,
modified or supplemented from time to time, the "U.S. Pledge Agreement") and,
subject to the provisions of Section 4 of the U.S. Pledge Agreement, shall have
delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledged
Securities, if any, referred to therein then owned by the U.S. Borrower and each
U.S. Subsidiary Guarantor, (x)
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endorsed in blank in the case of promissory notes constituting Pledged
Securities and (y) together with executed and undated stock powers in the case
of capital stock constituting Pledged Securities.
5A.14 U.S. Security Agreement. On the Initial Borrowing Date, the
U.S. Borrower and each U.S. Subsidiary Guarantor shall have duly authorized,
executed and delivered a Security Agreement in the form of Exhibit J (as
modified, supplemented or amended from time to time, the "U.S. Security
Agreement") covering all of the U.S. Borrower's and each such U.S. Subsidiary
Guarantor's present and future U.S. Security Agreement Collateral, together
with:
(i) proper Financing Statements (Form UCC-1 or the equivalent)
fully executed for filing under the UCC or other appropriate filing
offices of each jurisdiction as may be necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect the security
interests purported to be created by the U.S. Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, dated as at a recent date listing all
effective financing statements that name the U.S. Borrower or any of the
U.S. Subsidiary Guarantors as debtor and that are filed in the
jurisdictions referred to in clause (i) above, together with copies of
such other financing statements that name the U.S. Borrower or any of
the U.S. Subsidiary Guarantors as debtor (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or in respect
of which the Collateral Agent shall have received termination statements
(Form UCC-3) or such other termination statements as shall be required
by local law fully executed for filing);
(iii) evidence of the execution and delivery of all other
instruments for recording and filing of, or with respect to, U.S.
Security Agreement as may be necessary or, in the reasonable opinion of
the Collateral Agent, desirable to perfect the security interests
intended to be created by the U.S. Security Agreement; and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the U.S.
Security Agreement have been taken.
5A.15 German Security Documents. (a) On the Initial Borrowing
Date, each of the German Subsidiaries (including the German Borrowers) shall
have duly authorized, executed and delivered a Security Agreement in
substantially the form of Exhibit K (the "German Security Agreement") together
with:
(i) evidence of the completion of all other recordings and
filings of, or
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with respect to, the German Security Agreement as may be necessary or,
in the reasonable opinion of the Collateral Agent, desirable to perfect
the security interests intended to be created by the German Security
Agreement including, without limitation, the delivery of the German
Security Agreement; and
(ii) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the German
Security Agreement have been taken.
(b) On the Initial Borrowing Date, the Pledgors (as defined in
the German Pledge Agreement referred to below) shall have duly authorized,
executed and delivered a Pledge Agreement in the form of Exhibit L (the "German
Pledge Agreement").
5A.16 Mortgages; Title Insurance; Survey. On the Initial
Borrowing Date, the Collateral Agent shall have received:
(i) fully executed counterparts of mortgages, deeds of trust or
deeds to secure debt, in each case in form and substance reasonably
satisfactory to the Administrative Agent (as modified, supplemented or
amended from time to time, each a "Mortgage" and, collectively, the
"Mortgages"), which Mortgages shall cover such of the Real Property, if
any, owned or leased by the U.S. Borrower and its Domestic Subsidiaries
as shall be designated as a Mortgaged Property on Schedule III (each a
"Mortgaged Property" and, collectively, the "Mortgaged Properties"),
together with evidence that counterparts of the Mortgages have been
delivered to the title insurance company insuring the Lien of the
Mortgages for recording in all places to the extent necessary or, in the
reasonable opinion of the Collateral Agent, desirable to effectively
create a valid and enforceable first priority mortgage lien on each
Mortgaged Property in favor of the Collateral Agent (or such other
trustee as may be required or desired under local law) for the benefit
of the Secured Creditors, subject to such exceptions as are listed in
the respective Mortgage Policy;
(ii) a mortgagee title insurance policy on each Mortgaged
Property issued by a title insurer reasonably satisfactory to the
Collateral Agent (the "Mortgage Policies") in amounts reasonably
satisfactory to the Administrative Agent assuring the Collateral Agent
that the Mortgages on such Mortgaged Properties are valid and
enforceable first priority mortgage liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances except
Permitted Encumbrances and such Mortgage Policies shall otherwise be in
form and substance reasonably satisfactory to the Administrative Agent
and shall include, as appropriate, an endorsement for future advances
under this Agreement and the
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Notes and for any other matter that the Administrative Agent in its
reasonable discretion may reasonably request, shall not include an
exception for mechanics' liens, and shall provide for affirmative
insurance as the Administrative Agent in its discretion may reasonably
request; and
(iii) a survey, in form and substance reasonably satisfactory to
the Administrative Agent, of each Mortgaged Property, certified by a
licensed professional surveyor reasonably satisfactory to the
Administrative Agent.
5A.17 Pro Forma Balance Sheet. On or prior to the Initial
Borrowing Date, there shall have been delivered to the Administrative Agent an
unaudited pro forma consolidated balance sheet of the U.S. Borrower and its
Subsidiaries, after giving effect to the Transaction and the incurrence of all
Indebtedness contemplated herein and prepared in accordance with generally
accepted accounting principles, which pro forma consolidated balance sheets
shall not be materially different than the pro forma balance sheet delivered to
the Administrative Agent on July 8, 1997.
5A.18 Borrowing Base Certificates. On the Initial Borrowing Date,
each of the U.S. Borrower and the German Borrowers shall have delivered to the
Administrative Agent its or their initial Borrowing Base Certificate meeting the
requirements of Section 8.01(j).
5A.19 Solvency Certificate; Environmental Analyses; Insurance
Analyses. On the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent:
(i) a solvency certificate in the form of Exhibit M from the
chief financial officer of the U.S. Borrower and dated the Initial
Borrowing Date;
(ii) environmental and hazardous substance assessment and
analyses in scope, and in form and substance, satisfactory to the
Administrative Agent and the results of which do not disclose any
environmental liabilities or potential environmental liabilities
reasonably likely to result in a Material Adverse Effect; and
(iii) analyses and evidence of insurance complying with the
requirements of Section 8.03 for the business and properties of the U.S.
Borrower and its Subsidiaries, in scope, form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders and
naming the Collateral Agent as an additional insured and as loss payee,
and stating that such insurance shall not be cancelled or revised
without at least 30 days prior written notice by the insurer to the
Collateral Agent.
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SECTION 5B. Conditions Precedent to Initial Delayed Draw Term
Loans. The obligation of each Lender with a Delayed Draw Term Loan Commitment to
make Delayed Draw Term Loans is subject to the satisfaction of the following
conditions:
5B.01 Occurrence of Initial Borrowing Date. On or prior to the
date of the making of the initial Delayed Draw Term Loans (the "Initial Delayed
Draw Term Loan Borrowing Date"), the Initial Borrowing Date shall have occurred.
5B.02 Purchase of Rainbow Royalty Payments; Rainbow Mortgage
Debt. On or prior to the Initial Delayed Draw Term Loan Borrowing Date, the U.S.
Borrower shall have (i) purchased 100% of the Rainbow Royalty Payments for an
amount not to exceed $19 million and (ii) purchased the Rainbow Debt in the
amount of approximately $7.4 million, for cash consideration not to exceed $7.4
million. All rights of the U.S. Borrower with respect to the Rainbow Royalty
Payments shall have been pledged as security for the Secured Lenders pursuant to
the U.S. Security Agreement, and the Rainbow Debt shall have been pledged (and
all promissory notes or chattel paper with respect thereto shall have been
delivered for pledge) pursuant to the U.S. Pledge Agreement.
5B.03 Execution of Guaranty and Security Documents by RCVP. On
the Initial Delayed Draw Term Loan Borrowing Date, RCVP shall have executed and
delivered a counterpart of the U.S. Subsidiaries Guaranty pursuant to which RCVP
unconditionally guaranties all Obligations of the Borrowers pursuant to this
Agreement; provided that it is expressly acknowledged and agreed that the
guaranty executed and delivered by RCVP pursuant to this Section 5B.03 may be
expressly limited as provided in the U.S. Subsidiaries Guaranty. Furthermore,
RCVP shall have executed and delivered counterparts to the U.S. Security
Agreement and the U.S. Pledge Agreement (or substantially similar security
documents or such other security documents as may be reasonably requested by the
Administrative Agent or Collateral Agent), providing security interests in its
assets to secure its obligations pursuant to the guaranty referenced in the
immediately preceding sentence. Furthermore, on the Initial Delayed Draw Term
Loan Borrowing Date, the Collateral Agent shall have received security interests
(whether pursuant to mortgages, deeds of trusts, security agreements or other
documentation) in such other assets of RCVP as shall have been requested by the
Administrative Agent, the Collateral Agent or the Required Lenders. In
connection with the actions to be taken pursuant to this Section 5B.03, the U.S.
Borrower and RCVP shall be required to take such actions, and execute such
ancillary documentation and furnish such opinions of counsel, as would have been
required (and as specified by the Administrative Agent or the Collateral Agent)
had the actions required by this Section 5B been taken on the Initial Borrowing
Date pursuant to Section 5A. All actions taken pursuant to this Section 5B.03
shall be taken to the satisfaction of the Administrative Agent and Collateral
Agent.
5B.04 Opinions of Counsel. Without limiting the foregoing, the
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Administrative Agent shall receive such opinions of counsel in connection with
the actions taken pursuant to this Section 5B as shall be reasonably requested
by the Administrative Agent, the Collateral Agent or the Required Lenders, which
opinions (and the counsel delivering same) shall be satisfactory in form and
substance to the Administrative Agent and the Collateral Agent.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Lender to make Loans (including Loans made on the Initial
Borrowing Date and the Initial Delayed Draw Term Loan Borrowing Date, but
excluding Mandatory Borrowings to be made thereafter, which shall be made as
provided in Section 1.01(h)), and the obligation of any Issuing Bank to issue
any Letter of Credit, is subject, at the time of each such Credit Event (except
as hereinafter indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of
each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to
the making of each Loan (excluding Swingline Loans), the Administrative Agent
shall have received a Notice of Borrowing meeting the requirements of Section
1.03(a). Prior to the making of any Swingline Loan, CSFB shall have received the
notice required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.03.
6.03 Regulations U and G. If at any time any Margin Stock is
pledged or required to be pledged pursuant to any of the Security Documents, all
actions required to be taken pursuant to Section 8.15 shall have been taken to
the reasonable satisfaction of the Administrative Agent.
The acceptance of the proceeds of each Loan or the making of each
Letter of Credit Request (occurring on the Initial Borrowing Date and
thereafter) shall constitute a representation and warranty by each Credit Party
to the Administrative Agent and each of the Lenders that all the conditions
specified in Section 5A (with respect to Credit Events on the Initial Borrowing
Date), in Section 5B (with respect to Credit Events on the Initial
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Delayed Draw Term Loan Borrowing Date) and in this Section 6 (with respect to
Credit Events on and after the Initial Borrowing Date) and applicable to such
Credit Event exist as of that time. All of the Notes, certificates, legal
opinions and other documents and papers referred to in Section 5A, 5B and in
this Section 6, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the account of each of the Lenders
and, except for the Notes, in sufficient counterparts or copies for each of the
Lenders and shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.
SECTION 7. Representations, Warranties and Agreements. In order
to induce the Lenders to enter into this Agreement and to make the Loans, and
issue (or participate in) the Letters of Credit as provided herein, each
Borrower (as to itself and its Subsidiaries) makes the following
representations, warranties and agreements, in each case after giving effect to
the actions taken pursuant to Section 5A on the Initial Borrowing Date, all of
which shall survive the execution and delivery of this Agreement and the Notes
and the making of the Loans and issuance of the Letters of Credit, with the
occurrence of each Credit Event on or after the Initial Borrowing Date being
deemed to constitute a representation and warranty that the matters specified in
this Section 7 are true and correct in all material respects on and as of the
Initial Borrowing Date and in all material respects on the date of each such
Credit Event (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date).
7.01 Corporate and Other Status. Each Borrower and each of its
Subsidiaries, other than Specified Inactive Subsidiaries, (i) is a duly
organized and validly existing corporation, partnership or other entity in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
requisite corporate or other power and authority to own its property and assets
and to transact the business in which it is engaged and presently proposes to
engage and (iii) is duly qualified and is authorized to do business and is in
good standing in each jurisdiction where the ownership, leasing or operation of
its property or the conduct of its business requires such qualification except
for failures to be so qualified which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
7.02 Corporate and Other Power and Authority. Each Credit Party
has the requisite corporate or other power and authority to execute, deliver and
perform the terms and provisions of each of the Documents to which it is party
and has taken all necessary corporate or other action to authorize the
execution, delivery and performance by it of each of such Documents. Each Credit
Party has duly executed and delivered each of the Documents to which it is (as
determined on each date upon which this representation is made) party, and each
of such Documents constitutes its legal, valid and binding obligation
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization,
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moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
7.03 No Violation. Neither the execution, delivery or performance
by any Credit Party of the Documents to which it is a party, nor compliance by
it with the terms and provisions thereof, (i) will contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or decree of
any court or governmental instrumentality, (ii) will conflict with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of any Credit Party or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, to which any Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the certificate of incorporation or
by-laws (or equivalent organizational documents) of any Borrower or any of its
Subsidiaries.
7.04 Governmental Approvals. Except as specifically described in
Schedule X, no order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made on or prior to the Initial Borrowing Date), or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Document or (ii) the legality, validity, binding
effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of the U.S.
Borrower and its Subsidiaries at June 30, 1995, June 30, 1996 and March 31, 1997
and the related statements of consolidated income, consolidated cash flows and
shareholders' equity of the U.S. Borrower and its Subsidiaries for the fiscal
year or the nine-month period ended on such date, as the case may be, and
furnished to the Lenders prior to the Initial Borrowing Date, fairly present in
all material respects the consolidated results of the operations of the U.S.
Borrower and its Subsidiaries for the respective fiscal year or nine-month
period ended on such date, as the case may be, and consolidated financial
position of the U.S. Borrower and its Subsidiaries at the date of such balance
sheet. All such consolidated financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes in the
case of the March 31, 1997 financial statements.
(b) The consolidated balance sheet of Alliance Automaten & Co. KG
and its Subsidiaries (excluding Bally Gaming International GmbH) at March
31,1997 and the related statements of consolidated income for the nine months
ended on such date and
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furnished to the Lenders prior to the Initial Borrowing Date, were prepared in
accordance with GAAP as of March 31, 1997 and give a true and fair view of the
state of affairs of Alliance Automaten & Co. KG and its Subsidiaries (excluding
Bally Gaming International GmbH) at March 31, 1997 and for the nine months then
ended.
(c) Since March 31, 1996 (but for this purpose, assuming that the
Transaction had been consummated on such date), there has been no material
adverse change in the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the U.S. Borrower and its
Subsidiaries taken as a whole.
(d) (i) On and as of the Initial Borrowing Date, after giving
effect to the Transaction and to all Indebtedness (including the Loans) being
incurred or assumed and Liens created by the Credit Parties in connection
therewith, (a) the sum of the assets, at a fair valuation, of the U.S. Borrower
and its Subsidiaries taken as a whole and each of the U.S. Borrower, Bally Xxxxx
Automaten and Bally Xxxxx Vertriebs on a stand-alone basis will exceed their
respective debts; (b) the U.S. Borrower and its Subsidiaries taken as a whole
and each of the U.S. Borrower, Bally Xxxxx Automaten and Bally Xxxxx Vertriebs
on a stand-alone basis have not incurred and do not intend to incur, and do not
believe that they will incur, debts beyond their ability to pay such debts as
such debts mature; and (c) the U.S. Borrower and its Subsidiaries taken as a
whole and each of the U.S. Borrower, Bally Xxxxx Automaten and Bally Xxxxx
Vertriebs on a stand-alone basis will have sufficient capital with which to
conduct their respective businesses. For purposes of this Section 7.05(d),
"debt" means any liability on a claim, and "claim" means (i) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
(e) Except (i) as disclosed in the financial statements delivered
pursuant to Sections 7.05(a) and (b) and except for the Transaction and (ii)
liabilities arising in the ordinary course of business since March 31, 1997,
there were as of the Initial Borrowing Date no liabilities or obligations with
respect to the U.S. Borrower or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, would be material to the U.S.
Borrower and its Subsidiaries taken as a whole. As of the Initial Borrowing
Date, and except for the Transaction, no Borrower knows of any basis for the
assertion against it or any of its Subsidiaries of any liability or obligation
of any nature whatsoever that is not disclosed in the financial statements
delivered pursuant to Sections 7.05(a) and (b) which, either individually or in
the aggregate, could reasonably be expected to be material to the U.S. Borrower
or the U.S. Borrower and its Subsidiaries taken as a whole.
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(f) On and as of the Initial Borrowing Date, the Projections have
been prepared in good faith and are based on reasonable assumptions under the
then known facts and circumstances (it being understood that nothing contained
herein shall constitute a representation that the results forecasted in such
Projections will in fact be achieved), and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to any Borrower to be misleading in any material respect or
which knowingly fail to take into account material information regarding the
matters reported therein. On the Initial Borrowing Date, each Borrower believes
that the Projections are reasonable and attainable based upon the then known
facts and circumstances, it being understood that nothing contained herein shall
constitute a representation that the results forecasted in such Projections will
in fact be achieved.
7.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of each Borrower, threatened (i) with respect
to any Document or (ii) that are reasonably likely to result in a Material
Adverse Effect.
7.07 True and Complete Disclosure. All factual information (other
than the Projections, which are covered in Section 7.05(f)) (taken as a whole)
furnished by any Credit Party in writing to the Administrative Agent or any
Lender (including, without limitation, all information contained in the
Documents), is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of any Credit Party in writing to the
Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
U.S. Borrower Tranche A Term Loans, the German Borrower Tranche A Term Loans,
the Tranche B Term Loans and the Tranche C Term Loans will be used by the
Borrowers (i) to finance the Refinancing (including, without limitation, to
refinance Revolving Loans theretofore incurred to finance purchases of Existing
PIK Preferred Stock before the PIK Preferred Drawdown Date pursuant to Section
9.03(iv)) and (ii) to pay fees and expenses related to the Transaction.
(b) All proceeds of the Delayed Draw Term Loans shall be used by
the U.S. Borrower to purchase the assets as contemplated in Section 5B.02.
(c) The proceeds of Revolving Loans incurred by each Revolving
Loan Borrower will be used for such Revolving Loan Borrower's and its
Subsidiaries' general corporate and working capital purposes, provided that no
proceeds of any Revolving Loan may be used to finance the Refinancing (although
up to $10 million of
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Revolving Loans may be utilized on the Initial Borrowing Date to fund working
capital requirements of the U.S. Borrower and its Subsidiaries (including
refinancing amounts owing under Indebtedness to be Refinanced) and proceeds of
Revolving Loans may be used after the Initial Borrowing Date to pay fees and
expenses incurred in connection with the Refinancing). In addition, Revolving
Loans may be incurred to finance acquisitions permitted under Section 9.02 and
otherwise in accordance with the terms of this Agreement.
(d) No part of the proceeds of any Loan (other than Revolving
Loans and Swingline Loans incurred after the Initial Borrowing Date) will be
used to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof nor the occurrence of any other Credit Event
will violate or be inconsistent with the provisions of Regulation G, T, U or X.
7.09 Tax Returns and Payments. The U.S. Borrower and each of its
Subsidiaries have timely filed or caused to be timely filed with the appropriate
taxing authority, all Federal, and all material state, local, foreign and other
returns, statements, forms and reports for taxes (the "Returns") required to be
filed by or with respect to the income, properties or operations of the U.S.
Borrower and/or any of its Subsidiaries. The Returns accurately reflect all
liability for taxes of the U.S. Borrower and its Subsidiaries for the periods
covered thereby. The U.S. Borrower and each of its Subsidiaries have paid all
taxes payable by them other than taxes contested in good faith and for which
adequate reserves have been established in accordance with generally accepted
accounting principles. On the Effective Date, there is no material action, suit,
proceeding, investigation, audit or claim now pending or, to the knowledge of
any Borrower, threatened by any authority regarding any taxes relating to the
U.S. Borrower or any of its Subsidiaries. As of the Initial Borrowing Date,
neither the U.S. Borrower nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of the U.S. Borrower or any of its Subsidiaries, is aware of any agreement
or waiver extending any statute of limitations relating to the payment or
collection of other taxes of the U.S. Borrower or any of its Subsidiaries, or is
aware of any circumstances that would cause the taxable years or other taxable
periods of the U.S. Borrower or any of its Subsidiaries not to be subject to the
normally applicable statute of limitations.
7.10 Compliance with ERISA. (a) Schedule IX sets forth each Plan
in effect on the date hereof; each Plan (and each related trust, insurance
contract or fund) is in compliance with its terms and with all applicable laws,
including without limitation ERISA and the Code except to the extent that such a
failure to comply could not reasonably be expected to result in a Material
Adverse Effect; each Plan (and each related trust, if any) which is intended to
be qualified under Section 401(a) of the Code has received a
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determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code or a request
for such a determination letter is pending; no Reportable Event has occurred; to
the best knowledge of the U.S. Borrower no Plan which is a multiemployer plan
(as defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization if
such insolvency or reorganization could reasonably be expected to have a
Material Adverse Effect; no Plan has an Unfunded Current Liability which, when
added to the aggregate amount of Unfunded Current Liabilities with respect to
all other Plans, exceeds an amount that could reasonably be expected to result
in a Material Adverse Effect; no Plan which is subject to Section 412 of the
Code or Section 302 of ERISA has an accumulated funding deficiency, within the
meaning of such sections of the Code or ERISA, or has applied for or received a
waiver of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA in an amount that could reasonably be expected to result in a Material
Adverse Effect; all contributions required to be made with respect to a Plan
have been timely made except to the extent that the failure to make any such
contribution could not reasonably be expected to result in a Material Adverse
Effect; neither the U.S. Borrower nor any Subsidiary of the U.S. Borrower or any
ERISA Affiliate has incurred any liability (including any indirect, contingent
or secondary liability) to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any such
liability under any of the foregoing sections with respect to any Plan which
could reasonably be expected to result in a Material Adverse Effect; to the best
knowledge of the U.S. Borrower or any Subsidiary of the U.S. Borrower or any
ERISA Affiliate, no condition exists which presents a material risk to the U.S.
Borrower or any Subsidiary of the U.S. Borrower or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code an amount that could reasonably be expected to
result in a Material Adverse Effect; no proceedings have been instituted to
terminate or appoint a trustee to administer any Plan which is subject to Title
IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any Plan
(other than routine claims for benefits) is pending, or, to the best knowledge
of the U.S. Borrower or any Subsidiary of the U.S. Borrower or any ERISA
Affiliate, expected or threatened which could reasonably be expected to result
in a Material Adverse Effect; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of the U.S. Borrower and its Subsidiaries and its ERISA Affiliates
to all Plans which are multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Plan ended prior to the date of the most
recent Credit Event, would not exceed an amount that could reasonably be
expected to result in a Material Adverse Effect; each group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which
covers or has covered employees or former employees of the U.S. Borrower, any
Subsidiary of the U.S. Borrower, or any ERISA Affiliate has at all times
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been operated in substantial compliance with the provisions of Part 6 of
subtitle B of Title I of ERISA and Section 4980B of the Code, except to the
extent that any such failure to so comply could not reasonably be expected to
result in a Material Adverse Effect; no lien, not permitted by Section 9.01(i),
imposed under the Code or ERISA on the assets of the U.S. Borrower or any
Subsidiary of the U.S. Borrower or any ERISA Affiliate exists or, to the best
knowledge of the U.S. Borrower or any Subsidiary of the U.S. Borrower or any
ERISA Affiliate, is likely to arise on account of any Plan; and the U.S.
Borrower and its Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any Plan the obligations with respect to which could
reasonably be expected to have a material adverse effect on the ability of the
U.S. Borrower to perform its obligations under this Agreement.
(b) Each Foreign Pension Plan has been maintained in compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities except to the extent
that such a failure to comply could not reasonably be expected to result in a
Material Adverse Effect. All contributions required to be made with respect to a
Foreign Pension Plan have been timely made except to the extent that the failure
to make any such contribution could not reasonably be expected to result in a
Material Adverse Effect. Neither the U.S. Borrower nor any of its Subsidiaries
has incurred any obligation in connection with the termination of or withdrawal
from any Foreign Pension Plan an amount that could reasonably be expected to
result in a Material Adverse Effect. The present value of the accrued benefit
liabilities (whether or not vested) under each Foreign Pension Plan, determined
as of the end of the U.S. Borrower's most recently ended fiscal year on the
basis of actuarial assumptions, each of which is reasonable, did not exceed the
current value of the assets of such Foreign Pension Plan allocable to such
benefit liabilities by more than an amount that could reasonably be expected to
result in a Material Adverse Effect.
7.11 The Security Documents. (a) The provisions of the U.S.
Security Agreement are effective to create in favor of the Collateral Agent for
the benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties party thereto in
the U.S. Security Agreement Collateral described therein, subject to the
provisions of the U.S. Security Agreement, and the Collateral Agent, for the
benefit of the Secured Creditors, has a fully perfected first lien on, and
security interest in, all right, title and interest in all of the U.S. Security
Agreement Collateral described therein to the extent such pledge and security
interest can be perfected under the applicable UCC, subject to no other Liens
other than Permitted Liens. The recordation of the Assignment of Security
Interest in U.S. Patents and Trademarks in the form attached to the U.S.
Security Agreement in the United States Patent and Trademark Office together
with filings on Form UCC-1 made pursuant to the U.S. Security Agreement will
create a perfected security interest granted to the Collateral Agent in the
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trademarks and patents covered by the U.S. Security Agreement and the
recordation of the Assignment of Security Interest in U.S. Copyrights in the
form attached to the U.S. Security Agreement with the United States Copyright
Office together with filings on Form UCC-1 made pursuant to the U.S. Security
Agreement will create a perfected security interest granted to the Collateral
Agent in the copyrights covered by the U.S. Security Agreement.
(b) Subject to the last sentence of this Section 7.11(b) and the
provisions of Section 4 of the U.S. Pledge Agreement, the security interests
created in favor of the Collateral Agent, as Pledgee, for the benefit of the
Secured Creditors under the U.S Pledge Agreement constitute first priority
perfected security interests in the Collateral described in the U.S. Pledge
Agreement (as same exists on each date this representation and warranty is
made), subject to no security interests of any other Person. Notwithstanding
anything to the contrary contained above in this Section 7.11(b) or elsewhere in
this Agreement, so long as any Existing Senior Secured Notes remain outstanding,
the security interests described above arising pursuant to the U.S. Pledge
Agreement in any collateral which has been pledged or in which a security
interest has been granted to secure the Existing Senior Secured Notes shall be
subject to the prior security interests created in favor of the holders of the
Existing Senior Secured Notes; provided that at all times the security interests
created pursuant to the U.S. Pledge Agreement in all such collateral shall be
required to be fully perfected (pursuant to the Bailee Agreement or, after all
Existing Senior Secured Notes have been repaid in full, by delivery of the
relevant collateral to the Collateral Agent pursuant to the U.S. Pledge
Agreement).
(c) Subject to the terms of the Mortgages, the Mortgages (if any)
create, for the obligations purported to be secured thereby, a valid and
enforceable perfected security interest in and mortgage lien on all of the
Mortgaged Properties in favor of the Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the Secured
Creditors, superior to and prior to the rights of all third persons (except that
the security interest and mortgage lien created in the Mortgaged Properties may
be subject to the Permitted Encumbrances related thereto) and subject to no
other Liens (other than Liens permitted under Section 9.01). Schedule III
contains a true and complete list of each parcel of Real Property owned or
leased by the U.S. Borrower and its Subsidiaries on the Initial Borrowing Date,
and the type of interest therein held by the U.S. Borrower or such Subsidiary.
The U.S. Borrower and each of its Subsidiaries have good and marketable title to
all fee-owned Real Property and valid leasehold title to all Leaseholds, in each
case free and clear of all Liens except those described in the first sentence of
this subsection (c).
(d) Subject to the terms of the respective German Security
Documents, the security interests created in favor of the Collateral Agent for
the benefit of the Secured Creditors under the German Security Documents
constitute first priority perfected security
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interests in the assets pledged or in which a Lien is granted pursuant to the
German Security Documents (as same exists on each date this representation and
warranty is made), subject to no security interests of any other Person. No
filings or recordings are required in order to perfect (or maintain the
perfection or priority of) the security interests created in the assets charged
pursuant to the German Security Documents.
(e) Notwithstanding anything to the contrary contained above in
this Section 7.11 or in any of the Security Documents, the foregoing
representations and warranties shall not be deemed violated if at any time there
is a failure in perfection of the security interest in any Collateral as
otherwise provided above, so long as the aggregate fair market value of all
Collateral with respect to which such defects in perfection exist at any time
does not in the aggregate exceed $1,000,000. The provisions of the foregoing
sentence shall not excuse the U.S. Borrower or the other relevant Credit Parties
from taking such action as may be required to be taken by them in accordance
with the terms of the various Credit Documents.
7.12 Representations and Warranties in Other Documents. All
representations and warranties set forth in the Documents (other than the Credit
Documents) were true and correct in all material respects at the time as of
which such representations and warranties were made (or deemed made).
7.13 Properties. The U.S. Borrower and each of its Subsidiaries
have good and marketable title to all material properties owned by them,
including all property reflected in the financial statements referred to in
Sections 7.05(a) and (b) (except as sold or otherwise disposed of since the date
of such balance sheet in the ordinary course of business), free and clear of all
Liens, other than Liens permitted by Section 9.01.
7.14 Capitalization. On the Initial Borrowing Date (or on June
30, 1997 in the case of the U.S. Borrower), the authorized capital stock of (x)
the U.S. Borrower shall consist of (i) 175,000,000 shares of common stock, $.01
par value per share, of which approximately 31.8 million were on such date
issued and outstanding, (ii) 10,000,000 shares of Special Stock of which
approximately 124,000 shares of Series E Preferred Stock were on such date
issued and outstanding and of which approximately 754,000 shares of Existing PIK
Preferred Stock were on such date issued and outstanding, (y) Bally Xxxxx
Automaten shall consist of one share, in the nominal amount of DM 6,509,000,
held by the German Parent and (z) Bally Xxxxx Vertriebs shall consist of one
share, in the nominal amount of DM 37,190,000, held by the German Parent. All
such outstanding shares have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights. Except for as disclosed on
Schedule XII, on the Initial Borrowing Date, neither the U.S. Borrower nor any
of its Subsidiaries has outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls,
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commitments or claims of any character relating to, its capital stock.
7.15 Subsidiaries. Schedule IV correctly sets forth, as of the
Initial Borrowing Date and after giving effect to the Transaction, each
Subsidiary of the U.S. Borrower (including the full and correct legal name
thereof, the type of organization and jurisdiction under which it is organized),
and the direct and indirect ownership interests of the U.S. Borrower therein.
Schedule IV also includes an accurate organization chart showing the U.S.
Borrower, each of its Subsidiaries, and the direct and indirect ownership
interests therein, in each case as of the Initial Borrowing Date.
7.16 Compliance with Statutes, etc. Each Borrower and each of its
Subsidiaries is in compliance with all applicable statutes, regulations
(including, without limitation, all applicable Gaming Regulations) and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign (including, without limitation, all relevant Gaming
Authorities), in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to the Gaming Business and environmental standards and controls),
except such noncompliances as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
7.17 Investment Company Act. Neither the U.S. Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither the U.S.
Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) Each Borrower and each of its
Subsidiaries have complied with, and on the date of such Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or, to the
best knowledge of each Borrower, overtly threatened Environmental Claims against
any Borrower or any of its Subsidiaries (including any such Environmental Claim
arising out of the ownership or operation by any Borrower or any of its
Subsidiaries of any Real Property no longer owned by any Borrower or any of its
Subsidiaries) or, to the best knowledge of each Borrower, any Real Property
owned or operated by any Borrower or any of its Subsidiaries. There are no
facts, circumstances, conditions or occurrences with respect to the business or
operations of any Borrower or any of its Subsidiaries or any Real Property owned
or operated by any Borrower or any of its Subsidiaries (including any Real
Property formerly owned or operated by any Borrower or any of its Subsidiaries
but no
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longer owned by any Borrower or any of its Subsidiaries) or, to the best
knowledge of any Borrower, any real property adjoining or adjacent to any such
Real Property that would reasonably be expected (i) to form the basis of an
Environmental Claim against any Borrower or any of its Subsidiaries or any Real
Property owned or operated by any Borrower or any of its Subsidiaries, or (ii)
to cause any Real Property owned or operated by any Borrower or any of its
Subsidiaries to be subject to any restrictions on the ownership, occupancy or
transferability of such Real Property by any Borrower or any of its Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by any Borrower or any of its Subsidiaries where such generation,
use, treatment, storage or transportation has violated or would reasonably be
expected to violate any applicable Environmental Law. Hazardous Materials have
not at any time been Released on or from any Real Property owned or operated by
any Borrower or any of its Subsidiaries where such Release has violated or would
reasonably be expected to violate any applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section
7.19, the representations made in this Section 7.19 shall not be untrue unless
the aggregate effect of all violations, Environmental Claims, facts,
circumstances, conditions, occurrences, restrictions, failures and
noncompliances of the types described above would reasonably be expected to have
a Material Adverse Effect.
7.20 Labor Relations. No Borrower or any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint pending
against any Borrower, any of its Subsidiaries or, to the best knowledge of any
Borrower, overtly threatened against any of them, before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against any Borrower or
any of its Subsidiaries or, to the best knowledge of each Borrower, overtly
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against any Borrower or any of its Subsidiaries or, to the best
knowledge of each Borrower, overtly threatened against any Borrower or any of
its Subsidiaries and, (iii) no payments are due and no circumstances exist which
might make any payment due by any of the German Subsidiaries under the
provisions of any law, statute, rule or regulation (relating to the U.S.
Borrower's or any of its Subsidiaries' labor practices) or any order, writ,
injunction or decree (relating to the U.S. Borrower's or any of its
Subsidiaries' labor practices) of any court or governmental instrumentality
except (with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as could not reasonably be
expected to have a Material Adverse Effect.
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7.21 Patents, Licenses, Franchises and Formulas. Each Borrower
and each of its Subsidiaries owns, or has the right to use, all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises, proprietary information (including but not limited to rights in
computer programs and databases) and formulas, or rights with respect to the
foregoing, or has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected to result in a Material Adverse
Effect.
7.22 Indebtedness. Schedule V sets forth a true and complete list
of all Indebtedness of the U.S. Borrower and its Subsidiaries as of the Initial
Borrowing Date and which is to remain outstanding after giving effect to the
Transaction (excluding the Loans, the Letters of Credit, the Existing Senior
Secured Notes, the New Senior Subordinated Notes and any Preferred Stock of the
U.S. Borrower which is to remain outstanding, the "Existing Indebtedness"), in
each case, showing the aggregate principal amount thereof and the name of the
respective borrower and any Credit Party or any of its Subsidiaries which
directly or indirectly guaranteed such debt and describing any security
therefor.
7.23 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in all material respects in accordance
with the terms of the respective Documents and all applicable laws. At the time
of consummation thereof, except as specifically set forth on Schedule X, all
material consents and approvals of, and filings and registrations with, and all
other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Transaction to the
extent then required have been obtained, given, filed or taken and are or will
be in full force and effect (or effective judicial relief with respect thereto
has been obtained). Except as specifically set forth on Schedule X, all
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Transaction. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Transaction, or the occurrence of any Credit Event or the
performance by any Credit Party of its obligations under the Documents to which
it is party.
7.24 Existing Senior Secured Notes. At the time of consummation
thereof, the Existing Senior Secured Notes Tender Offer/Consent Solicitation
shall have been consummated in all material respects in accordance with the
terms of the respective Documents therefor and all applicable laws. At the time
of consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to make or
consummate the Existing Senior Secured Notes Tender Offer/Consent Solicitation
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shall have been obtained, given, filed or taken or waived and are or will be in
full force and effect (or effective judicial relief with respect thereto has
been obtained). All applicable waiting periods with respect thereto have or,
prior to the time when required, will have, expired without, in all such cases,
any action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Existing Senior Secured Notes
Tender Offer/Consent Solicitation. Additionally, there shall not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Existing Senior Secured Notes Tender Offer/Consent
Solicitation, or the performance by the U.S. Borrower of its obligations under
the respective Documents therefor and all applicable laws.
7.25 Specified Inactive Subsidiaries and Specified Non-Material
Subsidiaries. (a) On the Initial Borrowing Date, the aggregate assets and
liabilities (other than liabilities owed by the respective Specified Inactive
Subsidiary to the U.S. Borrower or any Subsidiary of the U.S. Borrower which
owns a direct or indirect equity interest in the respective Specified Inactive
Subsidiary) of all Specified Inactive Subsidiaries does not exceed $1,000,000.
(b) The aggregate book value or fair market value (as determined
in good faith by the U.S. Borrower), whichever is greater, of all assets of each
Specified Non-Material Subsidiary is less than $5,000,000. Furthermore, the
aggregate book value or fair market value (as determined in good faith by the
U.S. Borrower), whichever is greater, of all assets of all Specified
Non-Material Subsidiaries is less than $15,000,000.
7.26 Existing Senior Secured Notes Collateral. Schedule XIII is
an accurate and complete (in all material respects) list of all collateral, as
of the Initial Borrowing Date, which is held by the trustee under the Existing
Senior Secured Notes Indenture, or any other agent, sub-agent, collateral agent
or other custodian for the benefit of the holders of the Existing Senior Secured
Notes, which schedule lists the respective collateral and identifies the Person
or Persons which have custody of same.
7.27 Margin Stock. On the Initial Borrowing Date, the aggregate
fair market value of all Margin Stock owned by the U.S. Borrower and its
Subsidiaries does not exceed $100,000.
SECTION 8. Affirmative Covenants. Each Borrower hereby covenants
and agrees that on and after the Effective Date and until the Total Commitments
and all Letters of Credit have terminated and the Loans, Notes and Unpaid
Drawings, together with interest, Fees and all other Obligations (other than
contingent indemnification obligations) incurred hereunder and thereunder, are
paid in full:
8.01 Information Covenants. The Borrowers will furnish to the
Administrative Agent (with sufficient copies for distribution to each of the
Lenders):
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(a) Monthly Reports. Within 40 days (or 45 days in the case of
the first twelve fiscal months ended after the Initial Borrowing Date)
after the end of each fiscal month of the U.S. Borrower, the
consolidated balance sheet of each of (x) the U.S. Borrower and its
Subsidiaries and (y) the German Parent and its Subsidiaries (other than
Bally Gaming International GmbH), each as at the end of such fiscal
month and the related statements (consolidated, in the case of the U.S.
Borrower and the German Parent) of income for such fiscal month and for
the elapsed portion of the fiscal year ended with the last day of such
fiscal month, in each case, setting forth comparative figures for the
corresponding fiscal month in the prior fiscal year and comparable
budgeted income figures for such fiscal month (except that, in the case
of balance sheets, such comparison shall be to the last day of the prior
fiscal year).
(b) Quarterly Financial Statements. Within 45 days after the
close of the first three quarterly accounting periods in each fiscal
year of the U.S. Borrower, (i) the consolidated and consolidating
balance sheets of the U.S. Borrower and its Subsidiaries, as at the end
of such quarterly accounting period, and the related consolidated and,
in the case of income statements only, consolidating statements of
income and retained earnings and statement of cash flows for such
quarterly accounting period (in the case of the statements of income and
retained earnings) and for the elapsed portion of the fiscal year (in
each case) ended with the last day of such quarterly accounting period,
in each case setting forth comparative figures for the related periods
in the prior fiscal year (except that, in the case of balance sheets,
such comparison shall be to the last day of the prior fiscal year), all
of which shall be certified by the chief financial officer of the U.S.
Borrower, subject to normal year-end audit adjustments and the absence
of footnotes and (ii) management's discussion and analysis of the
important operational and financial developments during the quarterly
and year-to-date periods.
(c) Annual Financial Statements. Within 90 days after the close
of each fiscal year of the U.S. Borrower, (i) the consolidated and
consolidating balance sheets of the U.S. Borrower and its Subsidiaries,
as at the end of such fiscal year, and the related consolidated and, in
the case of income statements only, consolidating statements of income
and retained earnings and of cash flows for such fiscal year setting
forth comparative figures for the preceding fiscal year and certified
(x) in the case of the consolidating financial statements, by the chief
financial officer of the U.S. Borrower and (y) in the case of the
consolidated financial statements, by independent certified public
accountants of recognized national standing reasonably acceptable to the
Administrative Agent, together with a report of such accounting firm
stating that in the course of its regular audit of the respective
financial statements, which audit was conducted in accordance with
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generally accepted auditing standards, nothing came to the attention of
such accountants that caused them to believe that the U.S. Borrower was
not in compliance with any of Sections 4.02(f) or 9, insofar as such
Sections relate to accounting matters, or, if in the opinion of such
accounting firm any such non-compliance has occurred and is continuing,
a statement as to the nature thereof and (ii) management's discussion
and analysis of the important operational and financial developments
during the respective fiscal year.
(d) Management Letters. Promptly after the U.S. Borrower's or any
of its Subsidiaries' receipt thereof, a copy of any "management letter"
addressed to the board of directors of the U.S. Borrower or such
Subsidiary from its certified public accountants and the management's
responses thereto.
(e) Budgets. No later than 30 days after the first day of each
fiscal year (or not later than September 15, 1997, for the fiscal year
ended June 30, 1998) of the U.S. Borrower, a budget in form satisfactory
to the Administrative Agent and the Required Lenders (including budgeted
statements of income and sources and uses of cash and balance sheets)
prepared by the U.S. Borrower for (x) each of the months of such fiscal
year prepared in reasonable detail (although budgeted statements of
sources and uses of cash and balance sheets shall be prepared on a
quarterly (or annual in the case of the budget for the fiscal year ended
June 30, 1998) basis only) and (y) the immediately following fiscal year
prepared in summary form, in each case accompanied by the statement of
the chief financial officer of the U.S. Borrower to the effect that, to
the best of his knowledge, the budget is a reasonable estimate for the
period covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(b) and (c), a
certificate of the chief financial officer of the U.S. Borrower to the
effect that, to the best of such officer's knowledge, no Default or
Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature
and extent thereof, which certificate shall (w) contain a calculation of
the Cumulative Net Income Amount as of the last day of such fiscal
quarter or year, as the case may be, showing in reasonable detail the
accretions thereto and deductions therefrom, in each case in accordance
with the definition of Cumulative Net Income Amount contained herein,
during the respective fiscal quarter or year, as the case may be, (x)
set forth in reasonable detail the calculations required to establish
whether the U.S. Borrower and its Subsidiaries were in compliance with
the provisions of Section 4.02(f) (to the extent delivered with the
financial statements required by Section 8.01(c)), 9.03, 9.04, 9.05 and
9.07 through 9.11, inclusive, at the end of such fiscal quarter or year,
as the case may be, (y) if delivered with the financial statements
required by Section 8.01(c), set forth in reasonable detail the amount
of Excess Cash Flow for the Excess Cash Payment
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Period and (z) contain a list of all Specified Inactive Subsidiaries in
existence, and a list of all Specified Non-Material Subsidiaries, as of
the last day of the immediately preceding fiscal quarter or year, as
the case may be, and containing calculations required to establish
whether the respective Subsidiaries so designated as Specified
Non-Material Subsidiaries continue to qualify as such in accordance
with the definition of Specified Non-Material Subsidiaries contained
herein.
(g) Notice of Default or Litigation. Promptly, and in any event
within three Business Days (or ten Business Days in the case of
following clause (ii)) after any Knowledgeable Officer of any Borrower
obtains actual knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or an Event of Default and (ii) any
litigation or governmental investigation or proceeding pending (x)
against the U.S. Borrower or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect, (y) with respect to any material Indebtedness of the U.S.
Borrower or any of its Subsidiaries or (z) with respect to any Document.
(h) Other Reports and Filings. Promptly after the filing or
delivery thereof, copies of all financial information, proxy materials
and reports, if any, which the U.S. Borrower or any of its Subsidiaries
shall publicly file with the Securities and Exchange Commission or any
successor thereto (the "SEC") or the Federal Supervisory Office for
Securities Trading (Bundesaufsichtsamt fur den Wertpapierhandel) or
shall deliver to its shareholders or to holders of its Indebtedness (but
only if the respective issue of Indebtedness is in excess of $10,000,000
outstanding principal amount or, if less, the notice relates to a
default or event of default under the respective Indebtedness) pursuant
to the terms of the documentation governing such Indebtedness (or any
trustee, agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within
ten Business Days after, any Knowledgeable Officer of any Borrower
obtains knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters would not,
individually or when aggregated with all other such environmental
matters, be reasonably expected to have a Material Adverse Effect:
(i) any pending or threatened Environmental Claim
against the U.S. Borrower or any of its Subsidiaries or any Real
Property owned or operated by the U.S. Borrower or any of its
Subsidiaries;
(ii) any condition or occurrence on or arising from any
Real Property owned or operated by the U.S. Borrower or any of
its Subsidiaries that (a) results in noncompliance by the U.S.
Borrower or any of its
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Subsidiaries with any applicable Environmental Law or (b)
would reasonably be expected to form the basis of an
Environmental Claim against the U.S. Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property
owned or operated by the U.S. Borrower or any of its Subsidiaries
that would reasonably be expected to cause such Real Property to
be subject to any restrictions on the ownership, occupancy, use
or transferability by the U.S. Borrower or any of its
Subsidiaries of such Real Property under any Environmental Law;
and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned or operated by the U.S.
Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency (with the items described above in preceding clauses (i)
through (iv) being herein called, collectively, "Environmental
Matters").
All such notices shall describe in reasonable detail the nature
of the respective Environmental Matter and the U.S. Borrower's or such
Subsidiary's intended response thereto. In addition, the U.S. Borrower or any of
its Subsidiaries will provide the Administrative Agent (with sufficient copies
for distribution to each of the Lenders) with copies of all communications
between the U.S. Borrower or any of its Subsidiaries and any government or
governmental agency relating to Environmental Laws which would reasonably be
expected to have a Material Adverse Effect, all notices of any Environmental
Claims, and such detailed reports of any outstanding Environmental Claim as may
reasonably be requested by the Lenders; provided, that in any event the U.S.
Borrower and its Subsidiaries shall deliver to the Administrative Agent (with
sufficient copies for distribution to each of the Lenders) all notices received
by the U.S. Borrower or any of its Subsidiaries from any government or
governmental agency under, or pursuant to, CERCLA which identify the U.S.
Borrower or any of its Subsidiaries as potentially responsible parties for
response costs or which otherwise notify the U.S. Borrower or any of its
Subsidiaries of potential liability under CERCLA.
(j) Borrowing Base Certificates. (i) On the Initial Borrowing
Date and (ii) no later than 10:00 a.m. (New York time or Frankfurt time, as
appropriate) on the 40th day (or 45th day in the case of the first 12 calendar
months ended after the Initial Borrowing Date) after the last day of each
calendar month, a borrowing base certificate of (a) the U.S. Borrower in the
form of Exhibit N-1 and (b) the German Borrowers in the form of Exhibit N-2
(each a "Borrowing Base Certificate"), with respect to the Eligible Receivables
and Eligible Inventory of the respective Borrower or Borrowers (and (x) the
Wholly-Owned U.S. Subsidiary Guarantors, in the case of a Borrowing Base
Certificate
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delivered by the U.S. Borrower and (y) Bally Gaming International
GmbH, in the case of a Borrowing Base Certificate delivered by the German
Borrowers) as of (x) in the case of clause (i), June 30, 1997 (after giving
effect to the transactions contemplated hereby and by the other Credit
Documents) and (y) in the case of clause (ii), the last day of such calendar
month, and in all such cases, certified by the chief financial officer of the
respective Borrower or Borrowers.
(k) Annual Meetings with Lenders. At the request of the
Administrative Agent, at a date to be mutually agreed upon between the
Administrative Agent and the U.S. Borrower occurring on or prior to the 120th
day after the close of each fiscal year of the U.S. Borrower, the U.S. Borrower
shall hold a meeting with all of the Lenders at which meeting shall be reviewed
the financial results of the previous fiscal year and the financial condition of
the U.S. Borrower and its Subsidiaries and the budgets presented for the current
fiscal year of the U.S. Borrower and its Subsidiaries.
(l) Other Information. From time to time, such other information
or documents (financial or otherwise) with respect to the U.S. Borrower or any
of its Subsidiaries as any Lender may reasonably request, including, without
limitation, copies of financial reports or documents filed by the U.S. Borrower
or any of its Subsidiaries with any Gaming Authority.
8.02 Books, Records and Inspections. Each Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts in
which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities. Upon prior notice,
each Borrower will, and will cause each of its Subsidiaries to, permit officers
and designated representatives of the Administrative Agent or any Lender to
visit and inspect, during regular business hours and under guidance of officers
of the U.S. Borrower or such Subsidiary, any of the properties of the U.S.
Borrower or such Subsidiary, and to examine the books of account of the U.S.
Borrower or such Subsidiary and discuss the affairs, finances and accounts of
the U.S. Borrower or such Subsidiary with, and be advised as to the same by, its
and their officers and independent accountants, all at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent or such
Lender may request.
8.03 Maintenance of Property; Insurance. (a) Schedule VI sets
forth a true and complete listing of all insurance maintained by the U.S.
Borrower and its Subsidiaries as of the Initial Borrowing Date. Each Borrower
will, and will cause each of its Subsidiaries to, (i) keep all property
necessary to the business of the U.S. Borrower and its Subsidiaries in
reasonably good working order and condition, ordinary wear and tear excepted,
(ii) maintain insurance on all such property in at least such amounts and
against at least such risks as is consistent and in accordance with industry
practice for companies similarly situated owning similar properties in the same
general areas in which
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the U.S. Borrower or any of its Subsidiaries operates, and (iii) furnish to the
Administrative Agent or any Lender, upon written request, full information as to
the insurance carried.
(b) The U.S. Borrower will, and will cause each of its
Subsidiaries to, at all times keep its property insured in favor of the
Collateral Agent, and all policies or certificates (or certified copies thereof)
with respect to such insurance (and any other insurance maintained by the U.S.
Borrower and/or its Subsidiaries) (i) shall be endorsed to the Collateral
Agent's satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and/or additional
insured), (ii) shall state that such insurance policies shall not be cancelled
or revised without at least 30 days' prior written notice thereof by the
respective insurer to the Collateral Agent, (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Secured Creditors, (iv) shall contain
the standard non-contributing mortgage clause endorsement in favor of the
Collateral Agent with respect to hazard liability insurance, (v) shall provide
that any losses shall be payable notwithstanding (A) any act or neglect of the
U.S. Borrower or any of its Subsidiaries, (B) the occupation or use of the
properties for purposes more hazardous than those permitted by the terms of the
respective policy if such coverage is obtainable at commercially reasonable
rates and is of the kind from time to time customarily insured against by
Persons owning or using similar property and in such amounts as are customary,
(C) any foreclosure or other proceeding relating to the insured properties or
(D) any change in the title to or ownership or possession of the insured
properties and (vi) shall provide that all proceeds thereof shall be deposited
with the Collateral Agent (although such proceeds received thereunder shall be
permitted to be used by the U.S. Borrower and its Subsidiaries to the extent
provided in Section 4.02(g)). Except as may otherwise be specifically agreed
from time to time by the Collateral Agent, copies of all insurance policies and
certificates from time to time maintained by the U.S. Borrower and its
Subsidiaries, as described above, shall be furnished to the Collateral Agent by
the U.S. Borrower promptly after same are obtained by the U.S. Borrower or one
or more of its Subsidiaries.
(c) If the U.S. Borrower or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 8.03, or if the U.S.
Borrower, or any of its Subsidiaries shall fail to so endorse all policies or
certificates with respect thereto as provided in this Section 8.03, the
Collateral Agent shall have the right (but shall be under no obligation), upon
10 Business Days' prior notice to the U.S. Borrower, to procure such insurance
and the U.S. Borrower agrees to reimburse the Collateral Agent for all costs and
expenses of procuring such insurance.
8.04 Corporate Franchises. Each Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents;
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provided, however, that nothing in this Section 8.04 shall prevent (i)
transactions permitted under Sections 8.14 and 9.02, (ii) the withdrawal by the
U.S. Borrower or any of its Subsidiaries of its qualification as a foreign
corporation in any jurisdiction where such withdrawal could not reasonably be
expected to have a Material Adverse Effect or (iii) the liquidation or
dissolution of any other Subsidiary that no longer conducts any business and the
aggregate assets (taken at fair market value as determined in good faith by the
U.S. Borrower) and liabilities (taking the reasonable probable liability in the
case of any contingent obligations) of which are less than $100,000.
8.05 Compliance with Statutes, etc. Each Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations (including without limitation all applicable Gaming Regulations) and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign (including without limitation all relevant Gaming
Authorities), in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to the Gaming Business and environmental standards and controls),
except such noncompliances as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
8.06 Compliance with Environmental Laws. (a) Each Borrower will
comply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned or operated by the U.S. Borrower or any of its Subsidiaries,
except for any non-compliance that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, will promptly pay or
cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens (except Permitted Liens) imposed pursuant to such
Environmental Laws. No Borrower nor any of its Subsidiaries will generate, use,
treat, store, release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of Hazardous Materials on any Real Property now or
hereafter owned or operated by the U.S. Borrower or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except for Hazardous Materials generated, used, treated,
stored, released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and as is reasonably
required in connection with the operation, use and maintenance of the business
or operations of the U.S. Borrower or any of its Subsidiaries.
(b) At the written request of the Administrative Agent or the
Required Lenders, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the U.S. Borrower will provide, at
its sole cost and expense, an environmental site assessment report concerning
any Real Property owned or operated by the U.S. Borrower and its Subsidiaries,
prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent, indicating the presence or absence of
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Hazardous Materials and the estimated reasonably likely cost of any removal or
remedial action required under Environmental Laws in connection with such
Hazardous Materials on such Real Property, provided that in no event shall such
request be made more often than once every two years for any particular Real
Property unless either (i) an Event of Default shall be in existence or (ii) the
Lenders receive notice under Section 8.01(i) of any Environmental Matter for
which notice is required to be delivered for any such Real Property. If the U.S.
Borrower fails to provide the same within ninety days after such request was
made, the Administrative Agent may order the same, the cost of which shall be
borne by the U.S. Borrower, and the U.S. Borrower shall grant and hereby grants
to the Administrative Agent and the Lenders and their agents access to such Real
Property and specifically grant the Administrative Agent and the Lenders an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment using a nationally recognized environmental
consulting firm reasonably acceptable to the U.S. Borrower at any reasonable
time upon reasonable notice to the U.S. Borrower, all at the sole costs and
reasonable expense of the U.S. Borrower.
8.07 ERISA. As soon as reasonably practicable and, in any event,
within fifteen (15) days after any Knowledgeable Officer of the U.S. Borrower
obtains actual knowledge of the occurrence of any of the following, to the
extent that the same could reasonably be expected to have a Material Adverse
Effect, either individually or in the aggregate, the U.S. Borrower will deliver
to the Administrative Agent a notice setting forth the reasonable details as to
such occurrence and the action, if any, that the U.S. Borrower, any Subsidiary
or any ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the U.S.
Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or
the Plan administrator with respect thereto: that a Reportable Event has
occurred (except to the extent that the U.S. Borrower has previously delivered
to the Lenders a notice (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may reasonably be
expected to be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan or Foreign Pension Plan has not been timely made; that a Plan
has been or may be terminated, reorganized, partitioned or declared insolvent
under Title IV of ERISA; that a Plan has an Unfunded Current Liability; that
proceedings may reasonably be expected to be or have been instituted to
terminate or appoint a trustee to administer a Plan which is subject to Title IV
of ERISA; that a
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proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan which proceeding is not dismissed within (30)
days of the institution of such proceeding; that the U.S. Borrower, any
Subsidiary of the U.S. Borrower or any ERISA Affiliate will or may reasonably be
expected to incur any liability (including any indirect, contingent, or
secondary liability) to or on account of the termination of or withdrawal from a
Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that the U.S. Borrower or any Subsidiary of U.S.
Borrower may reasonably be expected to incur any liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan. Upon
request by the respective Lender, the U.S. Borrower will deliver to such Lender
(i) a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service and (ii) copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA. In addition to any certificates or notices delivered
to the Lenders pursuant to the first sentence hereof, copies of any material
notices received from the PBGC by the U.S. Borrower, any Subsidiary of the U.S.
Borrower or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan
shall be delivered to the Lenders no later than fifteen (15) days after the date
such notice has been received by the U.S. Borrower, such Subsidiary or the ERISA
Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Each Borrower will
cause (i) each of its, and each of its Subsidiaries', fiscal years to end on
June 30 (except that the U.S. Borrower may elect to change its, and its
Subsidiaries', fiscal year ends to December 31, in which event (x) a short
fiscal year shall exist as a result of such election (which fiscal year shall
end on the respective December 31 and shall begin on the prior July 1) and (y)
at all times thereafter, each such fiscal year of each Borrower and each of its
Subsidiaries shall be required to end on a December 31), and (ii) each of its,
and each of its Subsidiaries' fiscal quarters to end on September 30, December
31, March 31 and June 30. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, in the event the U.S. Borrower changes its fiscal
year as provided above, then in each instance in this Agreement where basket or
other amounts are expressly permitted to be incurred or remain outstanding on a
fiscal year basis, the amount shall be appropriately reduced on a proportionate
basis for the respective short fiscal year resulting from the actions taken as
described above.
8.09 Obtaining Approvals. Each Borrower will, and will cause each
of its
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Subsidiaries to, use their respective best efforts to obtain all approvals
listed on Schedule X as soon as practicable following the Initial Borrowing
Date. Furthermore, if at any time any approval of any Gaming Authority or any
other governmental or similar approval is required in connection with the
execution, delivery or performance of any Credit Document, or the taking by the
Administrative Agent, the Collateral Agent or any Secured Creditors of any
remedial action pursuant thereto, then each of the Borrowers shall, and shall
cause the respective Subsidiaries to, use their best efforts to obtain any such
approvals, upon request from the Administrative Agent, the Collateral Agent or
the Required Lenders.
8.10 Payment of Taxes. Each Borrower will, and will cause each of
its Subsidiaries to, pay and discharge, or cause to be paid and discharged, all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits, or upon any properties belonging to it, in each
case on a timely basis, and all material lawful claims which, if unpaid, might
become a lien or charge upon any properties of the U.S. Borrower or any of its
Subsidiaries; provided that neither the U.S. Borrower nor any of its
Subsidiaries will be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by appropriate proceedings if
it has maintained adequate reserves with respect thereto in accordance with
generally accepted accounting principles.
8.11 Additional Security; Further Assurances; etc. (a) The U.S.
Borrower will, and will cause each of the other Credit Parties to, (x) grant to
the Collateral Agent security interests and mortgages in such assets and
properties of the Credit Parties as are not covered by the original Security
Documents and (y) enter into any additional security documentation as may be
deemed by the Administrative Agent or the Required Lenders as necessary or
desirable (including, in the case of any pledge of stock of, or assets by, a
Foreign Subsidiary, such additional documentation or actions requested under the
relevant local law of the jurisdiction of organization of the Foreign Subsidiary
as may be requested), in each case as may be reasonably requested from time to
time by the Administrative Agent or the Required Lenders (collectively, together
with any security documents entered into pursuant to the other provisions of
this Section 8.11 or pursuant to Section 8.12, the "Additional Security
Documents"). Notwithstanding anything to the contrary contained above in this
clause (b), in no event will (i) the U.S. Borrower or any U.S. Subsidiary
Guarantor be required to pledge a greater percentage of the voting stock of any
Foreign Subsidiary, in support of Obligations of the U.S. Borrower, than is
originally provided in the U.S. Pledge Agreement, except to the extent otherwise
required by following Section 8.12, (ii) any German Subsidiary Guarantor or
German Borrower be required to grant a security interest in its assets in
support of Obligations of the U.S. Borrower, except to the extent otherwise
required by following Section 8.12 or (iii) any security interest be required to
be granted pursuant to this Section 8.11(b) to the extent same would violate
applicable law. To the extent the granting of a security interest in any assets,
properties or equity interests is not permitted by reason of clause (iii) of the
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immediately preceding sentence, at the request of the Administrative Agent or
Required Lenders, the U.S. Borrower will, and will cause each of the other
Credit Parties to, take all action as may be reasonably requested to obtain any
necessary approvals or to isolate the assets which would give rise to the
respective violation, or cause the respective Gaming Regulations to apply, in a
special purpose Subsidiary of the U.S. Borrower, as is intended to be done with
the Missouri License Subsidiary pursuant to Section 13.18.
(b) All security interests and mortgages created as required by
this Section 8.11 shall be granted pursuant to documentation in form and
substance (and shall be governed by law) reasonably satisfactory to the
Administrative Agent and shall constitute (after giving effect to any filings or
recording required in accordance with applicable law, which filings and
recordings shall be required to be made) valid and enforceable perfected
security interests and mortgages superior to and prior to the rights of all
third Persons (and subject to no other Liens) except for any such rights or
Liens constituting Permitted Liens. The Additional Security Documents or
instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Additional Security Documents and all taxes, fees and other
charges payable in connection therewith shall have been paid in full by the U.S.
Borrower or their respective Subsidiaries.
(c) The U.S. Borrower will, and will cause each of its
Subsidiaries to, at the expense of the U.S. Borrower and its Subsidiaries, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments, and take such
further steps relating to the collateral covered by any of the Security
Documents, as the Collateral Agent may reasonably require in order to effect,
protect or further evidence the grant or perfection of Liens provided for in the
Security Documents, provided that in no event shall the U.S. Borrower be
required to obtain any consent from Bally Entertainment Corporation.
Furthermore, the U.S. Borrower will cause to be delivered to the Collateral
Agent such opinions of counsel, title insurance and other related documents as
may be reasonably requested by the Administrative Agent to assure themselves
that this Section 8.11 has been complied with.
(d) The U.S. Borrower agrees that each action required above by
this Section 8.11 shall be completed within 30 days (or (x) 60 days if the
Administrative Agent agrees to such longer period in a specific instance or (y)
in any case, such longer period as may be required under local law or as may be
necessary to obtain required governmental approvals) after such action is either
requested to be taken by the Administrative Agent or the Required Lenders or
required to be taken by the U.S. Borrower and its Subsidiaries pursuant to the
terms of this Section 8.11. It is understood that the foregoing provisions of
this Section 8.11 are subject to the provisions of Section 13.18.
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8.12 Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, the U.S.
Borrower does not cause Milbank, Tweed, Xxxxxx & XxXxxx or such other counsel
for the U.S. Borrower as may be reasonably acceptable to the Administrative
Agent, within 30 days after a request from the Administrative Agent or the
Required Lenders, to deliver evidence, in form and substance mutually
satisfactory to the Administrative Agent and the U.S. Borrower, with respect to
any Foreign Subsidiary of the U.S. Borrower, that (i) a pledge of 66-2/3% or
more of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, (ii) the entering into by such Foreign
Subsidiary of a security agreement in substantially the form of the U.S.
Security Agreement and (iii) the entering into by such Foreign Subsidiary of a
guaranty in substantially the form of the U.S. Subsidiaries Guaranty, in each
case in support of Obligations of the U.S. Borrower pursuant to this Agreement,
would cause the undistributed earnings of such Foreign Subsidiary as determined
for Federal income tax purposes to be treated as a deemed dividend to such
Foreign Subsidiary's United States parent for Federal income tax purposes, then
in the case of a failure to deliver the evidence described in clause (i) above,
that portion of such Foreign Subsidiary's outstanding capital stock so issued by
such Foreign Subsidiary, in each case not theretofore pledged pursuant to the
U.S. Pledge Agreement in respect of all Obligations shall be pledged to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the U.S.
Pledge Agreement in respect of all Obligations (or another pledge agreement in
substantially similar form, if needed), and in the case of a failure to deliver
the evidence described in clause (ii) above, such Foreign Subsidiary will
execute and deliver the U.S. Security Agreement (or another security agreement
in substantially similar form, if needed), granting the Secured Creditors a
security interest in all of such Foreign Subsidiary's assets and securing the
Obligations of all Borrowers under the Credit Documents and under any Interest
Rate Protection Agreement or Other Hedging Agreement and, in the event that the
respective Foreign Subsidiary shall have executed and delivered a Guaranty, the
obligations of such Foreign Subsidiary thereunder, and in the case of a failure
to deliver the evidence described in clause (iii) above, such Foreign Subsidiary
will execute and deliver the U.S. Subsidiaries Guaranty (or another guaranty in
substantially similar form, if needed), guaranteeing the Obligations of all
Borrowers under the Credit Documents and under any Interest Rate Protection
Agreement or Other Hedging Agreement, in each case to the extent that the
entering into of the respective security documents or guaranty is permitted by
the laws of the respective foreign jurisdiction and with all documents delivered
pursuant to this Section 8.12 to be in form and substance reasonably
satisfactory to the Administrative Agent. Notwithstanding anything to the
contrary contained above, (x) a Foreign Subsidiary which is not a Wholly-Owned
Subsidiary of the U.S. Borrower shall not be required to become a party to a
Guaranty or Security Document, in each case as otherwise contemplated above,
(y) any German Leasing Subsidiary established after the Initial Borrowing Date
shall not be required to become party to a Guaranty or Security Document, in
each case as otherwise
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contemplated above, and (z) any Wholly-Owned Foreign Subsidiary may, if the
preceding provisions of this Section 8.12 are applicable to it, be designated as
constituting a Specified Non-Material Subsidiary to the same extent as a
Wholly-Owned Domestic Subsidiary may be so designated (in which case the
respective Specified Non-Material Subsidiary would not be required to become a
party to the Credit Documents otherwise contemplated above in this Section 8.12
except to the extent required by Section 8.14).
8.13 Permitted Acquisitions. Subject to the provisions of this
Section 8.13, Section 9.02(ii) and the requirements contained in the definition
of Permitted Acquisition (and, if applicable, Two-Step Permitted Acquisition),
the U.S. Borrower and its Wholly-Owned Subsidiaries may from time to time after
the Initial Borrowing Date effect Permitted Acquisitions, so long as (i) the
U.S. Borrower shall have given the Administrative Agent and the Lenders at least
10 Business Days' prior written notice of any Permitted Acquisition, (ii) based
on calculations made by the U.S. Borrower on a Pro Forma Basis after giving
effect to the respective Permitted Acquisition and any Indebtedness (including,
without limitation, Acquired Indebtedness and any Revolving Loans) incurred,
issued or assumed in connection with the respective Permitted Acquisition or to
finance same, no Default or Event of Default will exist under, or would have
existed during the periods covered by, the financial covenants contained in
Sections 9.08 through 9.11, inclusive, of this Agreement; provided that if the
respective Permitted Acquisition is a Two-Step Permitted Acquisition, the
calculations required pursuant to this clause (ii) and following clause (iii)
shall be required to be made on a Pro Forma Basis as otherwise required above or
below, as the case may be, both after giving effect to (x) first, the
acquisition of shares of the Target actually acquired pursuant to the First Step
of the respective Two-Step Permitted Acquisition (but not giving effect to any
subsequent merger or compulsory share acquisition to be effected as part of the
Two-Step Permitted Acquisition) and (y) second, to the actions described in
preceding clause (x) and the subsequent merger or compulsory share acquisition
which will conclude the respective Two-Step Permitted Acquisition, and both sets
of calculations shall show that the financial covenants referenced above or
below, as the case may be, would have been (or are projected to be) complied
with in both scenarios described in preceding clauses (x) and (y) of this
proviso (i.e., whether or not the subsequent merger or compulsory share
acquisition is ever effected), (iii) based on good faith projections prepared by
the U.S. Borrower for the period from the date of the consummation of the
Permitted Acquisition to the date which is one year thereafter, the level of
financial performance measured by the covenants set forth in Sections 9.08
through 9.11 inclusive shall be better than or equal to such level as would be
required to provide that no Default or Event of Default would exist under the
financial covenants contained in Sections 9.08 through 9.11, inclusive, of this
Agreement as compliance with such covenants would be required through the date
which is one year from the date of the consummation of the respective Permitted
Acquisition; provided that if the respective Permitted Acquisition is a Two-Step
Permitted Acquisition, the calculations required pursuant to this clause (iii)
shall be subject to the requirements contained in the proviso to preceding
clause (ii), (iv) the U.S. Borrower shall
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certify that the proposed Permitted Acquisition could not reasonably be expected
to result in increased tax (excluding income and similar tax liabilities as a
result of increased earnings which may result from the respective Permitted
Acquisition), ERISA or environmental liabilities with respect to the U.S.
Borrower or any of its Subsidiaries, in each case that could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, it being understood that any determination of whether the proposed
Permitted Acquisition could reasonably be expected to result in such a Material
Adverse Effect shall take into account, inter alia, (x) any available
indemnities and (y) the timing and likelihood of payment thereunder and (v) the
U.S. Borrower shall have delivered to the Administrative Agent an officer's
certificate executed by an Authorized Representative of the U.S. Borrower,
certifying (A) to the best of his knowledge, compliance with the requirements of
preceding clauses (i), (ii) and (iii) and containing the calculations required
by the preceding clauses (ii) and (iii) and (B) compliance with the requirements
of Section 9.02(ii).
8.14 Actions With Respect to Certain Subsidiaries. (a) Within 150
days after the Initial Borrowing Date, the U.S. Borrower shall cause all
Specified Inactive Subsidiaries to be dissolved or liquidated. If any Specified
Inactive Subsidiary is, for any reason, not so dissolved or liquidated within
150 days after the Initial Borrowing Date, then on or prior to such date the
U.S. Borrower shall have caused such Subsidiary to execute and deliver
counterparts of the U.S. Subsidiaries Guaranty, the U.S. Pledge Agreement and
the U.S. Security Agreement, and shall have caused all actions to be taken in
connection therewith as would have been taken if the respective Subsidiary were
a Credit Party on the Initial Borrowing Date.
(b) If at any time any Domestic Subsidiary of the U.S. Borrower
which was not theretofore a Wholly-Owned Subsidiary becomes a Wholly-Owned
Subsidiary of the U.S. Borrower, or any Wholly-Owned Domestic Subsidiary is
created, established or acquired, then on such date, unless at such time the
respective such Subsidiary is designated as a Specified Non-Material Subsidiary
in accordance with the definition thereof (and so long as such Subsidiary meets
the requirements of such definition), such Subsidiary shall be required to
execute and deliver counterparts of the U.S. Subsidiaries Guaranty, the U.S.
Pledge Agreement and the U.S. Security Agreement, and take all action in
connection therewith as would otherwise have been required to be taken pursuant
to Section 5 if such Subsidiary were a Credit Party on the Initial Borrowing
Date.
(c) If at any time any Domestic Subsidiary which was theretofore
a Specified Non-Material Subsidiary ceases to qualify as such in accordance with
the definition thereof, such Subsidiary shall on such date be required to
execute and deliver counterparts of the U.S. Subsidiaries Guaranty, the U.S.
Pledge Agreement and the U.S. Security Agreement, and take all action in
connection therewith as would otherwise have been required to be taken pursuant
to Section 5 if such Subsidiary had been a Credit Party
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on the Initial Borrowing Date. Furthermore, if the aggregate assets of all
Specified Non-Material Subsidiaries exceed the threshold provided in the
definition of Specified Non-Material Subsidiaries contained herein, then one or
more Subsidiaries which were theretofore designated as Specified Non-Material
Subsidiaries shall cease to constitute same (as designated by the U.S. Borrower
or the Administrative Agent in accordance with the definition of Specified
Non-Material Subsidiaries contained herein), and each such Subsidiary, as well
as any other Subsidiary which the U.S. Borrower at any time notifies the
Administrative Agent in writing shall no longer constitute a Specified
Non-Material Subsidiary, shall take all actions specified in the immediately
preceding sentence.
(d) In addition to the foregoing requirements, if at any time any
Subsidiary of the U.S. Borrower executes and delivers any guaranty in respect of
the New Senior Subordinated Notes, such Subsidiary shall automatically and
without any further action cease to constitute a Specified Non-Material
Subsidiary (if same was theretofore designated as a Specified Non-Material
Subsidiary) and, in any event, the respective Subsidiary shall on such date be
required to execute and deliver counterparts of the U.S. Subsidiaries Guaranty,
the U.S. Pledge Agreement and the U.S. Security Agreement, and take all action
in connection therewith as would otherwise have been required to be taken
pursuant to Section 5 if such Subsidiary were a Credit Party on the Initial
Borrowing Date.
(e) If at any time the U.S. Borrower or any of its Subsidiaries
creates, establishes or acquires any new German Subsidiaries (excluding any
German Leasing Subsidiary), then on the date of the creation, establishment or
acquisition thereof, such Subsidiary shall be required, unless it is designated
as a Specified Non-Material Subsidiary in accordance with the definition thereof
contained herein, to execute and deliver such Credit Documents as the respective
such Subsidiary would have had to execute and deliver on the Initial Borrowing
Date had such German Subsidiary existed on such date.
(f) Each Subsidiary required to take actions pursuant to
preceding Section 8.14(a) through (e), inclusive, shall execute and deliver, or
cause to be executed and delivered, all other relevant documentation of the type
described in Section 5 (including without limitation opinions of counsel) as
such Subsidiary would have had to deliver if such new Subsidiary were a Credit
Party on the Initial Borrowing Date, with all actions to be taken pursuant to
this Section 8.14 to be taken to the reasonable satisfaction of the
Administrative Agent and the Collateral Agent.
8.15 Margin Stock. The U.S. Borrower will, and will cause each of
its Subsidiaries to, take any and all actions as may be required to ensure that
no Margin Stock (other than Margin Stock owned on the Initial Borrowing Date the
fair market value of which does not exceed the amount referenced in Section
7.27) is at any time owned by the U.S. Borrower and its Subsidiaries, except
that (i) after the Initial Borrowing Date, the U.S. Borrower and its
Subsidiaries may acquire and own (so long as the respective
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acquisition is permitted by the other covenants contained in this Agreement,
including without limitation Section 9.05) Margin Stock so long as the fair
market value thereof at no time, when aggregated with the fair market value of
any Margin Stock owned on the Initial Borrowing Date as referenced in Section
7.27 which continues to be owned by the U.S. Borrower and/or its Subsidiaries at
such time, exceeds $7,500,000 (except as a result of appreciation in such fair
market value after the acquisition of such Margin Stock by the U.S. Borrower or
its respective Subsidiary) and (ii) in addition to Margin Stock at any time held
pursuant to preceding clause (i), Margin Stock may be acquired in connection
with a Two-Step Permitted Acquisition where the consummation of the First Step
thereof results in the acquisition of Margin Stock. Notwithstanding anything to
the contrary contained above, at the time the U.S. Borrower or any of its
Subsidiaries acquires any Margin Stock, and if at such time the aggregate fair
market value of all Margin Stock owned by the U.S. Borrower and its Subsidiaries
exceeds (or would exceed) $100,000, the U.S. Borrower shall immediately notify
the Administrative Agent of such acquisition (providing in reasonable detail a
description of the Margin Stock and the fair market value thereof) and, to the
extent required by the terms of the various Security Documents, the Margin Stock
so acquired shall be pledged thereunder. In addition, at any time when, and upon
the occurrence of each Credit Event during any period when, Obligations
hereunder are secured by Margin Stock, (i) the Borrower will, and will cause its
Subsidiaries to, take any and all actions as may be required, or as may be
reasonably requested by the Administrative Agent, to establish compliance with
Regulations G and U, (ii) the U.S. Borrower shall deliver to each Lender a duly
completed Form U-1 or G-3, as appropriate, referred to in Regulations U and G
and (iii) each Lender shall be able in good faith to complete said Form U-1 or
G-3, as the case may be, showing that the Loans and other extensions of credit
by the Lenders pursuant to this Agreement comply with Regulations U and G,
including with respect to the collateral valuation requirements thereof.
Furthermore, as promptly as practicable after the consummation of any Two-Step
Permitted Acquisition and in any event within 30 days thereafter, the U.S.
Borrower will, and will cause its Subsidiaries to, take any and all actions as
may be required to ensure that no capital stock acquired pursuant to such
Two-Step Permitted Acquisition shall continue to, or at any time thereafter,
constitute Margin Stock.
8.16 Existing Senior Secured Notes Collateral. From time to time
as requested by the Administrative Agent, the U.S. Borrower shall, so long as
any Existing Senior Secured Notes remain outstanding, furnish to the
Administrative Agent an updated Schedule XIII, which shall list all collateral,
as of the date such updated schedule is prepared, held by the trustee under the
Existing Senior Secured Notes Indenture, or any other agent, sub-agent,
collateral agent or other custodian for the benefit of the holders of the
Existing Senior Secured Notes, which schedule shall list the respective
collateral and identify the person or persons which have custody of same. The
U.S. Borrower shall take all actions so that, at all times after the Initial
Borrowing Date, each Person holding collateral for the benefit of the holders of
the Existing Senior Secured Notes, whether in its capacity as trustee, agent,
sub-agent, collateral agent or other custodian, shall have
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executed and delivered to the Administrative Agent a copy of the Bailee
Agreement (or an agreement in substantially similar form which is acceptable to
the Administrative Agent). The U.S. Borrower shall notify the Administrative
Agent before any such additional trustee, agent, sub-agent, collateral agent or
other custodian is so appointed. It is understood and agreed that the foregoing
covenant shall not apply to any cash or government securities deposited in
defeasance of any Existing Senior Secured Notes which remain outstanding after
the Initial Borrowing Date.
8.17 Covenant Defeasance of Existing Senior Secured Notes. The
U.S. Borrower shall take all action as is required so that, within 180 days of
the Initial Borrowing Date, (x) any Existing Senior Secured Notes which remain
outstanding at such time are defeased pursuant to a covenant defeasance meeting
the requirements of the Existing Senior Secured Notes Indenture and (y) all
collateral (other than cash and U.S. government securities deposited to effect
such defeasance) held by the trustee under the Existing Senior Secured Notes
Indenture, or any other agent, sub-agent, collateral agent or other custodian
for the benefit of the holders of Existing Senior Secured Notes, is released
from the security interests created pursuant to the Existing Senior Secured
Notes Collateral Documents and is, as contemplated by the Bailee Agreement,
delivered to (or as directed by) the Collateral Agent to be held by it (or a
sub-agent designated by the Collateral Agent) pursuant to the terms of the
Security Documents; provided that any such collateral so released at the time of
a covenant defeasance with respect to the Existing Senior Secured Notes as
contemplated above which is not permitted to be granted as security pursuant to
the Security Agreements under Applicable Gaming Regulations as contemplated by
the provisions of Section 13 hereof, shall (to the extent such collateral is not
permitted to be held in pledge at such time) be delivered to the U.S. Borrower.
SECTION 9. Negative Covenants. Each of the Borrowers hereby
covenant and agree that subject to receipt of the Subsidiary Stock Restrictions
Requisite Approvals, on and after the Effective Date and until the Total
Commitments and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations (other
than contingent indemnification obligations) incurred hereunder and thereunder,
are paid in full:
9.01 Liens. Such Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of such Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to such Borrower
or any of its Subsidiaries), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
of this Section 9.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens
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described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes,
assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves have
been established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of the U.S. Borrower
or any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from
the value of the property and assets of the U.S. Borrower and its
Subsidiaries taken as a whole or materially impair the use thereof in
the operation of the business of the U.S. Borrower or such Subsidiary or
(y) which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale
of the property or assets subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date (but not
securing the Existing Senior Secured Notes) which are listed, and the
property subject thereto described, in Schedule VII, but only to the
respective date, if any, set forth in such Schedule VII for the removal,
replacement and termination of any such Liens, plus renewals,
replacements and extensions of such Liens to the extent set forth on
Schedule VII, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal, replacement or
extension and (y) any such renewal, replacement or extension does not
encumber any additional assets or properties of the U.S. Borrower or any
of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) licenses, leases, sublicenses or subleases granted to other
Persons not materially interfering with the conduct of the business of
the U.S. Borrower and its Subsidiaries taken as a whole;
(vii) Liens upon assets of the U.S. Borrower or its Subsidiaries
subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 9.04(iv), provided that
(x) such Liens only serve to secure the payment of Indebtedness arising
under such Capitalized Lease Obliga-
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tion and (y) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset of the
U.S. Borrower or any Subsidiary of the U.S. Borrower;
(viii) Liens placed upon equipment or machinery used in the
ordinary course of business of the U.S. Borrower or any of its
Subsidiaries at the time of acquisition thereof by the U.S. Borrower or
any such Subsidiary or within 90 days thereafter to secure Indebtedness
incurred to pay all or a portion of the purchase price thereof or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition of any such equipment or machinery or extensions, renewals
or replacements of any of the foregoing for the same or a lesser amount,
provided that (x) the aggregate outstanding principal amount of all
Indebtedness secured by Liens permitted by this clause (viii) shall not
at any time exceed $1,000,000 and (y) in all events, the Lien
encumbering the equipment or machinery so acquired does not encumber any
other asset of the U.S. Borrower or such Subsidiary;
(ix) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances, and minor title deficiencies, in
each case not securing Indebtedness and not materially interfering with
the conduct of the business of the U.S. Borrower or any of its
Subsidiaries;
(x) Liens arising from precautionary UCC financing statement
filings regarding operating leases entered into by the U.S. Borrower or
any of its Subsidiaries in the ordinary course of business;
(xi) Liens arising out of the existence of judgments, decrees or
awards not constituting an Event of Default under Section 10.09,
provided that no cash or property is deposited or delivered to secure
the respective judgment or award (or any appeal bond in respect thereof,
except as permitted by following clause (xiii));
(xii) statutory and common law landlords' liens under leases to
which the U.S. Borrower or any of its Subsidiaries is a party;
(xiii) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security or (y) to secure the performance of tenders, statutory
obligations (other than excise taxes), surety, stay, customs and appeal
bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money)
and (z) deposits made in the ordinary course of business to secure
liability for premiums to insurance carriers, provided that the
aggregate amount of deposits at any time pursuant to clauses (y) and (z)
shall not exceed $15,000,000 in the
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aggregate;
(xiv) Liens securing Acquired Indebtedness incurred in accordance
with Section 9.04(ix) and, to the extent provided therein, (xiii)
provided that (A) such Liens secured such Acquired Indebtedness at the
time of and prior to the incurrence of such Acquired Indebtedness by the
U.S. Borrower or a Subsidiary of the U.S. Borrower and were not granted
in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by the U.S. Borrower or a Subsidiary of the U.S.
Borrower and (B) such Liens do not extend to or cover any property or
assets of the U.S. Borrower or of any of its Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to the
time such indebtedness became Acquired Indebtedness of the U.S. Borrower
or a Subsidiary of the U.S. Borrower and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the U.S. Borrower or a
Subsidiary of the U.S.Borrower;
(xv) (a) until the 180th day after the Initial Borrowing Date (or
any earlier date upon which the covenant defeasance with respect to the
Existing Senior Secured Notes is effected as required by Section 8.17),
Liens on capital stock of Subsidiaries of the U.S. Borrower which
secured the Existing Senior Secured Notes prior to the Initial Borrowing
Date and Liens on any proceeds thereof, in each case pursuant to the
requirements of the Existing Senior Secured Note Documents, and so long
as the Collateral Agent, on behalf of the Secured Creditors, maintains a
second priority perfected security interest therein as contemplated by
the Bailee Agreement and the U.S. Pledge Agreement, and (b) at any time
after the covenant defeasance of the Existing Senior Secured Notes has
been effected as required by Section 8.17, Liens created on Cash
Equivalents or Investments made as described in Section 9.05 (xix)(b)
which have been deposited in order to effect the covenant defeasance of
the Existing Senior Secured Notes;
(xvi) Liens may be created on Cash Equivalents or Investments made
as described in Section 9.05(xix)(a) securing liabilities for jackpots
payable for progressive games in a manner consistent with industry
practice and applicable Gaming Regulations;
(xvii) any German Leasing Subsidiary may create Liens on its assets
to secure its outstanding Non-Recourse German Leasing Subsidiary Debt,
so long as the respective Non-Recourse German Leasing Subsidiary Debt is
permitted pursuant to Section 9.04(xiv); and
(xviii) additional Liens, so long as neither the fair market value
of all assets subject thereto, nor the aggregate amount of obligations
secured thereby, exceeds $1,000,000 in the aggregate at any time
outstanding.
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9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
Subject to receipt of Subsidiary Stock Restrictions Requisite Gaming approvals,
the U.S. Borrower will not, and will not permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any sale-leaseback transactions, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the property or
assets (other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any Person, except that:
(i) Capital Expenditures by the U.S. Borrower and its
Subsidiaries shall be permitted to the extent not in violation of
Section 9.07;
(ii) the U.S. Borrower and its Wholly-Owned Subsidiaries shall be
permitted to make Permitted Acquisitions so long as (A) such Permitted
Acquisitions are effected in accordance with the requirements of Section
8.13, (B) after giving effect to any Permitted Acquisition effected
after the Effective Date, the aggregate amount paid (including for the
purpose of this clause (ii) all cash consideration, the fair market
value of all non-cash consideration and the aggregate principal amount
of all Acquired Indebtedness issued, incurred or assumed in connection
with Permitted Acquisitions effected after the Effective Date, but
excluding any U.S. Borrower Common Stock directly issued as
consideration in connection with Permitted Acquisitions) by the U.S.
Borrower and its Subsidiaries in connection with all Permitted
Acquisitions effected after the Effective Date shall not exceed $30
million, except to the extent the Cumulative Net Income Amount (as in
effect on the date the respective Permitted Acquisition is consummated)
is used to pay (or justify the payment of) consideration in connection
with one or more Permitted Acquisitions, and (C) with respect to each
Permitted Acquisition, no Default or Event of Default is in existence at
the time of the consummation of such Permitted Acquisition or would
exist after giving effect thereto;
(iii) Investments may be made to the extent permitted by Section
9.05;
(iv) the U.S. Borrower and its Subsidiaries may lease (as lessee)
real or personal property in the ordinary course of business (so long as
any such lease does not create a Capitalized Lease Obligation except to
the extent permitted by Section 9.04);
(v) the U.S. Borrower and its Subsidiaries may sell and lease
(but not pursuant to Sale and Leaseback Transactions or to any German
Leasing Subsidiary or German Leasing Joint Venture) inventory
(including, without limitation, gaming equipment) in the ordinary course
of business;
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(vi) the U.S. Borrower and its Subsidiaries may sell used and
obsolete gaming equipment in the ordinary course of business; provided
that at least 85% of the consideration therefor shall constitute cash
(for this purpose, treating the amount of credit for trade-ins on new
gaming equipment as cash receipts);
(vii) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, the U.S. Borrower
and its Subsidiaries may sell equipment and other assets, to the extent
not otherwise permitted under any other clause of this Section 9.02, at
the fair market value thereof (as determined in good faith by management
of the U.S. Borrower), provided that (x) of the total consideration
received therefor (taking the amount of cash and the fair market value
of any non-cash consideration), at least 85% of such consideration shall
be in cash and (y) the aggregate consideration (valued as described
above) for all sales pursuant to this clause (vii) shall not exceed (1)
$10,000,000 in any fiscal year of the U.S. Borrower or (2) $50,000,000
in the aggregate;
(viii) the U.S. Borrower and its Subsidiaries may, in the ordinary
course of business, license, as licensor or licensee, patents,
trademarks, copyrights and know-how to third Persons and to one another;
(ix) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, the sale or initial
public offering of up to 20% of the capital stock or other equity
interests in the German Parent, or any other Wholly-Owned Foreign
Subsidiary into which the U.S. Borrower consolidates or transfers its
German operations in advance of such offering of capital stock or equity
interests, shall be permitted, provided that (x) such sale or initial
public offering does not impair the ability of the German Parent (or
other entity described above) and its Subsidiaries to repatriate cash
freely to the U.S. Borrower in a percentage at least equal to the U.S.
Borrower's direct and indirect equity interests therein, (y) 100% of the
net after tax proceeds of such sale or initial public offering shall
remain with the U.S. Borrower and/or its Subsidiaries and (z) 50% of
such proceeds of such sale or initial public offering shall be required
to be applied as a mandatory prepayment and/or commitment reduction
pursuant to Section 4.02(c);
(x) the U.S. Borrower and its Subsidiaries may, subject to
compliance with Section 9.06, transfer inventory (including, without
limitation, gaming equipment) to each other in the ordinary course of
business, provided that transfers of inventory to one or more German
Leasing Subsidiaries shall not be permitted pursuant to this clause (x);
(xi) the U.S. Borrower and its Subsidiaries may enter into
agreements
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to effect acquisitions and dispositions of stock or assets so long as
the respective transaction is permitted pursuant to the provisions of
this Section 9.02; provided that the U.S. Borrower and its Subsidiaries
may enter into agreements to effect acquisitions and dispositions of
capital stock or assets in transactions not permitted by the provisions
of this Section 9.02 at the time the respective agreement is entered
into, so long as in the case of each such agreement, such agreement
shall be expressly conditioned upon obtaining the requisite consent of
the Required Lenders under this Agreement as a condition precedent to
the consummation of their respective transaction and, if for any reason
the transaction is not consummated because of the failure to obtain
such consent, the aggregate liability of the U.S. Borrower and its
Subsidiaries under any such agreement shall not exceed $1,000,000;
(xii) the German Parent and its Subsidiaries may sell and/or
otherwise transfer German lease receivables, gaming equipment leased in
Germany or gaming equipment to be leased in Germany, to one or more
German Leasing Subsidiaries and/or German Leasing Joint Ventures, in
each case so long as the aggregate fair market value of all assets so
transferred pursuant to this clause (xii) in any fiscal year of the U.S.
Borrower does not exceed $12,500,000 and so long as the German Parent
and its Subsidiaries (excluding German Leasing Subsidiaries) receive in
return (at the time of transfer or within one Business Day thereafter)
cash equal to at least 70% of the fair market value (as determined in
good faith by the U.S. Borrower) of the assets so transferred;
(xiii) liquidations and dissolutions of Subsidiaries expressly
contemplated by Sections 8.04 and 8.14 shall be permitted; and
(xiv)(a) the German Borrowers may transfer assets to each other,
(b) any Wholly-Owned Subsidiary Guarantor of the U.S. Borrower may merge
into the U.S. Borrower (so long as the U.S. Borrower is the surviving
corporation thereof) or with or into any other Wholly-Owned Subsidiary
Guarantor and (c) the U.S. Borrower and one or more Wholly-Owned
Subsidiary Guarantors may sell or transfer assets to each other, in each
case so long as the action or actions taken pursuant to this clause
(xiv) does not, or do not, adversely affect the Lenders or the security
interests in assets or guarantees given in respect of the Obligations
hereunder.
To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02, in each case so long as the respective sale is
to a Person other than a Borrower or any of its Subsidiaries (other than a
German Leasing Subsidiary in a case of transfers pursuant to clause (xii)
above), such Collateral shall be sold free and clear of the Liens created by the
Security Documents, and the Administrative Agent and the Collateral Agent shall
be
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authorized to take any actions deemed appropriate in order to effect the
foregoing. Notwithstanding anything to the contrary contained above in this
Section 9.02, except as expressly permitted pursuant to Section 9.02(ix), no
capital stock of, or equity interests in, any Subsidiary shall be sold,
transferred or otherwise disposed of pursuant to this Section 9.02 to any Person
which is not the U.S. Borrower or a Wholly-Owned Subsidiary thereof, in each
case unless 100% of the equity interest of the U.S. Borrower and its
Subsidiaries in the respective such Subsidiary (and any Subsidiary of the
respective such Subsidiary) are sold pursuant to a sale effected in accordance
with the applicable requirements of this Section 9.02. If 100% of the equity
interests of any Subsidiary are sold to Persons other than the U.S. Borrower and
its Subsidiaries in a transaction effected in accordance with the requirements
of this Section 9.02, then the respective Person wherein the equity the
interests were so sold and each of its Subsidiaries shall be released from its
obligations pursuant to any Subsidiary Guaranty to which it was a party and all
other Credit Documents to which it was a party, in each case so long as the
respective Subsidiary is also released from all guarantees theretofore executed
and delivered by and in respect of the New Senior Subordinated Notes.
9.03 Restricted Payments. The U.S. Borrower will not, and will not
permit any of its Subsidiaries to, authorize, declare, pay or make any
Restricted Payments, except that (i) any Subsidiary of the U.S. Borrower (x) may
make Restricted Payments to the U.S. Borrower or any Wholly-Owned Subsidiary of
the U.S. Borrower and (y) if such Subsidiary is not a Wholly-Owned Subsidiary,
may pay cash dividends to their minority shareholders (not to exceed their
proportionate share thereof as determined in accordance with the relevant
documentation relating to the minority interests) upon a payment of dividends by
the respective such non-Wholly-Owned Subsidiary to the U.S. Borrower and its
Subsidiaries; (ii) so long as (x) no Default or Event of Default is in existence
(or will exist after given effect to the respective Restricted Payment) and (y)
the Leverage Ratio is no greater than 3.50:1.00 as tested on the last day of the
Test Period last ended (and would remain so after the respective Restricted
Payment), the U.S. Borrower and its Subsidiaries may make Restricted Payments so
long as the amount thereof would not exceed the Cumulative Net Income Amount as
in effect immediately before the making of the respective Restricted Payment (it
being understood and agreed that, if any dividend is declared by the U.S.
Borrower pursuant to this clause (ii) at a time when the foregoing requirements
are met (and would be met if the respective dividend were paid on such date),
such dividend may be made within sixty days after the date of such declaration;
provided that in the event of any such declaration the amount so declared shall
be deemed a usage of the Cumulative Consolidated Net Income Amount on the date
of the respective declaration); (iii) so long as there exists no Default or
Event of Default (both before and after giving effect to the payment thereof),
the U.S. Borrower may repurchase outstanding shares of its common stock (or
options to purchase such common stock) following the death, disability or
termination of employment of employees of the U.S. Borrower or any of its
Subsidiaries, provided that the aggregate amount of Restricted Payments made by
the U.S. Borrower pursuant to this clause (iii) shall not exceed
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$300,000 in any fiscal year of the U.S. Borrower; (iv) the U.S. Borrower may,
within 45 days after the Initial Borrowing Date, redeem its outstanding Existing
PIK Preferred Stock in connection with the Refinancing (and, prior to the
redemption of the Existing PIK Preferred Stock as required by this Agreement,
the U.S. Borrower may make open market or negotiated purchases of any
outstanding Existing PIK Preferred Stock so long as the U.S. Borrower does not
pay consideration therefor which exceeds the amount which would have been
payable in connection with the redemption of same and so long as any Existing
PIK Preferred Stock so repurchased is retired); (v) the U.S. Borrower may
repurchase the Existing Senior Secured Notes pursuant to the Existing Senior
Secured Notes Tender Offer/Consent Solicitation; (vi) so long as not more than
$12.5 million aggregate principal amount of Existing Senior Secured Notes remain
outstanding following the consummation of the Existing Senior Secured Notes
Tender Offer/Consent Solicitation, same may be repurchased (and cancelled) or
redeemed at any time when no Default or Event of Default is in existence (or
would exist immediately after giving effect thereto), provided that the
aggregate amounts spent pursuant to preceding clause (vi) shall not exceed $12.5
million; (vii) the U.S. Borrower may repay any then outstanding Existing Senior
Secured Notes at maturity in accordance with the terms thereof; and (viii) Bally
Gaming International, Inc. may pay up to $2,350,000 in respect of the settlement
of options outstanding on the Initial Borrowing Date under previously adopted
employee benefit plans.
9.04 Indebtedness. The U.S. Borrower will not, and will not
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Indebtedness with respect to performance bonds, surety
bonds, appeal bonds or customs bonds required in the ordinary course of
business or in connection with the enforcement of rights or claims of
the U.S. Borrower or any of its Subsidiaries or in connection with
judgments that do not result in a Default or an Event of Default,
provided that the aggregate outstanding amount of all such performance
bonds, surety bonds, appeal bonds and customs bonds permitted by this
clause (ii) shall not at any time exceed $15,000,000;
(iii) Indebtedness under Interest Rate Protection Agreements which
are non-speculative in nature and are entered into to protect the U.S.
Borrower and/or its Subsidiaries against fluctuations in interest rates
in respect of floating rate Indebtedness outstanding at the time of the
respective Interest Rate Protection Agreements are entered into (or
expected to be outstanding within 30 days thereafter), which floating
rate Indebtedness is otherwise permitted to remain outstanding or be
incurred, as the case may be, pursuant to this Section 9.04;
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(iv) Indebtedness evidenced by Capitalized Lease Obligations
entered into in connection with Capital Expenditures permitted pursuant
to Section 9.07, provided that in no event shall the aggregate principal
amount of Capitalized Lease Obligations permitted by this clause (iv)
exceed $3,000,000 at any time outstanding;
(v) Indebtedness subject to Liens permitted under Section
9.01(viii);
(vi) Existing Indebtedness outstanding on the Initial Borrowing
Date and listed on Schedule V, without giving effect to any subsequent
extension, renewal or refinancing thereof, except that with respect to
the Existing Indebtedness specifically identified on Schedule V as being
permitted to be refinanced, such Existing Indebtedness may be extended,
renewed or refinanced (and successively extended, renewed or refinanced)
so long as (x) the principal amount thereof is not increased, (y) no
additional security is furnished in connection therewith and (z) the
obligor remains the same and no additional guaranties are furnished in
connection therewith;
(vii) Indebtedness constituting intercompany loans and advances to
the extent permitted by Section 9.05(viii);
(viii) Indebtedness under Other Hedging Agreements providing
protection against fluctuations in currency values in connection with
the U.S. Borrower's or any of its Subsidiaries' operations so long as
management of the U.S. Borrower's or such Subsidiary, as the case may
be, has determined that the entering into of such Other Hedging
Agreements are bona fide hedging activities and are not speculative in
nature;
(ix) Acquired Indebtedness may be incurred or assumed in
connection with Permitted Acquisitions, so long as the aggregate
principal amount of all Acquired Indebtedness incurred or assumed after
the Initial Borrowing Date does not exceed $10,000,000;
(x) the New Senior Subordinated Notes shall be permitted to be
issued and remain outstanding (and may be guaranteed, on a subordinated
basis, by any U.S. Subsidiary Guarantor other than RCVP); provided that
the aggregate principal amount thereof at no time outstanding shall
exceed the principal amount thereof originally issued on or prior to the
Initial Borrowing Date less the amount of all repayments thereof made
after the Initial Borrowing Date in accordance with Section 9.03;
(xi) the Existing Senior Secured Notes not purchased pursuant to
the
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Existing Senior Secured Notes Tender Offer/Consent Solicitation shall
be permitted to remain outstanding (and may be guaranteed, to the
extent required in accordance with the Existing Senior Secured Notes
Documents by one or more U.S Subsidiary Guarantors) so long as (A) the
aggregate principal amount thereof at no time outstanding exceeds the
remainder of (x) the aggregate principal amount of such Existing Senior
Secured Notes not tendered pursuant to the Existing Senior Secured
Notes Tender Offer/Consent Solicitation less (y) the aggregate
principal amount thereof repaid after the Initial Borrowing Date
pursuant to Section 9.03 and (B) on and after the 180th day after the
Initial Borrowing Date, the provisions of Section 8.17 have been
complied with;
(xii) Indebtedness incurred by the U.S. Borrower or any of its
Subsidiaries represented by liabilities for jackpots payable for
progressive games in a manner consistent with industry practice and
applicable Gaming Regulations;
(xiii) in addition to Indebtedness otherwise permitted above or
pursuant to clause (xiv) below, the U.S. Borrower and its Subsidiaries
may from time to time issue or incur Indebtedness (of which (x) up to
$5,000,000 may be incurred in connection with Permitted Acquisitions and
(y) no more than $1,000,000 may be secured by Liens pursuant to Section
9.01(viii)) so long as the aggregate principal amount of all
Indebtedness at any time outstanding pursuant to this clause (xiii) does
not exceed $10,000,000; and
(xiv) Non-Recourse German Leasing Debt incurred by one or more
German Leasing Subsidiaries, so long as the aggregate principal amount
of Indebtedness incurred pursuant to this clause (xiv)(a) in no fiscal
year of the U.S. Borrower exceeds $10,000,000 and (b) at no time
outstanding exceeds $40,000,000.
9.05 Advances, Investments and Loans. The U.S. Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, lend
money or credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person, or purchase or own a futures contract
or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or, Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the U.S. Borrower and its Subsidiaries may acquire and hold
accounts receivables, trade receivables, notes receivables, prepaid
expenses and similar items owing to any of them, if created or acquired
in the ordinary course of business and payable or dischargeable in
accordance with customary terms, and the U.S. Borrower and its
Subsidiaries may own Investments received in
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connection with the bankruptcy, work-out, reorganization, liquidation
or similar proceeding of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(ii) the U.S. Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents;
(iii) the U.S. Borrower and its Subsidiaries may hold the
Investments held by them on the Initial Borrowing Date and described on
Schedule VIII without giving effect to any additions thereto or
replacements thereof;
(iv) the U.S. Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs
of such loans and advances) shall not exceed $1,000,000;
(v) the U.S. Borrower and its Subsidiaries may enter into
Interest Rate Protection Agreements to the extent permitted by Section
9.04(iii);
(vi) the U.S. Borrower and its Subsidiaries may enter into Other
Hedging Agreements to the extent permitted by Section 9.04(viii);
(vii) the U.S. Borrower and its Subsidiaries shall be permitted to
make Capital Expenditures to the extent permitted by Section 9.07;
(viii) after the Initial Borrowing Date, (a) the U.S. Borrower and
the Wholly-Owned Subsidiary Guarantors may make, or permit to remain
outstanding, Investments in each other; provided that if at any time any
Person ceases to be a Wholly-Owned Subsidiary Guarantor no Investments
(excluding equity contributions which are not returned in the case of
the sale of 100% of the equity interests in said Wholly-Owned Subsidiary
to a Person other than the U.S. Borrower and its Subsidiaries in a
transaction effected in compliance with Section 9.02) theretofore made
in such Person shall cease to be permitted pursuant to this clause (a),
(b) Investments may be made by the U.S. Borrower and its Wholly-Owned
Domestic Subsidiaries in other Wholly-Owned Domestic Subsidiaries that
are Specified Non-Material Subsidiaries, provided that if, as a result
of the respective Investment or otherwise, the respective Subsidiary
ceases to qualify as a Specified Non-Material Subsidiary, it shall be
required to take the actions specified in Section 8.14 and, provided
further, if the respective Specified Non-Material Subsidiary ceases to
be a Wholly-Owned Domestic Subsidiary, any Investments theretofore made
therein (other than equity contributions which are not returned in
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the case of the sale of 100% of the equity interests in said Wholly-
Owned Subsidiary to a Person other than the U.S. Borrower and its
Subsidiaries in a transaction effected in compliance with Section 9.02)
shall cease to be permitted pursuant to this clause (b), (c) the German
Borrowers may make unlimited Investments in each other without
limitation, (d) the German Parent may make Investments in the German
Borrowers without limitation, (e) the German Borrowers may make
intercompany loans to any German Subsidiary Guarantor, which
intercompany loans shall be evidenced by an inter-company note which,
in a case of loans to Bally Gaming International GmbH, shall be Bally
Gaming International GmbH Senior Secured Loans secured by the inventory
and receivables of Bally Gaming International GmbH, (f) Subsidiaries of
the German Parent or German Borrowers (excluding German Leasing
Subsidiaries and German Leasing Joint Ventures) may lend and advance
money to the German Parent and/or German Borrowers on an unsecured
basis, (g) Investments may be made in Domestic Subsidiaries which are
not Wholly-Owned Subsidiaries, and may be made in Wholly-Owned Foreign
Subsidiaries, in each case which have provided unlimited guarantees (in
form and substance reasonably satisfactory to the Administrative Agent)
of all Obligations owing pursuant to this Agreement, so long as the
aggregate amount of such Investments at no time outstanding (determined
without regard to any write-downs or write-offs thereof) does not
exceed $10,000,000, and (h) any Subsidiary of the U.S. Borrower may
make intercompany loans to the U.S. Borrower, provided that all such
loans are subordinated to the Obligations of the U.S. Borrower pursuant
to subordination provisions in substantially the form attached hereto
as Exhibit O, provided further that if any loans made pursuant to this
clause (viii) are evidenced by a promissory note, the respective
promissory note shall be pledged to the extent such pledge is required
by the terms of any Security Document;
(ix) the U.S. Borrower and its Subsidiaries may make any
Investments (x) expressly permitted pursuant to Section 9.02(ii) or (y)
consisting of non-cash consideration to the extent permitted in
connection with dispositions pursuant to Section 9.02(vi) and (vii);
(x) the U.S. Borrower may purchase the Rainbow Royalty Payments
and Rainbow Debt with proceeds of Delayed Draw Term Loans, as
contemplated by Section 5B.02 and, at any time after the Rainbow Royalty
Payments and Rainbow Debt have been so purchased, the U.S. Borrower may
make additional Investments in RCVP (a) to repurchase minority
interests, so long as the aggregate amount spent pursuant to this clause
(x) to purchase minority interests does not exceed $4,000,000 and/or (b)
by way of intercompany loans to RCVP, so long as the aggregate principal
amount of such loans at no time outstanding (determined without regard
to any write-downs or write-offs thereof) exceeds $2,500,000;
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(xi) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, the U.S. Borrower
may make Investments in a joint venture with a gaming company identified
in a letter delivered to the Administrative Agent prior to the Initial
Borrowing Date, in an aggregate amount not to exceed $5,000,000;
(xii) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, the U.S. Borrower
may make investments in a Japanese company identified in a letter
delivered to the Administrative Agent prior to the Initial Borrowing
Date, in an aggregate amount not to exceed $5,000,000;
(xiii) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, Investments in
Kansas Gaming Partners, LLC and Kansas Financial Partners, LLC, so long
as the respective entity is a Subsidiary of the U.S. Borrower, shall be
permitted so long as the aggregate amount of Investments made pursuant
to this clause (xiii) does not exceed $3,000,000;
(xiv) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, Investments, so
long as same constitute Subsidiaries of the U.S. Borrower, may be made
in VSI, SVS and VDSI, in each case to repurchase minority equity
interests therein, so long as the aggregate amount of Investments made
pursuant to this clause (xiv) does not exceed $4,000,000;
(xv) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, Investments may be
made through Native American Investments, Inc., in connection with the
development of gaming facilities at the Cuyapaipe Indian Reservation in
San Diego County, California, so long as the aggregate amount of
Investments made pursuant to this clause (xv) does not exceed
$3,000,000;
(xvi) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, additional
Investments may be made at any time so long as the amount thereof, on
the date the respective Investment is made, does not exceed the
Cumulative Net Income Amount as in effect on such date (immediately
before the making of the respective Investment);
(xvii) the U.S. Borrower and its Wholly-Owned Subsidiaries may
establish Subsidiaries to the extent permitted by Section 9.16 (although
any Investments therein must be independently justified pursuant to the
other provisions of this Section 9.05);
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(xviii) the German Parent and its Subsidiaries may make Investments
in one or more German Leasing Subsidiaries or German Leasing Joint
Ventures, in each case resulting from transfers of assets to the
respective German Leasing Subsidiaries and German Leasing Joint Ventures
effected in accordance with the requirements of Section 9.02(xii);
(xix) Investments by the U.S. Borrower or any of its Subsidiaries
in securities issued directly or indirectly and fully guaranteed or
insured by the United States government or any agency or instrumentality
thereof (a) in an amount outstanding at any time equal to the net
present value of the aggregate amount of payments owed to winners of
jackpots from progressive games and having maturities that are
approximately the same as the due dates for future jackpot payments
and/or (b) in such amounts as are needed to, and that are deposited
pursuant to the requirements of the Existing Senior Secured Notes
Indenture in order to, effect a covenant defeasance of the Existing
Senior Secured Notes as required by Section 8.17; and
(xx) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, in addition to the
investments permitted by clauses (i) through (xvii) above, the U.S.
Borrower and its Subsidiaries may make additional Investments to or in
one or more Persons, so long as all such Investments (determined without
regard to any write-downs or write-offs thereof) do not exceed in
aggregate amount $9,500,000 at any time outstanding.
The aggregate amount of an Investment at any time outstanding for purposes of
determinations pursuant to this Section 9.05 shall be deemed to be equal to the
aggregate amount of cash, together with the aggregate fair market value of all
non-cash assets, loaned, advanced, contributed, transferred or otherwise
invested that gives rise to such Investment, together with the maximum amount of
credit extended (including by way of guaranties) in respect of any such
Investment. For purposes of preceding clauses (xi), (xii), (xiii), (xv) and
(xx), the amount invested at any time shall be deemed reduced by the net
reduction in the respect of such Investments resulting from dividends or
distributions on or repurchases or redemptions of such Investments by the Person
in which the Investment was made, proceeds realized upon the sale of such
Investment to an unaffiliated purchaser, reductions in amounts guaranteed and
repayments of loans or advances or other transfers of assets by such Person to
the U.S. Borrower or its Subsidiary thereof that made the respective Investment;
provided, however, that no amount shall be included pursuant to this sentence as
a reduction in Investment to the extent that is already included in Consolidated
Net Income. Notwithstanding anything to the contrary contained above in the
Section 9.05, (x) after the creation thereof, Investments in the Missouri
License Subsidiary shall be limited to amounts determined by the U.S. Borrower
to be reasonably necessary in connection with the conduct of the Gaming Business
of the U.S. Borrower and its
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Subsidiaries in the State of Missouri and (y) if any other special purpose
Subsidiary is created in a manner similar to the Missouri License Subsidiary for
the reasons expressed in the last sentence of Section 8.11(a) or in Section
9.16(c), the Investments in the respective such Subsidiary shall be limited to
those amounts as the U.S. Borrower reasonably determines are necessary in
connection with the conduct of the Gaming Business required to be isolated in
the respective such special purpose Subsidiary.
9.06 Transactions with Affiliates. The U.S. Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction
(including the purchase, sale, lease or exchange of property or the rendering of
services) with any Affiliate (each of the foregoing, an "Affiliate Transaction")
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the U.S. Borrower or the relevant Subsidiary than those that would have been
obtained in a comparable transaction by the U.S. Borrower or such Subsidiary
with an unrelated Person and (ii) the U.S. Borrower delivers to the
Administrative Agent (a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$1.0 million, a resolution of the board of directors of the U.S. Borrower set
forth in an officer's certificate of the U.S. Borrower certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the disinterested members of the
board of directors of the U.S. Borrower and (b) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $10.0 million, an opinion as to the fairness to the
U.S. Borrower of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing; provided that (v) any Exempt Affiliate Transaction, (w) any
compensation or indemnity arrangement with any officer or director of the U.S.
Borrower (pertaining to his or her duties as an officer or director) entered
into in the ordinary course of business, (x) transactions between or among the
U.S. Borrower and/or its Independent Subsidiaries, (y) Restricted Payments that
are permitted by the provisions of Section 9.03 and (z) Investments permitted
pursuant to Section 9.05 in persons which are Independent Subsidiaries or who
otherwise constitute an Affiliate of the U.S. Borrower, but only because of the
Investment or Investments made by the U.S. Borrower and/or its Subsidiaries in
such Person pursuant to Section 9.05, in each case, shall not be deemed
Affiliate Transactions.
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9.07 Capital Expenditures. (a) The U.S. Borrower will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
the U.S. Borrower and its Subsidiaries may make Capital Expenditures so long as
the aggregate amount of such Capital Expenditures does not exceed, during any
period of four consecutive fiscal quarters (taken as one accounting period)
ending on the last day of a fiscal quarter described below, the amount set forth
opposite such fiscal quarter below:
Period of Four Consecutive
Fiscal Quarters Ended Closest to Amount
-------------------------------- ------
June 30, 1998 $18.5 million
June 30, 1999 $18.5 million
June 30, 2000 $15 million
June 30, 2001 $15 million
each June 30 ended thereafter $16 million
(b) Notwithstanding anything to the contrary contained in clause
(a) above, to the extent that the amount of Capital Expenditures (excluding
Capital Expenditures made pursuant to following clause (c)) made by the U.S.
Borrower and its Subsidiaries in any period of four consecutive fiscal quarters
set forth in clause (a) above is less than the amount permitted to be made in
such period (without giving effect to any additional amount available as a
result of this clause (b)), the amount of such difference, but not in excess of
50% of the amount originally permitted to be spent in said period pursuant to
said clause (a), may be carried forward and used to make Capital Expenditures in
the immediately succeeding period of four consecutive fiscal quarters of the
U.S. Borrower. Any amount carried forward into a four consecutive- fiscal
quarter period pursuant to this clause (b) shall, if not used to make Capital
Expenditures in such four consecutive-fiscal quarter period, terminate at the
end thereof (and shall not be carried forward to a subsequent period).
(c) In addition to the Capital Expenditures permitted to be made
pursuant to preceding clauses (a) and (b) of this Section 9.07, (i) the U.S.
Borrower and its Subsidiaries may make additional Capital Expenditures with the
amount of (x) insurance proceeds received by the U.S. Borrower or any of its
Subsidiaries from any Recovery Event so long as such proceeds are used to
replace or restore any properties or assets in respect of which such proceeds
were paid within the time periods set forth in Section 4.02(g) and (y) the Net
Sale Proceeds from sales of assets pursuant to Section 9.02(vii) to the extent
such Net Sale Proceeds are permitted to be reinvested pursuant to Section
4.02(e) and are in fact reinvested in accordance with the requirements of said
Section 4.02(e), (ii) Permitted Acquisitions shall be permitted to be made in
accordance with Sections 9.02 and 8.13, (iii) the U.S. Borrower and its
Subsidiaries may make additional Capital Expenditures in connection with the
establishment of new Proprietary Gaming Operations, provided that the aggregate
amount of Capital Expenditures made pursuant to
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this clause (iii) shall not exceed $5,000,000 and (iv) so long as no Default or
Event of Default then exists or would exist immediately after giving effect
thereto, the U.S. Borrower and its Subsidiaries may at any time make additional
Capital Expenditures so long as the amount thereof does not exceed the
Cumulative Net Income Amount as in effect on the date the respective Capital
Expenditure is made (immediately before the making of such Capital Expenditure).
To the extent Capital Expenditures are made as permitted by this clause (c),
same shall not count as Capital Expenditures for purposes of determining
compliance with clause (a) or (b) of this Section 9.07.
9.08 Consolidated Fixed Charge Coverage Ratio. The Borrowers will
not permit the Consolidated Fixed Charge Coverage Ratio for any Test Period
ended on the last day of a fiscal quarter of the U.S. Borrower ended on or after
June 1, 1998, to be less than (x) in the case of any such Test Period ended on
or prior to June 1, 1999, 1.00:1 and (y) in the case of any Test Period ended
after June 1, 1999, 1.05:1.
9.09 Consolidated Interest Coverage Ratio. The Borrowers will not
permit the Consolidated Interest Coverage Ratio for any Test Period ended after
December 1, 1997 and during a period described below to be less than the ratio
set forth opposite such period below:
Test Periods Ending Ratio
------------------- -----
After December 1, 1997 and
on or prior to June 1, 1999 1.75:1
After June 1, 1999 and
on or prior to June 1, 2000 2.00:1
After June 1, 2000 and
on or prior to June 1, 2001 2.25:1
Thereafter 2.75:1
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9.10 Maximum Leverage Ratio. The Borrowers will not permit the
Leverage Ratio at any time during a period set forth below to be greater than
the ratio set forth opposite such period below:
Period Ratio
------ -----
From and including December 31, 1997
to but excluding June 30, 1999 5.75:1
From and including June 30, 1999
to but excluding June 30, 2000 5.00:1
From and including June 30, 2000
to but excluding June 30, 2001 4.50:1
Thereafter 3.75:1
9.11 Minimum Consolidated EBITDA. The Borrowers will not permit
Consolidated EBITDA for any Test Period ended during a period described below to
be less than the respective amount set forth opposite such period below:
Period Amount
------ ------
After December 1, 1997
to and including June 1, 1998 $50 million
After June 1, 1998
to and including June 1, 1999 $52 million
After June 1, 1999
to and including June 1, 2000 $58 million
After June 1, 2000
to and including June 1, 2001 $65 million
Thereafter $74 million
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. The U.S. Borrower will not, and will not permit any of
its Subsidiaries to, (i) amend, modify or change its certificate of
incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or by-laws or any agreement entered into by it,
with respect to its capital stock (including any Shareholders'
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Agreement), or enter into any new agreement with respect to its capital stock
unless such amendment, modification, change or other action contemplated by this
clause (i) could not reasonably be expected to be adverse to the interests of
the Lenders under the Credit Documents in any material respect (it being
understood and agreed that the adoption of a Permitted Rights Plan shall be
permitted), (ii) amend, modify or change, or permit the amendment, modification
or change of any provision of any New Senior Subordinated Notes or the New
Senior Subordinated Notes Documents unless such amendment, modification or
change to the New Senior Subordinated Notes Documents could not be adverse to
the interests of the Lenders in any respect (it being understood and agreed
that, in no event shall any amendment be permitted which relates to the
subordination provisions contained in the New Senior Subordinated Notes
Documents), (iii) after giving effect to the amendments effected pursuant to the
Existing Senior Secured Notes Tender Offer/Consent Solicitation, amend, modify
or change, or permit the amendment, modification or change of, any provision of
any Existing Senior Secured Notes or the Existing Senior Secured Notes Documents
unless such amendment, modification or change to the Existing Senior Secured
Notes Documents could not be adverse to the interest of the Lenders in any
respect or (iv) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any Person money or securities before due for the purpose of
paying when due), exchange or purchase, redeem or acquire for value (whether as
a result of a Change of Control, the consummation of asset sales or otherwise)
any Existing Senior Secured Note or any New Senior Subordinated Note, in each
case except to the extent expressly permitted pursuant to Section 9.03.
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9.13 Limitation on Certain Restrictions on Subsidiaries. The U.S.
Borrower will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any such Subsidiary to (a) pay dividends or
make any other distributions on its capital stock or any other interest or
participation in its profits owned by the U.S. Borrower or any of its
Subsidiaries, or pay any Indebtedness owed to the U.S. Borrower or any of its
Subsidiaries, (b) make loans or advances to the U.S. Borrower or any of its
Subsidiaries or (c) transfer any of its properties or assets to the U.S.
Borrower or any of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) the New Senior Subordinated
Notes and the other New Senior Subordinated Notes Documents, (iv) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the U.S. Borrower or any of its Subsidiaries, (v)
customary provisions restricting assignment of any licensing agreement entered
into by the U.S. Borrower or any of its Subsidiaries in the ordinary course of
business, and (vi) restrictions on the transfer of any asset subject to a Lien
permitted by Sections 9.01(iii), (vii), (viii), (xiv) or (xvi), and (vii) any
restriction with respect to a Subsidiary of the U.S. Borrower imposed pursuant
to an agreement entered into for the sale or disposition of all or substantially
all of the capital stock or assets of such Subsidiary, so long as the respective
sale or disposition is permitted pursuant to Section 9.02, pending the close of
such sale or disposition.
9.14 Limitation on Issuance of Capital Stock. Subject to receipt
of Subsidiary Stock Restrictions Requisite Gaming approvals, the U.S. Borrower
will not permit any of its respective Subsidiaries to issue any capital stock
(including by way of sales of treasury stock) or any options or warrants to
purchase, or securities convertible into, capital stock, except (i) for
transfers and replacements of then outstanding shares of capital stock, (ii) for
stock splits, stock dividends and other issuances which do not decrease the
percentage ownership of the U.S. Borrower or any of its Subsidiaries in any
class of the capital stock of such Subsidiary, (iii) to qualify directors to the
extent required by applicable law, (iv) issuances to the U.S. Borrower and its
Wholly-Owned Subsidiaries, so long as such issuances in no event reduce the
percentage of the capital stock of the respective issuer (if any) pledged at
such time pursuant to the Security Documents and (v) in the case of the German
Parent or other entity described in Section 9.02(ix), issuances permitted
pursuant to Section 9.02(ix).
9.15 Business. The U.S. Borrower will not, and will not permit
any of its Subsidiaries to, engage (directly or indirectly) in any business
other than a Gaming Business.
9.16 Limitation on Creation of Subsidiaries. (a) Except as
otherwise specifically provided in following clause (b), the U.S. Borrower will
not, and will not per-
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mit any of its Subsidiaries to, establish, create or acquire after the Initial
Borrowing Date any Subsidiary; provided that, (i) the U.S. Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish or create Wholly-Owned
Subsidiaries so long as the capital stock of such new Subsidiary that is owned
by any Credit Party is pledged pursuant to, and to the extent required by, the
U.S. Pledge Agreement or other relevant Security Document and the certificates
representing such stock, together with stock powers duly executed in blank, are
delivered to the Collateral Agent for the benefit of the Secured Creditors, (ii)
such new Subsidiary, if a Domestic Subsidiary or a German Subsidiary, executes a
counterpart of the U.S. Subsidiaries Guaranty or the German Subsidiaries
Guaranty, as is appropriate, and (x) in the case of any Domestic Subsidiary, the
U.S. Pledge Agreement and the U.S. Security Agreement and (y) in the case of the
German Subsidiary, such other security documentation as may be requested by the
Administrative Agent, the Collateral Agent or the Required Lenders, and (iii)
such new Subsidiary, to the extent requested by the Administrative Agent or the
Required Lenders, takes all actions required pursuant to Section 8.11. In
addition, each new Wholly-Owned Subsidiary shall execute and deliver, or cause
to be executed and delivered, all other relevant documentation of the type
described in Section 5 as such new Subsidiary would have had to deliver if such
new Subsidiary were a Credit Party on the Initial Borrowing Date. Without
prejudice to the preceding provisions of this Section 9.16(a), the Collateral
Agent may require that the capital stock of a new Subsidiary (in the case of a
Foreign Subsidiary, subject to limitations on the percentage of voting stock
required to be pledged which are consistent with the limitations provided in the
Security Documents as originally in effect) be pledged pursuant to an agreement
in a form suitable for enforcement in the jurisdiction in which the new
Subsidiary in incorporated.
(b) In addition to Subsidiaries created pursuant to preceding
clause (a), the U.S. Borrower may establish or acquire one or more Subsidiaries
after the Initial Borrowing Date as a result of Investments expressly permitted
to be made pursuant to Section 9.05 or acquisitions expressly permitted pursuant
to Section 9.02; provided that (x) all capital stock of each such Subsidiary
shall be pledged by any Credit Party which owns same to the extent required by
the U.S. Pledge Agreement or other relevant Security Document and (y) if any
such Subsidiary is, or becomes, a Wholly-Owned Subsidiary of the U.S. Borrower,
such Subsidiary shall at such time take all actions as would otherwise be
required pursuant to Section 9.16(a) in connection with the creation of a new
Wholly-Owned Subsidiary.
(c) Notwithstanding anything to the contrary contained above, if
any Subsidiary created, acquired or established as contemplated above in this
Section 9.16 is a Specified Non-Material Subsidiary, such Subsidiary shall not
be required to execute and deliver a Guaranty or any Security Documents, in each
case except to the extent thereafter required in accordance with the provisions
of Section 8.14. Furthermore, no action shall be required pursuant to the
foregoing provisions of this Section 9.16 to the extent the taking of such
action would violate applicable law. If, and to the extent, the immediately
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preceding sentence is applicable, at the request of the Administrative Agent or
the Required Lenders, the U.S. Borrower will, and will cause each of its
Subsidiaries to, take all action as may be reasonably requested to obtain any
necessary approvals or to isolate the assets which would give rise to the
respective violation, or cause the respective Gaming Regulations to apply, in a
special purpose Subsidiary of the U.S. Borrower, as is intended to be done with
the Missouri License Subsidiary pursuant to Section 13.18.
SECTION 10. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
10.01 Payments. Any Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any interest on any Loan or Note, any Unpaid Drawing or any Fees or any
other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered to the Administrative Agent or any Lender pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(g)(i), 8.08 or 8.13 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement or any other Credit Document (other than those set
forth in Sections 10.01 and 10.02 and clause (ii) of this Section 10.03) and
such Default as described in this clause (ii) shall continue unremedied for a
period of 30 days after written notice thereof to the U.S. Borrower by the
Administrative Agent or any Lender; or
10.04 Default Under Other Agreements. (i) The U.S. Borrower or any
of its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Notes) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, without any further notice
(other than notice of acceleration or demand for payment) or any further lapse
of time, such Indebtedness to become due prior to its stated maturity, or (ii)
any Indebtedness (other than the Notes) of the U.S. Borrower or any of its
Subsidiaries shall be declared to be (or shall become) due and payable, or
required to be prepaid other than by a regularly scheduled required
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prepayment, prior to the stated maturity thereof, provided that it shall not be
a Default or an Event of Default under this Section 10.04 unless the aggregate
principal amount of all Indebtedness as described in preceding clauses (i) and
(ii) is at least $2,500,000 (or in the case of currencies other than Dollars,
the Dollar Equivalent thereof); or
10.05 Bankruptcy, etc. The U.S. Borrower or any of its
Subsidiaries (excluding Insignificant Subsidiaries) shall commence a voluntary
case concerning itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against the U.S.
Borrower or any of its Subsidiaries (excluding Insignificant Subsidiaries), and
the petition is not controverted within 15 days, or is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the U.S. Borrower or any of its Subsidiaries (excluding
Insignificant Subsidiaries), or the U.S. Borrower or any of its Subsidiaries
(excluding Insignificant Subsidiaries) commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency, receivership, administration or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the U.S. Borrower or
any of its Subsidiaries (excluding Insignificant Subsidiaries), or there is
commenced against the U.S. Borrower or any of its Subsidiaries (excluding
Insignificant Subsidiaries) any such proceeding which remains undismissed for a
period of 60 days, or the U.S. Borrower or any of its Subsidiaries (excluding
Insignificant Subsidiaries) is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
the U.S. Borrower or any of its Subsidiaries (excluding Insignificant
Subsidiaries) suffers any appointment of any custodian, administrator,
administrative receiver or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
U.S. Borrower or any of its Subsidiaries (excluding Insignificant Subsidiaries)
makes a general assignment for the benefit of creditors; or any corporate action
is taken by the U.S. Borrower or any of its Subsidiaries (excluding
Insignificant Subsidiaries) for the purpose of effecting any of the foregoing;
or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any
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Plan which is subject to Title IV of ERISA is, shall have been or is likely to
be terminated or to be the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability, a contribution required to be
made with respect to a Plan or a Foreign Pension Plan has not been timely made,
the U.S. Borrower or any Subsidiary of the U.S. Borrower or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of a
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) under Section 4980B of the Code, or the U.S. Borrower or any
Subsidiary of the U.S. Borrower has incurred or is likely to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in Section
3(1) of ERISA) that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or Plans or Foreign
Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate has had, or could reasonably be
expected to have, a Material Adverse Effect; or
10.07 Security Documents. At any time after the execution and
delivery thereof, (i) any of the Security Documents (except as expressly
provided by the terms thereof) shall cease to be in full force and effect, or
shall cease to give the Collateral Agent for the benefit of the Secured
Creditors the Liens, rights, powers and privileges purported to be created
thereby (including, without limitation, a perfected security interest in, and
Lien on, all of the Collateral to the extent required in accordance with the
requirements of the respective Security Documents, in favor of the Collateral
Agent, superior to and prior to the rights of all third Persons (except as
permitted by Section 9.01), and subject to no other Liens (except as permitted
by Section 9.01), or (ii) any Credit Party shall default, and in the case of
this clause (ii) such default shall continue unremedied for a period of 30 days
after written notice thereof to the U.S. Borrower by the Administrative Agent,
the Collateral Agent or any Lender, in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
any of the Security Documents and such default shall continue beyond any grace
period specifically applicable thereto pursuant to the terms of such Security
Document; or
10.08 Guaranties. Except in accordance with the express terms of
the respective Guaranty, any Guaranty or any provision thereof shall cease to be
in full force or effect as to the relevant Guarantor, or any Guarantor or Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under the relevant Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
against the U.S. Borrower or any Subsidiary of the U.S. Borrower involving in
the
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aggregate for the U.S. Borrower and its Subsidiaries a liability (not paid or
fully covered by a reputable and solvent insurance company) and such judgments
and decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments exceeds $1,000,000 (or in
the case of currencies other than Dollars, the Dollar Equivalent thereof); or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Gaming Licenses. At any time after the Effective Date, the
U.S. Borrower or any of its Subsidiaries shall lose, or fail to obtain, any
Gaming License or Gaming Licenses if the aggregate effect of all such losses and
failures at any time is reasonably likely to result in a Material Adverse
Effect; or
10.12 Bailee Agreement. Except in accordance with the express
terms thereof, any Bailee Agreement or any provision thereof shall cease to be
in full force or effect, or the Bailee under any Bailee Agreement shall (except
to the extent it has turned over all Collateral held by it to the Collateral
Agent) default in its obligations thereunder or notify the Administrative Agent,
the Collateral Agent, any Lender or the U.S. Borrower or any of its Subsidiaries
that it no longer holds the collateral thereunder for the benefit of the
Collateral Agent and the Secured Creditors; or
10.13 Subsidiary Stock Restrictions. At any time on or prior to
the Subsidiary Stock Restrictions Approval Date, any Lien shall be created with
respect to, or any disposition shall occur with respect to, any capital stock or
any Subsidiary or the U.S. Borrower identified in the definition of "Subsidiary
Stock Restrictions" contained herein if such Lien or disposition, as the case
may be, would not have been permitted if the Subsidiary Stock Restrictions
contained in this Agreement were then fully effective in accordance with the
terms thereof;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrowers, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (provided, that, if an Event of Default specified in Section 10.05
shall occur with respect to any Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitments terminated, whereupon all Commitments of each
Lender shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans and
the Notes and all Obligations owing hereunder and thereunder to be, whereupon
the same shall become,
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forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (iv) direct the U.S. Borrower to pay (and U.S. Borrower agrees that upon
receipt of such notice, or upon the occurrence of an Event of Default specified
in Section 10.05 with respect to any Borrower, it will pay) to the Collateral
Agent at the appropriate Payment Office such additional amount of cash, to be
held as security by the Collateral Agent, as is equal to the aggregate Stated
Amount of all U.S. Letters of Credit then outstanding; (v) direct the German
Borrowers to pay (and the German Borrowers jointly and severally agree that upon
receipt of such notice, or upon the occurrence of an Event of Default specified
in Section 10.05 with respect to any Borrower, it will pay) to the Collateral
Agent at the appropriate Payment Office such additional amount of cash, to be
held as security by the Collateral Agent, as is equal to the aggregate Stated
Amount of all German Letters of Credit then outstanding; (vi) enforce, as
Collateral Agent, all of the Liens and security interests created pursuant to
the Security Documents; and (vii) apply any cash collateral held pursuant to
Section 4.02 to the repayment of the Obligations of the U.S. Borrower or the
German Borrowers, as the case may be.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"A PIK Preferred Holdback Amount" shall mean $0.
"A Share" shall mean, for each Lender with a U.S. Borrower Tranche
A Term Loan Commitment, a fraction the numerator of which is the U.S. Borrower
Tranche A Term Loan Commitment of such Lender at such time and the denominator
of which is the Total U.S. Borrower Tranche A Term Loan Commitment at such time.
"Account Party" shall mean (x) in the case of each U.S. Letter of
Credit, the U.S. Borrower and (y) in the case of each German Letter of Credit,
both of the German Borrowers, as joint and several account parties with respect
such Letter of Credit.
"Acquired Indebtedness" means, with respect to any specified
Person, Indebtedness of any other Person (the "Acquired Person") existing at the
time such Acquired Person becomes a Subsidiary of or merges or consolidates with
such specified Person or any of its Subsidiaries pursuant to a Permitted
Acquisition (and not redeemed, defeased, retired or otherwise repaid at the time
of or upon consummation of such merger or acquisition) or Indebtedness assumed
in connection with the acquisition of assets from such Acquired Person pursuant
to a Permitted Acquisition, but in each case excluding any Indebtedness incurred
or secured by Liens (on additional assets or otherwise) in connection
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with, or in anticipation or contemplation of, such Acquired Person merging or
consolidating with, or becoming a Subsidiary of, such specified Person.
"Additional Guaranty" shall mean any guaranty executed and
delivered by a Domestic Subsidiary of the U.S. Borrower in accordance with
relevant requirements of Sections 8.11, 8.14 or 9.16 of this Agreement.
"Additional Security Documents" shall have the meaning provided in
Section 8.11.
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense, non-cash interest expense) and
net non-cash losses which were included in arriving at Consolidated Net Income
for such period less all net non-cash gains included in arriving at Consolidated
Net Income for such period; provided that gains or losses from sales of assets
(other than sales of inventory in the ordinary course of business) shall be
excluded to the extent same would otherwise be included in Adjusted Consolidated
Net Income for the respective period.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Administrative Agent" shall mean Credit Suisse First Boston, in
its capacity as Administrative Agent for the Lenders hereunder, and shall
include any successor to the Administrative Agent appointed pursuant to Section
12.09.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with, such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities, of a
Person shall be deemed to be control.
"Affiliate Transactions" shall have the meaning provided in
Section 9.06.
"Aggregate Non-German Revolving Exposure" at any time shall mean
the aggregate principal amount of all Dollar Revolving Loans and Swingline Loans
then outstanding and the aggregate amount of all U.S. Letter of Credit
Outstandings at such time.
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"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended (including any amendment and restatement hereof) from
time to time.
"Applicable Commitment Commission Percentage" and "Applicable
Margin" shall mean, during each Margin Adjustment Period beginning after the
Initial Borrowing Date, the percentage set forth below opposite the respective
Tranche of Loan (or opposite Applicable Commitment Commission Percentage in the
case of the Applicable Commitment Commission Percentage) and under the
respective Level (i.e., Xxxxx 0, Xxxxx 0, Xxxxx 0, Xxxxx 0, Xxxxx 5 or Level 6,
as the case may be) indicated to have been achieved on the applicable Test Date
for such Margin Adjustment Period (as shown in the respective officer's
certificate delivered pursuant to Section 8.01(f)):
Level 1: Leverage Ratio is less than 3.00 to 1.
Level 2: Leverage Ratio is greater than or equal to 3.00 to 1 but less than 3.50
to 1.
Level 3: Leverage Ratio is greater than or equal to 3.50 to 1 but less than 4.00
to 1.
Level 4: Leverage Ratio is greater than or equal to 4.00 to 1 but less than 4.50
to 1.
Level 5: Leverage Ratio is greater than or equal to 4.50 to 1 but less than 4.75
to 1.
Level 6: Leverage Ratio is greater than or equal to 4.75 to 1.
Xxxxx Xxxxx Xxxxx Xxxxx Xxxxx Xxxxx
Xxxxx 0 0 3 4 5 6
----- ----- ----- ----- ----- ----- -----
Euro Rate Loan
Margin for U.S.
Borrower Tranche A
Term Loans, German
Borrower Tranche A
Term Loans and Re-
volving Loans 1.00% 1.25% 1.50% 1.75% 2.00% 2.25%
Base Rate Loan
Margin for U.S.
Borrower Tranche A
Term Loans,
Revolving Loans and
Swingline Loans 0.00% 0.25% 0.50% 0.75% 1.00% 1.25%
Euro Rate Loan
Margin for Delayed
Draw Term Loans and
Tranche B Term
Loans 2.25% 2.25% 2.25% 2.50% 2.50% 2.75%
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Base Rate Loan
Margin for Delayed
Draw Term Loans and
Tranche B Term
Loans 1.25% 1.25% 1.25% 1.50% 1.50% 1.75%
Euro Rate Loan
Margin for
Tranche C Term
Loans 2.50% 2.50% 2.50% 2.75% 2.75% 3.00%
Base Rate Loan
Margin for Tranche
C Term Loans 1.50% 1.50% 1.50% 1.75% 1.75% 2.00%
Applicable Commit-
ment Commission
Percentage 0.20% 0.25% .375% 0.40% 0.45% 0.50%
; provided, however, that if the U.S. Borrower fails to deliver the officer's
certificate as described in Section 8.01(f) by the date required by such
Section, then Level 6 Pricing shall apply for the period from the date upon
which the respective certificate is required to be delivered pursuant to said
Section 8.01(f) until the date of the actual delivery thereof (except that, to
the extent the respective certificate is delivered within one week of the date
when required pursuant to the terms of this Agreement and before the respective
payment of Commitment Commission or interest is required to be made, the
respective payment shall be based on the certificate actually delivered).
Furthermore, and notwithstanding anything to the contrary contained above, (i)
for the period from the Effective Date to but not including the first Start Date
after the U.S. Borrower's fiscal quarter ended September 30, 1997, Level 6
pricing shall apply, (ii) if at any time after the 270th day after the Initial
Borrowing Date, either (x) the Collateral Agent has not received a pledge of all
the capital stock of the Subsidiaries of the U.S. Borrower (excluding the
Missouri License Subsidiary, so long as established as contemplated by Section
13.18 but in any event including all the capital stock of Bally Gaming
International, Inc. and Bally Gaming, Inc.) which would be required to be
pledged pursuant to the Security Documents, in the absence of otherwise
applicable requirements of law (including without limitation requirements of
applicable Gaming Regulations, Gaming Authorities or requirements to obtain
Gaming Licenses) or (y) the Subsidiary Stock Restrictions Approval Date has not
theretofore occurred, then at all times when either (x) any capital stock of any
Subsidiary of the U.S. Borrower (excluding the Missouri License Subsidiary)
which would otherwise be required to be pledged pursuant to the relevant
Security Documents is not pledged because of the requirements of applicable law
(including, without limitation, all Gaming Regulations) or the need to obtain
Gaming Approvals or the requirements of any Gaming License, and at any time
prior to the occurrence of the Subsidiary Stock Restrictions Approval Date, all
percentages set forth in the table above (other than Applicable Commitment
Commission Percentage) shall be deemed to be increased by .50%, and (iii) Level
6 pricing shall apply at all times when any Default exists under Section 10.01
or
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10.05, or when any Event of Default (excluding Events of Default arising
pursuant to clause (ii) of Section of 10.03, unless the respective Event of
Default is as a result of a failure to deliver information required pursuant to
Section 8.01(b), (c), (f) or (j)) exists.
"Applicable Currency" shall mean Dollars or Deutsche Marks, as
the case may be.
"Applicable Gaming Regulations" shall have the meaning provided in
Section 13.18(a).
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) other than sales and leases of assets or rights in the
ordinary course of business, including, without limitation, sales of inventory
and damaged, surplus or obsolete property in the ordinary course of business and
(ii) the issue or sale by U.S. Borrower or any of its Subsidiaries of Equity
Interests of any of the U.S. Borrower's Subsidiaries, in the case of either
clause (i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a fair market value in excess of $100,000 or (b) for
net proceeds in excess of $100,000. Notwithstanding the foregoing, the following
will not be deemed to be Asset Sales: (i) transfers of assets between the U.S.
Borrower and/or one or more of its Subsidiaries in accordance with the relevant
requirements of Section 9.02; (ii) an issuance of Equity Interests by a
Subsidiary of the U.S. Borrower to the U.S. Borrower or to another Subsidiary of
the U.S Borrower; (iii) a Restricted Payment that is permitted pursuant to
Section 9.03; and (iv) an Investment permitted pursuant to Section 9.05.
"Assignment and Assumption Agreement" shall mean the Assignment
and Assumption Agreement substantially in the form of Exhibit P (appropriately
completed).
"Authorized Officer" of any Credit Party shall mean any of the
President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
any Vice-President, the Secretary or any Assistant Secretary of such Credit
Party or any other officer of such Credit Party which is designated in writing
to the Administrative Agent, CSFB and the Issuing Bank by any of the foregoing
officers of such Credit Party as being authorized to give such notices under
this Agreement.
"Authorized Telephone Officer" shall mean (x) in respect of the
U.S. Borrower, any of Xxxxx Xxxxxxxxxxxx, Xxxxx Des Champs, Xxxx Xxxxxx and
Xxxxx Xxxxxxxxx or (y) in the case of the German Borrowers, any of Xxxxx
Xxxxxxxx, Xxxxxx Xxxx and Xxxxxx Xxxxxx, and in each case such additional
Authorized Officers as may from time to time be designated in writing to the
Administrative Agent by any of the foregoing officers of the U.S. Borrower or,
in the case of clause (y) only, the German Borrowers as being an Authorized
Telephone Officer for purposes of this Agreement.
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"B PIK Preferred Holdback Amount" shall mean $50,595,200.
"B Share" shall mean, for each Lender with a Tranche B Term Loan
Commitment, a fraction the numerator of which is the Tranche B Term Loan
Commitment of such Lender at such time and the denominator of which is the Total
Tranche B Term Loan Commitment at such time.
"Bailee" shall mean any bailee party to a Bailee Agreement.
"Bailee Agreement" shall have the meaning provided in Section
5A.06.
"Bally Gaming International GmbH Senior Secured Loans" shall mean
loans made by either German Borrower to Bally Gaming International GmbH, which
loans shall be evidenced by intercompany promissory notes pledged by the
respective German Borrower pursuant to the German Security Documents and which
intercompany notes shall be secured by the inventory and receivables of Bally
Gaming International GmbH (or such inventory and receivables of Bally Gaming
International GmbH which are to be included as German Eligible Inventory or
German Eligible Receivables, as the case may be). All Bally Gaming International
GmbH Senior Secured Loans shall be made pursuant to promissory notes in form and
substance reasonably satisfactory to the Administrative Agent, and the
Administrative Agent shall have received satisfactory opinions of counsel as to
the validity thereof and of the security interests created to secure same.
"Bally Xxxxx Automaten" shall have the meaning provided in the
first paragraph of this Agreement.
"Bally Xxxxx Vertriebs" shall have the meaning provided in the
first paragraph of this Agreement.
"Bank Information Memorandum" shall mean the Confidential
Memorandum, dated July, 1997, of the U.S. Borrower with respect to this
Agreement, which was distributed to the Lenders prior to the Initial Borrowing
Date.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
excess of the overnight Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Dollar Loan designated or deemed
designated as such by the U.S. Borrower at the time of the incurrence thereof or
conversion thereto.
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"XXX Xxxxxxx Paper" shall mean Chattel Paper evidencing
obligations of account debtors to Bally Gaming, Inc., arising from the sale of
inventory on an installment basis in the ordinary course of business.
"Borrowers" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a
single Tranche from all the Lenders having Commitments of the respective Tranche
on a given date (or resulting from a conversion or conversions on such date)
having in the case of Euro Rate Loans the same Interest Period, provided that
Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of
the related Borrowing of Eurodollar Loans.
"Borrowing Base Certificate" shall have the meaning provided in
Section 8.01(j).
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking institutions
are authorized or required by law or other government action to close and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Euro Rate Loans and German Letters of Credit, any
day which is a Business Day described in clause (i) above and which is also a
day for trading by and between banks in the London interbank market and which
shall not be a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close in the city
where the applicable Payment Office of the Administrative Agent is located in
respect of Euro Rate Loans or German Letters of Credit, as the case may be.
"C PIK Preferred Holdback Amount" shall mean $27,004,800.
"C Share" shall mean, for each Lender with a Tranche C Term Loan
Commitment, a fraction the numerator of which is the Tranche C Term Loan
Commitment of such Lender at such time and the denominator of which is the Total
Tranche C Term Loan Commitment at such time.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be shown as capital expenditures in
accordance with generally accepted accounting principles and, without
duplication, the amount of Capitalized Lease Obligations incurred by such
Person.
"Capitalized Lease Obligations" of any Person shall mean all
rental obligations which, under generally accepted accounting principles, are or
will be required to be
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capitalized on the books of such Person, in each case taken at the amount
thereof accounted for as indebtedness in accordance with such principles.
"Cash Equivalents" means (i) United States dollars and German
Deutsche Marks, (ii) securities issued or directly fully guaranteed or insured
by the United States government or any agency or instrumentality thereof having
maturities of not more than six months from the date of acquisition, (iii)
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any domestic commercial bank or commercial bank of a foreign country
recognized by the United States, in each case having capital and surplus in
excess of $500 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or similar equivalent thereof) or higher by
at least one nationally recognized statistical rating organization (as defined
under Rule 436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor, (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above and (v)
commercial paper having one of the two highest ratings obtainable form Xxxxx'x
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within six months after the date of acquisition.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean (i) the board of directors of the
U.S. Borrower shall at any time cease to consist of a majority of Continuing
Directors, (ii) any Person, entity or "group" (as such term is defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other than
a Permitted Holder) is or becomes the beneficial owner of an amount of
outstanding Voting Stock, or of outstanding common stock, of the U.S. Borrower
in excess of 35%, and the Permitted Holders own less than such Person, entity or
group (as defined above), of the total amount of fully diluted shares of
outstanding Voting Stock or common stock, as the case may be, of the U.S.
Borrower, or (iii) any Change of Control under, and as defined in, the New
Senior Subordinated Notes Indenture shall occur.
"Chattel Paper" shall mean any writing or writings which evidence
both a monetary obligation and the security interest in or a lease of specific
goods, which would constitute "chattel paper" under, and as defined in, the
Uniform Commercial Code as in effect in the State of Nevada.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from
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time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal)
with respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
U.S. Pledge Agreement Collateral, all U.S. Security Agreement Collateral, the
Mortgaged Properties, if any, and all cash and Cash Equivalents delivered as
collateral pursuant to Section 4.02 or 10 hereof.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Commitment" shall mean any of the commitments of any Lender,
i.e., whether, the U.S. Borrower Tranche A Term Loan Commitment, the German
Borrower Tranche A Term Loan Commitment, the Delayed Draw Term Loan Commitment,
the Tranche B Term Loan Commitment, the Tranche C Term Loan Commitment or the
Revolving Loan Commitment.
"Commitment Commission" shall mean and include all Term Loan
Commitment Commission and all Revolving Loan Commitment Commission.
"Committed Financing" shall mean and include, at any time (i) the
Total Unutilized Revolving Loan Commitment under this Agreement at such time and
(ii) other financings permitted under this Agreement, as then in effect, for
which a binding commitment to provide same, extending for at least 270 days, is
then in place, which commitment, and the terms and conditions and issue thereof,
shall be reasonably satisfactory to the Administrative Agent and (iii) cash on
hand.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period, adjusted by excluding therefrom
all non-cash interest expense (i.e., interest expense which was not paid in cash
during the respective period and which does not represent regularly accruing
items which are required, or expected, to be paid in cash (other than through
the repayment of principal of the respective Indebtedness at maturity) during a
subsequent period) reflected therein.
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of the U.S. Borrower and its Subsidiaries at such
time.
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of the U.S. Borrower and its Subsidiaries at
such time, but excluding (i)
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the current portion of any long-term Indebtedness which would otherwise be
included therein and (ii) the current portion of Indebtedness constituting
Capitalized Lease Obligations.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income, adjusted by adding thereto the amount of all amortization and
depreciation and all interest and income or similar tax expense, in each case
that were deducted in arriving at Consolidated Net Income for such period. To
the extent that Consolidated EBITDA is being determined for any period during
which the transactions contemplated by Section 5B.02 were actually consummated,
determinations of Consolidated EBITDA for such period shall give pro forma
effect to the transactions effected as contemplated by said Section 5B.02 as if
same were consummated on the first day of such period.
"Consolidated Fixed Charge Coverage Ratio" for any period shall
mean the ratio of Consolidated EBITDA to Consolidated Fixed Charges for such
period.
"Consolidated Fixed Charges" for any period shall mean the sum,
without duplication, of (i) Consolidated Net Cash Interest Expense for such
period, (ii) the amount of all cash payments by the U.S. Borrower and its
Subsidiaries in respect of taxes or tax liabilities during such period (net of
any cash tax refunds actually received during such period), (iii) the scheduled
principal amount of all amortization payments on all Indebtedness (including,
without limitation, the principal component of all Capitalized Lease
Obligations) of the U.S. Borrower and its Subsidiaries for such period (as
determined on the first day of the respective period of, if later, on the
Initial Borrowing Date) and (iv) the aggregate amount of all Capital
Expenditures made by the U.S. Borrower and its Subsidiaries during such period
(but excluding (x) Capital Expenditures made pursuant to Section 9.07(c) and (y)
during each Test Period, not more than $2,500,000 of Capital Expenditures made
pursuant to Sections 9.07(a) and (b) which were financed pursuant to Capitalized
Lease Obligations or with proceeds of purchase money Indebtedness incurred from
third parties during the respective Test Period to finance same (but not with
proceeds of Loans pursuant to this Agreement)). Notwithstanding anything to the
contrary contained above, no amounts shall be included pursuant to clause (iii)
of the immediately preceding sentence in respect of Indebtedness to be
refinanced pursuant to the Refinancing.
"Consolidated Indebtedness" shall mean, at any time, the aggregate
amount of all Indebtedness of the U.S. Borrower and its Subsidiaries determined
on a consolidated basis with respect to borrowed money or other obligations of
such Persons which would appear on the balance sheet of such Persons as
indebtedness plus, to the extent same remains outstanding after the 45th day
after the Initial Borrowing Date, the aggregate liquidation preference of all
outstanding Existing PIK Preferred Stock. Notwithstanding anything to the
contrary contained above or pursuant to GAAP, to the extent the consolidated
balance sheet of the U.S. Borrower and its Subsidiaries reflects liabilities for
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jackpots payable (or other similar liabilities however designated), including
but not limited to jackpot liabilities with respect to progressive games, then
the aggregate amount of such liabilities, as reduced (but not below zero) by
amounts shown on the consolidated balance sheet of the U.S. Borrower and its
Subsidiaries as constituting assets in the nature of Cash Equivalents or
government securities pledged, deposited or "restricted" to offset said
liabilities, shall be included as (and shall be deemed to increase the amount
of) Consolidated Indebtedness.
"Consolidated Interest Coverage Ratio" for any period shall mean
the ratio of Consolidated EBITDA to Consolidated Interest Expense for such
period; provided that in determining the Consolidated Interest Coverage Ratio
for (i) the Test Period ended closest to December 31, 1997, Consolidated
Interest Expense for the two fiscal quarters then ended (taken as one accounting
period), multiplied by two, shall be used in lieu of Consolidated Interest
Expense for such period and (ii) for the Test Period ended closest to March 31,
1998, Consolidated Interest Expense for the three fiscal quarters then ended
(taken as one accounting period), multiplied by 4/3 shall be used in lieu of
Consolidated Interest Expense for such period.
"Consolidated Interest Expense" means, for any period, the sum,
without duplication, of (i) the consolidated interest expense of the U.S.
Borrower and its Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Interest Rate Protection Agreements or Other Hedging
Agreements), (ii) the consolidated interest expense of the U.S. Borrower and its
Subsidiaries that was capitalized during such period, and (iii) the product of
(a) all dividend payments, whether or not in cash, on any series of Preferred
Stock of such Person or any of its Subsidiaries, other than dividend payments on
Equity Interests payable solely in Equity Interests of the U.S. Borrower, times
(b) a fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory tax rate
of the U.S. Borrower, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP. Notwithstanding anything to the contrary
contained above, Consolidated Interest Expense shall not, pursuant to clause
(iii) of the immediately preceding sentence, include any amounts in respect of
the Existing PIK Preferred Stock so long as same is redeemed within 45 days
after the Initial Borrowing Date.
"Consolidated Net Cash Interest Expense" means, for any period,
Consolidated Cash Interest Expense for such period, reduced by cash interest
income received by the U.S. Borrower and its Subsidiaries on a consolidated
basis during such period (but not including any interest income attributable
to Cash Equivalents or other Investments deposited or dedicated to the payment
of liabilities of the U.S. Borrower and
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its Subsidiaries, where such cash interest secures said obligation and is not
available to the U.S. Borrower and its Subsidiaries for their use).
"Consolidated Net Income" means for any period, the aggregate of
the Net Income of the U.S. Borrower and its Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided that (without
duplication of exclusions) (i) the Net Income (to the extent positive) of any
Person that is not a Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the U.S. Borrower or a Wholly Owned Subsidiary
thereof, (ii) to the extent Consolidated Net Income reflects amounts
attributable to minority interests in Subsidiaries that are not Wholly-Owned
Subsidiaries of the U.S. Borrower, Consolidated Net Income shall be reduced by
the amounts attributable to such minority interests, (iii) the Net Income of any
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends and distributions by that Subsidiary of Net Income is not at the date
of determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders, (iv)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded and (v) the
cumulative effect of a change in accounting principles shall be excluded.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the directors of the U.S.
Borrower on
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the Initial Borrowing Date and each other director of the U.S. Borrower if such
director's nomination for election to the Board of Directors of the U.S.
Borrower is recommended by a majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Bailee Agreement, each Guaranty and each Security Document.
"Credit Event" shall mean the making of any Loan or the issuance
of any Letter of Credit.
"Credit Party" shall mean each Borrower and each Subsidiary
Guarantor.
"CSFB" shall mean Credit Suisse First Boston in its individual
capacity.
"Cumulative Net Income Amount" at any date shall mean (i) an
amount equal to 50% of Consolidated Net Income for the period (taken as one
accounting period) from the Initial Borrowing Date to the end of the U.S.
Borrower's most recently ended fiscal quarter for which financial statements
have been delivered to the Lenders pursuant to Section 8.01(b) or (c), as the
case may be, at the time of such determination, minus (ii) the aggregate amount
of consideration (including the amount of any Indebtedness assumed) in
connection with acquisitions effected pursuant to Section 9.02(ii) after the
Effective Date and on or prior to such date, in each case to the extent the
amount of such consideration was justified based on the Cumulative Net Income
Amount (as opposed to a usage of the $30 million provided in said clause (ii)),
minus (iii) the aggregate amount of Restricted Payments made (or, without
duplication, declared) pursuant to clause (ii) of Section 9.03 after the
Effective Date and prior to such date, minus (iv) the aggregate amount of
Investments made pursuant to Section 9.05(xvi) after the Effective Date and on
or prior to such date, minus (v) the aggregate amount of Capital Expenditures
made after the Effective Date and prior to such date pursuant to Section
9.07(c)(iv).
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Delayed Draw Scheduled Repayment" shall have the meaning provided
in Section 4.02(b)(iii).
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"Delayed Draw Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(iii).
"Delayed Draw Term Loan" shall have the meaning provided in
Section 1.01(c).
"Delayed Draw Term Loan Borrowing Date" shall mean each date on or
after the Initial Borrowing Date and on or prior to the Delayed Draw Term Loan
Commitment Termination Date on which Delayed Draw Term Loans are incurred
hereunder.
"Delayed Draw Term Loan Commitment" shall mean, for each Lender,
the amount set forth opposite such Lender's name in Schedule I-A directly below
the column entitled "Delayed Draw Term Loan Commitment", as the same may be (x)
reduced from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 or 13.04(b).
"Delayed Draw Term Loan Commitment Termination Date" shall mean
January 31, 1998.
"Delayed Draw Term Loan Maturity Date" shall mean January 31,
2005.
"Delayed Draw Term Note" shall have the meaning provided in
Section 1.05(a).
"Deutsche Xxxx Equivalent" of an amount denominated in a currency
other than Deutsche Marks (the "Other Applicable Currency") shall mean, at any
time for the determination thereof, the amount of Deutsche Marks which could be
purchased with the amount of such Other Applicable Currency involved in such
computation at the spot rate of exchange therefor as quoted by the
Administrative Agent as of 11:00 A.M. (Frankfurt time) on the date two Business
Days prior to the date of any determination thereof for purchase on such date;
provided that to the extent this Agreement requires the calculation of the
Deutsche Xxxx Equivalent of the Stated Amount of any German Letter of Credit
issued in a currency other than Deutsche Marks, the Deutsche Xxxx Equivalent of
such Other Applicable Currency shall be revalued on a quarterly basis using the
spot exchange rate therefor quoted in the Wall Street Journal on the last
Business Day of each calendar quarter; provided, however, that the
Administrative Agent may revalue the Deutsche Xxxx Equivalent of any such
amounts described in the preceding proviso of this definition at any time at its
sole discretion or at the direction of the Required Lenders.
"Deutsche Xxxx Euro Rate" means, in respect of Deutsche Marks for
an Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date which is two Business Days
prior to the beginning of the relevant Interest Period (as specified in the
applicable Notice of Borrowing or Notice of Conversion) by reference to the
"British Bankers' Association Interest Settlement Rates" for deposits in
Deutsche Marks (as set forth by any service
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selected by the Administrative Agent which has been nominated by the British
Bankers' Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period (rounded, if
necessary, upward to the nearest whole multiple of 1/16th of 1%); provided that,
to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the "Deutsche Xxxx Euro Rate" shall be
the interest rate per annum determined by the Administrative Agent to be the
rate (rounded, if necessary, upward to the nearest whole multiple of 1/16th of
1% per annum, if such average is not such a multiple) per annum at which
deposits in Deutsche Marks are offered for such relevant Interest Period to
major banks in the London interbank market in London, England by CSFB at
approximately 11:00 a.m. (London time) on the date which is two Business Days
prior to the beginning of such Interest Period. Notwithstanding anything to the
contrary contained above, in the event the Administrative Agent has made any
determination pursuant to Section 1.10(a)(i) in respect of Deutsche Xxxx Loans,
or in the circumstances described in clause (i) to the proviso to Section
1.10(b) in respect to Deutsch Xxxx Loans, the Deutsche Xxxx Euro Rate determined
pursuant to this definition shall instead be the rate determined by CSFB as the
all-in-cost of funds for CSFB to fund a Deutsche Xxxx Loan with maturities
comparable to the Interest Period applicable thereto.
"Deutsche Xxxx Loan" shall mean each German Borrower Tranche A
Term Loan and each Deutsche Xxxx Revolving Loan.
"Deutsche Xxxx Revolving Loan" shall have the meaning provided in
Section 1.01(f).
"Deutsche Xxxx Revolving Note" shall have the meaning provided in
Section 1.05(a).
"Deutsche Marks" and "DM" shall mean (i) freely and transferable
lawful money of the Federal Republic of Germany and (ii) in the event that the
Deutsche Xxxx is replaced by a European Currency of the European Union (the
"Euro"), Euros having a corresponding value, calculated in accordance with the
relevant provisions of the treaty on the European Union.
"Distribution" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock of the U.S. Borrower) or cash
to its stockholders or partners as such, or redeemed, retired, purchased or
otherwise acquired, directly or indirectly, for any consideration (other than
for common stock of the U.S. Borrower) any shares of any class of its capital
stock or any partnership interests outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock or any partnership interests), or set aside any funds for any of the
foregoing purposes, or shall
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have permitted any of its Subsidiaries to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock or any partnership
interests of such Person outstanding on or after the Effective Date (or any
options or warrants issued by such Person with respect to its capital stock).
Without limiting the foregoing, "Distributions" with respect to any Person shall
also include all payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Documents" shall mean the Credit Documents, the Existing Senior
Secured Notes Tender Offer/Consent Solicitation Documents, the Existing PIK
Preferred Stock Redemption Documents and the New Senior Subordinated Notes
Documents.
"Dollar Equivalent" of an amount denominated in a currency other
than Dollars (the "Other Currency") shall mean, at any time for the
determination thereof, the amount of Dollars which could be purchased with the
amount of Other Currency involved in such computation at the spot exchange rate
therefor as quoted by the Administrative Agent as of 11:00 A.M. (New York time)
on the date two Business Days prior to the date of any determination thereof for
purchase on such date; provided that the Dollar Equivalent of any Unpaid Drawing
in a currency other than Dollars shall be determined at the time the drawing
under the related Letter of Credit was paid or disbursed by the Issuing Bank;
provided further, that for purposes of (x) determining compliance with Sections
1.01(f), 1.01(g), 2.02(a) and 4.01(a) and (y) calculating Term Loan Commitment
Commission pursuant to Section 3.01(a), Revolving Loan Commitment Commission
pursuant to Section 3.01(b), Letter of Credit Fees pursuant to Section 3.01(c)
and Facing Fees pursuant to Section 3.03(d), the Dollar Equivalent of any
portion of the Total Term Loan Commitment or the Revolving Loan Commitment
denominated in Deutsche Marks and the Stated Amount of any outstanding Letters
of Credit and any Unpaid Drawings, in each case denominated in a currency other
than Dollars, shall be revalued on a quarterly basis using the spot exchange
rate therefor quoted in the Wall Street Journal on the last Business Day of each
calendar quarter, provided, however, that the Administrative Agent may revalue
the Dollar Equivalent of any such amounts described in the second proviso of
this definition at any time at its sole discretion or at the direction of the
Required Lenders.
"Dollar Loan" shall mean each U.S. Borrower Tranche A Term Loan,
each Delayed Draw Term Loan, each Tranche B Term Loan, each Tranche C Term Loan,
each Dollar Revolving Loan and each Swingline Loan.
"Dollar Revolving Loan" shall have the meaning provided in Section
1.01(f).
"Dollar Revolving Note" shall have the meaning provided in Section
1.05(a).
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"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the U.S.
Borrower incorporated or organized in the United States or any State or
territory thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Inventory" shall mean German Eligible Inventory or U.S.
Eligible Inventory, as the case may be.
"Eligible Receivables" shall mean German Eligible Receivables or
U.S. Eligible Receivables, as the case may be.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, any fund that invests in bank loans and any other
"accredited investor" (as defined in Regulation D of the Securities Act), in
each case which Person shall not have been denied an approval or a license, or
found unsuitable under the Applicable Gaming Regulations (including, without
limitation, Nevada Gaming Regulations) applicable to lenders, shall not have
been found unsuitable by the Mississippi Gaming Commission and which meets the
requirements of all other jurisdictions relating to the Gaming Business of the
U.S. Borrower and its Subsidiaries to the extent that the U.S. Borrower has so
notified the Banks of such requirements of such other jurisdiction pursuant to
Section 13.04(e).
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of non-compliance or violation, investigations or
proceedings arising under any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to human health, safety or the
environment due to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written policy
and rule of common law now or hereafter in effect and in each case as amended,
and any judicial or administrative interpretation thereof, including any
judicial or administrative order, con-
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sent decree or judgment, relating to the environment, employee health and safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3803
et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C.
Section 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq.; and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"Environmental Matters" shall have the meaning provided in Section
8.01(i).
"Equity Interests" means capital stock or general partnership or
limited partnership interests and all warrants, options or other rights to
acquire capital stock or such interests (but excluding any debt security that is
convertible into, or exchangeable for, capital stock or such interests).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with the U.S. Borrower or a Subsidiary of the U.S.
Borrower would be deemed to be a "single employer" within the meaning of Section
414(b), (c), (m) or (o) of the Code.
"Euro Rate" shall mean and include each of the Eurodollar Rate and
the Deutsche Xxxx Euro Rate.
"Euro Rate Loan" shall mean each Eurodollar Loan and each Deutsche
Xxxx Loan.
"Eurodollar Loan" shall mean each Dollar Loan designated as such
by the U.S. Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean (a) for any Interest Period, the rate
per annum determined by the Administrative Agent at approximately 11:00 a.m.
(London time) on the date which is two Business Days prior to the beginning of
the relevant Interest Period (as specified in the applicable Notice of Borrowing
or Notice of
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Conversion) by reference to the "British Bankers' Association Interest
Settlement Rates" for deposits in Dollars (as set forth by any service selected
by the Administrative Agent which has been nominated by the British Bankers'
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Interest Period; provided that, to the
extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the rate to be used for purposes of this clause
(a) shall be the interest rate per annum determined by the Administrative Agent
to be the rate per annum at which deposits in Dollars are offered for such
relevant Interest Period to major banks in the London interbank market in
London, England by CSFB at approximately 11:00 a.m. (London time) on the date
which is two Business Days prior to the beginning of such Interest Period,
divided (and rounded, if necessary, upward to the nearest whole multiple of 1/16
of 1%) by (b) a percentage equal to 100% minus the then stated maximum rate of
all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserve required by applicable law)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency funding or liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of
(i) the sum of (a) Adjusted Consolidated Net Income for such period and (b) the
decrease, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period, minus (ii) the sum of (a) the amount of Capital
Expenditures (but excluding Capital Expenditures (x) financed with Indebtedness
(other than proceeds of Revolving Loans) or equity proceeds or (y) made pursuant
to Section 9.07(c)(i), (ii) or (iv)) made by the U.S. Borrower and its
Subsidiaries during such period in accordance with Section 9.07, (b) the
aggregate amount of permanent principal payments of Indebtedness for borrowed
money of the U.S. Borrower and its Subsidiaries (excluding payments pursuant to
the Transaction, payments of Indebtedness with proceeds of refinancing
Indebtedness or proceeds of Asset Sales and excluding repayments of Loans,
provided that repayments of Loans shall be deducted in determining Excess Cash
Flow if such repayments were (x) required as a result of a Scheduled Repayment
under Section 4.02(b) or (y) made as a voluntary prepayment by the Borrowers
with internally generated funds (but in the case of a voluntary prepayment of
Revolving Loans, only to the extent accompanied by a voluntary reduction to the
Total Revolving Loan Commitment)) during such period, (c) the amount of cash
Investments made during such period pursuant to clauses (x) (but only to the
extent constituting a usage of the $4,000,000 permitted to be used to repurchase
minority equity issuances in RCVP), (xi), (xii), (xiii), (xiv), (xv) and (xx) of
Section 9.05 during such period, reduced by the amount of all reductions to such
Investments during such period as a result of the provisions of the penultimate
sentence of Section 9.05, and (d) the increase, if any, in Adjusted Consolidated
Working Capital from the first day to the last day of such period.
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"Excess Cash Payment Date" shall mean the date occurring 90 days
after the last day of each fiscal year of Holdings ended after the Initial
Borrowing Date.
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the U.S. Borrower.
"Exempt Affiliate Transaction" means (i) any extension or renewal,
in accordance with their terms, of those certain Employment Agreements dated as
of July 1, 1997 between the U.S. Borrower and each of Xxxxxxx X. XxXxxxxx, Xxxx
Xxxxxxxxxx and Xxxxxxx X. Xxxxx (collectively, the "Employment Agreements") and
that certain letter agreement dated July 1, 1997 between the U.S. Borrower and
Xxxxxxxx Investment Corporation providing for the payment of overhead expenses,
as well as any restructuring of the Employment Agreements, provided in the case
of a restructuring of any Employment Agreement, that the board of directors of
the U.S. Borrower has determined that the restructured terms are fair to the
U.S. Borrower and if the restructuring involves aggregate consideration in
excess of $10,000,000, the U.S. Borrower delivers a fairness opinion of the type
specified in Section 9.06 and (ii) any agreements between U.S. Borrower and Xx.
Xxxxx or any of his Affiliates providing for the payment by the U.S. Borrower of
consulting fees or similar fees in an aggregate amount not to exceed $500,000
per annum.
"Existing Credit Agreements" shall mean (i) the Credit Agreement
among Bally Xxxxx Vertriebs, Bally Xxxxx Automaten and Berliner Bank AG dated as
of January 22, 1997, (ii) the Credit Agreement among Bally Xxxxx Vertriebs,
Bally Xxxxx Automaten, certain other debtors and Berliner Bank dated as of Xxxxx
0, 0000, (xxx) the Credit Agreement among Bally Xxxxx Automaten and Dresdner
Bank, (iv) the Guaranty Credit Agreement among Bally Xxxxx Vertriebs, Bally
Xxxxx Automaten and Berliner Bank dated as of December 20, 1994 and (iv) the
Loan and Security Agreement between Congress Financial Corporation (Western) and
Bally Gaming, Inc. dated March 31, 1997.
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
"Existing PIK Preferred Stock" shall mean the U.S. Borrower's 15%
Non-Voting Senior Special Stock, Series B.
"Existing PIK Preferred Stock Documents" shall mean the
certificate of designation with respect to the Existing PIK Preferred Stock and
all other documents relating thereto.
"Existing PIK Preferred Stock Redemption Documents" shall mean the
notice of redemption of the Existing PIK Preferred Stock plus any other
documents or
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agreements entered into in connection with the redemption of the Existing PIK
Preferred Stock.
"Existing Senior Secured Notes" shall mean the $154,000,000
aggregate principal amount of the U.S. Borrower's 12-7/8% Senior Secured Notes
due 2003 which were issued pursuant to the Existing Senior Secured Notes
Indenture.
"Existing Senior Secured Notes Collateral Documents" shall mean
all documents securing, or creating Liens to secure, the Existing Senior Secured
Notes from time to time outstanding.
"Existing Senior Secured Notes Collateral Documents Amendments"
shall mean the amendments to the Existing Senior Secured Notes Collateral
Documents in the form contemplated by the Existing Senior Secured Notes Tender
Offer/Consent, Solicitation Documents and entered into by the parties to the
respective Existing Senior Secured Notes Collateral Documents in connection with
the Existing Senior Secured Notes Tender Offer/Consent Solicitation.
"Existing Senior Secured Notes Documents" shall mean the Existing
Senior Secured Notes Indenture, the Existing Senior Secured Notes Indenture
Supplement, the Existing Senior Secured Notes, the Existing Senior Secured Notes
Collateral Documents, the Existing Senior Secured Notes Collateral Documents
Amendments and each of the other agreements and documents entered into in
connection therewith.
"Existing Senior Secured Notes Indenture" shall mean the
Indenture, dated as of June 18, 1996, among the U.S. Borrower, as issuer,
certain Guarantors (as defined therein) and United States Trust Company of New
York, as trustee (as amended, modified or supplemented from time to time,
including pursuant to the Existing Senior Secured Notes Indenture Supplement, in
accordance with the terms of this Agreement).
"Existing Senior Secured Notes Indenture Supplement" shall mean
the First Supplemental Indenture to the Existing Senior Secured Notes Indenture
in the form delivered to the Administrative Agent pursuant to Section 5A.06 and
entered into by the U.S. Borrower and the trustee for the Existing Senior
Secured Notes in connection with the Existing Senior Secured Notes Tender
Offer/Consent Solicitation.
"Existing Senior Secured Notes Reduction Amount" shall have the
meaning provided in Section 3.03(h).
"Existing Senior Secured Notes Tender Offer/Consent Solicitation"
shall have the meaning provided in Section 5A.06.
"Existing Senior Secured Notes Tender Offer/Consent Solicitation
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Documents" shall mean the Existing Senior Secured Notes Tender Offer/Consent
Solicitation, the Existing Senior Secured Notes Indenture Supplement and each of
the other agreements and documents entered into in connection with the Existing
Senior Subordinated Notes Tender Offer/Consent Solicitation.
"Existing Senior Secured Notes Tender Offer Repurchases" shall
have the meaning provided in Section 5A.06.
"Facing Fee" shall have the meaning provided in Section 3.01(d).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to
in Section 3.01.
"First-Step" shall have the meaning provided in the definition of
Two- Step Permitted Acquisition.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by the U.S.
Borrower or any one or more of its Subsidiaries primarily for the benefit of
employees of the U.S. Borrower or such Subsidiaries residing outside the United
States of America, which plan, fund or other similar program provides, or
results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which plan
is not subject to ERISA or the Code.
"Foreign Subsidiaries Guaranty" shall mean and include the German
Subsidiaries Guaranty and each Additional Guaranty delivered by a Foreign
Subsidiary pursuant to Section 8.11, 8.12, 8.14 or 9.16.
"Foreign Subsidiary" shall mean each Subsidiary of the U.S.
Borrower other than a Domestic Subsidiary.
"Former Lender" shall have the meaning provided in Section
13.04(c).
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"GAAP" shall mean generally accepted accounting principles in the
United States consistently applied throughout the periods involved.
"Gaming Authority" shall mean the governmental authorities charged
with the administration and enforcement of the Gaming Regulations.
"Gaming Business" means the business conducted by the U.S.
Borrower and its Subsidiaries as of the Effective Date, including the management
and operation of gaming machines and casinos, the design, manufacture and
distribution of gaming machines, equipment, monitoring systems and amusement
equipment, and other gaming-related businesses, including but not limited to
amusements, arcades, Internet-based gaming, pari-mutuel and lottery-related
activities, and any and all businesses that in the good faith judgment of the
board of directors of the U.S. Borrower are materially related businesses.
"Gaming License" means every license, permit, registration,
finding of suitability, franchise, approval or other authorization required to
own, lease, operate or otherwise conduct or manage riverboat, dockside or
land-based gaming (including any applicable liquor licenses) or to design,
manufacture or distribute gaming machines, equipment or systems, or to conduct
any Gaming Business, in any state or jurisdiction where the U.S. Borrower or any
of its Subsidiaries conduct such business.
"Gaming Regulations" shall mean the laws, rules, regulations,
ordinances and orders applicable to the casino and Gaming Business or activities
of U.S. Borrower or any of its Subsidiaries, as in effect from time to time,
including the policies, interpretations and administration thereof by the Gaming
Authorities.
"German Borrower" shall mean each of Bally Xxxxx Vertriebs and
Bally Xxxxx Automaten, as joint and several obligors hereunder.
"German Borrower Tranche A Scheduled Repayment" shall have the
meaning provided in Section 4.02(b)(ii).
"German Borrower Tranche A Scheduled Repayment Date" shall have
the meaning provided in Section 4.02(b)(ii).
"German Borrower Tranche A Term Loan" shall have the meaning
provided in Section 1.01(b).
"German Borrower Tranche A Term Loan Commitment" shall mean, for
each Lender, the amount set forth opposite such Lender's name in Schedule I-A
directly below the column entitled "German Borrower Tranche A Term Loan
Commitment", as the same may be (x) reduced from time to time pursuant to
Sections 3.03, 4.02 and/or 10
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or (y) adjusted from time to time as a result of assignments to or from such
Lender pursuant to Section 1.13 or 13.04(b).
"German Borrower Tranche A Term Note" shall have the meaning
provided in Section 1.05(a).
"German Borrowing Base" shall mean, as of any date of which the
amount thereof is being determined, an amount (expressed in Deutsche Marks)
equal to the sum of (i) 75% of German Eligible Receivables and (ii) 40% of
German Eligible Inventory, each as determined for the Borrowing Base Certificate
most recently delivered by the German Borrowers pursuant to Section 8.01(j).
"German Eligible Inventory" shall mean the book value of the
inventory of the German Borrowers and Bally Gaming International GmbH, so long
as Bally Gaming International GmbH is a Wholly-Owned Subsidiary of Bally Xxxxx
Vertriebs and is party to a German Subsidiaries Guaranty and German Security
Agreement, which conforms to the representations and warranties contained in the
German Security Agreement which inventory is located in the Republic of Germany,
less (i) any supplies (other than raw materials), goods returned or rejected
(except to the extent that such returned or rejected goods continue to conform
to the representations and warranties contained in the German Security
Agreement) by customers and goods returned to suppliers, (ii) all used equipment
otherwise reflected in such inventory, (iii) any advance payments made by
customers with respect to inventory of the German Borrowers or Bally Gaming
International GmbH and (iv) inventory subject to any Lien other than Liens
created under the German Security Agreement. Notwithstanding anything to the
contrary contained above, German Eligible Inventory of Bally Gaming
International GmbH shall be included as otherwise provided above only to the
extent same secures Bally Gaming International GmbH Senior Secured Loans which
are then outstanding; provided that the amount of German Eligible Inventory and
German Eligible Receivables of Bally Gaming International GmbH at any time
included in the German Borrowing Base (i.e., after reducing same by the
percentages specified in the definition of German Borrowing Base) shall at no
time exceed the lesser of (x) $10,000,000 (or the Deutsche Xxxx Equivalent
thereof) or (y) the aggregate principal amount of Bally Gaming International
GmbH Senior Secured Loans then outstanding.
"German Eligible Receivables" shall mean the gross book value of
the receivables of the German Borrowers and Bally Gaming International GmbH, so
long as Bally Gaming International GmbH is a Wholly-Owned Subsidiary of Bally
Xxxxx Vertriebs and is party to a German Subsidiaries Guaranty and German
Security Agreement arising from the sale or lease of inventory or services by
such Persons in the ordinary course of business which conform to the
representations and warranties contained in the German Security Agreement
(including, without limitation, that the Collateral Agent shall have and
maintain a first priority perfected security interest in all such receivables)
less any returns and claims of any nature (whether issued, owing, granted or
outstanding) and
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excluding (i) xxxx and hold (deferred shipment) and consignment transactions,
(ii) contracts or sales to any Affiliate, (iii) all installment or lease
receivables where the respective account debtor has two or more installments
which are past due, (iv) all receivables from any party subject to any
bankruptcy, receivership insolvency or like proceedings by the account debtor,
and (v) excluding one-third of the amount of all receivables to account debtors
outside the Federal Republic of Germany which would otherwise have been included
as German Eligible Receivables. Notwithstanding anything to the contrary
contained above, (x) to the extent that the book reserves in respect of
receivables of the German Borrowers or Bally Gaming International GmbH, as the
case may be, would exceed 20% of the gross book value of the receivables of such
Person or Persons on its financial statements as prepared in accordance with
GAAP, the amount of such excess reserves shall apply to reduce the amount of
German Eligible Receivables and (y) German Eligible Receivables of Bally Gaming
International GmbH shall be included as otherwise provided above only to the
extent same secures Bally Gaming International GmbH Senior Secured Loans which
are then outstanding; provided that the amount of German Eligible Inventory and
German Eligible Receivables of Bally Gaming International GmbH at any time
included in the German Borrowing Base (i.e., after reducing same by the
percentages specified in the definition of German Borrowing Base) shall at no
time exceed the lesser of (x) $10,000,000 (or the Deutsche Xxxx Equivalent
thereof) or (y) the aggregate principal amount of Bally Gaming International
GmbH Senior Secured Loans then outstanding.
"German Leasing Joint Venture" shall mean any Person, which is not
a Subsidiary of the U.S. Borrower, but in which the German Parent or one or more
of its Subsidiaries makes Investments, which is established for the same purpose
described in the definition of German Leasing Subsidiary.
"German Leasing Subsidiary" shall mean a German Subsidiary formed
for the special purpose of acquiring gaming equipment and leasing the same to
customers in the ordinary course of business, and obtaining third-party
financing for the gaming equipment so acquired; provided that no German Leasing
Subsidiary shall engage in any business other than as contemplated by the
immediately preceding sentence.
"German Letter of Credit" shall mean each Letter of Credit issued
for the joint and several account of the German Borrowers pursuant to Section
2.01.
"German Letter of Credit Outstandings" shall mean, at any time,
the sum of (i) the aggregate Stated Amount of all outstanding German Letters of
Credit and (ii) the amount of all Unpaid Drawings with respect to German Letters
of Credit.
"German Parent" shall mean Alliance Automaten GmbH & Co. KG (and
its successors).
"German Pledge Agreement" shall have the meaning provided in
Section
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5A.15.
"German Pledge Documents" shall have the meaning provided in
Section 5A.15.
"German RL Percentage" of any German Revolving Lender at any time
shall mean a fraction (expressed as a percentage) the numerator of which is the
German Revolving Loan Sub-Commitment of such German Revolving Lender at such
time and the denominator of which is the aggregate amount of German Revolving
Loan Sub- Commitments of all German Revolving Lenders at such time, provided
that if the German RL Percentage of any German Revolving Lender is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the German RL Percentages of the German Revolving Lenders shall be determined
immediately prior (and without giving effect) to such termination.
"German Revolving Lender" means (i) each Person listed on Schedule
I-B, and (ii) each additional Person that becomes a German Revolving Lender
party hereto in accordance with Section 1.13 and/or 13.04. A German Revolving
Lender shall cease to be a "German Revolving Lender" when it has assigned all of
its German Revolving Loan Sub-Commitments in accordance with Section 1.13 and/or
13.04. For purposes of this Agreement, "Lender" includes each German Revolving
Lender unless the context otherwise requires.
"German Revolving Loan Sub-Commitment" means, as to any German
Revolving Lender, (i) the amount set forth opposite such German Revolving
Lender's name in Schedule I-B directly below the column entitled "German
Revolving Loan Sub- Commitment", as same may be (x) reduced from time to time
pursuant to Section 3.02, 3.03 and/or 10 or (y) adjusted from time to time as a
result of assignments to or from such Lender pursuant to Section 1.13 or
13.04(b). The German Revolving Loan Sub-Commitment of each German Revolving
Lender is a sub-limit of the Revolving Loan Commitment of the respective German
Revolving Lender (or its respective Affiliate which is a Lender with the related
Revolving Loan Commitment) and not an additional commitment and, in no event,
may exceed at any time the amount of the Revolving Loan Commitment of such
German Revolving Lender (or its respective Affiliate which is a Lender with the
related Revolving Loan Commitment).
"German Security Agreement" shall have the meaning provided in
Section 5A.15.
"German Security Documents" shall mean the German Security
Agreement, each German Pledge Document and, after the execution and delivery
thereof, each Additional Security Document executed and delivered by any
Subsidiary of the U.S. Borrower incorporated or organized under the laws of
Germany.
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"German Subsidiaries Guaranty" shall have the meaning provided in
Section 5A.12.
"German Subsidiary" shall mean each Subsidiary of the U.S.
Borrower incorporated or organized under the laws of the Federal Republic of
Germany.
"German Subsidiary Guarantors" shall mean each German Subsidiary
of the U.S. Borrower which has executed and delivered the German Subsidiaries
Guaranty.
"Guaranteed Creditors" shall mean and include each of the Agent,
the Collateral Agent, the Lenders and each party (other than any Credit Party)
party to an Interest Rate Protection Agreement or Other Hedging Agreement to the
extent that the obligations under such Interest Rate Protection Agreement or
Other Hedging Agreement constitute Guaranteed Obligations.
"Guaranteed Obligations" shall mean (i) the principal and interest
on each Note issued by the German Borrowers to each Lender, and Loans made to
the German Borrowers under this Agreement and all reimbursement obligations and
Unpaid Drawings with respect to German Letters of Credit, together with all the
other obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of the
German Borrowers to such Lender, the Agent and the Collateral Agent now existing
or hereafter incurred under, arising out of or in connection with this Agreement
or any other Credit Document and the due performance and compliance with all the
terms, conditions and agreements contained in the Credit Documents by the German
Borrowers and (ii) all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities of the German Borrowers or any of their respective Subsidiaries
owing under any Interest Rate Protection Agreement or Other Hedging Agreement
entered into by any German Borrower or any of their respective Subsidiaries with
any Lender or any affiliate thereof (even if such Lender subsequently ceases to
be a Lender under this Agreement for any reason) so long as such Lender or
affiliate participate in such Interest Rate Protection Agreement or Other
Hedging Agreement, and their subsequent assigns, if any, whether now in
existence or hereafter arising, and the due performance and compliance with all
terms, conditions and agreements contained therein.
"Guaranteed Party" shall mean each German Borrower.
"Guaranty" shall mean and include each of the Parent Guaranty, the
U.S. Subsidiaries Guaranty, the German Subsidiaries Guaranty and each additional
guaranty delivered pursuant to Section 8.11, 8.12, 8.14 and/or 9.16.
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"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, which are regulated under any applicable Environmental Law; and
(c) any other chemical, material or substance, the Release of which is
prohibited, limited or regulated by any governmental authority.
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services (excluding accounts payable and accrued expenses arising in the
ordinary course of business), (ii) the maximum amount available to be drawn
under all letters of credit issued for the account of such Person and all unpaid
drawings in respect of such letters of credit, (iii) all Indebtedness of the
types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person (provided, that, if the Person has
not assumed or otherwise become liable in respect of such Indebtedness, such
Indebtedness shall be deemed to be in an amount equal to the fair market value
of the property to which such Lien relates as determined in good faith by such
Person), (iv) the aggregate amount required to be capitalized under leases under
which such Person is the lessee, (v) all obligations of such person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person and (vii) all obligations under any Interest Rate
Protection Agreement, any Other Hedging Agreement or under any similar type of
agreement.
"Indebtedness to be Refinanced" shall mean collectively, the
indebtedness, rising pursuant to the Existing Credit Agreements.
"Independent Subsidiary" shall mean each Subsidiary of the U.S.
Borrower wherein no Equity Interests are held, directly or indirectly (except as
a result of ownership interests in the U.S. Borrower) by any Person (other than
another Subsidiary of the U.S. Borrower) which is an Affiliate of the U.S.
Borrower.
"Initial Borrowing Date" shall mean the date occurring on or after
the Effective Date on which the initial Borrowing of Loans hereunder occurs.
"Initial Delayed Draw Term Loan Borrowing Date" shall have the
meaning provided in Section 5B.01.
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"Insignificant Subsidiary" shall mean any Subsidiary of the U.S.
Borrower (excluding the German Parent and the German Borrowers) which has assets
of not greater than $2,500,000 in the aggregate and which, if aggregated with
all other Subsidiaries of the Borrower with respect to which an event described
in Section 10.05 has occurred and is continuing, would have assets of not
greater than $2,500,000.
"Interest Determination Date" shall mean, (x) with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan and (y) with respect to any
Deutsche Xxxx Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Deutsche Xxxx Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean CSFB and any other Lender which at the
request of the Account Parties (or the respective Account Party) and with the
consent of the Administrative Agent agrees, in such Lender's sole discretion, to
become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to
Section 2. The sole Issuing Bank on the Initial Borrowing Date is CSFB.
"Judgment Currency" shall have the meaning provided in Section
13.16(a).
"Judgment Currency Conversion Date" shall have the meaning
provided in Section 13.16(a).
"Knowledgeable Officer" shall mean with respect to any Borrower,
the chief financial officer and chief executive officer of such Borrower, the
treasurer, controller and any other financial officer of such Borrower, and the
general counsel or any assistant general counsel of such Borrower; provided to
the extent the matter relates to environmental matters, a Knowledgeable Officer
shall also include any environmental officer of the respective Borrower and any
other officer with responsibility for environmental matters.
"L/C Supportable Obligations" of each Account Party shall mean
obligations of such Account Party or any of its (or their) Subsidiaries incurred
in the ordinary course of business and which do not violate the applicable
provisions, if any, of this Agreement.
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"Leaseholds" of any Person means all the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule
I, as well as any Person which becomes a "Lender" hereunder pursuant to Section
1.13 or 13.04(b). Unless the context otherwise requires, each reference in this
Agreement to a Lender includes each German Revolving Lender and, if the
reference is to a specific Lender which has a Revolving Loan Commitment
hereunder, shall include references to any Affiliate of any such Lender which is
acting as a German Revolving Lender.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Lender to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Lender having notified in
writing any Borrower and/or the Administrative Agent that such Lender does not
intend to comply with its obligations under Section 1.01 or 2.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum
of (i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Indebtedness at such time to Consolidated EBITDA for the then most
recently ended Test Period; provided that to the extent any Permitted
Acquisition, any discontinuance of operations or any Assets Sale (or any similar
material transaction which requires a waiver or a consent of the Required
Lenders pursuant to Section 9.02) has occurred during the relevant Test Period,
Consolidated EBITDA shall be determined for the respective Test Period on a Pro
Forma Basis.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease
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having substantially the same effect as any of the foregoing).
"Loan" shall mean each U.S. Borrower Tranche A Term Loan, each
German Borrower Tranche A Term Loan, each Delayed Draw Term Loan, each Tranche B
Term Loan, each Tranche C Term Loan, each Revolving Loan and each Swingline
Loan.
"Longer Maturity Term Loans" shall have the meaning provided in
Section 4.05.
"LVI" shall mean Louisiana Ventures, Inc., a Nevada corporation
which is a Wholly-Owned Subsidiary of the U.S. Borrower.
"Majority Lenders" of any Tranche shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(h).
"Margin Adjustment Period" shall mean each period which shall
commence on the date occurring after the Effective Date on which the respective
officer's certificate is delivered pursuant to Section 8.01(f) (or, in the case
of Margin Adjustment Periods beginning after the initial such Margin Adjustment
Period, which shall begin on the last day of the Margin Adjustment Period then
ending) and which shall end on the earlier of (i) the date of actual delivery of
the next officer's certificate pursuant to Section 8.01(f) and (ii) the latest
date on which the next officer's certificate is required to be delivered.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean any material adverse effect
on the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of the U.S. Borrower and its Subsidiaries taken as a
whole.
"Maturity Date" shall mean, with respect to any Tranche of Loans,
the Tranche A Term Loan Maturity Date, Delayed Draw Term Loan Maturity Date, the
Tranche B Term Loan Maturity Date, the Tranche C Term Loan Maturity Date or the
Revolving Loan Maturity Date, as the case may be.
"Maximum Swingline Amount" shall mean $10,000,000.
"Minimum Borrowing Amount" shall mean, for each Type and Tranche
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of Loans hereunder, the respective amount specified below:
(i) in the case of a Borrowing of Euro Rate Loans of any Tranche
$2,000,000 (or the Deutsche Xxxx Equivalent thereof in the case of a
Borrowing of Deutsche Xxxx Loans);
(ii) in the case of a Borrowing (but excluding Borrowings of
Swingline Loans) of Base Rate Loans of any Tranche, $1,000,000; and
(iii) in the case of a Borrowing of Swingline Loans, $100,000.
"Missouri Equity Pledge Restriction" shall have the meaning
provided in Section 13.18(b).
"Missouri License Subsidiary" shall have the meaning provided in
Section 13.18(b).
"Mortgage" shall have the meaning provided in Section 5A.16.
"Mortgage Policy" shall have the meaning provided in Section
5A.16.
"Mortgaged Property" shall have the meaning provided in Section
5A.16.
"Net Income" means, with respect to any Person for any period, the
net income (loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of Preferred Stock dividends, excluding (without
duplication), however, (i) any gain or loss together with any related provision
for taxes on such gain or loss realized in connection with (a) any Asset Sale
(including, without limitation, dispositions pursuant to Sale and Leaseback
Transactions) or (b) the disposition of any securities by such Person or any of
its Subsidiaries or the extinguishment of any Indebtedness of such Person or any
of its Subsidiaries, (ii) any extraordinary gain or loss, together with any
related provision for taxes on such extraordinary gain or loss, and (iii)
prepayment premiums and other charges incurred in connection with the
Refinancing and any gains or losses directly related to the consummation of the
Transaction.
"Net Sale Proceeds" shall mean for any sale of assets, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of (a) cash expenses of sale (including,
without limitation, brokerage fees, if any, transfer taxes and payment of
principal, premium and interest of Indebtedness other than the Loans required to
be repaid as a result of such asset sale) and (b) all foreign, federal, state
and local taxes to the extent payable as a direct consequence of any such asset
sale.
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"Nevada Gaming Regulations" shall mean the Nevada Gaming Control
Act, as codified in Chapter 463 of the Nevada Revised Statutes, as amended from
time to time, and the regulations of the Nevada Gaming Commission promulgated
thereunder, as amended from time to time.
"New Senior Subordinated Note Indenture" shall mean the Indenture,
dated as of August 8, 1997, among the U.S. Borrower, certain of its Subsidiaries
and United States Trust Company of New York, as trustee thereunder, as in effect
on the Effective Date and as the same may be modified, amended or supplemented
from time to time in accordance with the terms hereof and thereof.
"New Senior Subordinated Notes" shall mean the Borrower's 10%
Senior Subordinated Notes due 2007, as in effect on the Effective Date and as
the same may be modified, supplemented or amended from time to time pursuant to
the terms hereof and thereof.
"New Senior Subordinated Notes Documents" shall mean and include
each of the documents and other agreements entered into (including, without
limitation, the New Senior Subordinated Note Indenture) relating to the issuance
by the U.S. Borrower of the New Senior Subordinated Notes, as in effect on the
Effective Date and as the same may be modified, supplemented or amended from
time to time pursuant to the terms hereof and thereof.
"New Senior Subordinated Notes Offering Memorandum" shall mean
the Offering Memorandum, dated August 4, 1997, in connection with the offering
of the New Senior Subordinated Notes.
"Non-Defaulting Lender" shall mean and include each Lender other
than a Defaulting Lender.
"Non-German Revolving Loan Sub-Commitment" means, for any Lender
at any time, such Lender's Revolving Loan Commitment minus, in the case of a
Lender that is, or whose Affiliate is, a German Revolving Lender, such Lender's
or such Affiliate's German Revolving Loan Sub-Commitment.
"Non-Recourse German Leasing Subsidiary Debt" means Indebtedness
(i) as to which neither the U.S. Borrower nor any of its Subsidiaries (other
than one or more German Leasing Subsidiaries) (a) provides credit support of any
kind (including any undertaking, agreement or instrument that would constitute
Indebtedness) or (b) is directly or indirectly liable (as a guarantor, general
partner or otherwise) and (ii) as to which the respective lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the U.S. Borrower or any of its Subsidiaries (other than the respective
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German Leasing Subsidiary or German Leasing Subsidiaries).
"Note" shall mean each U.S. Borrower Tranche A Term Note, each
German Borrower Tranche A Term Note, each Delayed Draw Term Note, each Tranche B
Term Note, each Tranche C Term Note, each Dollar Revolving Note, each Deutsche
Xxxx Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
XxxXxxxxx, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto; provided that in the
case of German Letters of Credit, the "Notice Office" shall mean the office
specified above, with a copy of the respective notice to be delivered at the
same time as otherwise required pursuant to the terms of this Agreement to the
office of the Administrative Agent located at Messefurm 00000, Xxxxxxxxx XX,
Xxxx, Xxxxxxx, attention: Hamad Urf.
"Obligation Currency" shall have the meaning provided in Section
13.16(a).
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Collateral Agent or any Lender pursuant to the terms of this
Agreement or any other Credit Document.
"Other Creditor" shall have the meaning provided in the Security
Documents.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values.
"Outstanding A Term Loan Amount" shall have the meaning provided
in Section 4.05.
"Parent Guarantor" shall mean the U.S. Borrower in its capacity as
a Guarantor pursuant to Section 14 of this Agreement.
"Parent Guaranty" shall mean the guaranty of the U.S. Borrower
pursuant to Section 14 of this Agreement.
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"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean (i) in respect of Dollar Loans, U.S.
Letters of Credit, Fees (other than Letter of Credit Fees and Facing Fees with
respect to German Letters of Credit) and, except as provided in clause (ii)
below, all other amounts owing under this Agreement and the other Credit
Documents, the office of the Administrative Agent located at 00 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, ABA Number: 000000000, Account Name: Alliance Gaming
Clearing Account, Account Number: 931268-31, Attention: Xxxxx XxxXxxxxx, and
(ii) in the case of Deutsche Xxxx Loans, German Letters of Credit, the office of
the Administrative Agent located at Xxxxxxxxx 00000, Xxxxxxxxx XX Xxxx, Xxxxxxx
Credit Suisse First Boston, Aktiengesellschaft Frankfurt, Germany, Swift
address: XXXXXXXX, Account Number: 000333361, Reference: Alliance Gaming,
Attention: Client Services or in each case such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean the acquisition (regardless of
form and whether by purchase of assets, purchase of stock, merger, consolidation
or otherwise) by the U.S. Borrower or any of the U.S. Subsidiary Guarantors
which is a Wholly-Owned Subsidiary of the U.S. Borrower of assets constituting a
business or division of any Person or of at least 80% of the Equity Interests of
any Person which Person shall, as a result of such acquisition, become a
Subsidiary of the U.S. Borrower, provided that (A) the consideration paid by the
U.S. Borrower and/or its Subsidiaries consists solely of cash, the issuance of
common stock of the U.S. Borrower and the issuance or assumption, as the case
may be, of Indebtedness permitted in Section 9.04(ix) and/or (xiii), (B) the
assets acquired, or the business of the Person whose stock is acquired, shall be
in the Gaming Business, and (C) in the case of the acquisition of 80% of the
Equity Interests of any Person (the "Acquired Person"), such Acquired Person
shall own no Equity Interests of any other Person unless (x) such Acquired
Person owns at least 80% of the Equity Interests of such other Person or (y) (1)
such Acquired Person and/or its Wholly-Owned Subsidiaries own 80% of the
consolidated assets of such other Person and its Subsidiaries and (2) any
non-Wholly-Owned Subsidiary of such Acquired Person was non-Wholly-Owned prior
to the date of such Permitted Acquisition of such Acquired Person.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, (x) a Permitted Acquisition of at least 80% of the Equity Interests in
a Person may be effected by means of a two-step transaction, but only so long as
such acquisition is effected by means of a Two-Step Permitted Acquisition
(complying with all requirements of the definition thereof) and, in any event,
all requirements set forth in this definition of Permitted Acquisition shall in
any event be satisfied, except as the requirement of 80% ownership of the Equity
Interests of the Target need not be satisfied until the earlier to
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occur of the consummation of the subsequent merger or compulsory share
acquisition referenced in the definition of Two-Step Permitted Acquisition or
the date which occurs 270 days after the consummation of the first step of the
Two-Step Permitted Acquisition and (y) any acquisition shall be a Permitted
Acquisition only if all requirements of Sections 8.13 and 9.02(ii) applicable to
Permitted Acquisitions are met with respect thereto.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Administrative Agent in its reasonable
discretion.
"Permitted Holders" shall mean Xxxx Xxxxxxxxxx, Koots XxXxxxxx or
Xxxx Xxxxx (or any entity controlled by one or more of such individuals).
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Permitted Rights Plan" shall mean any shareholder rights plan
adopted by the U.S. Borrower (i.e., a "poison pill"), so long as the respective
rights plan only entitles the holders (or specified holders) of the U.S.
Borrower's common stock to obtain or purchase additional shares of the U.S.
Borrower's stock or preferred stock meeting the requirements of the immediately
succeeding sentence (but not preferred stock, promissory notes or other assets)
in accordance with the terms provided in the respective plan. Any preferred
stock to be issued pursuant to any Permitted Rights Plan shall be preferred
stock of the U.S. Borrower which is not redeemable (except at the sole option of
the U.S. Borrower) prior to the second anniversary of the Tranche C Term Loan
Maturity Date as then in effect, provides that dividends may be paid thereon in
kind (through the issuance of additional shares of such preferred stock), rather
than in cash, and expressly provides that no payments shall be permitted to be
made thereon if the making of the respective such payment will violate the terms
of this Agreement or any other agreement relating to Indebtedness for borrowed
money of the U.S. Borrower.
"Person" shall mean any individual, partnership, joint venture,
limited liability company, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"PIK Preferred Drawdown Date" shall mean the date occurring after
the Initial Borrowing Date upon which payments are made to redeem all of the
then outstanding Existing PIK Preferred Stock, which date must occur on or prior
to the date which occurs 45 days after the Initial Borrowing Date.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute
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of) the U.S. Borrower or a Subsidiary of the U.S. Borrower or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which the U.S. Borrower, or a Subsidiary of the U.S. Borrower or
an ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.
"Pledge Agreement" shall mean and include the U.S. Pledge
Agreement and the German Pledge Documents.
"Pledged Securities" shall mean all "Pledged Securities" as
defined in the relevant Pledge Agreement.
"Pledged Securities Requisite Gaming Approvals" shall have the
meaning provided in Section 13.18(c).
"Preferred Stock" as applied to the capital stock of any Person,
means capital stock of such Person (other than common stock of such Person) of
any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of capital
stock of any other class of such Person.
"Prime Lending Rate" shall mean the rate which CSFB announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. CSFB may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, as to any Person, for any of the
following events which occur subsequent to the commencement of a period for
which the financial effect of such event is being calculated, and giving effect
to the event for which such calculation is being made, such calculation as will
give pro forma effect to such event as if same had occurred at the beginning of
such period of calculation, and
(i) for purposes of the foregoing calculation, the transaction
giving rise to the need to calculate the pro forma effect to any of the
following events shall be assumed to have occurred on the first day of
the four fiscal quarter period last ended before the occurrence of the
respective event for which such pro forma effect is being determined
(the "Reference Period"), and
(ii) in making any determination with respect to the incurrence
or assumption of any Indebtedness during the Reference Period or
subsequent to the Reference Period and on or prior to the date of the
transaction referenced in clause (i) above (the "Transaction Date"), (x)
all Indebtedness (including the Indebtedness
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incurred or assumed and for which the financial effect is being
calculated, whether incurred under this Agreement or otherwise, but
excluding normal fluctuations in revolving indebtedness incurred for
working capital purposes and not to finance any Permitted Acquisition)
incurred or permanently repaid during the Reference Period shall be
deemed to have been incurred or repaid at the beginning of such period,
(y) Consolidated Interest Expense of such Person attributable to
interest or dividends on any Indebtedness, as the case may be, bearing
floating interest rates should be computed on a pro forma basis as if
the rate in effect on the Transaction Date had been the applicable rate
for the entire period and (z) Consolidated Interest Expense will be
increased or reduced by the net cost (including amortization of
discount) or benefit (after giving effect to amortization of discount)
associated with the Interest Rate Protection Agreements, which will
remain in effect for the twelve-month period after the Transaction Date
and which shall have the effect of fixing the interest rate on the date
of computation, and
(iii) in making any determination of Consolidated EBITDA, pro
forma effect shall be given to any Permitted Acquisition, any
discontinued operations and any Asset Sale, in each case which occurred
during the Reference Period or subsequent to the Reference Period and
prior to the Transaction Date, as if such Permitted Acquisition,
discontinuance of operations or Asset Sale, as the case may be, occurred
on the first day of the Reference Period.
All pro forma determinations required above shall be determined in accordance
with GAAP. For purposes of this definition, whenever pro forma effect is to be
given to any occurrence or event, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the U.S.
Borrower.
"Projections" shall mean the projected financial statements of the
U.S. Borrower and its subsidiaries contained in the Bank Information Memorandum.
"Proprietary Gaming Operations" shall mean and include networked
progressive systems and games, second feature/multi-level niche games, network
gaming, new video product platforms and any electronic gaming machines for which
the U.S. Borrower and its Subsidiaries receive a participation in revenues.
"Quarterly Payment Date" shall mean the last Business Day of each
October, January, April and July occurring after the Initial Borrowing Date.
"Rainbow Debt" shall mean Indebtedness of RCVP in the original
principal amount of $12,000,000 in respect of loans made by National Gaming
Mississippi, Inc. to RCVP.
"Rainbow Royalty Payments" shall mean the payments required to be
paid
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made by Rainbow Casino Corporation ("RCC") under a Marketing and Services
Agreement dated as of March 15, 1994 between RCC and HFS Games Corp., which
payment obligations of RCC were assumed by RCVP upon the contribution by RCC of
the Rainbow Casino to RCVP.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"RCVP" shall mean Rainbow Casino-Vicksburg Partnership, L.P., a
Mississippi Limited partnership.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the U.S. Borrower or
any of its Subsidiaries of any cash insurance proceeds or condemnation awards
payable (i) by reason of theft, loss, physical destruction or damage or any
other similar event with respect to any property or assets of the U.S. Borrower
or any of its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03; provided that the term "Recovery Event" shall
exclude any receipt of cash insurance proceeds or condemnation awards in
connection with a single occurrence or event (but treating a series of related
occurrences or events as a single occurrence or event) where the aggregate
amount of cash proceeds so received by the U.S. Borrower and its Subsidiaries
does not exceed $100,000.
"Refinancing" shall mean the various refinancing transactions
described in clauses (ii), (iii) and (v) of the definition of Transaction
contained herein.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors
of the
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Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into the
environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum of
whose outstanding Term Loans (and, prior to the termination thereof, Term Loan
Commitments) and Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and RL Percentage and/or German RL Percentage, as
the case may be, of all Letter of Credit Outstandings and outstanding Swingline
Loans) represent an amount greater than 50% of the sum of all outstanding Term
Loans (and, if prior to the termination thereof, Term Loan Commitments) of
Non-Defaulting Lenders and the Total Revolving Loan Commitment less the
Revolving Loan Commitments of Defaulting Lenders (or after the termination of
the Total Revolving Loan Commitment, the sum of the then total outstanding
Revolving Loans of Non-Defaulting Lenders, and the aggregate RL Percentages
and/or German RL Percentage, as the case may be, of all Non-Defaulting Lenders
of Letter of Credit Outstandings and outstanding Swingline Loans at such time).
For purposes of determining Required Lenders, all outstanding Loans and
Commitments, as the case may be, that are denominated in Dollars will be
calculated in Dollars and all Loans and Commitments, as the case may be,
denominated in Deutsche Marks will be calculated according to the Dollar
Equivalent thereof.
"Restricted Payments" shall mean (a) any payment of any
Distributions with respect to the U.S. Borrower or any of its Subsidiaries by
the U.S. Borrower or any of its Subsidiaries and (b) the making (or the giving
of any notice in respect thereof) by the U.S. Borrower or any of its
Subsidiaries of any voluntary or mandatory payment, purchase, acquisition or
redemption, whether by the making of any payments of the principal, interest or
otherwise, in respect of any Preferred Stock of such Person, the
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Existing Senior Secured Notes or the New Senior Subordinated Notes; provided
that payments of regularly accruing interest and liquidated damages in
accordance with the requirements of the Existing Senior Secured Notes and the
New Senior Subordinated Notes (to the extent the payment is permitted in
accordance the subordination provisions applicable to the New Senior
Subordinated Notes) shall not constitute Restricted Payments.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section
1.01(f).
"Revolving Loan Borrowers" shall mean and include each of the U.S.
Borrower and each German Borrower.
"Revolving Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Schedule I-A directly below the
column entitled "Revolving Loan Commitment," as the same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Lender pursuant to Section
1.13 or 13.04(b).
"Revolving Loan Commitment Commission" shall have the meaning
provided in Section 3.01(b).
"Revolving Loan Maturity Date" shall mean July 30, 2003.
"RL Percentage" of any Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Non-German Revolving
Loan Sub-Commitment of such Lender at such time and the denominator of which is
the aggregate amount of Non-German Revolving Loan Commitments of all Lenders at
such time, or, in the case of a Lender that is, or whose Affiliate is, a German
Revolving Lender, at any time when the Aggregate Non-German Revolving Exposure
equals or exceeds the aggregate of the Non-German Revolving Loan Commitments,
such Bank's or such Affiliate's German RL Percentage. Notwithstanding anything
to the contrary contained above, if the RL Percentage of any Lender is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the RL Percentages of the Lenders shall be determined immediately prior (and
without giving effect) to such termination.
"Sale and Leaseback Transaction" shall mean any transaction
structured as a sale and leaseback or similar transaction.
"Scheduled Repayment" shall mean each U.S. Borrower Tranche A
Scheduled Repayment, each German Borrower Tranche A Scheduled Repayment, each
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Delayed Draw Scheduled Repayment, each Tranche B Scheduled Repayment and each
Tranche C Scheduled Repayment, as the case may be.
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided
in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in
the respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
"Security Document" shall mean and include each U.S. Security
Document, each German Security Document and each security document entered into
by the U.S. Borrower or any Subsidiary of the U.S. Borrower pursuant to Section
8.11, 8.12, 8.14 and/or 9.16.
"Series E Preferred Stock" shall mean the U.S. Borrower's 11-1/2%
Non-Voting Junior Convertible Pay-In-Kind Special Stock Series E.
"Shareholders' Agreements" shall mean all agreements entered into
by the U.S. Borrower or any of its Subsidiaries governing the terms and relative
rights of its capital stock and any agreements entered into by shareholders
relating to any such entity with respect to its capital stock.
"Specified Inactive Subsidiaries" shall mean and include each of:
APT Coin Machines, Inc.
Trolley Stop, Inc.
Oregon Ventures, Inc.
Indiana Gaming Ventures, Inc.
United Games, Inc.
Mizpah Investments, Inc.
United Gaming Ventures, Inc.
Mississippi Ventures II, Inc.
WCAL, Inc.
Slot Palace, Inc. (dba Quality Inn)
Vermont Financial Venture, Inc.
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Missouri Ventures II, Inc.
FCJI, Inc.
Xxxxxxx Eagle Hotel & Casino, Inc.
Pennsylvania Gaming Ventures, Inc.
Bally Xxxxx Beteiligungs GmbH
Xxxxxxx GmbH
"Specified Non-Material Subsidiaries" shall mean (i) on and after
the Initial Borrowing Date, each of:
Casino Electronics, Inc.
Mississippi Ventures, Inc.
United Gaming of Iowa, Inc.
United Native American, Inc.
Kansas Gaming Ventures, Inc.
Kansas Gaming Partners, LLC
Kansas Financial Partners, LLC
Alpine Willow Investments, Inc.
and (ii) after the Initial Borrowing Date, any additional Wholly-Owned
Subsidiary established, created or acquired after the Initial Borrowing Date
which at the time of such establishment, creation or acquisition is designated
as a Specified Non-Material Subsidiary; provided that no Subsidiary shall be
designated as a Specified Non-Material Subsidiary at any time when (x) the
aggregate book value or fair market value (as determined in good faith by the
U.S. Borrower), whichever is greater, of all assets of such Subsidiary is equal
to or in excess of $5,000,000 or (y) if immediately after giving effect to such
designation, the aggregate book value or fair market value (as determined in
good faith by the U.S. Borrower), whichever is greater, of all assets of all
Specified Non-Material Subsidiaries is equal to or in excess of $15,000,000.
Notwithstanding anything to the contrary contained above, (i) at any time when
the assets of any Subsidiary therefore designated as a Specified Non-Material
Subsidiary exceed the amount provided in clause (x) of the immediately preceding
sentence, such Subsidiary shall automatically cease to constitute a Specified
Non-Material Subsidiary, (y) at any time when the assets of all Specified
Non-Material Subsidiaries exceed the amount specified in clause (y) of the
immediately preceding sentence, one or more Specified Non-Material Subsidiaries
(as designated by the U.S. Borrower or, in the absence of any such designation,
as designated by the Administrative Agent) shall cease to constitute Specified
Non-Material Subsidiaries, so that the thresholds described in clause (y) of the
immediately preceding sentence are not exceeded and (iii) the U.S. Borrower may,
at its discretion, at any time, by giving written notice to the Administrative
Agent, designate a Subsidiary as no longer constituting a Specified Non-Material
Subsidiary (in which case such Subsidiary shall no longer constitute a Specified
Non-Material Subsidiary).
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"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Start Date" shall mean, with respect to any Margin Adjustment
Period, the first day of such Margin Adjustment Period.
"Stated Amount" of each Letter of Credit shall, at any time, mean
the maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met, but after
giving effect to all previous drawings made thereunder), provided that the
"Stated Amount" of each Letter of Credit denominated in any currency other than
Dollars shall be (except to the extent that calculations are expressly required
to be made hereunder in Deutsche Marks), on any date of calculation, the Dollar
Equivalent of the maximum amount available to be drawn in such other currency
thereunder (determined without regard to whether any conditions to drawing could
then be met).
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the U.S.
Borrower which has executed and delivered a Guaranty.
"Subsidiary Guaranty" shall mean and include the U.S. Subsidiaries
Guaranty and each Foreign Subsidiaries Guaranty.
"Subsidiary Stock Restrictions" shall mean the negative pledge
(i.e., the prohibition of Liens pursuant to Section 9.01), and restrictions on
transfers pursuant to Section 9.02, on the capital stock of (x) APT Games, Inc.,
Casino Electronics, Inc., Bally Gaming International, Inc., Bally Gaming Inc.,
Plantation Investments, Inc. and United Coin Machine Co. and (y) Bally Gaming,
Inc. and the general and limited partnership interests of RCVP, in each case to
the extent such restrictions, to be included in the Agreement, require the
approval of (i) in the case of the Persons listed in preceding clause (x), the
Nevada Gaming Commission acting upon the recommendation of the Nevada State
Gaming Control Board and (ii) in the case of the Persons listed in preceding
clause (y), the Mississippi Gaming Commission.
"Subsidiary Stock Restrictions Approval Date" shall mean the first
date
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occurring after the Initial Borrowing Date upon which (i) all requisite
approvals of Gaming Authorities have been obtained to the Subsidiary Stock
Restrictions, so that same may be fully effective in accordance with the terms
of this Agreement (without giving effect to the limitations provided in Section
13.18(c)) and (ii) the Administrative Agent shall have received a satisfactory
opinion of Nevada and Mississippi counsel to the U.S. Borrower to the effect
that such approvals have been obtained and that the Subsidiary Stock
Restrictions contained in this Agreement are fully enforceable in accordance
with the terms hereof, which opinion shall be in form and substance reasonably
satisfactory to the Administrative Agent.
"Subsidiary Stock Restrictions Requisite Gaming Approvals" shall
have the meaning provided in Section 13.18(c).
"Substitute Lender" shall have the meaning provided in Section
13.04(c).
"Supermajority Lenders" of any Tranche shall mean those Non-
Defaulting Lenders which would constitute the Required Lenders under, and as
defined in, this Agreement if (x) all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50%" contained therein
were changed to "66-2/3%."
"SVS" shall mean Southern Video Services, Inc., a Louisiana
corporation which, as of the Initial Borrowing Date, is 49% owned by LVI.
"Swingline Expiry Date" shall mean the date which is five (5)
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(g).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Date" shall have the meaning provided in Section
1.01(a).
"Target" shall have the meaning assigned that term in the
definition of "Two-Step Permitted Acquisition".
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall mean each U.S. Borrower Tranche A Term Loan,
each German Borrower Tranche A Term Loan, each Delayed Draw Term Loan, each
Tranche B Term Loan and each Tranche C Term Loan.
"Term Loan Commitment" shall mean each U.S. Borrower Tranche A
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Term Loan Commitment, each German Borrower Tranche A Term Loan Commitment, each
Delayed Draw Term Loan Commitment, each Tranche B Term Loan Commitment and each
Tranche C Term Loan Commitment.
"Term Loan Commitment Commission" shall have the meaning provided
in Section 3.01(a).
"Test Date" shall mean the last day of each fiscal quarter ended
after the Initial Borrowing Date.
"Test Period" shall mean each period of four consecutive fiscal
quarters of the U.S. Borrower ended after the Initial Borrowing Date.
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Lenders.
"Total Delayed Draw Term Loan Commitment" shall mean, at any
time, the sum of the Delayed Draw Term Loan Commitments of each of the Lenders.
"Total German Borrower Tranche A Term Loan Commitment" shall
mean, at any time, the sum of the German Borrower Tranche A Term Loan
Commitments of each of the Lenders.
"Total German Revolving Loan Sub-Commitment" at any time shall
mean the sum of the German Revolving Loan Sub-Commitments of all the German
Revolving Lenders; provided that at no time shall the Total German Revolving
Loan Sub-Commitment exceed the Total Revolving Loan Commitment as then in
effect.
"Total Non-German Revolving Loan Sub-Commitment" at any time
shall mean the sum of the Non-German Revolving Loan Sub-Commitments of all the
Lenders; provided that at no time shall the Total Non-German Revolving Loan Sub-
Commitment exceed the Total Revolving Loan Commitment as then in effect.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Lenders.
"Total Term Loan Commitment" shall mean, at any time, the sum of
the Total U.S. Borrower Tranche A Term Loan Commitment, the Total German
Borrower Tranche A Term Loan Commitment, the Total Delayed Draw Term Loan
Commitment, the Total Tranche B Term Loan Commitment and the Total Tranche C
Term Loan Commitment.
"Total Tranche B Term Loan Commitment" shall mean, at any time,
the
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sum of the Tranche B Term Loan Commitments of each of the Lenders.
"Total Tranche C Term Loan Commitment" shall mean, at any time,
the sum of the Tranche C Term Loan Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect, less (y) the sum of (I) the aggregate principal
amount of Revolving Loans then outstanding (or the Dollar Equivalent thereof in
the case of Deutsche Xxxx Revolving Loans then outstanding) plus (II) the
aggregate principal amount of Swingline Loans then outstanding plus (III) the
then aggregate amount of Letter of Credit Outstandings.
"Total U.S. Borrower Tranche A Term Loan Commitment" shall mean,
at any time, the sum of the U.S. Borrower Tranche A Term Loan Commitments of
each of the Lenders.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being seven separate Tranches,
i.e., U.S. Borrower Tranche A Term Loans, German Borrower Tranche A Term Loans,
Delayed Draw Term Loans, Tranche B Term Loans, the Tranche C Term Loans,
Revolving Loans and Swingline Loans.
"Tranche A Term Loan Maturity Date" shall mean July 31, 2003.
"Tranche B Scheduled Repayment" shall have the meaning provided
in Section 4.02(b)(iv).
"Tranche B Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(iv).
"Tranche B Term Loan" shall have the meaning provided in Section
1.01(d).
"Tranche B Term Loan Borrowing Date" shall mean each date on or
after the Initial Borrowing Date on which Tranche B Term Loans are incurred
hereunder.
"Tranche B Term Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Schedule I-A directly below the
column entitled "Tranche B Term Loan Commitment", as the same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 and (y) adjusted
from time to time as a
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result of assignments to or from such Lender pursuant to Section 1.13 or
13.04(b).
"Tranche B Term Loan Commitment Termination Date" shall mean the
date which occurs 45 days after the Initial Borrowing Date.
"Tranche B Term Loan Maturity Date" shall mean January 31, 2005.
"Tranche B Term Note" shall have the meaning provided in Section
1.05(a).
"Tranche C Scheduled Repayment" shall have the meaning provided
in Section 4.02(b)(v).
"Tranche C Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(v).
"Tranche C Term Loan" shall have the meaning provided in Section
1.01(e).
"Tranche C Term Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Schedule I-A directly below the
column entitled "Tranche C Term Loan Commitment", as the same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from
time to time as a result of assignments to or from such Lender pursuant to
Section 1.13 or 13.04(b).
"Tranche C Term Loan Commitment Termination Date" shall mean the
date which occurs 45 days after the Initial Borrowing Date.
"Tranche C Term Loan Maturity Date" shall mean July 31, 2005.
"Tranche C Term Note" shall have the meaning provided in Section
1.05(a).
"Transaction" shall mean, collectively, (i) the issuance by the
U.S. Borrower of the Senior Subordinated Notes, (ii) the consummation of the
Existing Senior Secured Notes Tender Offer/Consent Solicitation and the making
of the Existing Senior Secured Notes Tender Offer Repurchases pursuant thereto
and the amendments to the Existing Senior Secured Notes Indenture and Existing
Senior Secured Notes Collateral Documents as contemplated therein, (iii) the
repayment of all amounts owing, and the termination of all commitments, in
respect of the Indebtedness to be Refinanced, (iv) the incurrence of Loans on
the Initial Borrowing Date, (v) the redemption of all outstanding Existing PIK
Preferred Stock, (vi) the purchase of the Rainbow Royalty Payments and Rainbow
Debt as contemplated by Section 5B.02 and (vii) the payment of fees and
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expenses owing in connection with the foregoing.
"Two-Step Permitted Acquisition" shall mean the acquisition by
the U.S. Borrower or any Wholly-Owned Subsidiary of the U.S. Borrower of at
least 80% of the capital stock of any Person (a "Target") not already a
Subsidiary of the U.S. Borrower by way of (x) a tender offer for, or other
acquisition of, capital stock of such Target (with the actions taken pursuant to
preceding clause (x) being herein called the "First Step" of the respective
Two-Step Permitted Acquisition) and (y) a subsequent merger of the Target with
and into the U.S. Borrower or with and into a Subsidiary of the U.S. Borrower or
a subsequent compulsory acquisition of outstanding shares of capital stock (or
common stock) of the Target as a result of which the 80% requirement referred to
above is satisfied; provided that (i) any such Two-Step Permitted Acquisition
shall be effected in accordance with the definition of Permitted Acquisition,
(ii) the subsequent merger or compulsory share acquisition to be effected as
part of such Two-Step Permitted Acquisition shall be consummated as soon as
practicable after the consummation of the tender offer portion thereof but in
any event within 270 days thereafter, (iii) upon the consummation of the First
Step of any such Two-Step Permitted Acquisition, the U.S. Borrower or its
respective Subsidiary shall have acquired sufficient shares of the outstanding
capital stock of the respective Target to effect (without any vote by any other
stockholders of Target) the subsequent merger (as a result of which the Target
shall be merged into the U.S. Borrower or become an 80%-owned Subsidiary of the
U.S. Borrower) or compulsory share acquisition within 270 days after the
consummation of said tender offer and (iv) prior to the consummation of the
First Step of any such Two-Step Permitted Acquisition, the U.S. Borrower shall
have available to it sufficient Committed Financing to effect such Two-Step
Permitted Acquisition (and to make all payments owing in connection with both
steps thereof).
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan, a Eurodollar
Loan or a Deutsche Xxxx Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time
in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount,
if any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year, determined in
accordance with actuarial assumptions at such time consistent with Statement of
Financial Accounting Standards No. 87, exceeds the market value of the assets
allocable thereto.
"United Coin Machine Notes" shall mean promissory notes arising
from time to time in the ordinary course of business of United Coin Machine Co.
and payable to it by customers (primarily bar and restaurant owners).
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"United Coin Machine Percentage Notes" shall be any United Coin
Machine Note which provides for payments thereon to be based, in whole or in
part, on a percentage of the gaming revenues of the respective obligor or
equipment financed with the respective promissory note.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unutilized Revolving Loan Commitment" with respect to any
Lender, at any time, shall mean such Lender's Revolving Loan Commitment at such
time less the sum of (x) the aggregate principal amount of Revolving Loans of
such Lender (including any Affiliate of any such Lender acting as a German
Revolving Lender) then outstanding (taking the Dollar Equivalent thereof in the
case of any Deutsche Xxxx Revolving Loans then outstanding), (y) such Lender's
RL Percentage of the U.S. Letter of Credit Outstandings and (z) such Lender's
(or the related German Revolving Lender's) German RL Percentage of the German
Letter of Credit Outstandings; provided that the Unutilized Revolving Loan
Commitment of CFSB shall at any time and from time to time be deemed reduced
(but not below zero) by the aggregate principal amount of Swingline Loans made
by it which are then outstanding.
"U.S. Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"U.S. Borrower Common Stock" shall mean the common stock of the
U.S. Borrower.
"U.S. Borrower Tranche A Term Loan" shall have the meaning
provided in Section 1.01(a).
"U.S. Borrower Tranche A Term Loan Commitment" shall mean, for
each Lender, the amount set forth opposite such Lender's name in Schedule I-A
directly below the column entitled "U.S. Borrower Tranche A Term Loan
Commitment", as the same may be (x) reduced from time to time pursuant to
Sections 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a result of
assignments to or from such Lender pursuant to Section 1.13 or 13.04(b).
"U.S. Borrower Tranche A Term Loan Commitment Termination Date"
shall mean the date which occurs 45 days after the Initial Borrowing Date.
"U.S. Borrower Tranche A Term Note" shall have the meaning
provided in Section 1.05(a).
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"U.S. Borrower Tranche A Scheduled Repayment" shall have the
meaning provided in Section 4.02(b)(i).
"U.S. Borrower Tranche A Scheduled Repayment Date" shall have the
meaning provided in Section 4.02(b)(i).
"U.S. Borrowing Base" shall mean, as at any date of which the
amount thereof is being determined, an amount (expressed in Dollars) equal to
the sum of (i) 75% of U.S. Eligible Receivables and (ii) 40% of U.S. Eligible
Inventory, each as determined for the Borrowing Base Certificate most recently
delivered pursuant to Section 8.01(j).
"U.S. Eligible Inventory" shall mean the book value of the
inventory of the U.S. Borrower and the Wholly-Owned Subsidiary Guarantors which
conforms to the representations and warranties contained in the U.S. Security
Agreement (and in which a Lien has been granted pursuant to the U.S. Security
Agreement) which inventory is located in the United States less (i) any supplies
(other than raw materials), goods returned or rejected (except to the extent
that such returned or rejected goods continue to conform to the representations
and warranties contained in the U.S. Security Agreement) by customers and goods
returned to suppliers, (ii) all used equipment otherwise reflected in such
inventory, (iii) any advance payments made by customers with respect to
inventory of the U.S. Borrower and Wholly-Owned Subsidiary Guarantors and (iv)
inventory subject to any Lien other than Liens created under the Security
Agreement.
"U.S. Eligible Receivables" shall mean the gross book value of the
receivables of the U.S. Borrower and the Wholly-Owned Subsidiary Guarantors
arising from the sale or lease of inventory or services by the U.S. Borrower or
the Wholly- Owned Subsidiary Guarantors in the ordinary course of business which
conform to the representations and warranties contained in the Security
Agreement (including, without limitation, that the Collateral Agent shall have
and maintain a first priority perfected security interest in all such
receivables) less any returns and claims of any nature (whether issued, owing,
granted or outstanding) and excluding (i) xxxx and hold (deferred shipment) and
consignment transactions, (ii) contracts or sales to any Affiliate, (iii) all
installment or lease receivables where the respective account debtor has two or
more installments which are past due, (iv) all receivables from any party
subject to any bankruptcy, receivership insolvency or like proceedings by the
account debtor, and (v) excluding one-third of the amount of all receivables to
account debtors outside the United States of America which would otherwise have
been included as U.S. Eligible Receivables. Notwithstanding anything to the
contrary contained above, to the extent that the book reserves in respect of
receivables of the U.S. Borrower and the Wholly-Owned Subsidiary Guarantors
would exceed 20% of the gross book value of the receivables of such Persons on
their financial statements as prepared in accordance with GAAP, the amount of
such excess reserves shall apply to reduce the amount of U.S. Eligible
Receivables.
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"U.S. Letter of Credit" shall mean each Letter of Credit issued
for the account of the U.S. Borrower pursuant to Section 2.01.
"U.S. Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all outstanding U.S. Letters of Credit
and (ii) the amount of all Unpaid Drawings with respect to U.S. Letters of
Credit.
"U.S. Pledge Agreement" shall have the meaning provided in Section
5A.13.
"U.S. Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the U.S. Pledge Agreement.
"U.S. Security Agreement" shall have the meaning provided in
Section 5A.14.
"U.S. Security Agreement Collateral" shall mean all "Collateral"
as defined in the U.S. Security Agreement.
"U.S. Security Document" shall mean and include each of the U.S.
Security Agreement, the U.S. Pledge Agreement, each Mortgage and, after the
execution and delivery thereof, each Additional Security Document executed and
delivered by the U.S. Borrower or any Domestic Subsidiary thereof.
"U.S. Subsidiary Guarantor" shall mean each Domestic Subsidiary of
the U.S. Borrower which has executed and delivered a U.S. Subsidiaries Guaranty
or an Additional Guaranty unless and until such Person is released from the
respective such Guaranty in accordance with the terms thereof.
"U.S. Subsidiaries Guaranty" shall have the meaning provided in
Section 5A.12.
"VDSI" shall mean Video Distributing Services, Inc., a Louisiana
corporation which, as of the Initial Borrowing Date, is 49% owned by LVI.
"Voting Stock" shall mean, as to any Person, any class or classes
of capital stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such Person.
"VSI" shall mean Video Services, Inc., a Louisiana corporation
which, as of the Initial Borrowing Date, is 49% owned by LVI.
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"Waivable Repayment" shall have the meaning provided in Section
4.05.
"Wholly-Owned Domestic Subsidiary" shall mean any Subsidiary of
the U.S. Borrower which is both a Domestic Subsidiary and a Wholly-Owned
Subsidiary of the U.S. Borrower.
"Wholly-Owned Foreign Subsidiary" shall mean any Subsidiary of the
U.S. Borrower which is both a Foreign Subsidiary and a Wholly-Owned Subsidiary
of the U.S. Borrower.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time. Notwithstanding anything to the contrary contained above,
a Foreign Subsidiary of the U.S. Borrower shall be deemed to be a Wholly-Owned
Subsidiary of the U.S. Borrower if both (x) it would satisfy the requirements of
the definition contained above with respect to the U.S. Borrower if the
percentages "100%" contained above were changed to "99%" and (y) the reduction
to 99% as contemplated by preceding clause (x) is necessary because director's
qualifying shares, ownership of shares by foreign nationals, or other ownership
requirements apply under applicable law (or is necessary to obtain applicable
approvals required by law) to the respective such Foreign Subsidiary.
"Wholly-Owned Subsidiary Guarantors" shall mean, at any time,
each U.S. Subsidiary Guarantor which has executed and delivered a counterpart of
the U.S. Subsidiaries Guaranty (unlimited as to the amount guaranteed), and
which is a Wholly- Owned Domestic Subsidiary of the U.S. Borrower at such time.
"Withdrawal Period" shall have the meaning provided in Section
13.04(d).
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SECTION 12. The Administrative Agent.
12.01 Appointment. The Lenders hereby designate CSFB as
Administrative Agent (for purposes of this Section 12, the term "Administrative
Agent" shall include CSFB in its capacity as Collateral Agent pursuant to the
Security Documents) to act as specified herein and in the other Credit
Documents. Each Lender hereby irrevocably authorizes, and each holder of any
Note by the acceptance of such Note shall be deemed irrevocably to authorize,
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not have
any duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Administrative Agent
nor any of its respective officers, directors, agents, employees or affiliates
shall be liable for any action taken or omitted by it or them hereunder or under
any other Credit Document or in connection herewith or therewith, unless caused
by its or their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Lender or the holder
of any Note; and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent. Independently
and without reliance upon the Administrative Agent, each Lender and the holder
of each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrowers and their Subsidiaries in connection with the making
and the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrowers and their Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution,
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effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of any Borrower or any of its Subsidiaries
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or the financial condition of any Borrower or any of
its Subsidiaries or the existence or possible existence of any Default or Event
of Default.
12.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Lenders;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Lender and no holder of any
Note shall have any right of action whatsoever against the Administrative Agent
as a result of the Administrative Agent acting or refraining from acting
hereunder or under any other Credit Document in accordance with the instructions
of the Required Lenders.
12.05 Reliance. The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to be
the proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and thereunder,
upon advice of counsel selected by the Administrative Agent.
12.06 Indemnification. To the extent the Administrative Agent is
not reimbursed and indemnified by the U.S. Borrower or any of its Subsidiaries,
the Lenders will reimburse and indemnify the Administrative Agent, in proportion
to their respective "percentages" as used in determining the Required Lenders
(for this purpose, determined as if there were no Defaulting Lenders at such
time), for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Administrative Agent in performing its respective duties hereunder or
under any other Credit Document, in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct.
12.07 The Administrative Agent in its Individual Capacity. With
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this
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Agreement, the Administrative Agent shall have the rights and powers specified
herein for a "Lender" and may exercise the same rights and powers as though it
were not performing the duties specified herein; and the term "Lenders,"
"Required Lenders," "Majority Lenders," "Supermajority Lenders," "holders of
Notes" or any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, investment banking, trust or other business with
any Credit Party or any Affiliate of any Credit Party as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.
12.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Lenders and the Borrowers. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below,
provided that to the extent required by Applicable Gaming Regulations, the
incumbent Administrative Agent shall remain the Collateral Agent for the Secured
Creditors with respect to any Collateral for which a lienholder must be
qualified under such Gaming Regulations until the new Administrative Agent can
be so qualified (it being understood that the incumbent Administrative Agent
shall be entitled to the indemnities and other protections provided to the
Administrative Agent hereunder in such capacity).
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Administrative Agent hereunder or thereunder who shall
be a commercial bank or trust company reasonably acceptable to the U.S.
Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the U.S. Borrower (which consent shall not be unreasonably withheld
or delayed), shall then appoint a suc-
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cessor Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date such
notice of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Required Lenders shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Lenders
appoint a successor Administrative Agent as provided above.
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SECTION 13. Miscellaneous.
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13.01 Payment of Expenses, etc. The Borrowers jointly and
severally agree that they shall: (i) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent (including, without limitation, the
reasonable fees and disbursements of White & Case and the Administrative Agent's
local and foreign counsel and consultants) in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto, of the Administrative Agent in
connection with its syndication efforts with respect to this Agreement and of
the Administrative Agent and, after the occurrence of an Event of Default, each
of the Lenders in connection with the enforcement of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and
therein (including, without limitation, the reasonable fees and disbursements of
counsel for the Administrative Agent); (ii) pay and hold each of the Lenders
harmless from and against any and all present and future stamp, excise and other
similar documentary taxes with respect to the foregoing matters and save each of
the Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify the Administrative Agent and
each Lender, and each of their respective officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments and suits, and all reasonable (in
the context of the actions required to be taken) costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Lender is a party thereto) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein or in any other Credit Document or the
exercise of any of their rights or remedies provided herein or in the other
Credit Documents, or (b) the actual or alleged presence of Hazardous Materials
in the air, surface water or ground- water or on the surface or subsurface of
any Real Property owned or at any time operated by the U.S. Borrower or any of
its Subsidiaries, the generation, storage, transportation, handling or disposal
of Hazardous Materials at any location, whether or not owned or operated by the
U.S. Borrower or any of its Subsidiaries, the non-compliance of any Real
Property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any Real
Property, or any Environmental Claim asserted against the U.S. Borrower, any of
its Subsidiaries or any Real Property owned or at any time operated by the U.S.
Borrower or any of its Subsidiaries, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the
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gross negligence or willful misconduct of the Person to be indemnified). To the
extent that the undertaking to indemnify, pay or hold harmless the
Administrative Agent or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the U.S.
Borrower shall make the maximum contribution to the payment and satisfaction of
each of the indemnified liabilities which is permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized (to the extent not prohibited by applicable law) at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to any Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Lender
(including, without limitation, by branches and agencies of such Lender wherever
located) to or for the credit or the account of any Credit Party against and on
account of the Obligations and liabilities of such Credit Party to such Lender
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Lender
pursuant to Section 13.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to any Lender, at its address specified on Schedule II; and
if to the Administrative Agent, at its Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each
Lender, at such other address as shall be designated by such Lender in a written
notice to the U.S. Borrower and the Administrative Agent. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective (x) three Business Days after
deposited in the mails, (y) one Business Day after delivered to the telegraph
company, cable company or a recognized overnight courier, as the case may be, or
(z) when sent by telex or telecopier, except that notices and communications
to the Administrative Agent shall not be effective until received by the
Administrative Agent.
13.04 Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the
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respective successors and assigns of the parties hereto; provided, however, that
no Borrower may assign or transfer any of its rights, obligations or interest
hereunder or under any Credit Document without the prior written consent of the
Administrative Agent and all the Lenders (although any German Borrower may, at
its request and with the consent of the Required Lenders, otherwise cease to be
a Borrower hereunder so long as no Default or Event of Default then exists and
all Loans incurred by such German Borrower are repaid in full and the U.S.
Borrower shall become the account party with respect to any outstanding Letters
of Credit issued for the account of such German Borrower pursuant to
documentation satisfactory to the Administrative Agent and the respective
Issuing Bank) and, provided further, that, although any Lender may transfer or
grant participations in its rights hereunder to any Eligible Transferee, such
Lender shall remain a "Lender" for all purposes hereunder (and may not transfer
or assign all or any portion of its Revolving Loan Commitments hereunder except
as provided in Section 13.04(b)) and the transferee, assignee or participant, as
the case may be, shall not constitute a "Lender" hereunder and, provided
further, that (x) each Lender which transfers or grants any participation as
contemplated above shall provide written notice to the U.S. Borrower of such
participation promptly after entering into of the respective participation
agreement and (y) no Lender shall transfer or grant any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would extend the final scheduled maturity of any Loan, Note or Letter
of Credit (unless such Letter of Credit is not extended beyond the Revolving
Loan Maturity Date) in which such participant is participating, or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in any Commitment shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof). In the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit Documents (the participant's rights against such Lender
in respect of such participation to be those set forth in the agreement executed
by such Lender in favor of the participant relating thereto) and the Borrowers
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Credit
Documents and all amounts payable by the Borrowers hereunder shall be determined
as if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to an Eligible Transferee
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which is (i) its parent company and/or any affiliate of such Lender which is at
least 50% owned by such Lender or its parent company or to one or more Lenders
or (ii) in the case of any Lender that is a fund that invests in bank loans, any
other fund that invests in bank loans and is managed or advised by the same
investment advisor of such Lender or by an Affiliate of such investment advisor
or (y) assign all, or if less than all, a portion equal to at least $5,000,000
in the aggregate for the assigning Lender or assigning Lenders, of such
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to one or more Eligible Transferees, each of which assignees shall
become a party to this Agreement as a Lender by execution of an Assignment and
Assumption Agreement, provided that, (i) the assignment by any Lender of its
German Revolving Loan Sub-Commitment (or any portion thereof) shall constitute
the assignment of a like amount of such Lender's (or its respective Affiliate's)
Revolving Loan Commitment, (ii) any assignment of all or any portion of the
Revolving Loan Commitment of any Lender shall be required to be accompanied by
the assignment of all or such portions of the German Revolving Loan
Sub-Commitment and/or Non-German Revolving Loan Commitment Loan Sub-Commitment
of such Lender (or its respective Affiliate) as is equal, in the aggregate, to
the amount of the Revolving Loan Commitment being so assigned, (iii) any
assignment of all or any portion of the Revolving Loan Commitment and related
outstanding Obligations (or, if the Revolving Loan Commitment has terminated,
any assignment of Obligations originally extended pursuant to the Revolving Loan
Commitments) shall be made on a basis such that the respective assignee
participates in Revolving Loans, and in Letter of Credit Outstandings, in
accordance with the Revolving Loan Commitment (and Sub-Commitments described
above) so assigned (or if the Revolving Loan Commitment has terminated, on the
same basis as participated in by the Lenders with Revolving Loan Commitments
(and Sub-Commitments described above) prior to the termination thereof), (iv) at
such time Schedules I-A and, if applicable, I-B shall be deemed modified to
reflect the Commitments (or outstanding Term Loans, as the case may be) of such
new Lender and of the existing Lenders, (v) upon the surrender of the relevant
Notes by the assigning Lender (or, upon such assigning Lender's indemnifying the
respective Borrower for any lost Note pursuant to a customary indemnification
agreement) new Notes will be issued, at the Borrowers' expense, to such new
Lender and to the assigning Lender upon the request of such new Lender or
assigning Lender, such new Notes to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Commitments (or outstanding Term Loans, as the case may be), (vi)
the consent of the Administrative Agent shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) above, (vii) at any
time when no Event of Default is in existence, and when no Default exists
pursuant to Section 10.01 or 10.05, the approval of the U.S. Borrower shall be
required (except with respect to assignments of Loans, but not of Commitments,
pursuant to clause (x) above), which approval shall not be unreasonably withheld
or delayed (and, in instances where the approval of the U.S. Borrower is not
required, each Lender which effects any assignment as contemplated in this
Section 13.04(b) shall provide written notice to the U.S. Borrower of the
respective
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assignment promptly after entering into the respective assignment agreement),
(viii) the Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500, and (ix) promptly after such
assignment, the Borrowers shall have received from the Administrative Agent
notice of any such assignment and of the identity, nationality and applicable
lending office of any such Eligible Transferee that is not a United States
Person (as defined in Section 7701(a)(30) of the Code), together with the copy
of the Assignment and Assumption Agreement relating thereto and, provided
further, that such transfer or assignment will not be effective until recorded
by the Administrative Agent on the Register pursuant to Section 13.15 hereof. To
the extent of any assignment pursuant to this Section 13.04(b), the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Commitments. At the time of each assignment pursuant to this Section
13.04(b) to a Person which is not already a Lender hereunder and which is not a
United States Person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes, the respective assignee Lender shall, to
the extent legally entitled to do so, provide to the U.S. Borrower the Internal
Revenue Forms (and, if applicable a Section 4.04(b)(ii) Certificate) described
Section 4.04(b). To the extent that an assignment of all or any portion of a
Lender's Commitments and related outstanding Obligations pursuant to Section
1.13 or this Section 13.04(b) would, at the time of such assignment, result in
increased costs under Section 1.10, 2.06 or 4.04 in excess of those being
charged by the respective assigning Lender prior to such assignment, then the
Borrowers shall not be obligated to pay such excess increased costs (although
the Borrowers, in accordance with and pursuant to the other provisions of this
Agreement, shall be obligated to pay the costs which are not in excess of those
being charged by the respective assigning Lender prior to such assignment and
any subsequent increased costs of the type described above resulting from
changes after the date of the respective assignment).
(c) If the Gaming Authorities shall determine that any Lender does
not meet the suitability standards under the Nevada Gaming Regulations or any
other Gaming Authority with jurisdiction over the Gaming Business of the U.S.
Borrower and its Subsidiaries shall determine that any Lender does not meet its
suitability standards (in any such case, a "Former Lender"), the Administrative
Agent or the U.S. Borrower shall have the right (but not the duty) to designate
an Eligible Transferee or Transferees (in each case, a "Substitute Lender,"
which may be any Lender or Lenders that agree to become a Substitute Lender)
that has agreed to assume the rights and obligations of the Former Lender,
subject to receipt by the Administrative Agent of evidence that such Substitute
Lender is an Eligible Transferee. The Substitute Lender shall assume the rights
and obligations of the Former Lender under this Agreement, which assumption
shall become effective in accordance with, the provisions of Section 13.04(b),
provided that the purchase price to be paid by the Substitute Lender to the
Administrative Agent for the account of the Former Lender for such assumption
shall equal the sum of (i) the unpaid principal amount of any Notes held or
Loans made by the Former Lender plus accrued interest thereon plus (ii) the
Former Lender's pro rata share of the aggregate amount of
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Drawings under all Letters of Credit that have not been reimbursed by the
Borrowers, plus accrued interest thereon, plus (iii) such Former Lender's pro
rata share of accrued Fees to the date of the assumption, and, provided further,
the Borrowers shall pay all obligations owing to the Former Lender under the
Credit Documents (including all obligations, if any, owing pursuant to Section
1.11, but excluding those amounts in respect of which the purchase price is
being paid as provided above). Each Lender agrees that if it becomes a Former
Lender, upon payment to it by the Borrowers of all such amounts, if any, owing
to it under the Credit Documents, it will execute and deliver an Assignment and
Assumption Agreement, upon payment of such purchase price.
(d) Notwithstanding the provisions of subsection (c) of this
Section 13.04, if any Lender becomes a Former Lender, and if the Administrative
Agent or the U.S. Borrower fails to find a Substitute Lender pursuant to
subsection (c) of this Section within any time period specified by the
appropriate Gaming Authority for the withdrawal of a Former Lender (the
"Withdrawal Period"), the Borrowers shall, immediately (i) prepay in full the
outstanding principal amount of each Note held or Loan made by such Former
Lender, together with accrued interest thereon to the earlier of (x) the date of
payment or (y) the last day of any Withdrawal Period, and (ii) at the option of
the U.S. Borrower either (A) place an amount equal to such Former Lender's RL
Percentage or German RL Percentage as the case may be, in each Letter of Credit
in a separate cash collateral account with the Administrative Agent for each
outstanding Letter of Credit which amount will be applied by the Administrative
Agent to satisfy the respective Borrower's reimbursement obligations to the
respective Issuing Bank in respect of Drawings under the applicable Letter of
Credit or (B) if no Default or Event of Default then exists, terminate the
Revolving Loan Commitment of such Former Lender at which time the other Lenders'
RL Percentages and German RL Percentages will be automatically adjusted as a
result thereof, provided that the option specified in this clause (B) may only
be exercised if, immediately after giving effect thereto, no Lender's
outstanding Revolving Loans, when added to the product of (a) such Lender's RL
Percentage and/or German RL Percentage as the case may be, and (b) the sum of
(I) the aggregate amount of all Letter of Credit Outstandings at such time and
(II) the aggregate amount of all Swingline Loans then outstanding, would exceed
such Lender's Revolving Loan Commitments at such time.
(e) Subject to the last sentence of this Section 13.04(e), each
Lender agrees that all participations and assignments made hereunder shall be
subject to, and made in compliance with, all Gaming Regulations applicable to
lenders under this Agreement. Each Lender agrees further that it will not grant
participations or assignments prior to receiving notice from the Administrative
Agent that it has completed the primary syndication of this facility. The
Administrative Agent shall provide such notice to the Lenders promptly after
completing such primary syndication. Each Borrower hereby acknowledges that
unless the U.S. Borrower has provided the Lenders with a written opinion of
counsel as to the suitability standards applicable to lenders of any relevant
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Gaming Authority with jurisdiction over the Gaming Business of the U.S. Borrower
and its Subsidiaries, no Lender shall have the responsibility of determining
whether or not a potential assignee of such Lender would be an Eligible
Transferee under the Gaming Regulations of any such jurisdiction.
(f) Nothing in this Agreement shall prevent or prohibit any
Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank and,
with the consent of the Administrative Agent, any Lender which is a fund may
pledge all or any portion of its Notes or Loans to its trustee in support of its
obligations to its trustee. No pledge pursuant to this clause (f) shall release
the transferor Lender from any of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent, the Collateral Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between any Borrower or any other Credit Party
and the Administrative Agent, the Collateral Agent or any Lender shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights, powers and remedies herein or in
any other Credit Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which the Administrative Agent, the Collateral
Agent or any Lender would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent, the Collateral Agent or any Lender to any other or
further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of any Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of any such
payment) pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Term Loan Commitment Commission, Revolving Loan
Commitment Commission or Letter of Credit Fees, of a sum which with respect to
the related sum or sums received by other Lenders is in a
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greater proportion than the total of such Obligation then owed and due to such
Lender bears to the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Credit Party to
such Lenders in such amount as shall result in a proportional participation by
all the Lenders in such amount; provided that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
13.07 Calculations; Computations. (a) The financial statements to
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP, consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the U.S. Borrower to the Lenders).
(b) Notwithstanding anything to the contrary contained in clause
(a) of this Section 13.07, (i) for purposes of determining compliance with any
incurrence tests set forth in Sections 8 and/or 9 (excluding Sections 9.08
through 9.11, inclusive), any amounts so incurred or expended (to the extent
incurred or expended in a currency other than Dollars) shall be converted into
Dollars on the basis of the Dollar Equivalent of the respective such amounts as
in effect on the date of such incurrence or expenditure under any provision of
any such Section that has an aggregate Dollar limitation provided for therein
(and to the extent the respective incurrence test regulates the aggregate amount
outstanding at any time and it is expressed in terms of Dollars, all outstanding
amounts originally incurred or spent in currencies other than Dollars shall be
converted into Dollars on the basis of the Dollar Equivalent of the respective
such amounts as in effect on the date any new incurrence or expenditures made
under any provision of any such Section that regulates the Dollar amount
outstanding at any time) and (ii) except as otherwise specifically provided
herein, all computations determining compliance with Sections 9.08 through 9.11,
inclusive, shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements delivered to the Lenders pursuant
to Section 7.05(a).
(c) All computations of interest, Commitment Commission and Fees
hereunder shall be made on the basis of a year of 360 days (or 365 days in the
case of interest on Base Rate Loans) for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest, Commitment Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (EXCEPT, IN THE
CASE OF OTHER CREDIT DOCUMENTS, AS SPECIFICALLY OTHERWISE PROVIDED THEREIN) AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
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THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK AND APPLICABLE GAMING REGULATIONS. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF (X) THE XXXXX XX XXX XXXX XX XX XXX XXXXXX XXXXXX FOR
THE SOUTHERN DISTRICT OF NEW YORK, OR (Y) THE COURTS IN AND FOR BERLIN, GERMANY,
IN THE FEDERAL REPUBLIC OF GERMANY AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK PERSONAL JURISDICTION OVER SUCH BORROWER, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH
COURTS LACK PERSONAL JURISDICTION OVER SUCH BORROWER. EACH BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO
SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER
CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR
THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY BORROWER IN ANY
OTHER JURISDICTION.
(b) EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE
AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH
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ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the U.S.
Borrower and the Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which each Borrower, the Administrative Agent and
each of the Lenders shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at its Notice Office or, in the case of the Lenders, shall have given to
the Administrative Agent telephonic (confirmed in writing), written or telex
notice (actually received) at such office that the same has been signed and
mailed to it. The Administrative Agent shall give each Borrower and each Lender
prompt written notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Lenders (except that additional parties may be added to, and
Subsidiaries of the U.S. Borrower may be released from, the various Guaranties
and Security Documents in accordance with the provisions thereof, without the
consent of the other Credit Parties party thereto or the Required Lenders),
provided that no such change, waiver, discharge or termination shall, without
the consent of each Lender (other than a Defaulting Lender) with Obligations
being directly modified, (i) extend the final scheduled maturity of any Loan or
Note or extend the stated expiration date of any Letter of Credit beyond the
Revolving Loan Maturity Date, or reduce the rate or extend the time of payment
of interest or Fees thereon, or reduce the principal amount thereof (except to
the extent repaid in cash), (ii) release or terminate any Guaranty provided by
the U.S. Borrower or either German Borrower, (iii) release all or substantially
all of the Collateral (except as expressly provided in the Credit
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Documents) under all the Security Documents, (iv) amend, modify or waive any
provision of this Section 13.12 (except for technical amendments with respect to
additional extensions of credit pursuant to this Agreement which afford the
protections set forth in the proviso below to such additional extensions of
credit), (v) reduce the percentage specified in the definition of Required
Lenders (it being understood that, with the consent of the Required Lenders,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Lenders on substantially the same basis as the
extensions of Term Loans and Revolving Loan Commitments are included on the
Effective Date) or (vi) consent to the assignment or transfer by any Borrower of
any of its rights and obligations under this Agreement; provided further, that
no such change, waiver, discharge or termination shall (u) increase the
Commitments of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Commitments shall not constitute an increase of the
Commitment of any Lender, and that an increase in the available portion of any
Commitment of any Lender shall not constitute an increase of the Commitment of
such Lender), (v) without the consent of each Issuing Bank, amend, modify or
waive any provision of Section 2 or alter its rights or obligations with respect
to Letters of Credit, (w) without the consent of the Administrative Agent,
amend, modify or waive any provision of Section 12 or any other provision as
same relates to the rights or obligations of the Administrative Agent, (x)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent, (y)
except in cases where additional extensions of term loans are being afforded
substantially the same treatment afforded to the Term Loans pursuant to this
Agreement as originally in effect and except as expressly provided in Section
4.05, without the consent of the Majority Lenders of each Tranche which is being
allocated a lesser pre-payment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Majority Lenders of
each Tranche in the case of an amendment to the definition of Majority Lenders),
amend the definition of Majority Lenders or alter the required application of
any prepayments or repayments (or commitment reductions), as between the various
Tranches, pursuant to Section 4.01 or 4.02 (excluding Section 4.02(b)) (although
the Required Lenders may waive, in whole or in part, any such prepayment,
repayment or commitment reduction, so long as the application, as amongst the
various Tranches, of any such prepayment, repayment or commitment reduction
which is still required to be made is not altered) or (z) without the consent of
the Supermajority Lenders of the respective Tranche, waive, or decrease the
amount of, any U.S. Borrower Tranche A Scheduled Repayment, German Borrower
Tranche A Scheduled Repayment, Delayed Draw Scheduled Repayment, Tranche B
Scheduled Repayment or Tranche C Scheduled Repayment or extend the date on which
the respective Scheduled Repayment is required to be made.
(b) If, in connection with any proposed change, waiver, discharge
or termination to any of the provisions of this Agreement as contemplated by
clauses (i)
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through (vi), inclusive, of the first proviso to Section 13.12(a), the consent
of the Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the U.S. Borrower shall
have the right, so long as all non-consenting Lenders whose individual consent
is required are treated as described below, to replace each such non-consenting
Lender or Lenders (or, at the option of the U.S. Borrower if the respective
Lender's consent is required with respect to less than all Tranches of Loans (or
related Commitments), to replace only the respective Tranche or Tranches of
Commitments and/or Loans of the respective non-consenting Lender which gave rise
to the need to obtain such Lender's individual consent) with one or more
Replacement Lenders pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination provided further, that in any event the U.S.
Borrower shall not have the right to replace a Lender, terminate its Revolving
Loan Commitment or repay its Loans solely as a result of the exercise of such
Lender's rights (and the withholding of any required consent by such Lender)
pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall
survive the execution, delivery and termination of this Agreement and the Notes
and the making and repayment of the Obligations.
13.14 Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any office, Subsidiary or Affiliate of such
Lender. Notwithstanding anything to the contrary contained herein, to the extent
that a transfer of Loans pursuant to this Section 13.14 would, at the time of
such transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04
in excess of those being charged by the respective Lender prior to such
transfer, then the Borrowers shall not be obligated to pay such excess increased
costs (although the Borrowers, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay the costs which would
apply in the absence of such designation and any subsequent increased costs of
the type described above resulting from changes after the date of the respective
transfer).
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13.15 Register. Each Borrower hereby designates the
Administrative Agent to serve as such Borrower's agent, solely for purposes of
this Section 13.15, to maintain a register (the "Register") on which it will
record the Commitments from time to time of each of the Lenders, the Loans made
by each of the Lenders and each repayment in respect of the principal amount of
the Loans of each Lender. Failure to make any such recordation, or any error in
such recordation shall not affect the respective Borrower's obligations in
respect of such Loans. With respect to any Lender, the transfer of the
Commitments of such Lender and the rights to the principal of, and interest on,
any Loan made pursuant to such Commitments shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a Loan,
or as soon thereafter as practicable, the assigning or transferor Lender shall
surrender the Note evidencing such Loan, and thereupon one or more new Notes in
the same aggregate principal amount shall be issued to the assigning or
transferor Lender and/or the new Lender. Each Borrower jointly and severally
agrees to indemnify the Administrative Agent from and against any and all
losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 13.15.
13.16 Judgment Currency. (a) The Credit Parties' obligations
hereunder and under the other Credit Documents to make payments in the
respective Applicable Currency (the "Obligation Currency") shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent, the Collateral Agent or the respective
Lender of the full amount of the Obligation Currency expressed to be payable to
the Administrative Agent, the Collateral Agent or such Lender under this
Agreement or the other Credit Documents. If for the purpose of obtaining or
enforcing judgment against any Credit Party in any court or in any jurisdiction,
it becomes necessary to convert into or from any currency other than the
Obligation Currency (such other currency being hereinafter referred to as the
"Judgment Currency") an amount due in the Obligation Currency, the conversion
shall be made, at the Deutsche Xxxx Equivalent or the Dollar Equivalent thereof,
as the case may be, and, in the case of other currencies, the rate of exchange
(as quoted by the Administrative Agent or if the Administrative Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated
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by the Administrative Agent) determined, in each case, as of the day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Borrowers covenant and agree to pay, or cause to be paid,
such additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate or exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Deutsche Xxxx Equivalent or
the Dollar Equivalent or any other rate of exchange for this Section, such
amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
13.17 Confidentiality. (a) Subject to the provisions of clause (b)
of this Section 13.17, each Lender agrees that it will use its reasonable best
efforts not to disclose without the prior consent of the U.S. Borrower (other
than to its employees, auditors, advisors or counsel or to another Lender if the
Lender or such Lender's holding or parent company in its sole discretion
determines that any such party should have access to such information, provided
such Persons shall be subject to the provisions of this Section 13.17 to the
same extent as such Lender) any information with respect to the U.S. Borrower or
any of its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Credit Document, provided that any Lender may disclose
any such information (a) as has become generally available to the public other
than by virtue of a breach of this Section by such Lender, (b) to the extent
such information was legally in possession of such Lender prior to its receipt
from or on behalf of the U.S. Borrower or any of its Subsidiaries and was from a
source not known to such Lender to be (x) bound by a confidentiality agreement
with the U.S. Borrower or (y) otherwise prohibited from transmitting such
information to such Lender by a contractual, legal or fiduciary obligation, (c)
such information becomes available to such Lender from a source other than the
U.S. Borrower or any of its Subsidiaries and such source is not known to such
Lender to be (x) bound by a confidentiality agreement with the U.S. Borrower or
(y) otherwise prohibited from transmitting such information to such Lender by a
contractual, legal or fiduciary obligation, (d) as may be required or reasonably
appropriate in any report, statement or testimony submitted to, or in response
to a request from, any Gaming Authority or any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the Federal Reserve Board, the Federal Deposit Insurance Corporation, the NAIC
or similar organizations (whether in the United States or
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elsewhere) or their successors, (e) as may be required or reasonably appropriate
in respect to any summons or subpoena or in connection with any litigation, (f)
in order to comply with any law, order, regulation or ruling applicable to such
Lender, (g) to the Administrative Agent or the Collateral Agent or any other
Lender, (h) to any direct or indirect contractual counterparties in swap
agreements or such contractual counterparties' professional advisors; provided
that such contractual counterparty or professional advisor to such contractual
counterparty agrees in writing to keep such information confidential to the same
extent required of the Lenders thereunder, and (i) to any prospective or actual
transferee or participant in connection with any contemplated transfer or
participation of any of the Notes or Commitments or any interest therein by such
Lender, provided, that such prospective transferee shall have agreed to be
subject to the provisions of this Section 13.17(a).
(b) Each of the Borrowers hereby acknowledge and agree that each
Lender may, in connection with the Transaction or the participation of such
Lender pursuant to this Agreement and the other Credit Documents, share with any
of its affiliates any information related to the U.S. Borrower or any of its
Subsidiaries (including, without limitation, any nonpublic customer information
regarding the creditworthiness of the U.S. Borrower and its Subsidiaries,
provided such Persons shall be subject to the provisions of this Section 13.17
to the same extent as such Lender).
13.18 Applicable Gaming Laws; Requisite Gaming Approvals. (a)
This Agreement, the Notes, the Credit Documents and the security interests
thereunder are subject to the Nevada Gaming Regulations, the Louisiana Video
Draw Poker Devices Control Law and the rules and regulations thereunder, the
Mississippi Gaming Control Act and the rules and regulations thereunder,
Missouri laws relating to licensed gaming activities and excursion gambling
boats set forth in SectionSection 313.800 et seq. of the Missouri Code and the
rules and regulations thereunder, and the applicable gaming legislation, rules
and regulations of the Federal Republic of Germany (collectively, the
"Applicable Gaming Regulations") (and each Borrower represents and warrants that
all requisite approvals thereunder have been obtained, except as specifically
contemplated by following clauses (b) and (c)), and the exercise of remedies
under the Security Documents with respect to the collateral thereunder will be
subject to the Applicable Gaming Regulations.
(b) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement or the other Credit Documents, it is understood and
agreed that (x) pursuant to Gaming Regulations as in effect in the State of
Missouri on the Initial Borrowing Date, no direct or indirect ownership interest
in a Missouri gaming licensee that is not a publicly held entity or a holding
company that is not a publicly held entity may be pledged or hypothecated in any
way (the "Missouri Equity Pledge Restrictions") and (ii) security interests in
gaming equipment located in Missouri are not permitted to be held by any entity
not licensed by the Missouri Gaming Commission. The parties hereto hereby agree
that, notwithstanding anything to the contrary contained elsewhere in this
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Agreement or in any Security Document, so long as the applicable laws and Gaming
Regulations of the State of Missouri (x) prohibit the pledge of equity interests
in any Subsidiary of the U.S. Borrower, such pledge shall not be required or (y)
prohibit the granting of security interests in gaming equipment located in
Missouri, such security interests shall not be created or deemed to exist.
However, the U.S. Borrower hereby covenants and agrees to take all action as may
be needed so that a new Wholly-Owned Domestic Subsidiary is established after
the Initial Borrowing Date, which Subsidiary (the "Missouri License Subsidiary")
shall hold all Missouri gaming licenses theretofore held, or at any time in the
future to be held, by the U.S. Borrower or any of its Subsidiaries. The Missouri
License Subsidiary may also hold any gaming equipment from time to time located
in the State of Missouri, but shall hold no assets (including capital stock of
other Persons) except to the extent solely related to the conduct of business in
the State of Missouri. Notwithstanding anything to the contrary contained
elsewhere in this Agreement or in any of the other Credit Documents, the
Missouri License Subsidiary shall conduct no business, shall engage in no
operations, and shall hold no assets except in conjunction with the Missouri
gaming licenses held by it and the gaming activities of the U.S. Borrower and
its Subsidiaries to be conducted in Missouri. The Missouri License Subsidiary
shall, to the fullest extent permitted by applicable Missouri law, enter into a
counterpart of the U.S. Subsidiaries Guaranty and the various Security Documents
(although, to the extent the granting of security interest in any collateral is
prohibited under relevant Missouri Gaming Regulations, such prohibition shall
control), and the stock of the Missouri License Subsidiary shall not be required
to be pledged to the extent such pledge is not prohibited under applicable
Missouri Gaming Regulations as in effect from time to time.
(c) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement or in the other Credit Documents, it is understood
and agreed that, in connection with (i) the pledge of the stock of, or equity
interests in, (1) Bally Gaming, Inc. and RCVP which would otherwise be required
by this Agreement and the Security Documents, the prior approval of such pledge
is required by the Mississippi Gaming Commission pursuant to the Mississippi
Gaming Control Act, (2) APT Games, Inc., Casino Electronics, Inc., Bally Gaming
International, Inc., Bally Gaming, Inc., Plantation Investments, Inc. and United
Coin Machine Co. require the prior approval of the Nevada Gaming Commission
acting upon the recommendation of the Nevada State Gaming Control Board
(collectively, the "Pledged Securities Requisite Gaming Approvals") and (ii) to
become effective, the Subsidiary Stock Restrictions require the approvals
described in the definition thereof (the "Subsidiary Stock Restrictions
Requisite Gaming Approvals"). On the Initial Borrowing Date, the U.S. Borrower
in good faith believes that it shall be able to obtain all Pledged Securities
Requisite Gaming Approvals and all Subsidiary Stock Restrictions Requisite
Gaming Approvals, and shall be able to establish the Missouri License Subsidiary
and transfer assets to it so that the only pledge of stock or equity interests
subject to the Missouri Equity Pledge Restrictions is the stock of the Missouri
License Subsidiary, in each case within 270 days after the Initial Borrowing
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Date. Notwithstanding anything to the contrary contained in this Agreement or
any other Credit Document, unless and until (x) the relevant Pledged Securities
Requisite Gaming Approvals have been obtained with respect to the pledge of the
equity interests of any entity described above, the pledge of such equity
interests shall not be required and (y) the relevant Subsidiary Stock
Restrictions Requisite Gaming Approvals have been obtained, the Subsidiary Stock
Restrictions contained in Sections 9.01 and 9.02 shall not apply (although the
provisions of Sections 3.03(g), 4.02(l) and 10.12 shall be fully effective in
accordance with the terms thereof) with the U.S. Borrower hereby representing
and warranting that no Gaming Approvals are required for the effectiveness of
said Sections in accordance with the express terms thereof). To the extent the
relevant Pledged Securities Requisite Gaming Approvals are obtained with respect
to one or more of the entities described above, the equity interests of such
entity shall, subject to the provisions of Section 8.13(b) (to the extent
applicable) promptly (and in any event within 10 days after obtaining such
approvals) be pledged pursuant to the relevant Security Documents. Furthermore,
each Borrower agrees to use its best efforts to obtain all Pledged Securities
Requisite Gaming Approvals and all Subsidiary Stock Restrictions Requisite
Gaming Approvals, and to establish the Missouri License Subsidiary in such
manner so that the Missouri Equity Pledge Restrictions apply only to the capital
stock of the Missouri License Subsidiary, in each case as promptly as is
possible after the Initial Borrowing Date.
(d) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement or any of the other Credit Documents, to the extent
any promissory note, with respect to which the payee is the U.S. Borrower, APT
Games, Inc., Casino Electronics, Inc., Bally Gaming International, Inc., Bally
Gaming, Inc., Plantation Investments, Inc. or United Coin Machine Co., that
would otherwise be required to be pledged pursuant to the U.S. Pledge Agreement
or other relevant Security Document, constitutes a "security" the pledge of
which requires the approval of the Nevada Gaming Commission acting upon the
recommendation of the Nevada State Gaming Control Board, then the respective
such promissory note shall not be required to be pledged unless and until such
approval is obtained. If at any time any promissory note of the type described
in the first sentence of this clause (d) is outstanding, the U.S. Borrower shall
notify the Administrative Agent thereof and, if requested by the Administrative
Agent, the Collateral Agent or the Required Lenders, it shall use good faith
efforts to obtain all necessary approvals to permit the pledge of such
promissory note pursuant to the terms of the relevant Security Documents. Upon
obtaining such approvals with respect to one or more promissory notes, the
respective promissory note or notes shall be immediately pledged, and delivered
for pledge, pursuant to the U.S. Pledge Agreement or other relevant Security
Document.
13.19 Gaming Authorities. The Administrative Agent and each
Lender agrees to cooperate with any Gaming Authority in connection with such
Gaming Authority's administration of its regulatory jurisdiction over the U.S.
Borrower and/or its Subsidiaries, including, without limitation, through the
provision of such documents or
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other information as may be requested by any such Gaming Authority relating to
the Administrative Agent, any Lender, the U.S. Borrower or any of its
Subsidiaries or the Documents.
13.20 Nevada Gaming Collateral. Subject to the release of any
Collateral as contemplated by any of the Documents, the Collateral Agent shall
(or through one or more of its agents, sub-agents or sub-collateral agents
shall), to the extent required by Nevada Gaming Regulations, retain possession
of all Pledged Securities delivered to it consisting of capital stock of any
Nevada gaming licensee or registered intermediary company within the State of
Nevada at a location designated to the Nevada State Gaming Control Board.
13.21 Limitation on Additional Amounts, etc. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11 or 2.06 of this
Agreement, unless a Lender gives notice to the respective Borrower that it is
obligated to pay an amount under the respective Section within one year after
the later of (x) the date the Lender incurs the respective increased costs,
loss, expense or liability, reduction in amounts received or receivable or
reduction in return on capital or (y) the date such Lender has actual knowledge
of its incurrence of the respective increased costs, loss, expense or liability,
reductions in amounts received or receivable or reduction in return on capital,
then such Lender shall only be entitled to be compensated for such amount by
such Borrower pursuant to said Section 1.10, 1.11 or 2.06, as the case may be,
to the extent the costs, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital are incurred or
suffered on or after the date which occurs one year prior to such Lender giving
notice to such Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11 or 2.06, as the case may be. This Section
13.21 shall have no applicability to any Section of this Agreement other than
said Sections 1.10, 1.11 or 2.06.
13.22 Power of Attorney. Each of the Administrative Agent and the
Collateral Agent is hereby authorized by, and on behalf of, each Lender to enter
into any Security Document required to be executed and delivered pursuant to
this Agreement or the other Credit Documents in order to secure the obligations
of the Borrowers and Guarantors hereunder and thereunder. In addition, the
Administrative Agent shall be authorized to execute on behalf of each Lender the
German Security Documents and the German Subsidiaries Guaranty. The
Administrative Agent and the Collateral Agent shall be entitled to all
declarations it considers necessary or useful in connection with the
aforementioned matters. The Administrative Agent and the Collateral Agent shall
further be entitled to rescind, amend and/or execute new and different version
of before-mentioned documents. Each Lender hereby grants to each of the
Administrative Agent and the Collateral Agent an irrevocable power-of-attorney,
in such Lender's name, to take the actions contemplated above in this Section
13.22.
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13.23 Post Closing Actions. Notwithstanding anything to the
contrary contained in this Agreement or the other Credit Documents, the parties
hereto acknowledge and agree that:
(a) Filing of Financing Statements. The U.S. Borrower and its
Subsidiaries shall be required to cause the filing of all financing statements
(on Form UCC-1 or other appropriate form) in the relevant filing offices within
ten (10) days after the Initial Borrowing Date, but shall not be required to
have same filed on the Initial Borrowing Date;
(b) Filing of Credit Documents. The U.S. Borrower shall, or shall
cause, a loan report and any required Credit Documents to be filed with the
Mississippi Gaming Commission and the Nevada Gaming Commission, in each case
within 30 days (or 5 days in the case of the Nevada Gaming Commission) after the
Initial Borrowing Date.
(c) Bailee Agreements. Although a Bailee Agreement shall be
required to be executed and delivered on the Initial Borrowing Date by the
trustee pursuant to the Existing Senior Secured Notes Indenture, the sub-agent
of such trustee which holds collateral in the State of Nevada shall not be
required to execute or deliver a Bailee Agreement on the Initial Borrowing Date.
Within 10 Business Days after the Initial Borrowing Date, a copy of the executed
Bailee Agreement with the trustee pursuant to the Existing Senior Secured Notes
Indenture shall be sent to such sub-agent, with a notice, in form and substance
reasonably satisfactory to the Collateral Agent, informing the sub-agent that
all collateral held by it is subject to the Bailee Agreement and the security
interests (subject to the provisions of Section 13.18) created pursuant to the
Security Documents.
(d) Surveys. To the extent any survey otherwise meeting the
requirements of Section 5A.16(iii) is not available with respect to any
Mortgaged Property on the Initial Borrowing Date, such survey shall instead be
required to be delivered within 60 days after the Initial Borrowing Date.
(e) RCVP Actions. If the Delayed Draw Term Loans are incurred on,
or within one week after, the Initial Borrowing Date, then all conditions set
forth in Section 5B shall be satisfied on the Initial Delayed Draw Term Loan
Borrowing Date, except that the actions specified in the third and fourth
sentences of Section 5B.03 and the related opinions of counsel with respect to
such actions which would be required pursuant to Section 5B.04, shall instead be
required to be completed, to the satisfaction of the Collateral Agent, and to
the extent requested by the Administrative Agent, the Collateral Agent or the
Required Lenders as otherwise provided in Section 5B, within 60 days after the
Initial Delayed Draw Term Loan Borrowing Date.
(f) Pledge of Specified Inactive Susidiary Stock. The capital
stock of
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specified inactive subsidiaries shall not be required to be pledged, or
delivered for pledge, on the Initial Borrowing Date; provided that, to the
extent the respective specified Inactive Subsidiary remains in existence on the
60th day after the Initial Borrowing Date, all capital stock thereof owned by
the U.S. Borrower and its subsidiaries shall be pledged, and delivered to the
Collateral Agent for pledge, in accordance with the requirements of the U.S.
Pledge Agreement or other relevant Security Documents.
All conditions precedent and representations contained in this
Agreement and the other Credit Documents shall be deemed modified to the extent
necessary to effect the foregoing (and to permit the taking of the actions
described above within the time periods required above, rather than as elsewhere
provided in the Credit Documents); provided, that (x) to the extent any
representation and warranty would not be true because the foregoing actions were
not taken on the Initial Borrowing Date, the respective representation and
warranty shall be required to be true and correct in all material respects at
the time the respective action is taken (or was required to be taken) in
accordance with the foregoing provisions of this Section 13.23 and (y) all
representations and warranties relating to the Security Documents shall be
required to be true immediately after the actions required to be taken by
Section 13.23 have been taken (or were required to be taken). The acceptance of
the benefits of each Credit Event shall constitute a representation, warranty
and covenant by the Borrowers to each of the Lenders that the actions required
pursuant to this Section 13.23 will be, or have been, taken within the relevant
time periods referred to in this Section 13.23 and that, at such time, all
representations and warranties contained in this Agreement and the other Credit
Documents shall then be true and correct without any modification pursuant to
this Section 13.23, the parties hereto acknowledge and agree that the failure to
take any of the actions required above, within the relevant time periods
required above, shall give rise to an immediate Event of Default pursuant to
this Agreement.
13.24 Specific Provisions Regarding German Borrowers. It is
agreed and acknowledged by the parties hereto that Bally Xxxxx Automaten and
Bally Xxxxx Vertriebs regularly and customarily use the management services
(including, inter alia, financial management and cash management services) of
their common parent, Alliance Automaten GmbH & Co. KG. The parties hereto
therefore agree and acknowledge that Bally Xxxxx Automaten and Bally Xxxxx
Vertriebs coordinate their borrowings hereunder through Alliance Automaten GmbH
& Co. KG and that Alliance Automaten GmbH & Co. KG shall have the authority to
give any notice of borrowing or any other notice or communication hereunder on
behalf of, and with legally binding effect on, Bally Xxxxx Automaten and Bally
Xxxxx Vertriebs.
13.25 Specific Provisions Regarding BGI Chattel Paper. It is
acknowledged and agreed by the parties hereto that, notwithstanding anything to
the contrary contained in this Agreement or any other Credit Document, BGI
Chattel Paper shall not be required to be delivered to the Collateral Agent (or
any sub-agent of the
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Collateral Agent). Notwithstanding the foregoing, if a Specified Default (as
defined in the U.S. Security Agreement) has occurred and is continuing at any
time, then the Administrative Agent, the Collateral Agent or the Required
Lenders may require that all BGI Chattel Paper be delivered to the Collateral
Agent or a sub-agent designated by it (in which case the U.S. Borrower shall
cause all BGI Chattel Paper to be so deliv- ered). Furthermore, the fact that
BGI Chattel Paper need not be delivered to the Collateral Agent at a given time
as a result of the provisions of this Section 13.25 shall in no way alter the
requirement that a perfected security interest be granted therein pursuant to
the U.S. Security Agreement or the requirement that all appropriate filings
under the Uniform Commercial Code of the relevant jurisdictions be made and
maintained so that such a perfected security interest at all times exists in
favor of the Collateral Agent with respect to the BGI Chattel Paper.
Furthermore, if requested by the Administrative Agent or the Collateral Agent,
the U.S. Borrower shall cause all BGI Chattel Paper to be stamped with a legend
indicating that it is subject to the security interests created pursuant to the
U.S. Security Agreement.
13.26 Special Provisions Regarding United Coin Machine Notes. It
is acknowledged and agreed by the parties hereto that no United Coin Machine
Notes shall be pledged, or delivered for pledge, on the Initial Borrowing Date.
The U.S. Borrower shall, and shall cause United Coin Machine Co. to, take all
actions so that, not later than 90 days after the Initial Borrowing Date, all
United Coin Machine Notes shall be pledged, and delivered for pledge, to the
Collateral Agent (or a sub-agent designated by the Collateral Agent located in
the State of Nevada) pursuant to the U.S. Pledge Agreement; provided that the
parties hereto acknowledge and agree that the ability of the Collateral Agent to
foreclose on United Coin Machine Percentage Notes may be subject to licensing or
other necessary approvals pursuant to Applicable Gaming Regulations. It is
further understood and agreed that, with respect to all United Coin Machine
Notes required to be pledged pursuant to the immediately preceding sentence (or
thereafter acquired), all such United Coin Machine Notes shall be delivered on a
weekly or a monthly, as agreed with the Collateral Agent, to a sub-agent
designated by the Collateral Agent located in the State of Nevada.
Notwithstanding anything to the contrary contained above, it shall not
constitute a breach or violation of this Agreement or any related Credit
Document if at any time less than $500,000 in aggregate principal amount of
outstanding United Coin Machine Notes which are otherwise required to be pledged
pursuant to the U.S. Pledge Agreement (and in accordance with the provisions of
this Section 13.26) have not been delivered for pledge pursuant thereto
(although the U.S. Borrower and its Subsidiaries shall use good faith efforts to
deliver said promissory notes on a weekly or monthly basis as agreed with the
Collateral Agent as provided above).
13.27 Override Provisions Regarding Margin Stock. Notwithstanding
anything to the contrary contained in this Agreement or any other Credit
Document, the parties hereto acknowledge and agree that, so long as the
aggregate fair market value of all Margin Stock owned by the U.S. Borrower and
its Subsidiaries does not exceed
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$100,000, such Margin Stock shall not be required to be pledged, or delivered
for pledge, pursuant to any Security Document. If at any time the aggregate fair
market value of all Margin Stock owned by the U.S. Borrower and its Subsidiaries
exceeds $100,000, then all Margin Stock owned by the U.S. Borrower and its
Subsidiaries shall be pledged, and delivered for pledge, to the extent otherwise
required by the terms of this Agreement and the various Security Documents and,
in connection therewith, the U.S. Borrower will, or will cause to be taken, all
actions required pursuant to Section 8.15.
SECTION 14. Parent Guaranty.
14.01 The Parent Guaranty. In order to induce the Lenders to
enter into this Agreement and to extend credit hereunder and in recognition of
the direct benefits to be received by the Parent Guarantor from the proceeds of
the Loans extended to the German Borrowers and the issuance of the Letters of
Credit for the account of the German Borrowers, the Parent Guarantor hereby
agrees with the Lenders as follows: the Parent Guarantor hereby unconditionally
and irrevocably guarantees as primary obligor and not merely as surety the full
and prompt payment when due, whether upon maturity, by acceleration or
otherwise, of any and all Guaranteed Obligations of each German Borrower to the
Guaranteed Creditors. If any or all of the Guaranteed Obligations of any German
Borrower to the Guaranteed Creditors becomes due and payable hereunder, the
Parent Guarantor unconditionally promises to pay such indebtedness to the
Lenders, or order, on demand, together with any and all reasonable expenses
which may be incurred by the Guaranteed Creditors (or the Administrative Agent
or Collateral Agent) in collecting any of the Guaranteed Obligations. If claim
is ever made on upon any Guaranteed Creditor for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the German Borrowers), then and in such event the Parent
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon the Parent Guarantor, notwithstanding any revocation of
this Parent Guaranty or any other instrument evidencing any liability of the
German Borrowers, and the Parent Guarantor shall be and remain liable to the
aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such an amount had never originally been received by any such
payee.
14.02 Bankruptcy. Additionally, the Parent Guarantor
unconditionally and irrevocably guarantees the payment of any and all of the
Guaranteed Obligations of each German Borrower to the Guaranteed Creditors
whether or not due or payable by the respective German Borrower upon the
occurrence in respect of any Borrower of any of the events specified in Section
10.05, and unconditionally and irrevocably promises to pay such indebtedness to
the Guaranteed Creditors, or order, on demand, in lawful money of
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the United States.
14.03 Nature of Liability. The liability of the Parent Guarantor
hereunder is exclusive and independent of any security for or other guaranty of
the indebtedness of either German Borrower whether executed by the Parent
Guarantor, any other guarantor or by any other party, and the liability of the
Parent Guarantor hereunder shall not be affected or impaired by (a) any
direction as to application of payment by either German Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of either
German Borrower, or (c) any payment on or in reduction of any such other
guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by either German Borrower, or (e) any payment
made to the Administrative Agent or the Guaranteed Creditors on the indebtedness
which such Administrative Agent or such Guaranteed Creditor repays either German
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and the Parent Guarantor waives
any right to the deferral or modification of its obligations hereunder by reason
of any such proceeding.
14.04 Independent Obligation. The obligations of the Parent
Guarantor hereunder are independent of the obligations of any other guarantor or
the German Borrowers, and a separate action or actions may be brought and
prosecuted against the Parent Guarantor whether or not action is brought against
any other guarantor or either German Borrower and whether or not any other
guarantor or either German Borrower be joined in any such action or actions. The
Parent Guarantor waives, to the fullest extent permitted by law, the benefit of
any statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the respective German Borrower or other circumstance
which operates to toll any statute of limitations as to either German Borrower
shall, to the fullest extent permitted by law, operate to toll the statute of
limitations as to the Parent Guarantor.
14.05 Authorization. The Parent Guarantor authorizes the
Administrative Agent and the Guaranteed Creditors without notice or demand
(except as shall be required by applicable statute and cannot be waived), and
without affecting or impairing its liability hereunder, from time to time to:
(a) subject to the agreement of the respective German Borrower,
change the manner, place or terms of payment of, and/or change or extend
the time of payment of, renew, increase, accelerate or alter, any of the
indebtedness (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Parent Guaranty herein made shall
apply to the indebtedness as so changed, extended, renewed or altered;
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(b) take and hold security for the payment of the indebtedness
and sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the
indebtedness or any liabilities (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and/or any
offset thereagainst;
(c) exercise or refrain from exercising any rights against the
German Borrowers or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors,
the German Borrowers or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of the German Borrowers to their creditors other
than the Lenders;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of a German Borrower to the Banks
regardless of what liability or liabilities of the Parent Guarantor or
the German Borrowers remain unpaid; and/or
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise, with the agreements required pursuant
to Section 13.12, amend, modify or supplement this Agreement or any of
such other instruments or agreements.
14.06 Reliance. It is not necessary for the Administrative Agent
or any Guaranteed Creditors to inquire into the capacity or powers of either
German Borrower or its Subsidiaries or the officers, directors, partners or
agent acting or purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
14.07 Subordination. Any indebtedness of a German Borrower now or
hereafter owing to the Parent Guarantor is hereby subordinated in right of
payment to the indebtedness of the respective German Borrower owing to the
Administrative Agent and the Guaranteed Creditors; provided that payment may be
made by the respective German Borrower on any such indebtedness owing to the
Parent Guarantor so long as the same is not prohibited by this Agreement; and
provided further, that if the Administrative Agent so requests at a time when an
Event of Default exists, all such indebtedness of the German
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Borrowers to the Parent Guarantor shall be collected, enforced and received by
the Parent Guarantor as trustee for the Guaranteed Creditors and be paid over to
the Guaranteed Creditors on account of the indebtedness of the respective German
Borrower to the Guaranteed Creditors, but without affecting or impairing in any
manner the liability of the Parent Guarantor under the other provisions of this
Parent Guaranty. Prior to the transfer by the Parent Guarantor of any note or
negotiable instrument evidencing any indebtedness of a German Borrower to the
Parent Guarantor, the Parent Guarantor shall xxxx such note or negotiable
instrument with a legend that the same is subject to this subordination.
14.08 Waiver. (a) The Parent Guarantor waives any right (except
as shall be required by applicable statute and cannot be waived) to require the
Administrative Agent or the Guaranteed Creditors to (i) proceed against either
German Borrower, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from either German Borrower, any other guarantor or
any other party or (iii) pursue any other remedy in the Administrative Agent's
or the Guaranteed Creditors' power whatsoever. The Parent Guarantor waives any
defense based on or arising out of any defense of either German Borrower, any
other guarantor or any other party other than payment in full of the
indebtedness, including, without limitation, any defense based on or arising out
of the disability of either German Borrower, any other guarantor or any other
party, or the unenforceability of the indebtedness or any part thereof from any
cause, or the cessation from any cause of the liability of either German
Borrower other than payment in full of the indebtedness. The Administrative
Agent and the Guaranteed Creditors may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent or the
Guaranteed Creditors by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Administrative Agent and the Guaranteed Creditors may have against either German
Borrower or any other party, or any security, without affecting or impairing in
any way the liability of the Parent Guarantor hereunder except to the extent the
indebtedness has been paid. The Parent Guarantor waives, to the fullest extent
permitted by law, any defense arising out of any such election by the
Administrative Agent and the Guaranteed Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of the Parent Guarantor against any German Borrower or any
other party or any security.
(b) The Parent Guarantor waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Parent Guaranty, and notices of the existence, creation or incurring of
new or additional indebtedness. The Parent Guarantor assumes all responsibility
for being and keeping itself informed of each German Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the indebtedness and the nature, scope and extent of the risks
which the Parent Guarantor assumes and incurs hereunder, and agrees that the
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Administrative Agent and the Guaranteed Creditors shall have no duty to advise
the Parent Guarantor of information known to them regarding such circumstances
or risks.
14.09 Limitation on Enforcement. The Guaranteed Creditors agree
that this Parent Guaranty may be enforced only by the action of the
Administrative Agent or the Collateral Agent, in each case acting upon the
instructions of the Required Lenders and that no Guaranteed Creditors shall have
any right individually to seek to enforce or to enforce this Parent Guaranty, it
being understood and agreed that such rights and remedies may be exercised by
the Administrative Agent for the benefit of the Guaranteed Creditors upon the
terms of this Agreement. The Guaranteed Creditors further agree that this Parent
Guaranty may not be enforced against any Affiliate, director, officer, employee
or stockholder of the Parent Guarantor.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
--------
0000 Xxxxx Xxxxxxx Xxxx ALLIANCE GAMING CORPORATION
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxxxxxxxx
Telephone No.: (000) 000-0000 By __________________________________
Telecopier No.: (000) 000-0000 Name:
Title:
0000 Xxxxx Xxxxxxx Xxxx BALLY XXXXX VERTRIEBS GMBH
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxxxxxxxx
Telephone No.: (000) 000-0000 By __________________________________
Telecopier No.: (000) 000-0000 Name:
Title:
0000 Xxxxx Xxxxxxx Xxxx BALLY XXXXX AUTOMATEN GMBH
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxxxxxxxx
Telephone No.: (000) 000-0000 By __________________________________
Telecopier No.: (000) 000-0000 Name:
Title:
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000
Xxxxxx Xxxxxxx Xxxxxx CREDIT SUISSE FIRST BOSTON,
New York, New York 10010 Individually and as Administrative
Attention: Xx Xxxx Agent
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By __________________________________
Name:
Title:
By __________________________________
Name:
Title:
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218
SCHEDULE I-A
COMMITMENTS
Tranche A Delayed Draw Tranche B Tranche C
Term Loan Term Loan Term Loan Term Loan Revolving Loan
Lender Commitment Commitment Commitment Commitment Commitment
------ ---------- ---------- ---------- ---------- ----------
Credit Suisse $0.00 $11,428,571.43 $37,885,714.29 $18,285,714.28 $22,500,000.00
First Boston
The Bank of
Nova Scotia $0.00 $0.00 $0.00 $0.00 $22,500,000.00
Southern Pacific
Thrift & Loan
Association $0.00 $0.00 $0.00 $0.00 $15,000,000.00
The Mitsubishi
Trust and Banking
Corporation $0.00 $0.00 $0.00 $0.00 $15,000,000.00
Sumitomo Bank of
California $0.00 $0.00 $0.00 $0.00 $15,000,000.00
Xxxxxxx Xxxxx
Senior Floating
Rate Fund, Inc. $0.00 $2,678,571.43 $8,035,714.29 $4,285,714.28 $0.00
MassMutual Life $0.00 $2,142,857.14 $6,428,571.43 $3,428,571.43 $0.00
Insurance Co.
Xxx Xxxxxx American $0.00 $2,142,857.14 $6,428,571.43 $3,428,571.43 $0.00
Prime Rate Income Trust
Prime Income Trust $0.00 $1,428,571.43 $4,285,714.28 $2,285,714.29 $0.00
Royalton Company $0.00 $1,250,000.00 $3,750,000.00 $2,000,000.00 $0.00
CIBC Inc. $0.00 $1,071,428.57 $3,214,285.71 $1,714,285.72 $0.00
KZH-ING-1 Corporation, Inc. $0.00 $1,071,428.58 $3,214,285.71 $1,714,285.71 $0.00
Crescent/Mach I
Partners, L.P. $0.00 $714,285.71 $342,857.15 $1,142,857.14 $0.00
KZH-Crescent $0.00 $714,285.71 $342,857.14 $1,142,857.15 $0.00
Corporation
Deeprock & Company $0.00 $357,142.86 $1,071,428.57 $571,428.57 $0.00
------------- -------------- -------------- -------------- --------------
TOTAL: $0.00 $25,000,000 $75,000,000 $40,000,000 $90,000,000
219
SCHEDULE I-B
GERMAN REVOLVING LOAN SUB-COMMITMENTS
German Revolving Loan
German Revolving Lender Sub-Commitments
----------------------- ---------------
Credit Suisse First Boston $16,500,000.00
The Bank of Nova Scotia $16,500,000.00
The Mitsubishi Trust and Banking Corporation $11,000,000.00
Sumitomo Bank of California $11,000,000.00
--------------
TOTAL: $55,000,000
220
SCHEDULE II
LENDER ADDRESSES AND APPLICABLE LENDING OFFICES
Credit Suisse First Xxxxxx Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xx Xxxx
The Bank of Nova Scotia Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxxx
Southern Pacific Thrift & Loan 00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
Mitsubishi Trust and Banking 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxx
Sumitomo Bank of California 000 Xxxx 0xx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxx
Xxxxxxx Xxxxx Senior Floating Rate Fund, Inc. 000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
221
SCHEDULE II
Page 2
Deeproch & Company 00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx
KZH-ING-1 Corporation, Inc. 000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
CIBC Inc. 000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxxxx
Massachussetts Mutual Life Insurance Co. 0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxx
Prime Income Trust Xxx Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx
Xxx Xxxxxx American Capital Prime Rate Income Trust
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
222
SCHEDULE II
Page 3
Crescent/Mach I Partners, L.P. 000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
KZH-Crescent Corporation 000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
Royalton Company 000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxx
223
EXHIBIT A
224
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
Credit Suisse First Boston, as Administrative Agent
for the Banks party to the Credit Agreement
referred to below
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
Ladies and Gentlemen:
The undersigned, [Name of Borrower] (the "Borrower"), refers to the
Credit Agreement, dated as of August 8, 1997 (as amended from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among Alliance Gaming Corporation, Bally Xxxxx Automaten GmbH, Bally
Xxxxx Vertriebs GmbH, various lenders from time to time party thereto (the
"Lenders"), and you, as Administrative Agent for such Lenders, and hereby gives
you notice, irrevocably, pursuant to Section 1.03(a) of the Credit Agreement,
that the undersigned hereby requests a Borrowing under the Credit Agreement, and
in that connection sets forth below the information relating to such Borrowing
(the "Proposed Borrowing") as required by Section 1.03(a) of the Credit
Agreement:
(i) The Business Day of the Proposed Borrowing is________ ,
19___.(1)
(ii) The Proposed Borrowing shall consist of [U.S. Borrower
Tranche A Loans] [German Borrower Tranche A Term Loans] [Delayed Draw
Term Loans] [Tranche B Term Loans] [Tranche C Term Loans] [Dollar
Revolving Loans] [Deutsche Xxxx Revolving Loans].
----------
(1) Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Euro Rate Loans, in each case after
the date hereof.
225
EXHIBIT A
Page 2
(iii) The aggregate principal amount of the Proposed Borrowing
is __________.(2)
[(iv) The Dollar Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [Base Rate Loans]
[Eurodollar Loans].(3)
[(iv)/(v) The initial Interest Period for the Proposed
Borrowing is month(s).(4)
The undersigned hereby certifies that the following statements are true
and correct on the date hereof, and will be true and correct on the date of the
Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect
to the Proposed Borrowing and to the application of the proceeds
thereof, as though made on such date (it being understood and agreed
that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date); and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
[NAME OF BORROWER(S)]
By__________________________
Title:
----------
(2) Stated in the Applicable Currency.
(3) To be included for a Proposed Borrowing of Dollar Loans.
(4) To be included for a Proposed Borrowing of Euro Rate Loans.
226
EXHIBIT B
227
EXHIBIT B-1
228
EXHIBIT B-1
FORM OF U.S. BORROWER TRANCHE A TERM NOTE
$_____________ New York, New York
_______ ___, 199_
FOR VALUE RECEIVED, ALLIANCE GAMING CORPORATION, a Nevada corporation
(the "Borrower"), hereby promises to pay to the order of __________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the appropriate Payment Office (as defined in the Agreement
referred to below) of Credit Suisse First Boston (the "Administrative Agent") on
the Tranche A Term Loan Maturity Date (as defined in the Agreement) the
principal sum of ______________________ DOLLARS ($__________) or, if less, the
unpaid principal amount of the U.S. Borrower Tranche A Term Loans (as defined in
the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the U.S. Borrower Tranche A Term Notes referred to
in the Credit Agreement, dated as of August 8, 1997, among the Borrower, Bally
Xxxxx Vertriebs GmbH, Bally Xxxxx Automaten GmbH, the lenders from time to time
party thereto (including the Lender), and the Administrative Agent (as amended,
modified or supplemented from time to time, the "Agreement") and is entitled to
the benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by certain of the Security Documents (as
defined in the Agreement) and is entitled to the benefits of certain of the
Guaranties (as defined in the Agreement). This Note is subject to voluntary
prepayment and mandatory repayment prior to the Tranche A Term Loan Maturity
Date, in whole or in part, as provided in the Agreement.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
ALLIANCE GAMING CORPORATION
By________________________________
Title:
229
EXHIBIT B-2
230
EXHIBIT B-2
FORM OF GERMAN BORROWER TRANCHE A TERM NOTE
DM_____________ New York, New York
_______ ___, 199_
FOR VALUE RECEIVED, BALLY XXXXX VERTRIEBS GMBH, a company with limited
liability organized under the laws of the Federal Republic of Germany ("BWV"),
and BALLY XXXXX AUTOMATEN GMBH, a company with limited liability organized under
the laws of the Federal Republic of Germany ("BWA" and, together with BWV, each
a "Borrower" and, collectively, the "Borrowers"), hereby jointly and severally
promise to pay to the order of __________ (the "Lender"), in lawful money of the
Federal Republic of Germany in immediately available funds, at the appropriate
Payment Office (as defined in the Agreement referred to below) of Credit Suisse
First Boston (the "Administrative Agent") on the Tranche A Term Loan Maturity
Date (as defined in the Agreement), the principal sum of ____________________
DEUTSCHE MARKS (DM__________) or, if less, the unpaid principal amount of the
German Borrower Tranche A Term Loans (as defined in the Agreement) made by the
Lender pursuant to the Agreement.
The Borrowers also jointly and severally promise to pay interest on the
unpaid principal amount hereof in like money at said office from the date hereof
until paid at the rates and at the times provided in Section 1.08 of the
Agreement.
This Note is one of the German Borrower Tranche A Term Notes referred
to in the Credit Agreement, dated as of August 8, 1997, among Alliance Gaming
Corporation, the Borrowers, the lenders from time to time party thereto
(including the Lender), and the Administrative Agent (as amended, modified or
supplemented from time to time, the "Agreement") and is entitled to the benefits
thereof and of the other Credit Documents (as defined in the Agreement). This
Note is secured by certain of the Security Documents (as defined in the
Agreement) and is entitled to the benefits of certain of the Guaranties (as
defined in the Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the Tranche A Term Loan Maturity Date, in whole or
in part, as provided in the Agreement.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrowers hereby waive presentment, demand, protest or notice of
any kind in connection with this Note.
231
EXHIBIT B-2
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
BALLY XXXXX VERTRIEBS GMBH
By________________________________
Title:
BALLY XXXXX AUTOMATEN GMBH
By________________________________
Title:
232
EXHIBIT B-3
233
EXHIBIT B-3
FORM OF DELAYED DRAW TERM NOTE
$_____________ New York, New York
_______ ___, 199_
FOR VALUE RECEIVED, ALLIANCE GAMING CORPORATION, a Nevada corporation
(the "Borrower"), hereby promises to pay to the order of __________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the appropriate Payment Office (as defined in the Agreement
referred to below) of Credit Suisse First Boston (the "Administrative Agent") on
the Delayed Draw Term Loan Maturity Date (as defined in the Agreement) the
principal sum of ______________________ DOLLARS ($__________) or, if less, the
unpaid principal amount of the Delayed Draw Term Loans (as defined in the
Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Delayed Draw Term Notes referred to in the
Credit Agreement, dated as of August 8, 1997, among the Borrower, Bally Xxxxx
Vertriebs GmbH, Bally Xxxxx Automaten GmbH, the lenders from time to time party
thereto (including the Lender), and the Administrative Agent (as amended,
modified or supplemented from time to time, the "Agreement") and is entitled to
the benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by certain of the Security Documents (as
defined in the Agreement) and is entitled to the benefits of certain of the
Guaranties (as defined in the Agreement). This Note is subject to voluntary
prepayment and mandatory repayment prior to the Delayed Draw Term Loan Maturity
Date, in whole or in part, as provided in the Agreement.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
ALLIANCE GAMING CORPORATION
By________________________________
Title:
234
EXHIBIT B-4
235
EXHIBIT X-0
XXXX XX XXXXXXX X TERM NOTE
$_____________ New York, New York
_______ ___, 199_
FOR VALUE RECEIVED, ALLIANCE GAMING CORPORATION, a Nevada corporation
(the "Borrower"), hereby promises to pay to the order of __________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the appropriate Payment Office (as defined in the Agreement
referred to below) of Credit Suisse First Boston (the "Administrative Agent") on
the Tranche B Term Loan Maturity Date (as defined in the Agreement) the
principal sum of _______ DOLLARS ($______) or, if less the unpaid principal
amount of the Tranche B Term Loans (as defined in the Agreement) made by the
Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Tranche B Term Notes referred to in the Credit
Agreement, dated as of August 8, 1997, among the Borrower, Bally Xxxxx Vertriebs
GmbH, Bally Xxxxx Automaten GmbH, the lenders from time to time party thereto
(including the Lender), and the Administrative Agent (as amended, modified or
supplemented from time to time, the "Agreement") and is entitled to the benefits
thereof and of the other Credit Documents (as defined in the Agreement). This
Note is secured by certain of the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). This Note is subject to voluntary prepayment and mandatory repayment
prior to the Tranche B Term Loan Maturity Date, in whole or in part, as provided
in the Agreement.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
ALLIANCE GAMING CORPORATION
By________________________________
Title:
236
EXHIBIT-5
237
EXHIBIT B-5
FORM OF TRANCHE C TERM NOTE
$_____________ New York, New York
_______ ___, 199_
FOR VALUE RECEIVED, ALLIANCE GAMING CORPORATION, a Nevada corporation
(the "Borrower"), hereby promises to pay to the order of __________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the appropriate Payment Office (as defined in the Agreement
referred to below) of Credit Suisse First Boston (the "Administrative Agent") on
the Tranche C Term Loan Maturity Date (as defined in the Agreement) the
principal sum of _______ DOLLARS ($______) or, if less the unpaid principal
amount of the Tranche C Term Loans (as defined in the Agreement) made by the
Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Tranche C Term Notes referred to in the Credit
Agreement, dated as of August 8, 1997, among the Borrower, Bally Xxxxx Vertriebs
GmbH, Bally Xxxxx Automaten GmbH, the lenders from time to time party thereto
(including the Lender), and the Administrative Agent (as amended, modified or
supplemented from time to time, the "Agreement") and is entitled to the benefits
thereof and of the other Credit Documents (as defined in the Agreement). This
Note is secured by certain of the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). This Note is subject to voluntary prepayment and mandatory repayment
prior to the Tranche C Term Loan Maturity Date, in whole or in part, as provided
in the Agreement.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
ALLIANCE GAMING CORPORATION
By________________________________
Title:
238
EXHIBIT B-6
239
EXHIBIT B-6
FORM OF DOLLAR REVOLVING NOTE
$_______________ New York, New York
____________, 199_
FOR VALUE RECEIVED, ALLIANCE GAMING CORPORATION, a Nevada corporation
(the "Borrower"), hereby promises to pay to the order of ______________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the appropriate Payment Office (as defined in the Credit
Agreement referred to below) of Credit Suisse First Boston (the "Administrative
Agent") on the Revolving Loan Maturity Date (as defined in the Credit Agreement)
the principal sum of _______________ DOLLARS ($______________) or, if less, the
then unpaid principal amount of all Dollar Revolving Loans (as defined in the
Credit Agreement) made by the Lender pursuant to the Credit Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Dollar Revolving Notes referred to in the
Credit Agreement, dated as of August 8, 1997, among the Borrower, Bally Xxxxx
Vertriebs GmbH, Bally Xxxxx Automaten GmbH, the lenders from time to time party
thereto (including the Lender), and the Administrative Agent (as amended,
modified or supplemented from time to time, the "Credit Agreement"), and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Credit Agreement). This Note is secured by certain of the Security
Documents (as defined in the Credit Agreement) and is entitled to the benefits
of certain of the Guaranties (as defined in the Credit Agreement). This Note is
subject to voluntary prepayment and mandatory repayment prior to the Revolving
Loan Maturity Date, in whole or in part, as provided in the Credit Agreement.
In case an Event of Default (as defined in the Credit Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
ALLIANCE GAMING CORPORATION
By_____________________________
Title:
240
EXHIBIT B-7
241
EXHIBIT B-7
FORM OF DEUTSCHE XXXX REVOLVING NOTE
DM_______________ New York, New York
_____________, 199_
FOR VALUE RECEIVED, BALLY XXXXX VERTRIEBS GMBH ("BWV"), and BALLY XXXXX
AUTOMATEN GMBH, a company with limited liability organized under the laws of the
Federal Republic of Germany ("BWA" and, together with BWV, each a "Borrower"
and, collectively, the "Borrowers"), hereby jointly and severally promise to pay
to the order of (the "Lender"), in lawful money of the Federal Republic of
Germany in immediately available funds, at the appropriate Payment Office (as
defined in the Credit Agreement referred to below) of Credit Suisse First Boston
(the "Administrative Agent") on the Revolving Loan Maturity Date (as defined in
the Agreement) the principal sum of ____________ DEUTSCHE MARKS (DM_____) or, if
less, the unpaid principal amount of all Deutsche Xxxx Revolving Loans (as
defined in the Agreement) made by the Lender pursuant to the Credit Agreement.
The Borrowers also jointly and severally promise to pay interest on the
unpaid principal amount hereof in like money at said office from the date hereof
until paid at the rates and at the times provided in Section 1.08 of the
Agreement.
This Note is one of the Deutsche Xxxx Revolving Notes referred to in
the Credit Agreement, dated as of August 8, 1997, among Alliance Gaming
Corporation, the Borrowers, the lenders from time to time party thereto
(including the Lender), and the Administrative Agent (as amended, modified or
supplemented from time to time, the "Credit Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the Credit
Agreement). This Note is secured by certain of the Security Documents (as
defined in the Credit Agreement) and is entitled to the benefits of the
Guaranties (as defined in the Credit Agreement). This Note is subject to
voluntary prepayment and mandatory repayment prior to the Revolving Loan
Maturity Date, in whole or in part, as provided in the Credit Agreement.
In case an Event of Default (as defined in the Credit Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Credit Agreement.
The Borrowers hereby waive presentment, demand, protest or notice of
any kind in connection with this Note.
242
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
BALLY XXXXX VERTRIEBS GMBH
By_____________________________
Title:
BALLY XXXXX AUTOMATEN GMBH
By_____________________________
Title:
243
EXHIBIT B-8
244
EXHIBIT B-8
SWINGLINE NOTE
$________ New York, New York
____________, 199_
FOR VALUE RECEIVED, ALLIANCE GAMING CORPORATION, a Nevada corporation
(the "Borrower"), hereby promises to pay to the order of CREDIT SUISSE FIRST
BOSTON (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the appropriate Payment Office (as defined in
the Agreement referred to below) of Credit Suisse First Boston (the
"Administrative Agent") on the Swingline Expiry Date (as defined in the
Agreement) the principal sum of ______________ DOLLARS ($_____________) or, if
less, the unpaid principal amount of all Swingline Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit Agreement,
dated as of August 8, 1997, among the Borrower, Bally Xxxxx Vertriebs GmbH,
Bally Xxxxx Automaten GmbH, the lenders party thereto (including the Lender)
from time to time and CREDIT SUISSE FIRST BOSTON, as Administrative Agent (as
amended, modified or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by certain of the Security Documents (as
defined in the Agreement) and is entitled to the benefits of certain of the
Guaranties (as defined in the Agreement). This Note is subject to voluntary
prepayment and mandatory repayment prior to the Swingline Expiry Date, in whole
or in part, as provided in the Agreement.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may become
or be declared to be due and payable in the manner and with the effect provided
in the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
ALLIANCE GAMING CORPORATION
By__________________________
Title:
245
EXHIBIT C
246
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
No. (1) Dated (2)
Credit Suisse First Boston, individually and as Administrative Agent
under the Credit Agreement (as amended, modified or supplemented from time to
time, the "Credit Agreement"), dated as of August 8, 1997, among Alliance Gaming
Corporation, Bally Xxxxx Vertriebs GmbH, Bally Xxxxx Automaten GmbH (the
"Borrowers" and each a "Borrower"), the Lenders from time to time party thereto,
and Credit Suisse First Boston, as Administrative Agent.
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention :
Dear Sirs:
We hereby request that [Name of Proposed Issuing Bank], in its
individual capacity, issue a [Standby] [Trade] Letter of Credit for the [joint
and several] (3) account of the undersigned on (4) (the "Date of Issuance")
in the aggregate stated amount of (5). The requested Letter of Credit shall be
denominated in (6) .
----------------
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Insert in the case a German Letter of Credit is requested.
(4) Date of Issuance which shall be at least 5 Business Days from the date
hereof (or such shorter period as may be acceptable to the Issuing Bank).
(5) Aggregate initial stated amount of Letter of Credit.
(6) Specify Dollars in the case of U.S. Letters of Credit and Deutsche Marks
in the case of German Letters of Credit.
247
EXHIBIT C
Page 2
For purposes of this Letter of Credit Request, unless otherwise defined
herein, all capitalized terms used herein which are defined in the Credit
Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit will be (7), and such
Letter of Credit will be in support of (8) and will have a stated expiration
date of (9). The Letter of Credit will be a [U.S./German](10) Letter of Credit.
We hereby certify that:
(1) The representations and warranties contained in the Credit
Documents will be true and correct in all material respects on the Date
of Issuance, both before and after giving effect to the issuance of the
Letter of Credit requested hereby (it being understood and agreed that
any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date).
--------
(7) Insert name and address of beneficiary.
(8) Insert description of L/C Supportable Obligations in the case of Standby
Letters of Credit and a description of the commercial transaction which is
being supported in the case of Trade Letters of Credit.
(9) Insert last date upon which drafts may be presented which (i) in the case
of Standby Letters of Credit, may not be later than the 12 months after
the Date of Issuance or, if earlier, the third Business Day prior to the
Revolving Loan Maturity Date (although any such Standby Letter of Credit
may be extendable for successive periods of up to 12 months, but not
beyond the third Business Day prior to the Revolving Loan Maturity Date on
terms acceptable to Issuing Bank) or (ii) in the case of Trade Letters of
Credit, may not be later than 180 days after the Date of Issuance or, if
earlier, the date which is 30 days prior to the Revolving Loan Maturity
Date.
(10) Insert appropriate alternative.
248
EXHIBIT C
Page 3
(2) No Default or Event of Default has occurred and is
continuing nor, after giving effect to the issuance of the Letter of
Credit requested hereby, would such a Default or an Event of Default
occur.
[ALLIANCE GAMING CORPORATION
By_____________________________
Title:]
[BALLY XXXXX VERTRIEBS GMBH
By_____________________________
Title:
BALLY XXXXX AUTOMATEN GMBH
By_____________________________
Title:
249
EXHIBIT D
250
EXHIBIT D
SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of August 8,
1997, among Alliance Gaming Corporation, Bally Xxxxx Vertriebs GmbH, Bally Xxxxx
Automaten GmbH, the Lenders from time to time party thereto, and Credit Suisse
First Boston, as Administrative Agent (as amended from time to time, the "Credit
Agreement"). Pursuant to the provisions of Section 4.04(b)(ii) of the Credit
Agreement, the undersigned hereby certifies that it is not a "bank" as such term
is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended.
[NAME OF BANK]
By ____________________________
Title:
Date: _______________, ____
251
EXHIBIT F
252
EXHIBIT F
[NAME OF CREDIT PARTY]
FORM OF OFFICERS' CERTIFICATE
I, the undersigned, [Title of Authorized Officer] of [NAME OF CREDIT
PARTY], a [corporation] [partnership] organized and existing under the laws of
[the State of ________] [Country of incorporation] (the "Company"), DO HEREBY
CERTIFY that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of August 8, 1997, among Alliance Gaming Corporation, Bally Xxxxx
Vertriebs GmbH, Bally Xxxxx Automaten GmbH, the Lenders from time to time party
thereto, and Credit Suisse First Boston, as Administrative Agent (such Credit
Agreement, as in effect on the date of this Certificate, being herein called the
"Credit Agreement"). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit Agreement.
2. The following named individuals are presently the elected officers
of the Company, each holds the office of the Company set forth opposite his or
her name below and has held such office as of the date of signing of any Credit
Document. The signature written opposite the name and title of each such officer
below is his or her correct signature.
Name(1) Office Signature
__________________ ____________________ _________________
__________________ ____________________ _________________
__________________ ____________________ _________________
3. Attached hereto as Exhibit A is a true and correct copy of the
[Certificate of Incorporation of the Company as filed in the Office of the
Secretary of State of the State of its incorporation][equivalent organizational
documents], together with all amendments thereto adopted through the date
hereof.
--------
(1) Include name, office and signature of each officer who will sign any
Credit Document, including the officer who will sign the certification at
the end of this Certificate.
253
EXHIBIT F
Page 2
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws (or equivalent organizational document) of the Company, together with
all amendments thereto, which were duly adopted and are in full force and effect
on the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 199_ [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Credit Documents to which the Company is party.
[6. Attached hereto as Exhibit D are true and correct copies of all New
Senior Subordinated Notes Documents (other than the New Senior Subordinated
Notes actually issued).
7. Attached hereto as Exhibit E are true and correct copies of the
Existing PIK Preferred Stock Redemption Documents.
8. Attached hereto as Exhibit F are true and correct copies of all
Existing Senior Secured Notes Tender Offer/Consent Solicitation Documents (other
than the Existing Senior Subordinated Notes actually issued).
9. Attached hereto as Exhibit G are true and correct copies of the
Existing Senior Secured Notes Indenture, the Existing Senior Secured Notes
Indenture Supplement, the Existing Senior Secured Notes Collateral Documents and
the Existing Senior Secured Notes Collateral Document Amendments.](2)
[6][10]. On the date hereof, all of the applicable conditions set forth
in Sections 5A.05, 5A.06, 5A.07, 5A.08, 5A.09. 5A.10, 5A.11 and 5A.19 of the
Credit Agreement have been satisfied.](3)
[6][7][11]. On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents are true and
correct in all material respects, both before and after giving effect to each
Credit Event to occur on the date hereof and the application of the proceeds
thereof (it being understood and agreed that
--------
(2) Insert only in Officer's Certificate of the U.S. Borrower.
(3) Insert only in Officers' Certificate of a Borrower.
254
EXHIBIT F
Page 3
any representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
[7][8][12]. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Credit Events to occur on
the date hereof or from the application of the proceeds thereof.
[8][9][13]. There is no proceeding for the dissolution or liquidation
of the Company or, to the knowledge of the Company, threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
__________, 1997.
[NAME OF CREDIT PARTY]
______________________________
Name:
Title:
255
EXHIBIT F
Page 4
I, the undersigned, [Secretary] [Assistant Secretary] of the Company,
do hereby certify that:
1. [Name of Person making above certifications] is the duly
elected and qualified [Title] of the Company and the signature above is
[his/her] genuine signature.
2. The certifications made by [name of Person making the above
certifications] on behalf of the Company in paragraphs 2, 3, 4, 5 and
[8][9][13] above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
__________, 1997.
[NAME OF CREDIT PARTY]
___________________________________
Name:
Title:
256
EXHIBIT G
257
EXHIBIT G
[CONFORMED AS EXECUTED]
BAILEE AGREEMENT
THIS BAILEE AGREEMENT (this "Bailee Agreement") is made as of the 8th
day of August, 1997 among CREDIT SUISSE FIRST BOSTON, as Administrative Agent
and as Collateral Agent under the Credit Agreement and the other Credit
Documents and for the benefit of the Lenders from time to time party to the
Credit Agreement and the other Secured Creditors from time to time, United
States Trust Company of New York (the "Bailee"), ALLIANCE GAMING CORPORATION, a
Nevada corporation (the "U.S. Borrower") and each Subsidiary of the U.S.
Borrower which is a party to any Indenture Collateral Document.
W I T N E S S E T H :
WHEREAS, the U.S. Borrower has issued $154,000,000 of the Senior
Secured Notes pursuant to the Indenture, of which $153,981,000 aggregate
principal amount of Senior Secured Notes has been accepted by the U.S. Borrower
for purchase pursuant to its Offer to Purchase dated July 3, 1997;
WHEREAS, the obligations of the U.S. Borrower with respect to the
Senior Secured Notes which remain outstanding are guaranteed by the Subsidiaries
of the U.S. Borrower party to this Agreement, and are secured pursuant to the
Indenture Collateral Documents;
WHEREAS, the Lenders have entered or are about to enter into the Credit
Agreement with the Borrowers pursuant to which CSFB and various other Lenders
will, upon certain terms and conditions, make loans and provide other financial
accommodations to the Borrowers secured by substantially all of the assets and
properties of the U.S. Borrower and its Subsidiaries (a portion of the proceeds
of which will be used to pay for the purchase of Senior Secured Notes tendered
pursuant to the Offer to Purchase described above in the first recital);
258
EXHIBIT G
Page 2
WHEREAS, it is a condition precedent to the extensions of credit
pursuant to the Credit Agreement that this Agreement shall have been entered
into by the parties hereto;
WHEREAS, the parties hereto desire to enter into this Agreement to
satisfy the condition precedent referenced in the immediately preceding
paragraph and to set forth their respective rights, obligations and
responsibilities in connection with various collateral held by the Bailee
pursuant to the Indenture Collateral Documents;
NOW, THEREFORE, in consideration of the mutual benefits accruing
hereunder and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto do hereby agree as follows:
1. DEFINITIONS
As used above and in this Bailee Agreement, the following terms shall
have the meanings ascribed to them below:
"Administrative Agent" shall mean the Administrative Agent, under, and
as defined in, the Credit Agreement (including its successors in such capacity).
"Agreements" shall mean, collectively, the CSFB Agreements, the Senior
Secured Notes, the Indenture and the Indenture Collateral Documents.
"Bailee" shall have the meaning provided in the first paragraph of this
Bailee Agreement.
"Bailee Agreement" shall have the meaning provided in the first
paragraph hereof.
"Borrowers" shall mean any entity at any time which is a Borrower
under, and as defined in, the Credit Agreement, as then in effect.
"Collateral Agent" shall mean the Collateral Agent under, and as
defined in, the Credit Agreement and the various other Credit Documents,
including any successor thereto.
"Credit Agreement" shall mean the Credit Agreement, dated of even date
herewith, among the U.S. Borrower, Bally Xxxxx Vertriebs GmbH, Bally Xxxxx
259
EXHIBIT G
Page 3
Automaten GmbH, various Lenders party thereto from time to time, and CSFB as
Administrative Agent, as such agreement may be amended (including any amendment,
restatement or restructuring thereof), supplemented or otherwise modified or
replaced from time to time, including any agreement extending the maturity of,
refunding, refinancing, increasing the amount available under or replacing such
agreement or document or any successor or replacement agreement or document and
whether by the same or any other agent, lender or group of lenders.
"Credit Documents" shall mean that term as defined in the Credit
Agreement.
"Creditors" shall mean, collectively, CSFB (including in its capacity
as Administrative Agent and Collateral Agent for the various Secured Creditors
from time to time) and the Trustee (including in its capacity as the Trustee for
the holders of the Senior Secured Notes) and their respective successors and
assigns.
"CSFB" shall mean Credit Suisse First Boston and its successors and
assigns, acting in its capacity as Administrative Agent and Collateral Agent
under the Credit Agreement and for the benefit of the Lenders and the other
Secured Creditors.
"CSFB Agreements" shall mean, collectively, (a) the Credit Agreement,
(b) each Interest Rate Agreement or Other Hedging Agreement (each as defined in
the Credit Agreement) at any time secured pursuant to the Credit Agreement or
the related Credit Documents and (c) each guaranty, security agreement, pledge
agreement, mortgage or other Security Document (as defined in the Credit
Agreement) or Credit Document from time to time entered into pursuant to, or in
connection with, the Credit Agreement or the Interest Rate Agreements or Other
Hedging Agreements referenced in preceding clause (b).
"Existing Indenture Collateral" shall mean all Indenture Collateral as
same exists on the date of this Bailee Agreement (after giving effect to the
execution and delivery of the First Supplemental Indenture), as well as all
other Indenture Collateral required to be delivered pursuant to the Existing
Indenture Collateral Documents in accordance with the terms thereof as in effect
on the date of this Bailee Agreement (after giving effect to the execution and
delivery of the First Supplemental Indenture), and any proceeds thereof
constituting collateral pursuant to said Existing Indenture Collateral Documents
as in effect on the date of this Bailee Agreement.
"Existing Indenture Collateral Documents" shall mean all Indenture
Collateral Documents in effect on the date hereof (after giving effect to the
execution
260
EXHIBIT G
Page 4
and delivery of the First Supplemental Indenture), which agreements consist of
(i) a Pledge Agreement, dated as of June 18, 1996, among Alliance Gaming
Corporation, various of its Subsidiaries and the Trustee and (ii) the Pledge and
Security Agreement dated as of June 18, 1996, among Alliance Gaming Corporation,
various of its Subsidiaries and the Trustee, in each case after giving effect to
all amendments or modifications thereto effected on or prior to the date hereof
(including pursuant to the First Supplemental Indenture).
"First Supplemental Indenture" shall mean the First Supplemental
Indenture, dated as of August 8, 1997, supplementing the Indenture and the
Existing Indenture Collateral Documents.
"Indenture" shall mean the Indenture, dated as of June 18, 1996, among
U.S. Borrower the Guarantors referred to therein and the Trustee, as the same
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
"Indenture Documents" shall mean, collectively, the Senior Secured
Notes, the Indenture and the Indenture Collateral Documents.
"Indenture Collateral" shall mean all stock, promissory notes, cash,
investments, proceeds thereof and any other collateral whatsoever at any time
delivered to the Trustee (or any agent or sub-agent upon its behalf) pursuant to
the Indenture or any of the Indenture Collateral Documents.
"Indenture Collateral Documents" shall mean all pledge or security
agreements, and any other agreement securing, the Senior Secured Notes or any
obligations owing pursuant to the Indenture, whether now in existence or at any
time entered into, including, without limitation all Collateral Agreements as
defined in the Indenture as in effect on the date hereof.
"Lenders" shall mean each lender from time to time party to the Credit
Agreement.
"Obligations" shall mean all obligations, liabilities and indebtedness
of every kind, nature and description owing by the U.S. Borrower or any of its
Subsidiaries (including each Borrower) to the Creditors, the Secured Creditors
or the holders of Senior Secured Notes (and as to CSFB, the Lenders and
participants under the Credit Agreement and the other Secured Creditors),
including principal, reimbursement obligations, interest, charges, fees,
premiums, indemnities and expenses, however evidenced,
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EXHIBIT G
Page 5
whether as principal, surety, endorser, guarantor or otherwise, whether arising
under the CSFB Agreements, the Indenture Documents or by operation of law,
whether now existing or hereafter arising, whether arising before, during or
after the initial or any renewal term of the CSFB Agreements or Indenture
Documents or after the commencement of any case with respect to the U.S.
Borrower or any of its Subsidiaries under the U.S. Bankruptcy Code or any
similar statute, whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or unliquidated,
secured or unsecured, original, renewed or extended, and shall also include all
amounts chargeable to the U.S. Borrower or any of its Subsidiaries under the
CSFB Agreements or Indenture Documents, as the case may be, or in connection
with any of the foregoing.
"Secured Creditors" shall mean each Lender and each other person or
entity which constitutes a creditor secured pursuant to any of the Credit
Documents or defined as a "Secured Creditor" pursuant to the Credit Agreement.
"Senior Secured Notes" shall mean, individually and collectively, the
12-7/8% Senior Secured Notes due 2003 issued by U.S. Borrower pursuant to the
Indenture, as the same now exist or may hereafter be amended, modified or
supplemented from time to time.
"Subsidiary" shall have the meaning provided in the Indenture, as in
effect on the date of this Bailee Agreement.
"Trustee" shall mean United States Trust Company of New York, acting in
its capacity as Trustee on behalf of the holders of the Senior Secured Notes
pursuant to the Indenture, and its successors and assigns (and including,
without limitation, any successor, assignee or additional person at any time
acting as Trustee for the benefit of the holders of the Senior Secured Notes).
"U.S. Borrower" shall mean Alliance Gaming Corporation, a Nevada
corporation, and its successors and assigns, including, without limitation, a
receiver, trustee or debtor-in-possession on behalf of the U.S. Borrower or on
behalf of any such successor or assign.
All terms used herein which are defined in the Uniform Commercial Code,
unless otherwise defined herein, shall have the meanings set forth therein. All
references to any term in the plural shall include the singular and all
references to any term in the singular shall include the plural.
262
EXHIBIT G
Page 6
2. NOTICE OF SECURITY INTERESTS; ETC.
2.1 Notice. Notice is hereby given to the Bailee that security
interests in all Indenture Collateral (including without limitation all Existing
Indenture Collateral in the possession of the Bailee) have been granted pursuant
to the Credit Documents to secure all Obligations owing to the Secured
Creditors. Such security interests have been created in favor of the Collateral
Agent for the benefit of the Secured Creditors, and apply to all Indenture
Collateral now or hereafter in the Bailee's possession, including, without
limitation, all certificated securities, letters of credit, advices of credit,
goods and instruments now or at any time hereafter in the Bailee's possession.
The notice given pursuant to this paragraph is intended by the parties hereto to
perfect the Collateral Agent's (on behalf of the Secured Creditors) security
interests in all Indenture Collateral now or at any time hereafter in your
possession. Such notice is given for purposes of all applicable law (including
without limitation the provisions of Sections 9-305 and 8-313 of the Uniform
Commercial Code as in effect in the States of New York and Nevada).
2.2 Bailee Representations. For the benefit of the Secured Creditors,
the Bailee hereby represents that (x) Annex I hereto constitutes a true and
correct list, as of the date hereof, of all Existing Indenture Collateral in its
possession and (y) Annex II hereto is a true and correct list of each (or any)
agent, sub-agent, sub-collateral agent, custodian, bailee or other Person, as
of the date hereof, holding any Existing Indenture Collateral for, or at the
direction of, the Bailee, together with a true and correct list as of the date
hereof of all Existing Indenture Collateral held by such agent, sub-agent,
sub-collateral agent, custodian, bailee or other Person.
2.3 Successor Bailee; Resignation of Bailee. (a) If the Bailee at any
time resigns as a holder of Indenture Collateral, it shall (contemporaneously
with the effectiveness of such resignation) use reasonable efforts to cause any
successor to it as holder of Indenture Collateral (if any) to execute a Bailee
Agreement in substantially the form of this Bailee Agreement.
3. DELIVERY OF INDENTURE COLLATERAL TO CSFB.
3.1 Delivery of Collateral. (a) If at any time any Indenture Collateral
held by the Bailee or any of its agents or sub-agent is, in accordance with the
requirements of the respective Indenture Collateral Document, to be delivered to
the U.S. Borrower or any of its Subsidiaries (including without limitation as a
result of any covenant defeasance effected in accordance with the requirements
of the Indenture), the Bailee shall instead directly deliver such Indenture
Collateral to CSFB to be held by it
263
EXHIBIT G
Page 7
pursuant to the Credit Documents (or released by it in accordance with the terms
thereof if same is not required to be held pursuant thereto).
(b) If at any time an Event of Default under, and as defined in, the
Indenture occurs and the Bailee (or the Trustee) takes remedial action, or
otherwise obtains proceeds from, the Indenture Collateral, any Indenture
Collateral (or proceeds thereof) which remains after the satisfaction in full of
all Obligations of, and claims of, the holders of the Senior Secured Notes (and
of the Trustee and any Bailee) will be delivered to CSFB.
(c) By their execution and delivery of a copy of this Agreement, each
of the U.S. Borrower and each of its Subsidiaries party hereto hereby authorizes
and directs the Bailee to deliver Indenture Collateral to CSFB in accordance
with the provisions of preceding clauses (a) and (b).
4. MISCELLANEOUS
4.1 Successors and Assigns. (a) This Agreement shall be binding upon
the parties hereto and their respective successors and assigns and shall inure
to the benefit of each of Creditors (and the Secured Creditors) and their
respective successors, participants and assigns.
(b) In connection with any assignment or transfer of any or all of the
obligations owed to either Creditor or any or all rights of either of the
Creditors in the Indenture Collateral (other than pursuant to a participation),
the Bailee, the U.S Borrower and each of the Creditors agrees to execute and
deliver an agreement containing terms substantially identical to those contained
herein in favor of any such assignee or transferee and, in addition, upon CSFB's
request, will execute and deliver an agreement containing terms substantially
identical to those contained herein in favor of any third person who succeeds to
or replaces a material portion of the financing pursuant to the CSFB Agreements,
whether such successor financing or replacement occurs by transfer, assignment,
"takeout" or any other means or vehicle.
4.2 Notices. All notices, requests and demands to or upon the respec-
tive parties hereto shall be in writing and shall be deemed duly given, made or
received: if delivered in person, immediately upon delivery; if by telex,
telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next business day, one (1) business day after
sending; and if mailed by certified mail, return receipt requested, five (5)
days after mailing to the parties at their addresses set forth
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EXHIBIT G
Page 8
below (or to such other addresses as the parties may designate in accordance
with the provisions of this Section):
To CSFB:
Credit Suisse First Xxxxxx
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx Xxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
To the Bailee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-000
Attention: Corporate Trust and Agency Division
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
To the U.S. Borrower:
Alliance Gaming Corporation
0000 Xxxxx Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxxxx
Any Creditor may change the address(es) to which all notices, requests and other
communications are to be sent by giving written notice of such address change to
the other Creditor in conformity with this Section 6.2, but such change shall
not be effective until notice of such change has been received by the other
Creditor.
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EXHIBIT G
Page 9
4.3 Counterparts. This Bailee Agreement may be executed in any number
of counterparts, each of which shall be an original with the same force and
effect as if the signatures thereto and hereto were upon the same instrument.
4.4 Governing Law. The validity, construction and effect to this
Agreement shall be governed by the laws of the State of New York (without regard
to principles of conflict of laws).
4.5 Compensation. The Bailee shall not be entitled to any independent
compensation for its actions as Bailee hereunder; provided that the U.S.
Borrower agrees to promptly reimburse the Bailee for any fees and expenses
incurred by it hereunder (including, without limitation, reasonable fees and
expenses of legal counsel). Furthermore, the U.S. Borrower shall indemnify the
Bailee, to the same extent as it is obligated to indemnify the Trustee pursuant
to Section 8.7 of the Indenture, for any actions taken by it as Bailee pursuant
to this Bailee Agreement, which indemnification obligations shall be fully
secured by the Indenture Collateral.
4.6 No Third Parties Benefitted. Except as expressly provided in
Section 6.1, this Agreement is solely for the benefit of Bailee, the Creditors
(and the Secured Creditors) and the U.S. Borrower, its Subsidiaries party hereto
and their respective successors, participants and assigns, and no other person
shall have any right, benefit, priority or interest under, or because of the
existence of, this Bailee Agreement.
4.7 Applicable Gaming Laws. The parties hereto agree that the
provisions of this Agreement are subject to all Applicable Gaming Regulations
(as defined in the Credit Agreement) and all Gaming Regulations (as defined in
the Indenture). Furthermore, to the extent that at any time any Indenture
Collateral is not pledged to secure the Obligations owing pursuant to the Credit
Agreement (in the circumstances contemplated by Section 13.18 of the Credit
Agreement or otherwise), then this Bailee Agreement shall not create or be
deemed to create a security interest in such Indenture Collateral.
4.8 Term. This Bailee Agreement is a continuing agreement and shall
remain in full force and effect until the satisfaction in full of all
Obligations owing to the holders of the Senior Secured Notes and the Trustee, if
any, and the transfer by the Bailee of all Indenture Collateral then held by it
to CSFB in accordance with the requirements of this Bailee Agreement.
266
IN WITNESS WHEREOF, the parties have caused this Bailee Agreement to be
duly executed as of the day and year first above written.
UNITED STATES TRUST COMPANY
OF NEW YORK
By:/s/ Xxxx Xxxxxxxx
-------------------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent and
as Collateral Agent
By:/s/ Xxxx X. Xxxxxxx
-------------------------------
Title: Assistant Vice President
By:/s/ Xxxxxx Xxxx
-------------------------------
Title: Associate
267
Each of the undersigned hereby acknowledges and agrees to the foregoing
terms and provisions. By its signature below, each of the undersigned agrees
that it will, together with its successors and assigns, be bound by the
provisions of the foregoing Bailee Agreement.
Each of the undersigned acknowledges and agrees that it will execute and
deliver such additional documents and take such additional action as may be
reasonably requested by either of Creditors to effectuate the provisions and
purposes of the foregoing Bailee Agreement.
ALLIANCE GAMING CORPORATION
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Senior Vice President, CFO
and Treasurer
ALLIANCE HOLDING COMPANY,
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
APT GAMES, INC.,
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
268
UNITED COIN MACHINE CO.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
PLANTATION INVESTMENTS, INC.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
FOREIGN GAMING VENTURES, INC.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
LOUISIANA VENTURES, INC.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
269
UNITED GAMING RAINBOW
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
NATIVE AMERICAN INVESTMENT, INC.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
BALLY GAMING INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
BALLY GAMING, INC.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
Title: Treasurer
270
EXHIBIT H-1
271
EXHIBIT H-1
[CONFORMED AS EXECUTED]
U.S. SUBSIDIARIES GUARANTY
GUARANTY, dated as of August 8, 1997 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by each of the
undersigned (each a "Guarantor", and together with any other entity that becomes
a party hereto pursuant to Section 25 hereof, the "Guarantors"). Except as
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Alliance Gaming Corporation, Bally Xxxxx Vertriebs GmbH,
Bally Xxxxx Automaten GmbH (each a "Borrower, and collectively, the
"Borrowers"), various lenders from time to time party thereto (the "Lenders"),
and Credit Suisse First Boston, as Administrative Agent (together with any
successor agent, the "Administrative Agent", and together with the Lenders and
the Collateral Agent are herein called the "Lender Creditors"), have entered
into a Credit Agreement, dated as of August 8, 1997 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans and the issuance of, and participation in, Letters of Credit, as
contemplated therein;
WHEREAS, each Borrower and/or one or more of its Subsidiaries may at
any time and from time to time enter into one or more Interest Rate Protection
Agreements or Other Hedging Agreements with one or more Lenders or any affiliate
thereof (each such Lender or affiliate, even if the respective Lender
subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender's or affiliate's successors and assigns, if any,
collectively, the "Other Creditors," and together with the Lender Creditors, are
herein called the "Creditors");
WHEREAS, each Guarantor is a direct or indirect Subsidiary of the
U.S. Borrower;
272
EXHIBIT H-1
Page 2
WHEREAS, it is a condition precedent to the making of Loans and the
issuance of Letters of Credit under the Credit Agreement that each Guarantor
shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging Agreements
and, accordingly, desires to execute this Guaranty in order to satisfy the
conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, unconditionally and
irrevocably guarantees: (i) to the Lender Creditors the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of (x)
the principal of and interest on the Notes issued by, and the Loans made to,
each Borrower under the Credit Agreement, and all reimbursement obligations and
Unpaid Drawings with respect to Letters of Credit issued under the Credit
Agreement and (y) all other obligations (including obligations which, but for
the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities owing by any Borrower to the Lender Creditors under the
Credit Agreement or any other Credit Document to which such Borrower is a party
(including, without limitation, indemnities, Fees and interest thereon), whether
now existing or hereafter incurred under, arising out of or in connection with
the Credit Agreement or any such other Credit Document and the due performance
and compliance with all of the terms, conditions and agreements contained in
such Credit Documents by any Borrower (all such principal, interest, liabilities
and obligations being herein collectively called the "Credit Document
Obligations"); and (ii) to each Other Creditor the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the U.S. Borrower or any Subsidiary of the U.S. Borrower (each such
Subsidiary, together with the U.S. Borrower, are herein called the "Credit
Parties") under any Interest Rate Protection Agreement or Other Hedging
Agreement, whether now in existence or hereafter arising, and the due
performance and compliance by each Credit Party with all of the terms,
conditions and agreements contained in the Interest Rate Protection Agreements
or Other Hedging Agreements (all such obligations and liabilities being herein
collectively called the "Other Obligations," and together with the Credit
Document Obligations are herein collectively called the
273
EXHIBIT H-1
Page 3
"Guaranteed Obligations"). Each Guarantor understands, agrees and confirms that
the Creditors may enforce this Guaranty up to the full amount of the Guaranteed
Obligations against each Guarantor without proceeding against any other
Guarantor, any other Credit Party, against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a portion of the
Guaranteed Obligations. For purposes of this Section 1, the term "Guarantor" as
applied to any Guarantor shall refer to such Guarantor as a guarantor of
indebtedness incurred by others, as opposed to indebtedness directly incurred by
it.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of any Credit Party to the Creditors whether or not due
or payable by the Credit Parties upon the occurrence in respect of such Credit
Party of any of the events specified in Section 10.05 of the Credit Agreement,
and unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand.
3. Each Guarantor agrees that all payments made by it with respect
to any Guaranteed Obligations pursuant to this Guaranty shall be made in the
respective currency in which the underlying Guaranteed Obligations are
denominated or payable, as the case may be. This Guaranty shall constitute a
guaranty of payment, and not of collection.
4. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of any
Credit Party whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by any circumstance or occurrence whatsoever,
including, without limitation: (a) any direction as to application of payment by
any Credit Party or by any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the indebtedness of any Credit Party, (c) any payment on or in reduction
of any such other guaranty or undertaking, (d) any dissolution, termination or
increase, decrease or change in personnel by any Credit Party, (e) any payment
made to any Creditor on the indebtedness which any Creditor repays to any Credit
Party pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Guarantor waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding, (f) any action or inaction by the Creditors as contemplated
in Section 7 hereof, or (g) any invalidity, irregularity or unenforceability of
all or part of the Guaranteed Obligations or of any security therefor.
5. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or any Credit Party,
and a separate action or actions may be brought and prosecuted against each
Guarantor whether or not
274
EXHIBIT H-1
Page 4
action is brought against any other Guarantor, any other guarantor of any Credit
Party or any Credit Party and whether or not any other Guarantor, any other
guarantor of any Credit Party or any Credit Party be joined in any such action
or actions. Each Guarantor waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by any Credit Party or other circumstance which
operates to toll any statute of limitations as to such Credit Party shall
operate to toll the statute of limitations as to each Guarantor.
6. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Creditor against, and any other notice
to, any party liable thereon (including such Guarantor, any other guarantor of
any Credit Party or any Credit Party).
7. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against any
Credit Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, any
Credit Party or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all
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EXHIBIT H-1
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or any part thereof to the payment of any liability (whether due or not)
of any Credit Party to creditors of such Credit Party other than the
Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Credit Party to the Creditors regardless
of what liabilities of such Credit Party remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or supplement
any of the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of such other instruments or
agreements; and/or
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against any
Credit Party to recover full indemnity for any payments made pursuant to
this Guaranty.
8. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
9. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any Guarantor
in any case shall entitle such Guarantor to any other further notice or demand
in similar or other circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances without notice or
demand. It is not necessary for any Creditor to inquire into the capacity or
powers of any Credit Party or the officers, directors, partners or agents acting
or purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
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10. Any indebtedness of any Credit Party now or hereafter held by
any Guarantor is hereby subordinated to the indebtedness of such Credit Party to
the Creditors; and such indebtedness of such Credit Party to any Guarantor, if
the Administrative Agent, after an Event of Default has occurred and is
continuing, so requests, shall be collected, enforced and received by such
Guarantor as trustee for the Creditors and be paid over to the Creditors on
account of the indebtedness of such Credit Party to the Creditors, but without
affecting or impairing in any manner the liability of such Guarantor under the
other provisions of this Guaranty. Prior to the transfer by any Guarantor of any
note or negotiable instrument evidencing any indebtedness of any Credit Party to
such Guarantor, such Guarantor shall xxxx such note or negotiable instrument
with a legend that the same is subject to this subordination. Without limiting
the generality of the foregoing, each guarantor hereby agrees with the Creditors
that it will not exercise any right of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under Section
509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have
been irrevocably paid in full.
11. (a) Each Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Creditors to: (i)
proceed against any Credit Party, any other Guarantor, any other guarantor of
the Guaranteed Obligations or any other party; (ii) proceed against or exhaust
any security held from any Credit Party, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any
other remedy in the Creditors' power whatsoever. Each Guarantor waives any
defense based on or arising out of any defense of any Credit Party, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party
other than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of such Credit
Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or
any other party, or the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
such Credit Party other than payment in full of the Guaranteed Obligations. The
Creditors may, at their election, foreclose on any security held by the
Administrative Agent, the Collateral Agent or the other Creditors by one or more
judicial or nonjudicial sales (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Creditors may have
against any Credit Party or any other party, or any security, without affecting
or impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been paid in full. Each Guarantor waives
any defense arising out of any such election by the Creditors, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against any Credit Party
or any other party or any security.
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(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of each Credit Party's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
12. In order to induce the Lenders to make Loans and issue Letters
of Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Interest Rate Protection
Agreements or Other Hedging Agreements, each Guarantor represents, warrants and
covenants that:
(a) Such Guarantor (i) is a duly organized and validly existing
corporation partnership, or limited liability company in good standing
under the laws of the jurisdiction of its organization, (ii) has the
requisite corporate, partnership, or limited liability company power and
authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except where the
failure to be so qualified could not reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the U.S.
Borrower and its Subsidiaries taken as a whole.
(b) Such Guarantor has the requisite corporate, partnership, or
limited liability company power and authority to execute, deliver and
carry out the terms and provisions of this Guaranty and each other Credit
Document to which it is a party and has taken all necessary corporate,
partnership, or limited liability company action to authorize the
execution, delivery and performance by it of each such Credit Document.
Such Guarantor has duly executed and delivered this Guaranty and each
other Credit Document to which it is a party and each such Credit Document
constitutes the legal, valid and binding obligation of such Guarantor
enforceable in accordance with its terms, except to the extent that the
enforceability hereof and thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
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EXHIBIT H-1
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(c) Neither the execution, delivery or performance by such Guarantor
of this Guaranty or any other Credit Document to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof (i) will
contravene any applicable provision of any law, statute, rule or
regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with
or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under or (other than pursuant to
the Security Documents) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or
assets of such Guarantor or any of its Subsidiaries pursuant to the terms
of any indenture, mortgage, deed of trust, loan agreement, credit
agreement or other material agreement or other instrument to which such
Guarantor is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation or by-laws (or equivalent organizational
documents) of such Guarantor.
(d) Except as specifically described in Schedule X to the Credit
Agreement, no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by,
any governmental or public body or authority, or any subdivision thereof,
is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Guaranty or any other Credit
Document to which such Guarantor is a party or (ii) the legality,
validity, binding effect or enforceability of this Guaranty or any other
Credit Document to which such Guarantor is a party.
(e) There are no actions, suits or proceedings pending or threatened
(i) with respect to this Guaranty or (ii) with respect to such Guarantor
that could reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of the U.S. Borrower and its Subsidiaries taken
as a whole.
13. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitments and all Interest Rate
Protection Agreements or Other Hedging Agreements and when no Note or Letter of
Credit remains outstanding and all Guaranteed Obligations have been paid in
full, such Guarantor shall take, or will refrain from taking, as the case may
be, all actions that are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in Section 8 or 9 of the
Credit Agreement, and so that no Default or Event of Default, is caused by the
actions of such Guarantor or any of its Subsidiaries.
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14. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses of each Creditor in connection with
the enforcement of this Guaranty and any amendment, waiver or consent relating
hereto (including, without limitation, the reasonable fees and disbursements of
counsel (including in-house counsel) employed by any of the Creditors).
15. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
16. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of each
Guarantor directly affected thereby and with the written consent of either (x)
the Required Lenders (or to the extent required by Section 13.12 of the Credit
Agreement, with the written consent of each Lender) at all times prior to the
time at which the Total Commitments have terminated and all Credit Document
Obligations have been paid in full or (y) the holders of at least a majority of
the outstanding Other Obligations at all times after the time at which the Total
Commitments have terminated and all Credit Document Obligations have been paid
in full; provided, that any change, waiver, modification or variance affecting
the rights and benefits of a single Class (as defined below) of Creditors (and
not all Creditors in a like or similar manner) shall require the written consent
of the Requisite Creditors (as defined below) of such Class of Creditors (it
being understood that the addition or release of any Guarantor hereunder shall
not constitute a change, waiver, discharge or termination affecting any
Guarantor other than the Guarantor so added or released). For the purpose of
this Guaranty the term "Class" shall mean each class of Creditors, i.e., whether
(x) the Lender Creditors as holders of the Credit Document Obligations or (y)
the Other Creditors as the holders of the Other Obligations. For the purpose of
this Guaranty, the term "Requisite Creditors" of any Class shall mean (x) with
respect to the Credit Document Obligations, the Required Lenders and (y) with
respect to the Other Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection
Agreements or Other Hedging Agreements.
17. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents, as same exist on the Initial Borrowing Date,
have been made available to its principal executive officers and such officers
are familiar with the contents thereof.
18. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agree-
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EXHIBIT H-1
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ment or Other Hedging Agreement continuing after any applicable grace period),
each Creditor is hereby authorized at any time or from time to time, without
notice to any Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Creditor
to or for the credit or the account of such Guarantor, against and on account of
the obligations and liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or claims,
or any of them, shall be contingent or unmatured.
19. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Lender Creditor, as provided in the Credit Agreement,
(ii) in the case of any Guarantor, at 0000 Xxxxx Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx
00000, Attention: Xxxxx Xxxxxxxxxxxx, Telephone No.: (000) 000-0000, Telecopier
No.: (000) 000-0000 and (iii) in the case of any Other Creditor, at such address
as such Other Creditor shall have specified in writing to the Guarantors; or in
any case at such other address as any of the Persons listed above may hereafter
notify the others in writing.
20. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including any Credit Party), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of any Credit Party, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
21. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS). Any legal action or proceeding with respect to this
Guaranty or any other Credit Document to which such Guarantor is a party may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New
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York, and, by execution and delivery of this Guaranty, each Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby
further irrevocably waives any claim that any such courts lack jurisdiction over
such Guarantor, and agrees not to plead or claim, in any legal action or
proceeding with respect to this Agreement or any other Credit Document brought
in any of the aforesaid courts, that any such court lacks jurisdiction over such
Guarantor. Each Guarantor further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such Guarantor at its address set forth opposite its signature below, such
service to become effective 30 days after such mailing. Each Guarantor hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other Credit Document that service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
any of the Creditors to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against each Guarantor in any
other jurisdiction.
(B) Each Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which such Guarantor is a party brought in the courts
referred to in clause (A) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that such action or proceeding brought
in any such court has been brought in an inconvenient forum.
(C) EACH GUARANTOR AND EACH CREDITOR (BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
22. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of (but not to the U.S. Borrower or a
Subsidiary thereof) or liquidated in compliance with the requirements of Section
9.02 of the Credit Agreement (or such sale or other disposition has been
approved in writing by the Required Lenders (or all Lenders if required by
Section 13.12 of the Credit Agreement)) and the proceeds of such sale,
disposition or liquidation are applied in accordance with the provisions of the
Credit Agreement, to the extent applicable, such Guarantor shall (so long as
such Guarantor is contemporaneously released from any guaranty by it of the New
Senior Subordinated Notes)
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be released from this Guaranty and this Guaranty shall, as to each such
Guarantor or Guarantors, terminate, and have no further force or effect (it
being understood and agreed that the sale of one or more Persons (but not to the
U.S. Borrower or a Subsidiary thereof) that own, directly or indirectly, all of
the capital stock or partnership or limited liability company interests of any
Guarantor shall be deemed to be a sale of such Guarantor for the purposes of
this Section 22).
23. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.
24. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense and on the same basis as payments
made by the Borrowers pursuant to Sections 4.03 and 4.04 of the Credit
Agreement.
25. It is understood and agreed that any Subsidiary of the U.S.
Borrower that is required to execute a counterpart of this Guaranty pursuant to
the Credit Agreement shall automatically become a Guarantor hereunder by
executing a counterpart hereof and delivering the same to the Administrative
Agent.
26. At any time a payment in respect of the Guaranteed Obligations
is made under this Guaranty, the right of contribution of each Guarantor against
each other Guarantor shall be determined as provided in the immediately
following sentence, with the right of contribution of each Guarantor to be
revised and restated as of each date on which a payment (a "Relevant Payment")
is made on the Guaranteed Obligations under this Guaranty. At any time that a
Relevant Payment is made by a Guarantor that results in the aggregate payments
made by such Guarantor in respect of the Guaranteed Obligations to and including
the date of the Relevant Payment exceeding such Guarantor's Contribution
Percentage (as defined below) of the aggregate payments made by all Guarantors
in respect of the Guaranteed Obligations to and including the date of the
Relevant Payment (such excess, the "Aggregate Excess Amount"), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less than such other
Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other
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Guarantor. A Guarantor's right of contribution pursuant to the preceding
sentences shall arise at the time of each computation, subject to adjustment to
the time of any subsequent computation; provided, that no Guarantor may take any
action to enforce such right until the Guaranteed Obligations have been paid in
full and the Total Commitment and all Letters of Credit have been terminated, it
being expressly recognized and agreed by all parties hereto that any Guarantor's
right of contribution arising pursuant to this Section 26 against any other
Guarantor shall be expressly junior and subordinate to such other Guarantor's
obligations and liabilities in respect of the Guaranteed Obligations and any
other obligations owing under this Guaranty. As used in this Section 26: (i)
each Guarantor's "Contribution Percentage" shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y)
the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net
Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as defined
below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of each
Guarantor shall mean the amount by which the fair salable value of such
Guarantor's assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty) on such
date. All parties hereto recognize and agree that, except for any right of
contribution arising pursuant to this Section 26, each Guarantor who makes any
payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment. Each of the Guarantors recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. In this connection, each Guarantor has the right
to waive its contribution right against any Guarantor to the extent that after
giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Lenders.
27. Each Creditor and each Guarantor hereby confirms that it is its
intention that this Guaranty not constitute a fraudulent transfer or conveyance
for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act or
any similar Federal or state law. To effectuate the foregoing intention, each
Creditor and each Guarantor hereby irrevocably agrees that the Guaranteed
Obligations guaranteed by each Guarantor shall be limited to such amount as
will, after giving effect to such maximum amount and all of such Guarantor's
other (contingent or otherwise) liabilities that are relevant under such laws,
and after giving effect to any rights to contribution pursuant to any agreement
providing for an equitable contribution among the Guarantors (including pursuant
to Section 26 hereof), result in the Guaranteed Obligations of such Guarantor in
respect of such maximum amount not constituting a fraudulent transfer or
conveyance.
28. (a) The Guarantors' obligations hereunder to make payments in
the Applicable Currency (the "Obligation Currency") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency
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other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the respective Creditor of the full
amount of the Obligation Currency expressed to be payable to such Creditor under
this Guaranty. If for the purpose of obtaining or enforcing judgment against any
Guarantor in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made, at the Deutsche Xxxx
Equivalent or the Dollar Equivalent thereof, as the case may be, and, in the
case of other currencies the rate of exchange (as quoted by the Administrative
Agent or if the Administrative Agent does not quote a rate of exchange on such
currency, by a known dealer in such currency designated by the Administrative
Agent) determined, in each case, as on the day immediately preceding the day on
which the judgment is given (such Business Day being hereinafter referred to as
the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Guarantors covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment of judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Deutsche Xxxx Equivalent or the
Dollar Equivalent or any other rate of exchange for this Section, such amounts
shall include any premium and costs payable in connection with the purchase of
the Obligation Currency.
29. Notwithstanding anything to the contrary contained elsewhere in
this Guaranty, the parties hereto hereby agree that if at any time RCVP is a
Guarantor (whether as an initial signatory hereto or as a result of its
execution of a counterpart hereof as contemplated by Section 25 after the
Initial Borrowing Date), then, and for so long as RCVP is not a Wholly-Owned
Subsidiary of the U.S. Borrower, the obligations of RCVP pursuant to this
Guaranty (including without limitation pursuant to Sections 1 and 2) shall be
limited from time to time the maximum amount permitted to be guaranteed by it in
accordance with the terms of the Second Amended and Restated Agreement of
Limited Partnership, dated as of March 29, 1995 (the "RCVP Partnership
Agreement") entered into by United Gaming Rainbow, as general partner, and The
Rainbow Casino Corporation, as limited partner, as same is in effect from time
to time; provided that the relevant restrictions which would apply to amounts
guaranteed by RCVP shall not be made more restrictive (from the point of view of
Creditors) than those as in effect on the Initial Borrowing Date.
285
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
ALLIANCE HOLDING COMPANY,
as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
APT GAMES, INC.,
as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
UNITED COIN MACHINE CO.,
as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
PLANTATION INVESTMENTS, INC.,
as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
FOREIGN GAMING VENTURES, INC.,
as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
286
LOUISIANA VENTURES, INC.,
as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
UNITED GAMING RAINBOW,
as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
NATIVE AMERICAN INVESTMENT,
INC., as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
BALLY GAMING INTERNATIONAL,
INC., as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
BALLY GAMING, INC.,
as a Guarantor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
287
Accepted and Agreed to:
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent
By /s/ Xxxx X. Xxxxxxx
---------------------------------
Title: Assistant Vice President
By /s/ Xxxxxx X. Xxxx
---------------------------------
Title: Associate
288
EXHIBIT H-2
289
EXHIBIT H-2
[CONFORMED AS EXECUTED]
GERMAN SUBSIDIARIES GUARANTY
GUARANTY, dated as of August 8, 1997 (as amended, modified or
supplemented from time to time, the "Guaranty"), made by each of the undersigned
(each a "Guarantor" and collectively, the "Guarantors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
WHEREAS, (i) Alliance Gaming Corporation, Las Vegas, USA (the
"US-Borrower"), (ii) Bally Xxxxx Vertriebs GmbH, Hannover, Germany (hereinafter
the "Bally Xxxxx Vertrieb"), (iii) Bally Xxxxx Automaten GmbH, Berlin, Germany
(hereinafter the "Bally Xxxxx Automaten") (Bally Xxxxx Vertrieb and Bally Xxxxx
Automaten the "German Borrowers", the plural form including the singular; the
US-Borrower and the German Borrowers together the "Borrowers"), the financial
institutions from time to time party thereto (the "Lenders") and Credit Suisse
First Boston, as Administrative Agent (the "Agent," and together with the
Lenders, the "Lender Creditors"), have entered into a credit agreement, dated as
of August 8, 1997 (as amended, modified or supplemented from time to time, the
"Credit Agreement");
WHEREAS, in the Credit Agreement the Lender Creditors, among others,
severally agreed to grant to the German Borrowers Revolving Loans of up to the
amount of $55,000,000 (taking the Deutsche Xxxx Equivalent thereof) (the
"Loans");
WHEREAS, the German Borrowers may enter into Interest Rate
Protection Agreements and/or Hedging Agreements with one or all of the Lender
Creditors or any affiliate thereof (hereinafter the "Other Creditors" and
together with the Lender Creditors the "Creditors") (hereinafter the "Additional
Agreements").
WHEREAS, it is a condition precedent to the making of the Loans and
the issuance of, and participation in, German Letters of Credit under the Credit
Agreement that each German Subsidiary Guarantor shall have executed and
delivered this Guaranty in order to secure the obligations of the German
Borrowers under the Credit Agreement and the Additional Agreements.
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WHEREAS, each Guarantor will obtain benefits from the incurrence of
the Loans by, and the issuance of German Letters of Credit to, the German
Borrowers under the Credit Agreement and from the entering into Additional
Agreements and, accordingly, desires to execute this Guaranty in order to
satisfy the conditions described in the preceding paragraph and to induce the
Lenders to make Loans to, and to issue and participate in German Letters of
Credit for the account of the German Borrowers;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
Section 1
Guaranty
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees (i) to the Lender Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Loans made to the German Borrowers
under the Credit Agreement and all reimbursement obligations and Unpaid Drawings
with respect to German Letters of Credit issued under the Credit Agreement, and
(y) all other obligations and liabilities owing by any German Borrowers to the
Lender Creditors under the Credit Agreement or an other Credit Document to which
any German Borrower is a party (including, without limitation, indemnities, Fees
and interest thereon) whether now existing or hereafter incurred under, arising
out of or in connection with the Credit Agreement or any other Credit Document
and the due performance and compliance with all of the terms, conditions and
agreements contained in such Credit Documents by any German Borrower (all such
principal, interest, liabilities and obligations being herein collectively
called the "Credit Document Obligations") and (ii) to each Other Creditor the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations and liabilities owing by any
German Borrower under any Additional Agreement, whether now in existence or
hereafter arising and the due performance and compliance by any German
Subsidiary with all of the terms, conditions and agreements contained in the
Additional Agreements (all such obligations and liabilities being herein
collectively called the "Other Obligations").
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Page 3
2. In case the Credit Agreement should be void, each Guarantor,
jointly and severally, irrevocably and unconditionally guarantees any obligation
of the German Borrowers created by applicable law, including, but without
limitation the repayment of Loans already paid out to the German Borrowers
(those obligations together with the Credit Document Obligations and the Other
Obligations the "Guaranteed Obligations").
3. Each Guarantor, jointly and severally, unconditionally and
irrevocably, guarantees any and all Guaranteed Obligations of the German
Borrowers to the Creditors whether or not due or payable by the German Borrowers
upon the occurrence in respect of the German Borrowers of any of the events
specified in Section 10 of the Credit Agreement, and unconditionally and
irrevocably, jointly and severally, promises to pay such Guaranteed Obligations
to the Creditors, on demand, in lawful money of the Federal Republic of Germany.
4. Each Guarantor understands, agrees and confirms that the
guaranties created hereunder are payable on demand and that the Creditors may
enforce this Guaranty up to the full amount of the Guaranteed Obligations
against each Guarantor without proceeding against any other Guarantor, one of
the German Borrowers, against any security for the Guaranteed Obligations, or
under any other guaranty covering all or a portion of the Guaranteed
Obligations. All payments by each Guarantor under this Guaranty shall be made on
the same basis as payments by the German Borrowers under Section 4 of the Credit
Agreement.
5. The total amount collectable by the Creditors hereunder from
those Guarantors which are subsidiaries of each German Subsidiary, (i) shall not
exceed the total amount of free reserves plus profits carried forward of this
company, and (ii) will meet the restrictions of SectionSection 30, 31 of the
German Act on Limited Liability Companies.
Section 2
Severability
1. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
German Borrowers whether executed by such Guarantor, any other Guarantor, any
other guarantor of the German Borrowers or by any other party, and the liability
of each
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Page 4
Guarantor hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the German Borrowers or by any other party, (b) any
other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the indebtedness of the German Borrowers,
(c) any payment on or in reduction of any such other guaranty or undertaking,
(d) any dissolution, termination or increase, decrease or change in personnel by
the German Borrowers or (e) any payment made to any Creditor on the indebtedness
which any Creditor repays to the German Borrowers pursuant to a court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding.
2. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor of the German
Borrowers or the German Borrowers, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other Guarantor, any other guarantor of the German Borrowers or the
German Borrowers and whether or not any other Guarantor, any other guarantor of
the German Borrowers or the German Borrowers be joined in any such action or
actions.
Section 3
Waiver
Each Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the Agent
or any other Creditor against, and any other notice to, any party liable thereon
(including such Guarantor or any other guarantor of the German Borrowers).
Section 4
Amendments to Guaranteed Obligations;
Independence of Guaranteed Obligations
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EXHIBIT H-2
Page 5
1. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
German Borrowers, or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, any
German Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the German Subsidiaries to creditors of
the German Subsidiaries;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the German Subsidiaries to the Creditors
regardless of what liabilities of the German Subsidiaries remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Additional Agreements, the Credit Documents or
any of the instruments or agreements referred to therein, or otherwise
amend, modify or supplement any of the Additional Agreements, Credit
Documents or any of such other instruments or agreements; and/or
294
EXHIBIT H-2
Page 6
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against any
German Subsidiary to recover full indemnity for any payments made pursuant
to this Guaranty.
2. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a discharge of a
surety or guarantor of the German Borrowers except payment in full of the
Guaranteed Obligations.
3. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any Guarantor
in any case shall entitle such Guarantor to any other further notice or demand
in similar or other circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances without notice or
demand. It is not necessary for any Creditor to inquire into the capacity or
powers of the German Borrowers or any of their respective Subsidiaries or the
officers, directors, partners or agents acting or purporting to act on their
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
Section 5
Subordination of Rank; Guaranty on Demand
1. Any indebtedness of any German Subsidiary now or hereafter held
by any Guarantor is hereby subordinated to the indebtedness of such German
Subsidiary to the Creditors; and such indebtedness of such German Subsidiary to
any Guarantor, if the Agent, after an Event of Default has occurred, so
requests, shall be collected, enforced and received by such Guarantor as trustee
for the Creditors and be paid over
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EXHIBIT H-2
Page 7
to the Creditors on account of the indebtedness of such German Subsidiary to the
Creditors, but without affecting or impairing in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Prior to the
transfer by any Guarantor of any note or negotiable instrument evidencing any
indebtedness of any German Subsidiary to such Guarantor, such Guarantor shall
xxxx such note or negotiable instrument with a legend that the same is subject
to this subordination.
2. Each Guarantor waives any right (except as shall be required by
applicable statute and cannot be waived) to require the Creditors to: (i)
proceed against the German Borrowers, any other Guarantor, any other guarantor
of the Guaranteed Obligations or any other party; (ii) proceed against or
exhaust any security held from any German Subsidiary, any other Guarantor, any
other guarantor of the Guaranteed Obligations or any other party; or (iii)
pursue any other remedy in the Creditors' power whatsoever. Each Guarantor
waives, to the extent permitted by applicable law, any defense based on or
arising out of any defense of the German Subsidiaries, any other Guarantor, any
other guarantor of the Guaranteed Obligations or any other party other than
payment in full of the Guaranteed Obligations, including, without limitation,
any defense based on or arising out of the disability of the German
Subsidiaries, any other Guarantor, any other guarantor of the Guaranteed
Obligations or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the German Subsidiaries other than payment in full of the
Guaranteed Obligations. The Creditors may, at their election, foreclose on any
security held by the Agent, the Collateral Agent or the other Creditors by one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Creditors may have
against the German Subsidiaries or any other party, or any security, without
affecting or impairing in any way the liability of any Guarantor hereunder
except to the extent the Guaranteed Obligations have been paid in full.
3. Each Guarantor waives, to the extent permitted by applicable law,
all presentments, demands for performance, protests and notices, including,
without limitation, notices of nonperformance, notices of protest, notices of
dishonor, notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional indebtedness. Each Guarantor assumes
all responsibility for being and keeping itself informed of each German
Subsidiary's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks which such Guarantor assumes
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Page 8
and incurs hereunder and agrees that the Creditors shall have no duty to advise
any Guarantor of information known to them regarding such circumstances or
risks.
4. Until such time as the Guaranteed Obligations have been paid in
full in cash or Cash Equivalents, each Guarantor hereby waives all rights of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under applicable law, or otherwise) to the claims of the
Creditors against the German Subsidiaries, any other Guarantor or any other
guarantor of the Guaranteed Obligations and all contractual, statutory or common
law rights of reimbursement, contribution or indemnity from the German
Subsidiaries or any other Guarantor which it may at any time otherwise have as a
result of this Guaranty.
Section 6
Warranties
In order to induce the Bank Creditors to make Loans and issue German Letter of
Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Additional Agreements, each
Guarantor represents, warrants and covenants that:
1. Such Guarantor (i) is a duly organized and validly existing
limited partnership or limited liability company in good standing under the laws
of Germany, (ii) has the requisite power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in all jurisdictions where it is required to be so
qualified, except where the failure to be so qualified could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the German Borrowers and the other German Subsidiaries taken as a whole.
2. Such Guarantor has the requisite power and authority to execute,
deliver and carry out the terms and provisions of the Guaranty and each other
Credit Documents to which it is a party and has taken all necessary action to
authorize the execution, delivery and performance by it of each such Credit
Document. Such Guarantor has duly executed and delivered this Guaranty and each
other Credit Document to which it is party and each such Credit Document
constitutes the legal, valid and binding obligation of such Guarantor
enforceable in accordance with its terms,
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Page 9
except to the extent that the enforceability hereof and thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar law affecting creditors' rights generally.
3. Neither the execution, delivery or performance of such Guarantor
of this Guaranty or any other Credit Document to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof (i) will
contravene any applicable provision of any law, statute, rule or regulation, or
any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under or (other than pursuant to the Security Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of such Guarantor or any of its
Subsidiaries pursuant to the terms of an indenture, mortgage, loan agreement,
credit agreement or other material agreement or other instrument to which such
Guarantor is a party or by which it or any property or assets is bound or to
which it may be subject or (iii) will violate any provisions of the by-laws of
such Guarantor.
4. No order, consent, approval, license, authorization or validation
of, or filing recording or registration with, or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with, (i) the execution, delivery and
performance of this Guaranty, or any other Credit Document to which such
Guarantor is a party or (ii) the legality, validity, binding effect or
enforceability of this Guaranty or any other Credit Document to which such
Guarantor is a party.
5. There are no actions, suits or proceedings pending or threatened
(i) with respect to this Guaranty or (ii) with respect to such Guarantor that
could reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the German Borrowers and the other German Subsidiaries taken as a
whole.
Section 7
Payments
1. If and to the extent that any Guarantor makes any payment to any
Creditor or to any other Person pursuant to or in respect of this Guaranty, any
claim
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EXHIBIT H-2
Page 10
which such Guarantor may have against any German Subsidiary by reason thereof
shall be subject and subordinate to the prior payment in full of the Guaranteed
Obligations to each Creditor. Prior to the transfer by any Guarantor of any note
or negotiable instrument evidencing any indebtedness of the German Borrowers to
such Guarantor, such Guarantor shall xxxx such note or negotiable instrument
with a legend that the same is subject to this subordination.
2. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Deutsche Xxxx Revolving Loan
Commitment and when no Deutsche Xxxx Revolving Notes or German Letters of Credit
remain outstanding and all Guaranteed Obligations have been paid in full, such
Guarantor shall take, or will refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in Section 7, 8 or 9 of the Credit
Agreement, and so that no Event of Default, is caused by the actions of such
Guarantor or any of its Subsidiaries.
3. The Guarantors hereby jointly and severally agree to pay, to the
extent not paid pursuant to Section 13.01 of the Credit Agreement, all
reasonable out-of-pocket costs and expenses of each Lender Creditor in
connection with the enforcement of this Guaranty and any amendment, waiver or
consent relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel employed by any of the Lender Creditors).
Section 8
Miscellaneous
1. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
2. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of each
Guarantor directly affected thereby and with the written consent of either (x)
the Required Lenders (or to the extent required by Section 13.12 of the Credit
Agreement, with the written consent of each Lender) at all times prior to the
time at which the Total Revolving Loan Commitment has terminated and all Credit
Document Obligations has been paid in full or (y) the holders of at least a
majority of the outstanding Other Obligations at
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EXHIBIT H-2
Page 11
all times after the time at which the Total Revolving Loan Commitment has
terminated and all Credit Document Obligations has been paid in full; provided
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Creditors (and not all
Creditors in a like or similar manner, shall require the written consent of the
Requisite Creditors (as defined below) of such Class of Creditors) (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released). For the purpose of this Guaranty
the term "Class" shall mean each class of Creditors, i.e., whether (x) the
Lender Creditors as holders of the Credit Document Obligations or (y) the Other
Creditors as the holders of the Other Obligations. For purposes of this
Guaranty, the term "Requisite Creditors" of any Class shall mean (x) with
respect to the Credit Document Obligations, the Required Lenders and (y) with
respect to the Other Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Additional Agreements.
3. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and the Additional Agreements has been made
available to its principal executive officers and such officers are familiar
with the contents thereof.
4. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Bank Creditor Law) and not by way of limitation of any such rights,
upon the occurrence and during the continuance of an Event of Default (such term
to mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Additional Agreement continuing after any
applicable grace period), each Creditor is hereby authorized at any time or from
time to time, without notice to any Guarantor or to any other Person, any such
notice being expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Creditor to or for the credit or the account of such Guarantor,
against and on account of the obligations and liabilities of such Guarantor to
such Creditor under this Guaranty, irrespective of whether or not such Creditor
shall have made any demand hereunder and although said obligations, liabilities,
deposits or claims, or any of them, shall be contingent or unmatured. Each
Creditor agrees to promptly notify the relevant Guarantor after any such set off
and application, provided, however, that the failure to give such notice shall
not affect the validity of such set off and application.
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5. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Lender Creditor, as provided in the Credit Agreement,
(ii) in the case of any Guarantor, at its address set forth in Annex A attached
hereto and (iii) in the case of any Other Creditor, at such address as such
Other Creditor shall have specified in writing to the Guarantor; or in any case
at such other address as any of the Persons listed above may hereafter notify
the others in writing.
6. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the German Borrowers), then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of any German Subsidiary,
and such Guarantor shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
7. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS AND
OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding with
respect to this Guaranty may be brought in the courts of (x) the State of New
York or of the United States of America for the Southern District of New York,
or (y) the courts in and for Berlin, Germany, in the Federal Republic of Germany
and, by execution and delivery of this Guaranty, each Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby
irrevocably designates, appoints and empowers CT Corporation with offices on the
date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its designee,
appointee and agent to receive, accept and acknowledge for and on its behalf,
and in respect of its property, service of any and all legal process, summons,
notices and documents which may be served in any such action or proceeding, if
for any reason such designee, appointee and agent shall cease to be available to
act as such, each Guarantor agrees to designate a new designee, appointee and
agent in New York City
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Page 13
on the terms and for the purposes of this provision satisfactory to the Agent
under this Agreement. Each Guarantor irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Guarantor, at its address for notices pursuant to this Section
8, paragraph 7, such service to become effective 30 days after such mailing.
Nothing herein shall affect the right of any of the Creditors to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against each Guarantor in any other jurisdiction.
8. Each Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
Credit Document brought in the courts referred to in clause (7) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that such action or proceeding brought in any such court has been brought in an
inconvenient forum.
9. Each Guarantor hereby irrevocably waives all rights to a trial by
jury in any action, proceeding or counterclaim arising out of or relating to
this Guaranty, the other Credit Documents or the transactions contemplated
hereby or thereby.
10. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 9.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Lenders (or all the
Lenders if required by Section 13.12 of the Credit Agreement), in each case so
long as the respective sale is to a Person other than the U.S. Borrower or any
of its Subsidiaries and the proceeds of such sale, disposition or liquidation
are applied, to the extent applicable, in accordance with the provisions of the
Credit Agreement, such Guarantor shall be released from this Guaranty and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of one or
more Persons (but not to the U.S. Borrower or any of its Subsidiaries) that own,
directly or indirectly, all of the capital stock or partnership interests of any
Guarantor shall be deemed to be a sale of such Guarantor for the purposes of
this paragraph 10). The foregoing provisions of this paragraph 10 shall not be
construed to limit the ability of a Guarantor to merge with another Person to
the extent permitted by the Credit Agreement.
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EXHIBIT H-2
Page 14
11. Each Guarantor, in addition to the subrogation rights it shall
have against the German Subsidiaries under applicable law as a result of any
payment it makes hereunder, shall also have a right of contribution against all
other Guarantors in respect of any such payment pro rata among same based on
their respective net fair value as enterprises, provided any such right of
contribution shall be subject and subordinate to the prior payment in full of
the Guaranteed Obligations (and such Guarantor's obligations in respect
thereof). It is the desire and intent of each Guarantor and the Creditors that
this Guaranty shall be enforced to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
If and to the extent that the obligations of any Guarantor under this Guaranty
would, in the absence of this sentence, be adjudicated to be invalid or
unenforceable because of any applicable state or federal law relating to
fraudulent conveyances or transfers, then the amount of such Guarantor's
liability hereunder in respect of the Guaranteed Obligations shall be deemed to
be reduced ab initio to that maximum amount which would be permitted without
causing such Guarantor's obligations hereunder to be so invalidated.
12. The Creditors agree that this Guaranty may be enforced only by
the action of the Agent, in each case acting upon the instructions of the
Required Lenders and that no Creditor shall have any right individually to seek
to enforce or to enforce this Guaranty or to realize upon the security to be
granted by the Security Documents, it being understood and agreed that such
rights and remedies may be exercised by the Agent for the benefit of the
Creditors upon the terms of this Guaranty and the Security Documents. The
Creditors further agree that this Guaranty may not be enforced against any
director, officer or employee of any Guarantor.
13. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense and on the same basis as payments
made by the German Borrowers pursuant to Section 4.03 and 4.04 of the Credit
Agreement.
14. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Agent.
000
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
------------------------------ ------------------------------------
(time, place) (Alliance Automaten Verwaltungs
GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
------------------------------ ------------------------------------
(time, place) (Alliance Automaten GmbH&Co. KG)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
------------------------------ ------------------------------------
(time, place) (Geda AutomatenGrosshandel GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
------------------------------ ------------------------------------
(time, place) (Xxxxxx Vertriebs GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
------------------------------ ------------------------------------
(time, place) (Westav Westdeutscher Automaten
Vertrieb GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
------------------------------ ------------------------------------
(time, place) (Bally Gaming International GmbH)
Acknowledged and Agreed to by:
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxx X. Xxxxxxx
------------------------------ ------------------------------------
(time, place) (Credit Suisse First Boston)
August 8, 0000 Xxx Xxxx, XX /s/ Xxxxxx X. Xxxx
------------------------------ ------------------------------------
(time, place) (Credit Suisse First Boston)
304
EXHIBIT I
305
EXHIBIT I
[CONFORMED AS EXECUTED]
U.S. PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of August 8, 1997 (as amended,
modified or supplemented from time to time, this "Agreement"), made by each of
the undersigned (each a "Pledgor", and together with any entity that becomes a
party hereto pursuant to Section 23 hereof, the "Pledgors"), in favor of CREDIT
SUISSE FIRST BOSTON, as Collateral Agent (the "Pledgee"), for the benefit of the
Secured Creditors (as defined below). Except as otherwise defined herein, terms
used herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, Alliance Gaming Corporation, Bally Xxxxx Vertriebs GmbH,
Bally Xxxxx Automaten GmbH (each a "Borrower" and collectively, the
"Borrowers"), various lenders from time to time party thereto (the "Lenders"),
and Credit Suisse First Boston, as Administrative Agent (together with any
successor agent, the "Administrative Agent," and together with the Pledgee and
the Lenders, the "Lender Creditors"), have entered into a Credit Agreement,
dated as of August 8, 1997 (as amended, modified or supplemented from time to
time, the "Credit Agreement"), providing for the making of Loans to each
Borrower and the issuance of, and participation in, Letters of Credit for the
account of each Revolving Loan Borrower, all as contemplated therein;
WHEREAS, Borrower may from time to time be party to (or guaranty
the obligations of one or more of their Subsidiaries under) one or more (i)
interest rate agreements, interest rate cap agreements, interest rate collar
agreements or other similar agreements or arrangements, (ii) foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against the fluctuations in currency values and/or (iii)
other types of hedging agreements from time to time (each such agreement or
arrangement with an Other Creditor (as hereinafter defined), an "Interest Rate
Protection Agreement or Other Hedging Agreement"), with a Lender or an affiliate
of a Lender (each such Lender or affiliate, even if the respective Lender
subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender's or affiliate's successors and assigns, collectively,
the "Other Creditors," and together with Lender Creditors, the "Secured
Creditors");
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EXHIBIT I
Page 2
WHEREAS, pursuant to the Parent Guaranty, the Parent Guarantor
has guaranteed to the Secured Creditors the payment when due of all obligations
and liabilities of each Guaranteed Party under or with respect to (x) the Credit
Documents and (y) each Interest Rate Protection Agreement or Other Hedging
Agreement with one or more Other Creditors;
WHEREAS, pursuant to the U.S. Subsidiaries Guaranty, each U.S.
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all the Guaranteed Obligations as described
therein;
WHEREAS, it is a condition precedent to the extensions of credit
under the Credit Agreement that each Pledgor shall have executed and delivered
to the Pledgee this Agreement; and
WHEREAS, each Pledgor will obtain benefits from the incurrence of
Loans and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging Agreements
and, accordingly, each Pledgor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
liabilities (including, without limitation, indemnities, Fees and
interest thereon) of such Pledgor, now existing or hereafter incurred
under, arising out of or in connection with any Credit Document to which
it is a party (including, without limitation, all such obligations and
liabilities under the Guaranty to which such Pledgor is a party) and the
due performance and compliance by such Pledgor with the terms of each
such Credit Document (all such obligations and liabilities under this
clause (i), except to the extent consisting of Other Obligations (as
defined below), being herein collectively called the "Credit Document
Obligations");
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EXHIBIT I
Page 3
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
liabilities of such Pledgor, now existing or hereafter incurred under,
arising out of or in connection with any Interest Rate Protection
Agreement or Other Hedging Agreement (including, without limitation, all
such obligations and liabilities under the Guaranty to which such
Pledgor is a party) and the due performance and compliance by such
Pledgor with the terms of each such Interest Rate Protection Agreement
or Other Hedging Agreement (all such obligations and liabilities under
this clause (ii) being herein collectively called the "Other
Obligations");
(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral (as hereinafter defined);
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred to
in clauses (i), (ii) and (iii) above, after an Event of Default (such
term, as used in this Agreement, shall mean any Event of Default under,
and as defined in, the Credit Agreement, or any payment default by any
Borrower under any Interest Rate Protection Agreement or Other Hedging
Agreement and shall in any event include, without limitation, any
payment default (after the expiration of any applicable grace period) on
any of the Obligations (as hereinafter defined)) shall have occurred and
be continuing, the reasonable expenses of retaking, holding, preparing
for sale or lease, selling or otherwise disposing or realizing on the
Collateral, or of any exercise by the Pledgee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 12 of this
Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the type described above, whether outstanding on
the date of this Agreement or extended from time to time after the date of this
Agreement.
2. DEFINITION OF STOCK, NOTES, LIMITED LIABILITY COMPANY
INTERESTS, PARTNERSHIP INTERESTS, SECURITIES, ETC. As used herein: (i) the term
"Stock" shall mean (x) with respect to corporations incorporated under the laws
of the United States or any State or territory thereof (each a "Domestic
Corporation"), all of the issued and outstanding shares of capital stock at any
time owned by any Pledgor of any Domestic Corporation and (y) with respect to
corporations that are not Domestic
308
EXHIBIT I
Page 4
Corporations (each a "Foreign Corporation"), all of the issued and outstanding
shares of capital stock at any time owned by any Pledgor of any Foreign
Corporation, provided that, (A) except as provided in the last sentence of this
Section 2, to the extent capital stock entitled to vote for directors of any
Exempted Foreign Corporation (herein called "Voting Stock") is pledged hereunder
which represents more than 65% of the total combined voting power of all classes
of Voting Stock of the respective any Exempted Foreign Corporation (with all
Voting Stock of the respective Foreign Corporation in excess of said 65% limit
being herein called "Excess Foreign Corporation Voting Stock"), such Excess
Foreign Corporation Voting Stock shall secure Obligations of the respective
Pledgor only as a guarantor of Obligations of the German Borrowers, and shall
not secure any direct obligations of Alliance Gaming Corporation as a Borrower
(or guarantees of such Obligations by the respective Pledgor) and (B) the
Pledgor shall be required to pledge hereunder 100% of the issued and outstanding
shares of all capital stock which is not Voting Stock (herein called "Non-Voting
Stock") at any time owned by the Pledgor of any Foreign Corporation, which
Non-Voting Stock shall not be subject to the limitations described in preceding
clause (A); (ii) the term "Notes" shall mean all promissory notes from time to
time issued to, or held by, each Pledgor; (iii) the term "Limited Liability
Company Interest" shall mean the entire limited liability company interest at
any time owned by each Pledgor in any limited liability company; (iv) the term
"Partnership Interest" shall mean the entire partnership interests (whether
general and/or limited partnership interests) at any time owned by each Pledgor
in any Person (it being understood that the entire limited partnership interest
of Alliance Automaten GmbH & Co. KG shall be pledged by Alliance Holding Company
pursuant to this clause (iv)); (v) the term "Securities" shall mean all of the
Stock, Notes, Limited Liability Company Interests and Partnership Interests; and
(vi) the term "Exempted Foreign Corporation" shall mean any Foreign Corporation
that is treated as a corporation or an association taxable as a corporation for
U.S. Federal income tax purposes. Each Pledgor represents and warrants that on
the date hereof (i) the Stock held by such Pledgor consists of the number and
type of shares of the stock of the corporations as described in Annex A hereto;
(ii) such Stock constitutes that percentage of the issued and outstanding
capital stock of the issuing corporation as is set forth in Annex A hereto;
(iii) the Notes held by such Pledgor consist of the promissory notes described
in Annex B hereto; (iv) the Limited Liability Interests held by such Pledgor
consists of the number and type of interest of the Persons as described in Annex
C hereto; (v) such Limited Liability Company Interests constitute that
percentage of the issued and outstanding equity interests of the issuing Person
as set forth in Annex C thereto; (vi) the Partnership Interests held by such
Pledgor constitutes that percentage of the entire Partnership Interest of the
respective Pledged Partnership as is set forth in Annex D hereto for such
Pledgor; and (vii) on the date hereof, such Pledgor owns no other Securities. In
the circumstances and to the extent provided in Section 8.12 of the Credit
Agreement, the limitation set forth in part (A) of the proviso to clause (i)(y)
of this Section 2 and in Section 3.2 hereof shall
309
EXHIBIT I
Page 5
no longer be applicable and such Pledgor shall duly pledge and deliver to the
Pledgee such of the Securities not theretofore required to be pledged hereunder.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. (a) To secure all Obligations (subject to part (A)
of the proviso to clause (i)(y) of Section 2(a) of the case of Voting Stock of
Foreign Corporations pledged hereunder) of such Pledgor and for the purposes set
forth in Section 1 hereof, each Pledgor hereby: (i) grants to the Pledgee a
security interest in all of the Collateral (as defined in Section 3.4 hereof)
owned by such Pledgor; (ii) pledges and deposits as security with the Pledgee
the Securities owned by such Pledgor on the date hereof, and delivers to the
Pledgee certificates or instruments therefor, duly endorsed in blank in the case
of Notes and accompanied by undated stock powers duly executed in blank by such
Pledgor in the case of Stock, or such other instruments of transfer as are
reasonably acceptable to the Pledgee; (iii) assigns, transfers, hypothecates,
mortgages, charges and sets over to the Pledgee all of such Pledgor's right,
title and interest in and to such Securities (and in and to all certificates or
instruments evidencing such Securities), to be held by the Pledgee, upon the
terms and conditions set forth in this Agreement; and (iv) transfers and assigns
to the Pledgee all of such Pledgor's Limited Liability Company Interests and all
of such Pledgor's right, title and interest in each limited liability company to
which such interests relate, whether now existing or hereafter acquired,
including, without limitation:
(A) all the capital thereof and its interest in all profits,
losses, Limited Liability Company Assets (as defined below) and other
distributions to which such Pledgor shall at any time be entitled in
respect of such Limited Liability Company Interests;
(B) all other payments due or to become due to such Pledgor in
respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under any
limited liability company agreement or operating agreement, or at law or
otherwise in respect of such Limited Liability Company Interests;
(D) all present and future claims, if any, of any of such Pledgor
against any such limited liability company for moneys loaned or
advanced, for services rendered or otherwise;
310
EXHIBIT I
Page 6
(E) all of such Pledgor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
any of such Pledgor relating to such Limited Liability Company
Interests, including any power to terminate, cancel or modify any
limited liability company agreement or operating agreement, to execute
any instruments and to take any and all other action on behalf of and in
the name of any of such Pledgor in respect of such Limited Liability
Company Interest and any such limited liability company, to make
determinations, to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of the
foregoing or for any Limited Liability Company Asset, to enforce or
execute any checks, or other instruments or orders, to file any claims
and to take any action in connection with any of the foregoing;
(F) all other property hereafter delivered in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time
to time received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof; and
(G) to the extent not otherwise included, all proceeds of any or
all of the foregoing;
and (vi) transfers and assigns to the Pledgee such Pledgor's Partnership
Interests (and delivers any certificates or instruments evidencing such
partnership interests, duly endorsed in blank) and all of such Pledgor's right,
title and interest in each Pledged Partnership including, without limitation:
(A) all of the capital thereof and its interest in all profits,
losses, Partnership Assets (as defined below) and other distributions to
which such Pledgor shall at any time be entitled in respect of any such
Collateral;
(B) all other payments due or to become due to such Pledgor in
respect of any such Collateral, whether under any partnership agreement
or otherwise, whether as contractual obligations, damages, insurance
proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under any
partnership or other agreement or at law or otherwise in respect of any
such Collateral;
311
EXHIBIT I
Page 7
(D) all present and future claims, if any, of such Pledgor
against any Pledged Partnership for moneys loaned or advanced, for
services rendered or otherwise;
(E) all of such Pledgor's rights under any partnership agreement
or at law to exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to any Partnership
Interest, including any power, if any, to terminate, cancel or modify
any general or limited partnership agreement, to execute any instruments
and to take any and all other action on behalf of and in the name of
such Pledgor in respect of such Partnership Interest and any Pledged
Partnership, to make determinations, to exercise any election
(including, but not limited to, election of remedies) or option or to
give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce,
collect, or receipt for any of the foregoing or for any Partnership
Asset, to enforce or execute any checks, or other instruments or orders,
to file any claims and to take any action in connection with any of the
foregoing;
(F) all other property hereafter delivered in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time
to time received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof; and
(G) to the extent not otherwise included, all proceeds of any or
all of the foregoing.
(b) As used herein, the term "Limited Liability Company Assets"
shall mean all assets, whether tangible or intangible and whether real, personal
or mixed (including, without limitation, all limited liability company capital
and interests in other limited liability companies), at any time owned or
represented by any Limited Liability Company Interest.
(c) As used herein, the term "Partnership Assets" shall mean all
assets, whether tangible or intangible and whether real, personal or mixed
(including, without limitation, all partnership capital and interests in other
partnerships), at any time owned by any Pledged Partnership or represented by
any Partnership Interest.
3.2. Subsequently Acquired Securities. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, such Pledgor will forthwith
pledge and deposit such Securities (or certificates or instruments representing
such Securities) as security with the Pledgee and
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EXHIBIT I
Page 8
deliver to the Pledgee certificates therefor or instruments thereof, duly
endorsed in blank in the case of Notes and accompanied by undated stock powers
duly executed in blank in the case of Stock, Limited Liability Company Interests
or Partnership Interests or such other instruments of transfer as are reasonably
acceptable to the Pledgee, and will promptly thereafter deliver to the Pledgee a
certificate executed by any Authorized Officer of such Pledgor describing such
Securities and certifying that the same have been duly pledged with the Pledgee
hereunder. Subject to the last sentence of Section 2 hereof, any pledge of
Voting Stock of any Foreign Corporation shall be subject to the provisions of
part (A) of the proviso to clause (i)(y) of Section 2 hereof.
3.3. Uncertificated Securities. If any Securities (whether now
owned or hereafter acquired) are uncertificated securities, the respective
Pledgor shall promptly notify the Pledgee thereof, and shall promptly take all
actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York UCC, if applicable). Each Pledgor further agrees to take such actions
as the Pledgee deems reasonably necessary or desirable to effect the foregoing
and to permit the Pledgee to exercise any of its rights and remedies hereunder,
and agrees to provide an opinion of counsel reasonably satisfactory to the
Pledgee with respect to any such pledge of uncertificated Securities promptly
upon request of the Pledgee.
3.4. Definition of Pledged Stock, Pledged Notes, Pledged Limited
Liability Company Interests, Pledged Partnership Interests, Pledged Securities
and Collateral. All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock," all Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes," all Limited Liability Company Interests at any time pledged or required
to be pledged hereunder are hereinafter called the "Pledged Limited Liability
Company Interests," all Partnership Interests at any time pledged or required to
be pledged hereunder are hereinafter called the "Pledged Partnership Interests,"
all of the Pledged Stock, Pledged Notes, Pledged Limited Liability Interest and
Pledged Partnership Interest together are hereinafter called the "Pledged
Securities," which together with all proceeds thereof, including any securities
and moneys received and at the time held by the Pledgee hereunder are
hereinafter called the "Collateral".
4. CERTAIN OVERRIDE PROVISIONS.
4.1. Existing Senior Secured Notes; Delivery of Security
Requirements. Notwithstanding anything to the contrary contained in this
Agreement, to the extent at any time while this Agreement is in effect any
Existing Senior Secured Notes remain outstanding, and to the extent that any
Securities or other Collateral is pledged to secure the Existing Senior
313
EXHIBIT I
Page 9
Secured Notes in accordance with the terms of the Existing Senior Secured Notes
Documents, then the pledge of such Collateral pursuant to this Agreement shall
be subject to the prior security interests created pursuant to the Existing
Senior Secured Notes Collateral Documents in such Collateral (although the
existence of such prior security interests shall in no way limit or preclude the
Pledgee or Secured Creditors from taking enforcement actions with respect to the
Collateral). Furthermore, at any time when any Existing Senior Secured Notes
remain outstanding, to the extent that any Collateral has been physically
delivered to the trustee pursuant to the Existing Senior Secured Notes Indenture
(the "Trustee") or any other agent, sub-agent, collateral agent, custodian or
bailee for the benefit of the holders of the Existing Senior Secured Notes or as
directed by the Trustee (with each such person or entity, together with the
Trustee, being herein called a "Bailee"), then (and for so long as such
Collateral is so held), such Collateral shall not be required to be delivered to
the Pledgee pursuant to this Agreement, in each case (subject to the provisions
of Section 13.23(c) of the Credit Agreement) so long as the respective such
Bailee is a party to a Bailee Agreement, in the form required by the Credit
Agreement.
4.2. Pledged Securities Requisite Gaming Approvals; Etc.
Notwithstanding anything to the contrary contained above or elsewhere in this
Agreement, unless and until the Pledged Securities Requisite Gaming Approvals
are obtained, the Notes, stock or other equity interests of the entities listed
in Section 13.18(c) of the Credit Agreement shall not be pledged hereunder.
Furthermore, equity interests shall not be pledged hereunder to the extent the
pledge is not permitted as contemplated by Section 13(b) of the Credit
Agreement, and items which would otherwise constitute Collateral hereunder shall
not be pledged to the extent specifically provided in Sections 13.26 and 13.27
of the Credit Agreement. As and when, and to the extent, pledges of assets
described above are permitted in accordance with Applicable Gaming Regulations
and the provisions of Sections 13.18 and 13.26, as applicable, of the Credit
Agreement, all such assets which would otherwise constitute Collateral hereunder
shall be pledged, and delivered for pledge, hereunder.
5. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. (a) The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Securities, which may be held (in
the discretion of the Pledgee) in the name of such Pledgor, endorsed or assigned
in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or
a sub-agent appointed by the Pledgee. The Pledgee agrees to promptly notify the
relevant Pledgor after the appointment of any sub-agent; provided, however, that
the failure to give such notice shall not affect the validity of such
appointment.
(b) In the case of any Pledgor's grant to the Pledgee of Securities of
any corporation, partnership or limited liability company incorporated or
organized in the state
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EXHIBIT I
Page 10
of Nevada, such Securities shall be held by a sub-agent of the Pledgee residing
in the state of Nevada.
6. VOTING, ETC., WHILE NO SPECIFIED DEFAULT. Unless and until a
Default under Section 10.01 or 10.05 of the Credit Agreement, any other payment
default in respect of the Obligations, or any Event of Default under the Credit
Agreement (with each such Default or Event of Default being herein called a
"Specified Default") shall have occurred and be continuing, each Pledgor shall
be entitled to exercise any and all voting and other consensual rights
pertaining to the Pledged Securities and to give all consents, waivers or
ratifications in respect thereof; provided, that no vote shall be cast or any
consent, waiver or ratification given or any action taken which would violate or
be inconsistent with any of the terms of this Agreement, any other Credit
Document or any Interest Rate Protection Agreement or Other Hedging Agreement
(collectively, the "Secured Debt Agreements"), or which would have the effect of
impairing the rights, priorities or remedies of the Pledgee or any other Secured
Creditor under this Agreement or any other Secured Debt Agreement. All such
rights of such Pledgor to vote and to give consents, waivers and ratifications
shall cease in case a Specified Default shall occur and be continuing, and
Section 8 hereof shall become applicable.
7. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless a specified Default
shall have occurred and be continuing, all cash dividends payable in respect of
the Pledged Stock, Pledged Limited Liability Company Interests and Pledged
Partnership Interests and all payments in respect of the Pledged Notes shall be
paid to the respective Pledgor. The Pledgee shall also be entitled to receive
directly, and to retain as part of the Collateral:
(i) all other or additional stock or other securities or property
(other than cash) paid or distributed by way of dividend or otherwise in
respect of the Pledged Stock, Pledged Limited Liability Company
Interests and Pledged Partnership
Interests;
(ii) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged Stock,
Pledged Limited Liability Company Interests or Pledged Partnership
Interests by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement; and
(iii) all other or additional stock or other securities or property
(including cash) which may be paid in respect of the Collateral by
reason of any consolidation, merger, exchange of stock, conveyance of
assets, liquidation or similar corporate reorganization.
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EXHIBIT I
Page 11
Nothing contained in this Section 7 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by the Pledgor contrary to the provisions of this Section 7
and Section 8 below shall be received in trust for the benefit of the Pledgee,
shall be segregated from other property or funds of the Pledgor and shall be
forthwith paid over to the Pledgee as Collateral in the same form as so received
(with any necessary endorsement).
8. REMEDIES IN CASE OF SPECIFIED DEFAULTS. In case a Specified
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other Secured Debt Agreement or by law) for the protection
and enforcement of its rights in respect of the Collateral, and the Pledgee
shall, subject to compliance with the Applicable Gaming Regulations, be entitled
to exercise all the rights and remedies of a secured party under the Uniform
Commercial Code and also shall, subject to compliance with the Applicable Gaming
Regulations, be entitled, without limitation, to exercise the following rights,
which each Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
payable to such Pledgor under Section 7 hereof;
(ii) to transfer all or any part of the Pledged Securities into
the Pledgee's name or the name of its nominee or nominees (the Pledgee
agrees to promptly notify the relevant Pledgor after such transfer;
provided, however, that the failure to give such notice shall not affect
the validity of such transfer);
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other action to collect upon any
Pledged Note (including, without limitation, to make any demand for
payment thereon);
(iv) to vote all or any part of the Pledged Stock, Pledged Limited
Liability Company Interests or Pledged Partnership Interests (whether or
not transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise act
with respect thereto as though it were the outright owner thereof (each
Pledgor hereby irrevocably constituting and appointing the Pledgee the
proxy and attorney-in-fact of such Pledgor, with full power of
substitution to do so); and
(v) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of
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EXHIBIT I
Page 12
intention to sell or of the time or place of sale or adjournment thereof
or to redeem or otherwise (all of which are hereby waived by each
Pledgor), for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such
price or prices and on such terms as the Pledgee in its absolute
discretion may determine; provided, that at least 10 Business Days'
notice of the time and place of any such sale shall be given to such
Pledgor. Each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if
any, of marshalling the Collateral and any other security for the
Obligations or otherwise. At any such sale, unless prohibited by
applicable law, the Pledgee on behalf of the Secured Creditors may bid
for and purchase all or any part of the Collateral so sold free from any
such right or equity of redemption. Neither the Pledgee nor any Secured
Creditor shall be liable for failure to collect or realize upon any or
all of the Collateral or for any delay in so doing nor shall any of them
be under any obligation to take any action whatsoever with regard
thereto.
9. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or any other Secured Debt Agreement
or now or hereafter existing at law or in equity or by statute shall be
cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. The Secured Creditors
agree that this Agreement may be enforced only by the action of the
Administrative Agent or the Pledgee, in each case acting upon the instructions
of the Required Lenders (or, after the date on which all Credit Document
Obligations have been paid in full, the holders of at least a majority of the
outstanding Other Obligations) and that no other Secured Creditor shall have any
right individually to seek to enforce or to enforce this Agreement or to realize
upon the security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent or the Pledgee
or the holders of at least a majority of the outstanding Other Obligations, as
the case may be, for the benefit of the Secured Creditors upon the terms of this
Agreement.
10. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this
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EXHIBIT I
Page 13
Agreement, together with all other moneys received by the Pledgee hereunder,
shall be applied in the manner provided in the U.S. Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
11. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by
the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
12. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
indemnify and hold harmless the Pledgee in such capacity and each other Secured
Creditor from and against any and all claims, demands, losses, judgments and
liabilities of whatsoever kind or nature, and (ii) to reimburse the Pledgee and
each other Secured Creditor for all reasonable costs and expenses, including
reasonable attorneys' fees, in each case to the extent growing out of or
resulting from the exercise by the Pledgee of any right or remedy granted to it
hereunder or under any other Secured Debt Agreement except, with respect to
clauses (i) and (ii) above, for those arising from the Pledgee's or such other
Secured Creditor's gross negligence or willful misconduct. In no event shall the
Pledgee be liable, in the absence of gross negligence or willful misconduct on
its part, for any matter or thing in connection with this Agreement other than
to account for moneys actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of the Pledgors under this
Section 12 are unenforceable for any reason, each Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
13. FURTHER ASSURANCES. (a) Each Pledgor agrees that it will join
with the Pledgee in executing and, at such Pledgor's own expense, file and
refile under the applicable UCC or such other law such financing statements,
continuation statements and other documents in such offices as the Pledgee may
reasonably deem necessary or appropriate and wherever required or permitted by
law in order to perfect and preserve the Pledgee's security interest in the
Collateral and hereby authorizes the Pledgee to file financing statements and
amendments thereto relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably deem
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EXHIBIT I
Page 14
necessary or advisable to carry into effect the purposes of this Agreement or to
further assure and confirm unto the Pledgee its rights, powers and remedies
hereunder.
(b) Each Pledgor agrees to assist the Pledgee in obtaining all
approvals of any Gaming Authority or other governmental authority that are
required by law in connection with any action or transaction contemplated by
this Agreement, including, without limitation, the Pledged Stock Requisite
Gaming Approvals, and, at the Pledgee's request after and during the continuance
of an Event of Default, to prepare, sign and file with the appropriate Gaming
Authority the respective Pledgor's portion of any application or applications
for consent to the transfer of the equity interest of such Pledgor necessary or
appropriate under the Applicable Gaming Regulations for approval by the
respective Gaming Authority of any sale or transfer of such equity interest,
pursuant to the exercise of any Secured Creditor's remedies hereunder and under
the Documents.
14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. The Pledgee shall act hereunder on the
terms and conditions set forth herein and in Section 12 of the Credit Agreement.
15. TRANSFER BY PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except in accordance
with the terms of this Agreement and as permitted by the terms of the Credit
Agreement).
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
PLEDGOR. Each Pledgor represents, warrants and covenants that (i) it is the
legal, record and beneficial owner of, and has good title to, all Pledged
Securities, subject to no pledge, lien, mortgage, hypothecation, security
interest, charge, option or other encumbrance whatsoever, except the liens and
security interests created by this Agreement and liens permitted under Section
9.01 of the Credit Agreement (including those referenced in Section 4.10
hereof); (ii) it has requisite power, authority and legal right to pledge all
the Pledged Securities; (iii) this Agreement has been duly authorized, executed
and delivered by such Pledgor and constitutes a legal, valid and binding
obligation of such Pledgor enforceable in accordance with its terms, except to
the extent that the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law); (iv) no consent of any other
party (including, without limitation, any stockholder or creditor of such
Pledgor or any of its Subsidiaries)
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EXHIBIT I
Page 15
and, except for any approval of the Gaming Authorities that may be required as
contemplated by Section 13.18(b) of the Credit Agreement or in connection with
the exercise of any remedies hereunder, no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing
(except any filings required under the Uniform Commercial Code, which filings
have been made) or declaration with, any governmental authority is required to
be obtained by such Pledgor in connection with the execution, delivery or
performance of this Agreement, or in connection with the exercise of its rights
and remedies pursuant to this Agreement, except those which have been obtained
or made or as may be required by laws affecting the offer and sale of securities
generally in connection with the exercise by the Pledgee of certain of its
remedies hereunder; (v) the execution, delivery and performance of this
Agreement by such Pledgor does not violate any provision of any applicable law
or regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of the certificate
of incorporation or by-laws (or analogous organizational documents) of such
Pledgor or of any securities issued by such Pledgor or any of its Subsidiaries,
or of any mortgage, indenture, lease, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument to which such
Pledgor or any of its Subsidiaries is a party or which purports to be binding
upon such Pledgor or any of its Subsidiaries or upon any of their respective
assets and will not result in the creation or imposition of any lien or
encumbrance on any of the assets of such Pledgor or any of its Subsidiaries
except as contemplated by this Agreement; (vi) all the shares of Stock and all
Pledged Limited Liability Company Interests have been duly and validly issued,
are fully paid and nonassessable and subject to no options to purchase or
similar rights; (vii) to the best knowledge of the respective Pledgor, each of
the Pledged Notes, when executed by the obligor thereof, will be the legal,
valid and binding obligation of such obligor, enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by equitable principles
(regardless of whether enforcement is sought in equity or at law); and (viii)
subject to Section 4.2 hereof, the pledge, assignment and delivery to the
Pledgee of the Pledged Securities creates a valid and perfected first security
interest in such Securities, subject to no prior lien or encumbrance or to any
agreement purporting to grant to any third party a lien or encumbrance on the
property or assets of such Pledgor which would include the Securities. Each
Pledgor covenants and agrees that it will defend the Pledgee's right, title and
security interest in and to the Securities and the proceeds thereof against the
claims and demands of all persons whomsoever; and such Pledgor covenants and
agrees that it will have like title to and right to pledge any other property at
any time hereafter pledged to the Pledgee as Collateral hereunder and will
likewise defend the right thereto and security interest therein of the Pledgee
and the other Secured Creditors.
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EXHIBIT I
Page 16
17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument or this Agreement; (iii) any furnishing of any
additional security to the Pledgee or its assignee or any acceptance thereof or
any release of any security by the Pledgee or its assignee; (iv) any limitation
on any party's liability or obligations under any such instrument or agreement
or any invalidity or unenforceability, in whole or in part, of any such
instrument or agreement or any term thereof; or (v) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to such Pledgor or any Subsidiary of such Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
any court, in any such proceeding, whether or not such Pledgor shall have notice
or knowledge of any of the foregoing.
18. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and any Pledgor shall have received from the Pledgee
a written request or requests that such Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock or Pledged
Limited Liability Company Interests, such Pledgor as soon as practicable and at
its expense will, subject to compliance with the Applicable Gaming Regulations,
use its reasonable efforts to cause such registration to be effected (and be
kept effective) and will use its reasonable efforts to cause such qualification
and compliance to be effected (and be kept effective) as may be so requested and
as would permit or facilitate the sale and distribution of such Pledged Stock or
Pledged Limited Liability Company Interests, including, without limitation,
registration under the Securities Act of 1933 as then in effect (or any similar
statute then in effect), appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with any other government
requirements; provided, that the Pledgee shall furnish to such Pledgor such
information regarding the Pledgee as such Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Such Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee, each other Secured Creditor and all others participating in the
distribution of the Pledged Stock or Pledged Limited Liability Company Interests
against
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EXHIBIT I
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all claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to such Pledgor by the Pledgee or such other
Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise
its right to sell all or any part of the Pledged Securities pursuant to Section
7 hereof, such Pledged Securities or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Pledgee may, in its sole and absolute discretion,
other than as restricted by Applicable Gaming Regulations, sell such Pledged
Securities or part thereof by private sale in such manner and under such
circumstances as the Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration; provided, that at least
10 Business Days' notice of the time and place of any such sale shall be given
to such Pledgor. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion, other than as restricted
by Applicable Gaming Regulations: (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Securities or part thereof shall have been filed under such
Securities Act; (ii) may approach and negotiate with a single possible purchaser
to effect such sale; and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Pledged
Securities or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion,
may in good xxxxx xxxx reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
19. TERMINATION, RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 12 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will promptly execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used
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EXHIBIT I
Page 18
in this Agreement, "Termination Date" shall mean the date upon which the Total
Commitments and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note (as defined in the Credit Agreement) or
Letter of Credit is outstanding and all other Obligations then due and payable
have been indefeasibly paid in full.
(b) In the event that any part of the Collateral is sold (but not
to the U.S. Borrower or a Subsidiary thereof) in connection with a sale
permitted by Section 9.02 of the Credit Agreement or is otherwise released at
the direction of the Required Lenders (or all the Lenders if required by Section
13.12 of the Credit Agreement), the Pledgee, at the request and expense of such
Pledgor will duly assign, transfer and deliver to such Pledgor (without recourse
and without any representation or warranty) such of the Collateral as is then
being (or has been) so sold or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement.
(c) At any time that a Pledgor desires that Collateral be
released as provided in the foregoing Section 19(a) or (b), it shall deliver to
the Pledgee a certificate signed by an Authorized Officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
Section 19(a) or (b), and the Pledgee shall be entitled (but not required) to
conclusively rely thereof.
20. NOTICES, ETC. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed as follows:
(a) if to any Pledgor, at:
0000 Xxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx
Attention: Xxxxx Xxxxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) if to the Pledgee, at:
Credit Suisse First Xxxxxx
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx Xxxx
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EXHIBIT I
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Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(c) if to any Lender (other than the Pledgee), at such address as
such Lender shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Pledgor and the Pledgee; or at
such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Pledgor directly affected thereby (it
being understood that additional Pledgors may be added as parties hereto from
time to time in accordance with Section 23, and that no consent of any other
Pledgor or of the Required Lenders shall be required in connection therewith)
and the Pledgee (with the written consent of either (x) the Required Lenders (or
all the Lenders if required by Section 13.12 of the Credit Agreement) at all
times prior to the time on which all Credit Document Obligations have been paid
in full or (y) the holders of at least a majority of the outstanding Other
Obligations at all times after the time on which all Credit Document Obligations
have been paid in full; provided, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class (as defined below)
of Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors (as defined below)
of such Class. For the purpose of this Agreement, the term "Class" shall mean
each class of Secured Creditors, i.e., whether (i) the Lender Creditors as
holders of the Credit Document Obligations or (ii) the Other Creditors as
holders of the Other Obligations. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (i) with respect to the
Credit Document Obligations, the Required Lenders and (ii) with respect to the
Other Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Interest Rate Protection Agreements or
Other Hedging Agreements.
22. RELEASE OF GUARANTORS. In the event any Pledgor which is a
Subsidiary of the U.S. Borrower party to the U.S. Subsidiaries Guaranty is
released from its Guaranty under the U.S. Subsidiaries Guaranty, such Pledgor
shall be released from this Agreement and this Agreement shall, as to such
Pledgor only, have no further force or effect.
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EXHIBIT I
Page 20
23. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of each Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS). The
headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
24. ADDITIONAL PLEDGORS. It is understood and agreed that any
Domestic Subsidiary of the U.S. Borrower that is required to execute a
counterpart of this Agreement after the date hereof pursuant to the Credit
Agreement shall automatically become a Pledgor hereunder by executing a
counterpart hereof and delivering the same to the Pledgee.
25. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all representations, warranties, covenants and
agreements on the part of the Pledgors contained herein and in the other Secured
Debt Agreements and otherwise in writing in connection herewith or therewith.
26. LIMITATION BY LAW; SEVERABILITY. All rights, remedies and
powers in this Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of the Applicable Gaming
Regulations, and all the provisions of this Agreement are intended to be subject
to all applicable mandatory provisions of the Applicable Gaming Regulations
which may be controlling and to be limited to the extent necessary so that they
will not render this Agreement invalid or unenforceable, in whole or in part.
27. GAMING REGULATORY MATTERS. The Pledgee, on behalf of the
Secured Creditors, acknowledges and agrees that:
(a) In the event that a Secured Creditor exercises one or more of
the remedies set forth in this Agreement or any other Secured Debt Agreement
with respect to any Pledged Stock that is subject to the Pledged Stock Requisite
Gaming Approvals, such exercise of remedies would be deemed a separate transfer
of such Pledged Stock and would require the separate and prior approval of the
applicable Gaming Authority pursuant to Applicable Gaming Regulations.
(b) The approval by the applicable Gaming Authority of this
Agreement shall not be, and shall not be construed as, the approval, either
express or implied, for the
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Page 21
Secured Creditors to take any actions or steps provided for in this Agreement
for which approval by the Gaming Authorities is required, without first
obtaining such prior and separate approval of such Gaming Authority, to the
extent required by the Applicable Gaming Regulations.
(c) The Pledgee and each sub-agent of the Pledgee shall comply
with the conditions, if any, imposed by any Gaming Authority in connection with
the approvals of the security interests granted hereunder by Pledgors,
including, without limitation, any conditions requiring the Pledgee or sub-agent
of the Pledgee to maintain the certificates representing certain Pledged
Securities at a location within the applicable jurisdiction designated to the
applicable Gaming Authority and to permit representatives of the Gaming
Authorities to inspect such Pledged Securities and certificates thereof. Neither
the Pledgee nor any sub-agent of the Pledgee shall surrender possession of any
Pledged Securities to any Person other than the respective Pledgor without the
prior approval of the applicable Gaming Authority or as otherwise permitted by
Applicable Gaming Regulations.
(d) In connection with the foregoing provisions of this Section
27, it is acknowledged and agreed that neither the Pledgee, nor any Secured
Creditor, shall have any liability to any Pledgee for any non-compliance or
failure to meet obligations as otherwise provided above in this Section 27,
except to the extent of the gross negligence or willful misconduct of the
Pledgee or the respective Secured Creditor. Furthermore, the Pledgee and Secured
Creditors shall be entitled to conclusively rely on the advise of counsel
selected by it or them in connection with the foregoing matters.
326
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
ALLIANCE GAMING CORPORATION,
as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Senior Vice President, CFO
and Treasurer
ALLIANCE HOLDING COMPANY,
as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
UNITED COIN MACHINE CO.,
as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
PLANTATION INVESTMENTS, INC.,
as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
APT GAMES, INC.,
as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
327
FOREIGN GAMING VENTURES, INC.,
as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
LOUISIANA VENTURES, INC.,
as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
UNITED GAMING RAINBOW,
as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
NATIVE AMERICAN INVESTMENT,
INC., as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
BALLY GAMING INTERNATIONAL,
INC., as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
BALLY GAMING, INC., as a Pledgor
By /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------
Title: Treasurer
328
Accepted and Agreed to:
CREDIT SUISSE FIRST BOSTON,
as Pledgee
By /s/ Xxxx X. Xxxxxxx
------------------------------
Title: Assistant Vice President
By /s/ Xxxxxx X. Xxxx
-------------------------------
Title: Associate
329
EXHIBIT J
330
EXHIBIT J
[CONFORMED AS EXECUTED]
U.S. SECURITY AGREEMENT
among
ALLIANCE GAMING CORPORATION,
CERTAIN OF ITS SUBSIDIARIES
and
CREDIT SUISSE FIRST BOSTON,
as Collateral Agent
Dated as of August 8, 1997
331
TABLE OF CONTENTS
Page
----
ARTICLE I SECURITY INTERESTS......................................... 2
1.1. Grant of Security Interests.................................... 2
1.2. Power of Attorney.............................................. 3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND
COVENANTS.................................................. 3
2.1. Necessary Filings.............................................. 3
2.2. No Liens....................................................... 4
2.3. Other Financing Statements..................................... 4
2.4. Chief Executive Office; Records................................ 4
2.5. Location of Inventory and Equipment............................ 5
2.6. Recourse....................................................... 5
2.7. Trade Names; Change of Name.................................... 5
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS............................... 6
3.1. Additional Representations and Warranties...................... 6
3.2. Maintenance of Records......................................... 6
3.3. Direction to Account Debtors; Contracting Parties; etc......... 7
3.4. Modification of Terms; etc..................................... 7
3.5. Collection..................................................... 8
3.6. Instruments.................................................... 8
3.7. Assignors Remain Liable Under Receivables...................... 8
3.8. Assignors Remain Liable Under Contracts........................ 9
3.9. Further Actions................................................ 9
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS................... 9
4.1. Additional Representations and Warranties...................... 9
4.2. Infringements.................................................. 10
4.3. Preservation of Marks.......................................... 10
4.4. Maintenance of Registration.................................... 10
4.5. Future Registered Marks........................................ 11
4.6. Remedies....................................................... 11
4.7. Override Provisions Relating to Bally Trademark License
Agreement...................................................... 11
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS
AND TRADE SECRETS.......................................... 12
5.1. Additional Representations and Warranties...................... 12
(i)
332
Page
----
5.2. Infringements.................................................. 13
5.3. Maintenance of Patents......................................... 13
5.4. Prosecution of Patent Application.............................. 13
5.5. Other Patents and Copyrights................................... 13
5.6. Remedies....................................................... 14
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL....................... 14
6.1. Protection of Collateral Agent's Security...................... 14
6.2. Further Actions................................................ 15
6.3. Financing Statements........................................... 15
6.4. Assistance with Gaming Approvals............................... 15
ARTICLE VII REMEDIES UPON OCCURRENCE OF SPECIFIED DEFAULT............. 16
7.1. Remedies; Obtaining the Collateral Upon Default................ 16
7.2. Remedies; Disposition of the Collateral........................ 17
7.3. Waiver of Claims............................................... 18
7.4. Application of Proceeds........................................ 19
7.5. Remedies Cumulative............................................ 22
7.6. Discontinuance of Proceedings.................................. 22
ARTICLE VIII INDEMNITY.................................................. 23
8.1. Indemnity...................................................... 23
8.2. Indemnity Obligations Secured by Collateral; Survival.......... 24
ARTICLE IX DEFINITIONS................................................ 24
ARTICLE X MISCELLANEOUS.............................................. 30
10.1. Notices....................................................... 30
10.2. Waiver; Amendment............................................. 31
10.3. Obligations Absolute.......................................... 32
10.4. Successors and Assigns........................................ 32
10.5. Headings Descriptive.......................................... 32
10.6. Governing Law................................................. 32
10.7. Assignor's Duties............................................. 32
10.8. Termination; Release.......................................... 32
10.9. Counterparts.................................................. 33
10.10. Limitation by Law; Severability............................... 33
10.11. The Collateral Agent.......................................... 34
10.12. Additional Assignors.......................................... 34
ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
(ii)
333
ANNEX D List of Marks
ANNEX E List of Patents and Applications
ANNEX F List ofCopyrights and Applications
ANNEX G Assignment of Security Interest in United States
Trademarks and Patents
ANNEX H Assignment of Security Interest in United States
Copyrights
(iii)
334
EXHIBIT J
U.S. SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of August 8, 1997, among each of the
undersigned (each an "Assignor", and together with any other entity that becomes
a party hereto pursuant to Section 10.12 hereof, the "Assignors") and Credit
Suisse First Boston, as Collateral Agent (the "Collateral Agent") for the
benefit of the Secured Creditors (as defined below). Except as otherwise defined
herein, capitalized terms used herein and defined in the Credit Agreement
referred to below shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, Alliance Gaming Corporation, Bally Xxxxx Vertriebs GmbH,
Bally Xxxxx Automaten GmbH (collectively, the "Borrowers" and each, a
"Borrower"), various lenders from time to time party thereto (the "Lenders"),
and Credit Suisse First Boston, as Administrative Agent (together with any
successor agent, the "Administrative Agent," and together with the Collateral
Agent and the Lenders, the "Lender Creditors"), have entered into a Credit
Agreement, dated as of August 8, 1997 (as amended, modified or supplemented from
time to time, the "Credit Agreement"), providing for the making of Loans to each
Borrower and the issuance of, and participation in, Letters of Credit for the
account of each Revolving Loan Borrower, all as contemplated therein;
WHEREAS, each Borrower may from time to time be party to (or
guaranty the obligations of one or more of its Subsidiaries under) one or more
(i) interest rate protection agreements, interest rate cap agreements, interest
rate collar agreements or other similar agreements or arrangements, (ii) foreign
exchange contracts, currency swap agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values
and/or (iii) other types of hedging agreements from time to time with an Other
Creditor (as hereinafter defined) (collectively, the "Interest Rate Protection
Agreements or Other Hedging Agreements"), with a Lender or an affiliate of a
Lender (each such Lender or affiliate, even if the respective Lender
subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender's or affiliate's successors and assigns, collectively,
the "Other Creditors," and together with the Lender Creditors, the "Secured
Creditors").
335
EXHIBIT J
Page 2
WHEREAS, pursuant to the Parent Guaranty, the Parent Guarantor has
guaranteed to the Secured Creditors the payment when due of all obligations and
liabilities of each Guaranteed Party under or with respect to (x) the Credit
Documents and (y) each Interest Rate Protection Agreement or Other Hedging
Agreement with one or more Other Creditors;
WHEREAS, pursuant to the U.S. Subsidiaries Guaranty, each U.S.
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all the Guaranteed Obligations as described
therein;
WHEREAS, it is a condition precedent to the extensions of credit
under the Credit Agreement that each Assignor shall have executed and delivered
to the Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans and the Issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements and Other Hedging
Agreements and, accordingly, each Assignor desires to execute this Agreement to
satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of the Obligations of such
Assignor, each Assignor does hereby assign and transfer unto the Collateral
Agent, and does hereby pledge and grant to the Collateral Agent for the benefit
of the Secured Creditors, a continuing security interest of first priority in,
all of the right, title and interest of such Assignor in, to and under all of
the following, whether now existing or hereafter from time to time acquired: (i)
each and every Receivable, (ii) all Contracts, together with all Contract Rights
arising thereunder, (iii) all Inventory, (iv) all Equipment, (v) all Marks,
together with the registrations and right to all renewals thereof, and the
goodwill of the
336
EXHIBIT J
Page 3
business of such Assignor symbolized by the Marks, (vi) all Patents, (vii) all
Copyrights, (viii) all computer programs of such Assignor and all intellectual
property rights therein and all Proprietary Information and Trade Secrets of
such Assignor, (ix) all other Goods, General Intangibles, Chattel Paper,
Documents and Instruments, (x) the Cash Collateral Account and all monies,
securities and instruments deposited or required to be deposited in such Cash
Collateral Account and (xi) all Proceeds and products of any and all of the
foregoing (all of the above, collectively, the "Collateral").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of a Specified
Default (as hereinafter defined) (in the name of such Assignor or otherwise) to
act, require, demand, receive, compound and give acquittance for any and all
monies and claims for monies due or to become due to such Assignor under or
arising out of the Collateral, to endorse any checks or other instruments or
orders in connection therewith and to file any claims or take any action or
institute any proceedings which the Collateral Agent may deem to be necessary or
advisable to protect the interests of the Secured Creditors, which appointment
as attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral have been (or within 10 days after the Initial Borrowing Date will
be) accomplished and the security interest granted to the Collateral Agent
pursuant to this Agreement in and to the Collateral constitutes a perfected
security interest therein prior to the rights of all other Persons therein and
subject to no other Liens (other than Permitted Liens) and is entitled to all
the rights, priorities and benefits afforded by the Uniform Commercial Code or
other relevant law as enacted in any relevant jurisdiction to perfected security
interests, in each case to the extent that the
337
EXHIBIT J
Page 4
Collateral consists of the type of property in which a security interest may be
perfected by filing a financial statement under the Uniform Commercial Code as
enacted in the relevant jurisdiction or in the United States Patent and
Trademark Office or United States Copyright Office.
2.2. No Liens. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of all
Collateral pledged by it hereunder free from any Lien, security interest,
encumbrance or other right, title or interest of any Person (other than
Permitted Liens), and such Assignor shall defend the Collateral against all
claims and demands of all Persons at any time claiming the same or any interest
therein (other than in connection with Permitted Liens) adverse to the
Collateral Agent.
2.3. Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than financing statements filed in respect of
Permitted Liens), and so long as the Termination Date has not occurred, such
Assignor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or in connection with
Permitted Liens.
2.4. Chief Executive Office; Records. As of the date hereof, the
chief executive office of such Assignor is located at the address indicated on
Annex A hereto for such Assignor. Such Assignor will not move its chief
executive office except to such new location as such Assignor may establish in
accordance with the last sentence of this Section 2.4. A complete set of books
of account and records of such Assignor relating to the Receivables and the
Contract Rights are, and will continue to be, kept at such chief executive
office, at one or more of the other record locations set forth on Annex A hereto
for such Assignor or at such new locations as such Assignor may establish in
accordance with the last sentence of this Section 2.4. All Receivables and
Contract Rights of such Assignor are, and will continue to be, maintained at,
and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above or such new
location established in accordance with the last sentence of this Section 2.4.
No Assignor shall establish new locations for such offices until (i) it shall
have given to the Collateral Agent not less than 15 days' prior written notice
of its intention to do so, clearly describing such new location and providing
such other information in connection therewith as the Collateral Agent may
reasonably request and (ii) with respect to such new location, it shall have
taken all action, reasonably satisfactory to the Collateral Agent, to maintain
338
EXHIBIT J
Page 5
the security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor. Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex B
hereto, or such new location as such Assignor may establish in accordance with
the next sentence of this Section 2.5. Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent not less than 15 days' prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Collateral Agent may reasonably request and (ii)
with respect to such new location, it shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect. Notwithstanding anything to the
contrary contained in this Section 2.5, it is understood and agreed that (i) the
Assignors may hold Inventory and Equipment at locations other than those shown
on Annex B hereto so long as the aggregate fair market value of all such
Inventory and Equipment does not exceed $1,000,000 at any time and (ii) any
Assignor may hold Inventory and Equipment at a location other than those
identified on Annex B hereto so long as an effective UCC-1 financing statement
(or equivalent thereof) has been filed with the Secretary of State of the State
wherein such Inventory or Equipment is located (and, if necessary to create a
perfected security interest in such Inventory or Equipment, with the county
clerk of the county in which such Inventory or Equipment is located). Each
Assignor agrees from time to time upon the request of the Collateral Agent to
provide an updated Annex B which shall list the location of all Inventory and
Equipment held by each Assignor on the date such updated Annex B is prepared by
each Assignor.
2.6. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
2.7. Trade Names; Change of Name. As of the date hereof, no Assignor
has or operates in any jurisdiction under, or in the preceding 12 months has had
or has operated in any jurisdiction under, any trade names, fictitious names or
other names except its legal name and such other trade or fictitious names as
are listed on Annex C hereto for such Assignor. No Assignor shall change its
legal name or assume or operate in any jurisdiction under any trade, fictitious
or other name except those names listed on Annex C hereto for such Assignor and
new names established in accordance with the last sentence
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EXHIBIT J
Page 6
of this Section 2.7. No Assignor shall assume or operate in any jurisdiction
under any new trade, fictitious or other name until (i) it shall have given to
the Collateral Agent not less than 15 days' prior written notice of its
intention so to do, clearly describing such new name and the jurisdictions in
which such new name shall be used and providing such other information in
connection therewith as the Collateral Agent may reasonably request and (ii)
with respect to such new name, it shall have taken all action reasonably
requested by the Collateral Agent, to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are what they purport to be and that all
papers and documents (if any) relating thereto (i) will, to the best knowledge
of the respective Assignor, represent the genuine, legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by the
respective account debtor arising out of the performance of labor or services or
the sale or lease and delivery of the merchandise listed therein, or both, (ii)
will be the only original writings evidencing and embodying such obligation of
the account debtor named therein (other than copies created for general
accounting purposes), (iii) will, to the best knowledge of the respective
Assignor, evidence true and valid obligations of the account debtor, enforceable
in accordance with their respective terms and (iv) will be in compliance and
will conform in all material respects with all applicable federal, state and
local laws and applicable laws of any relevant foreign jurisdiction, except
where the failure to so comply and confirm could not reasonably be expected to
have a material adverse effect on the validity or enforceability of any such
Receivables.
3.2. Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense, records of its Receivables and Contracts and such
Assignor will make the same available on such Assignor's premises to the
Collateral Agent for inspection, at such Assignor's own cost and expense, at any
and all reasonable times upon reasonable prior notice to such Assignor. Upon the
occurrence and during the continuance of an Event of Default and at the
reasonable request of the Collateral Agent, such Assignor shall, at its own cost
and expense, deliver all tangible evidence of its Receivables and Contract
Rights (including, without limitation, all documents evidencing the Receivables
and all Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of
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EXHIBIT J
Page 7
which evidence and books and records may be retained by such Assignor). If the
Collateral Agent so directs, upon the occurrence and during the continuance of
an Event of Default, such Assignor shall legend, in form and manner reasonably
satisfactory to the Collateral Agent, the Receivables and the Contracts, as well
as books, records and documents of such Assignor evidencing or pertaining to
such Receivables and Contracts with an appropriate reference to the fact that
such Receivables and Contracts have been assigned to the Collateral Agent and
that the Collateral Agent has a security interest therein.
3.3. Direction to Account Debtors; Contracting Parties; etc. Upon
the occurrence and during the continuance of a Default under Section 10.01 or
10.05 of the Credit Agreement, any other payment default in respect of the
Obligations, or any Event of Default under the Credit Agreement (with each such
Default or Event of Default being herein called a "Specified Default"), and if
the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause
all payments on account of the Receivables and Contracts to be made directly to
the Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in preceding clause
(x) and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Assignor.
Without notice to or assent by any Assignor, the Collateral Agent may apply any
or all amounts then in, or thereafter deposited in, the Cash Collateral Account
which application shall be effected in the manner provided in Section 7.4 of
this Agreement. The reasonable costs and expenses (including reasonable
attorneys' fees) of collection, whether incurred by the relevant Assignor or the
Collateral Agent, shall be borne by the relevant Assignor. The Collateral Agent
shall deliver a copy of each notice referred to in the preceding clause (y) to
the relevant Assignor; provided, that the failure by the Collateral Agent to so
notify such Assignor shall not affect the effectiveness of such notice or the
other rights of the Collateral Agent created by this Section 3.3.
3.4. Modification of Terms; etc. No Assignor shall rescind or cancel
any indebtedness evidenced by any Receivable or under any Contract, or modify
any term thereof or make any adjustment with respect thereto, or extend or renew
the same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of the Collateral Agent, other than
at times when no direction has been given by the Collateral Agent which is then
in effect pursuant to preceding Section 3.3. Each Assignor will duly fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables and Contracts and will do nothing to impair the rights of the
Collateral Agent in the Receivables or Contracts.
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EXHIBIT J
Page 8
3.5. Collection. Each Assignor shall endeavor in accordance with
reasonable business practices to cause to be collected from the account debtor
named in each of its Receivables or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Receivable or Contract (as
adjusted or modified from time to time), and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivable or under such Contract, except that, at all times other than at times
when the Collateral Agent has given any direction which is then in effect
pursuant to preceding Section 3.3, any Assignor may allow in the ordinary course
of business as adjustments to amounts owing under its Receivables and Contracts
(i) an extension or renewal of the time or times of payment, or settlement for
less than the total unpaid balance, which such Assignor finds appropriate in
accordance with reasonable business judgment and (ii) a refund or credit due as
a result of returned or damaged merchandise or improperly performed services or
for other reasons which such Assignor finds appropriate in accordance with
reasonable business judgment. The reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees) of collection, whether incurred
by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral, such Assignor will promptly deliver such Instrument to
the Collateral Agent appropriately endorsed to the order of the Collateral Agent
as further security hereunder.
3.7. Assignors Remain Liable Under Receivables. Anything herein to
the contrary notwithstanding, the Assignors shall remain liable under each of
the Receivables to observe and perform all of the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to such Receivables. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Collateral Agent or any other Secured
Creditor of any payment relating to such Receivable pursuant hereto, nor shall
the Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by them
or as to the sufficiency of any performance by any party under any Receivable
(or any agreement giving rise thereto), to present or file any claim, to take
any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.
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EXHIBIT J
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3.8. Assignors Remain Liable Under Contracts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.9. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, power of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to its
Receivables, Contracts, Instruments and other property or rights covered by the
security interest hereby granted, as the Collateral Agent may reasonably
require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that, as of the date hereof, it is the true and lawful
owner of all right, title and interest to, or otherwise has the right to use the
registered Marks listed in Annex D hereto for such Assignor and that said listed
Marks constitute all the marks and applications for marks registered in the
United States Patent and Trademark Office that such Assignor presently owns or
uses in connection with its business. Each Assignor represents and warrants that
it owns, is licensed to use or otherwise has the right to use all material Marks
that it uses. Each Assignor further warrants that it has no actual knowledge of
any third party claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any trademark, service xxxx or
trade name. Each Assignor represents and warrants that it is the beneficial and
record owner of all trademark registrations and applications listed in Annex D
hereto for such Assignor and that said registrations are valid and subsisting,
and that such Assignor is not aware of any third-party
343
EXHIBIT J
Page 10
claim that any of said registrations in respect of any Xxxx is invalid or
unenforceable. Each Assignor hereby grants to the Collateral Agent an absolute
power of attorney to sign, upon the occurrence and during the continuance of a
Specified Default, any document which may be required by the United States
Patent and Trademark Office in order to effect an absolute assignment of all
right, title and interest in each Xxxx, and record the same.
4.2. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is infringing or diluting or otherwise
violating in any material respect any of such Assignor's rights in and to any
Xxxx, or with respect to any party, which Assignor has actual knowledge,
claiming that such Assignor's use of any Xxxx violates in any material respect
any property right of that party. Each Assignor further agrees, unless otherwise
agreed by the Collateral Agent, to prosecute any Person infringing any Xxxx in
accordance with reasonable business practices.
4.3. Preservation of Marks. Each Assignor agrees to use its Marks in
interstate commerce during the time in which this Agreement is in effect,
sufficiently to preserve such Marks as trademarks or service marks under the
laws of the United States and any other applicable law; provided, that no
Assignor shall be obligated to preserve any Xxxx in the event such Assignor
determines, in its reasonable business judgment, that the preservation of such
Xxxx is no longer desirable in the conduct of its business.
4.4. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. SectionSection 1051 et seq. to maintain trademark registrations,
including but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
registered Marks pursuant to 15 U.S.C. SectionSection 1058(a), 1059 and 1065,
and shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Collateral Agent; provided, that no Assignor shall
be obligated to maintain any Xxxx in the event that such Assignor determines, in
its reasonable business judgment, that the maintenance of such Xxxx is no longer
necessary or desirable in the conduct of its business.
4.5. Future Registered Marks. If any Xxxx registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 60 Business
Days of receipt of such certificate, such Assignor shall deliver to the
Collateral Agent a copy of such certificate, and an assignment for security in
such Xxxx, to the Collateral Agent and at the expense of such Assignor,
confirming the assignment for security in such Xxxx to the Collateral Agent
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hereunder, the form of such security to be substantially the same as the form
hereof or in such other form as may be reasonably satisfactory to the Collateral
Agent.
4.6. Remedies. If a Specified Default shall occur and be continuing,
the Collateral Agent may take any or all of the following actions: (i) declare
the entire right, title and interest of such Assignor in and to each of the
Marks, together with all trademark rights and rights of protection to the same,
vested in the Collateral Agent for the benefit of the Secured Creditors, in
which event such rights, title and interest shall immediately vest, in the
Collateral Agent for the benefit of the Secured Creditors, and the Collateral
Agent shall be entitled to exercise the power of attorney referred to in Section
4.1 hereof to execute, cause to be acknowledged and notarized and record said
absolute assignment with the applicable agency; (ii) take and use or sell the
Marks and the goodwill of such Assignor's business symbolized by the Marks and
the right to carry on the business and use the assets of such Assignor in
connection with which the Marks have been used; and (iii) direct such Assignor
to refrain, in which event such Assignor shall refrain, from using the Marks in
any manner whatsoever, directly or indirectly, and, if requested by the
Collateral Agent, change such Assignor's corporate name to eliminate therefrom
any use of any Xxxx and execute such other and further documents that the
Collateral Agent may request to further confirm this and to transfer ownership
of the Marks and registrations and any pending trademark application in the
United States Patent and Trademark Office to the Collateral Agent.
4.7. Override Provisions Relating to Bally Trademark License
Agreement. For purposes of Section 6(b) of the Third Amendment to Trademark
License Agreement and Settlement Agreement dated as of May 10, 1996, by and
among Bally Entertainment Corporation ("Bally"), the U.S. Borrower and BGII
Acquisition Corp. (the "Third Amendment"), a true, correct and complete copy of
which has been delivered to the Collateral Agent, the Collateral Agent
acknowledges and agrees (and each Secured Creditor, by accepting the benefits of
this Agreement, also acknowledges and agrees) that (a) any transfer (whether by
foreclosure or otherwise) of "Inventory" (as such term is defined in such Third
Amendment) effected by the Collateral Agent shall be subject to the royalty and
rebate provisions of the Bally Trademark License Agreement (as defined below) so
that the Collateral Agent (or the Secured Creditors) shall have paid or caused
to be paid to Bally, simultaneously with any such transfer, the royalty per
machine due to Bally by reason of such transfer, (b) any transfer (whether by
foreclosure or otherwise) of rights under the Bally Trademark License Agreement
effected by the Collateral Agent (or the Secured Creditors) shall be subject to
the condition precedent that the prospective transferee shall have agreed in
writing to be bound by the provisions of the Bally Trademark License Agreement;
and (c) any foreclosure by the Collateral Agent (or the Secured Creditors)
(whether involving stock or assets of the U.S. Borrower or any of its
affiliates) that would result in any transfer or change in ownership or control,
direct or indirect, of Bally Gaming
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International, Inc. ("BGI") or BGI's rights under the Bally Trademark License
Agreement shall comply with all of the provisions of the Bally Trademark License
Agreement applicable thereto (including, without limitation, the provisions of
Section 9 of the Amended and Restated Trademark License Agreement referred to
below and Section 6 of the Third Amendment). For purposes hereof, the term
"Bally Trademark License Agreement" shall mean, collectively, the Amended and
Restated Trademark License Agreement, dated as of July 8, 1992, between Bally
and BGI, the Second Amendment to Trademark License Agreement and Settlement
Agreement, dated as of March 31, 0000, xxxxxxx Xxxxx, XXX and Bally Gaming, Inc.
and the Third Amendment.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of all rights in
(i) all Trade Secrets and Proprietary Information necessary to operate the
business of such Assignor, (ii) the Patents listed in Annex E hereto for such
Assignor and that said Patents constitute all the patents and applications for
patents that such Assignor owns and (iii) the Copyrights listed in Annex F
hereto for such Assignor and that said Copyrights constitute all registrations
of copyrights and applications for copyright registrations that such Assignor
owns. Each Assignor further warrants that it has no actual knowledge of any
third party claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any patent or any copyright or
such Assignor has misappropriated any Trade Secret or Proprietary Information.
Each Assignor hereby grants to the Collateral Agent an absolute power of
attorney to sign, upon the occurrence and during the continuance of a Specified
Default, any document which may be required by the United States Patent and
Trademark Office or the United States Copyright Office in order to effect an
absolute assignment of all right, title and interest in each Patent and
Copyright, and to record the same.
5.2. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe in any respect any
material Patent or material Copyright or to any claim that the practice of any
material Patent or the use of any material Copyright violates in any material
respect any property right of a third party, or with respect to any
misappropriation of any Trade Secret or any claim that practice of any Trade
Secret violates in any material respect any property right of a third party.
Each Assignor further agrees, to the extent consistent
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with reasonable business practices, to prosecute any Person infringing any
Patent or Copyright or any Person misappropriating any Trade Secret.
5.3. Maintenance of Patents. At its own expense, each Assignor shall
make timely payment of all post-issuance fees required pursuant to 35 U.S.C.
Section 41 to maintain in force rights under each Patent, absent prior written
consent of the Collateral Agent; provided, that no Assignor shall be obligated
to maintain any Patent in the event such Assignor determines, in its reasonable
business judgment, that the maintenance of such Patent is no longer necessary or
desirable in the conduct of its business.
5.4. Prosecution of Patent Application. At its own expense, each
Assignor shall diligently prosecute all applications for Patents for such
Assignor and shall not abandon any such application prior to exhaustion of all
administrative and judicial remedies, absent written consent of the Collateral
Agent; provided, that no Assignor shall be obligated to prosecute any
application in the event such Assignor determines, in its reasonable business
judgment, that the prosecuting of such application is no longer necessary or
desirable in the conduct of its business.
5.5. Other Patents and Copyrights. Within 30 Business Days of the
acquisition or issuance of a Patent, registration of a Copyright, or acquisition
of a registered copyright, the relevant Assignor shall deliver to the Collateral
Agent a copy of said Copyright or certificate or registration of said patents,
as the case may be, with an assignment for security as to such Patent or
Copyright, as the case may be, to the Collateral Agent and at the expense of
such Assignor, confirming the assignment for security, the form of such
assignment for security to be substantially the same as the form hereof or in
such other form as may be reasonably satisfactory to the Collateral Agent.
5.6. Remedies. If a Specified Default shall occur and be continuing,
the Collateral Agent may take any or all of the following actions: (i) declare
the entire right, title, and interest of such Assignor in each of the Patents
and Copyrights vested in the Collateral Agent for the benefit of the Secured
Creditors, in which event such right, title, and interest shall immediately vest
in the Collateral Agent for the benefit of the Secured Creditors, in which case
the Collateral Agent shall be entitled to exercise the power of attorney
referred to in Section 5.1 hereof to execute, cause to be acknowledged and
notarized and to record said absolute assignment with the applicable agency;
(ii) take and practice or sell the Patents and Copyrights; and (iii) direct such
Assignor to refrain, in which event such Assignor shall refrain, from practicing
the Patents and using the Copyrights directly or indirectly, and such Assignor
shall execute such other and further documents as the Collateral Agent may
request further to confirm this and to transfer ownership of the Patents and
Copyrights to the Collateral Agent for the benefit of the Secured Creditors.
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ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor will
at all times keep its Inventory and Equipment insured in favor of the Collateral
Agent, at such Assignor's own expense to the extent and in the manner provided
in the Secured Debt Agreements; all policies or certificates with respect to
such insurance (and any other insurance maintained by such Assignor) (i) shall
be endorsed to the Collateral Agent's reasonable satisfaction for the benefit of
the Collateral Agent (including, without limitation, by naming the Collateral
Agent as additional insured and loss payee) and (ii) shall state that such
insurance policies shall not be cancelled without 30 days' prior written notice
thereof by the insurer to the Collateral Agent; and certified copies of such
policies or certificates with respect thereto shall be deposited with the
Collateral Agent. If any Assignor shall fail to insure its Inventory and
Equipment in accordance with the preceding sentence, or if any Assignor shall
fail to so endorse and deposit all policies or certificates with respect
thereto, the Collateral Agent shall have the right (but shall be under no
obligation), upon prior written notice to such Assignor, to procure such
insurance and such Assignor agrees to promptly reimburse the Collateral Agent
for all reasonable costs and expenses of procuring such insurance. The
Collateral Agent shall, at the time any proceeds of such insurance are
distributed to the Secured Creditors, apply such proceeds in accordance with
Section 7.4 hereof. Each Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of such Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
6.2. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.3. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are necessary or desirable in the reasonable
opinion of the Collateral Agent to establish and
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maintain a valid, enforceable, first priority perfected security interest in the
Collateral as provided herein and the other rights and security contemplated
hereby all in accordance with the UCC as enacted in any and all relevant
jurisdictions or any other relevant law. Each Assignor will pay any applicable
filing fees, recordation taxes and related expenses relating to its Collateral.
Each Assignor hereby authorizes the Collateral Agent to file any such financing
statements without the signature of such Assignor where permitted by law.
6.4. Assistance with Gaming Approvals. Each Assignor agrees to
assist the Collateral Agent in obtaining all approvals of any Gaming Authority
or other governmental authority that are required by law, including, without
limitation, the Applicable Gaming Regulations, in connection with any action or
transaction contemplated by this Agreement and, at the request of the Collateral
Agent after and during an Event of Default, to prepare, sign and file with the
appropriate Gaming Authority such Assignor's portion of any application for
consent to the transfer of any Collateral necessary or appropriate under
Applicable Gaming Regulations for approval by such Gaming Authority of any sale
or transfer of such Collateral pursuant to the exercise of the Collateral
Agent's (or Secured Creditors') remedies hereunder and under the Credit
Documents.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF SPECIFIED DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if a Specified Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the UCC in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent;
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(iii) withdraw all monies, securities and instruments in the Cash
Collateral Account and/or in any other cash collateral account for
application to the Obligations in accordance with Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct the relevant Assignor to sell, assign or otherwise liquidate any or
all of the Collateral or any part thereof, and, in each case, take
possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered to
the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by
the Collateral Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for
such term and on such conditions and in such manner as the Collateral
Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Collateral Agent acting upon the instructions of the Required Lenders
(or, after the date on which all Credit Document Obligations have been paid in
full, the holders of at least the majority of the Other Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Collateral
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Agent or the holders of at least a majority of the outstanding Other
Obligations, as the case may be, for the benefit of the Secured Creditors upon
the terms of this Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable, provided that the Collateral Agent shall first apply for and receive
all required approvals of any applicable Gaming Authority for the sale of
disposition of slot machines and other gaming devices. Any such disposition
which shall be pursuant to a private sale or other private proceedings permitted
by such requirements shall be made upon not less than 10 Business Days' written
notice to the relevant Assignor specifying the time at which such disposition is
to be made and the intended sale price or other consideration therefor, and
shall be subject, for the 10 Business Days after the giving of such notice, to
the right of the relevant Assignor or any nominee of such Assignor to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time and place of such sale and, in the absence of applicable
requirements of law, shall be by public auction (which may, at the Collateral
Agent's option, be subject to reserve), after publication of notice of such
auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York. The Collateral Agent may also request, in
connection therewith, that the Nevada Gaming Commission petition a District
Court of the State of Nevada for the appointment of a supervisor to conduct the
normal gaming activities on the premises of any non-restricted licensed location
following appointment of a receiver. To the extent permitted by any such
requirement of law, the Collateral Agent may bid for and become the purchaser of
the Collateral or any item thereof, offered for sale in accordance with this
Section without accountability to the relevant Assignor. If, under mandatory
requirements of applicable law, the Collateral Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to the relevant Assignor as hereinabove specified, the
Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of
applicable law.
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7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the U.S. Pledge Agreement or any Mortgage or
any other Security Document requires proceeds of collateral under such Security
Documents to be applied in accordance with the provisions of this Agreement, the
Pledgee, Mortgagee or Collateral Agent under such other Security Document) upon
any sale or other disposition of the Collateral, together with all other moneys
received by the Collateral Agent hereunder, shall be applied as follows:
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(i) first, to the payment of all Obligations owing the Collateral
Agent of the type provided in clauses (iii) and (iv) of the definition of
Obligations;
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e) hereof, with each Secured Creditor receiving an amount
equal to such outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full all such Primary Obligations, its Pro Rata
Share of the amount remaining to be distributed; and
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Creditors
as provided in Section 7.4(e) hereof, with each Secured Creditor receiving
an amount equal to its outstanding Secondary Obligations or, if the
proceeds are insufficient to pay in full all such Secondary Obligations,
its Pro Rata Share of the amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iii), inclusive, and
following the termination of this Agreement pursuant to Section 10.8(a)
hereof, to the relevant Assignor or to whomever may be lawfully entitled
to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Document Obligations, all obligations and liabilities of each Assignor
arising out of or in connection with the principal of, and interest on, all
Loans, all Unpaid Drawings theretofore made (together with all interest accrued
thereon), and the aggregate Stated Amounts of all Letters of Credit issued under
the Credit Agreement, and all Fees and (ii) in the case of the Other
Obligations, all amounts due under the Interest Rate Protection Agreements or
Other Hedging Agreements, (other than indemnities, fees (including, without
limitation, attorneys' fees) and similar obligations and liabilities) and (z)
"Secondary Obligations" shall mean all Obligations other than Primary
Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their
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Primary Obligations and (ii) second, to their Secondary Obligations. If any
payment to any Secured Creditor of its Pro Rata Share of any distribution would
result in overpayment to such Secured Creditor, such excess amount shall instead
be distributed in respect of the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of the other Secured Creditors, with each
Secured Creditor whose Primary Obligations or Secondary Obligations, as the case
may be, have not been paid in full to receive an amount equal to such excess
amount multiplied by a fraction the numerator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of such Secured
Creditor and the denominator of which is the unpaid Primary Obligations or
Secondary Obligations, as the case may be, of all Secured Creditors entitled to
such distribution.
(d) Each of the Secured Creditors agrees and acknowledges that if
the Lender Creditors are to receive a distribution on account of undrawn amounts
with respect to Letters of Credit issued under the Credit Agreement (which shall
only occur after all outstanding Loans and Unpaid Drawings with respect to such
Letters of Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Lender Creditors, as cash security for the repayment
of Obligations owing to the Lender Creditors as such. If any amounts are held as
cash security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit, and after the application of
all such cash security to the repayment of all Obligations owing to the Lender
Creditors after giving effect to the termination of all such Letters of Credit,
if there remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the Collateral Agent for distribution in accordance with
Section 7.4(a) hereof.
(e) Except as set forth in Section 7.4(d) hereof, all payments
required to be made hereunder shall be made (x) if to the Lender Creditors, to
the Administrative Agent under the Credit Agreement for the account of the
Lender Creditors, and (y) if to the Other Creditors, to the trustee, paying
agent or other similar representative (each a "Representative") for the Other
Creditors or, in the absence of such a Representative, directly to the Other
Creditors.
(f) For purposes of applying payments received in accordance with
this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative for
the Other Creditors or, in the absence of such a Representative, upon the Other
Creditors for a determination (which the Administrative Agent, each
Representative for any Other Creditors and the Secured Creditors agree (or shall
agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Lender Creditor or an Other Creditor)
to the contrary, the
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Administrative Agent and each Representative, in furnishing information pursuant
to the preceding sentence, and the Collateral Agent, in acting hereunder, shall
be entitled to assume that no Secondary Obligations are outstanding. Unless it
has actual knowledge (including by way of written notice from a Representative
for an Other Creditor or directly from an Other Creditor) to the contrary, the
Collateral Agent, in acting hereunder, shall be entitled to assume that no
Interest Rate Protection Agreements or Other Hedging Agreements are in
existence.
(g) It is understood and agreed that the Assignors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
7.5. Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, the other
Secured Debt Agreements or now or hereafter existing at law, in equity or by
statute and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or simultaneously
and as often and in such order as may be deemed expedient by the Collateral
Agent. All such rights, powers and remedies shall be cumulative and the exercise
or the beginning of the exercise of one shall not be deemed a waiver of the
right to exercise any other or others. No delay or omission of the Collateral
Agent in the exercise of any such right, power or remedy and no renewal or
extension of any of the Obligations shall impair any such right, power or remedy
or shall be construed to be a waiver of any Default or Event of Default or an
acquiescence therein. No notice to or demand on any Assignor in any case shall
entitle it to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Collateral
Agent to any other or further action in any circumstances without notice or
demand. In the event that the Collateral Agent shall bring any suit to enforce
any of its rights hereunder and shall be entitled to judgment, then in such suit
the Collateral Agent may recover reasonable expenses, including reasonable
attorneys' fees, and the amounts thereof shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
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ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, permitted assigns, employees, agents and
servants (hereinafter in this Section 8.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
losses, liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all reasonable costs, expenses or
disbursements (including reasonable attorneys' fees and expenses and/or costs
and expenses associated with obtaining required approvals of any Gaming
Authority) (for the purposes of this Section 8.1 the foregoing are collectively
called "expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any other Secured Debt Agreement or any other document executed in
connection herewith or therewith or in any other way connected with the
administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the
Collateral (including, without limitation, latent or other defects, whether or
not discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage), or contract claim; provided that no Indemnitee shall be indemnified
pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent
caused by the gross negligence or willful misconduct of such Indemnitee. Each
Assignor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation, damage, injury, penalty, claim, demand, action,
suit or judgment, the relevant Assignor shall assume full responsibility for the
defense thereof. Each Indemnitee agrees to use its best efforts to promptly
notify the relevant Assignor of any such assertion of which such Indemnitee has
knowledge.
(b) Without limiting the application of Section 8.1(a) hereof, each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with
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respect to the Collateral and all other reasonable fees, costs and expenses in
connection with protecting, maintaining or preserving the Collateral and the
Collateral Agent's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.
(c) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of the
other Obligations and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals of this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowers" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
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"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreements or Other Hedging Agreements), but excluding any contract
to the extent that the terms thereof prohibit the assignment of, or granting a
security interest in, such contract (it being understood and agreed, however,
that notwithstanding the foregoing, all rights to payment for money due or to
become due pursuant to any such excluded Contract shall be subject to the
security interests created pursuant to this Agreement).
"Copyrights" shall mean any United States or foreign copyright owned
(or subject to the rights of ownership) by any Assignor, including any
registrations of any copyright, in the United States Copyright Office or the
equivalent thereof in any foreign country, as well as any application for a
copyright registration now or hereafter made with the United States Copyright
Office or the equivalent thereof in any foreign country by any Assignor.
"Credit Agreement" shall have the meaning provided in the recitals
of this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time,
or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
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"Equipment" shall mean any "equipment," as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Goods" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Interest Rate Protection Agreements or Other Hedging Agreements"
shall have the meaning provided in the recitals of this Agreement.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same, in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"Lender Creditors" shall have the meaning provided in the recitals
of this Agreement.
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"Lenders" shall have the meaning provided in the recitals of this
Agreement.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Marks" shall mean any United States or foreign trademarks, service
marks and trade names now owned, subject to a right of ownership or hereafter
acquired by any Assignor, including any registration of, or application for, any
trademarks and service marks in the United States Patent and Trademark Office or
the equivalent thereof in any foreign country, and any trade dress including
logos and/or designs used by any Assignor in the United States or any foreign
country.
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor now existing or hereafter incurred under, arising out of or in
connection with any Credit Document to which such Assignor is a party and the
due performance and compliance by each Assignor with the terms of each such
Credit Document (all such obligations and liabilities under this clause (i),
except to the extent consisting of Other Obligations, being herein collectively
called the "Credit Document Obligations"); (ii) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection Agreement or Other Hedging
Agreement (including, without limitation, all obligations and liabilities of
such Assignor under the U.S. Subsidiaries Guaranty in respect of Interest Rate
Protection Agreements or Other Hedging Agreements) and the due performance and
compliance by such Assignor with the terms contained in each such Interest Rate
Protection Agreement or Other Hedging Agreement (all such obligations and
indebtedness under this clause (ii) being herein collectively called the "Other
Obligations"); (iii) any and all sums advanced by the Collateral Agent in order
to preserve the Collateral or preserve its security interest in the Collateral;
(iv) in the event of any proceeding for the collection or enforcement of any
obligations or liabilities referred to in clauses (i), (ii) and (iii) above,
after an Event of Default shall have occurred and be continuing, the reasonable
expenses of re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement.
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Page 27
"Other Creditors" shall have the meaning provided in the recitals of
this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any United States or foreign patent owned,
subject to a right of ownership by or hereafter acquired by any Assignor and any
divisions, continuations, reissues, reexaminations, extensions or renewals
thereof, as well as any application for a United States or foreign patent now or
hereafter made by any Assignor or subject to a right of ownership in such
Assignor.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b)
of this Agreement.
"Proprietary Information" means all information and know-how
worldwide, including, without limitation, technical data, manufacturing data,
research and development data, manufacturing data, research and development
data, data relating to compositions, processes and formulations, manufacturing
and production know-how and experience, management know-how, training programs,
manufacturing, engineering and other drawings, specifications, performance
criteria, operating instructions, maintenance manuals, technology, technical
information, software, engineering and computer data and databases, design and
engineering specifications, catalogs, promotional literature and financial,
business and marketing plans, inventions and invention disclosures.
"Receivables" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now
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Page 28
or hereafter owned by any Assignor and, in any event, shall include, but shall
not be limited to, all of such Assignor's rights to payment for goods sold or
leased or services performed by such Assignor, whether now in existence or
arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (b) all of any Assignor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards and invoices relating
thereto, (f) all evidences of the filing of financing statements and other
statements and the registration of other instruments in connection therewith and
amendments thereto, notices to other creditors or secured parties, and
certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (h) all other writings
related in any way to the foregoing.
"Representative" shall have the meaning provided in Section 7.4(e)
of this Agreement.
"Requisite Creditors" shall have the meaning provided in Section
10.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals
of this Agreement.
"Secured Debt Agreements" shall mean and include this Agreement, the
other Credit Documents and the Interest Rate Protection Agreements or Other
Hedging Agreements.
"Specified Default" shall have the meaning provided in Section 3.3
of this Agreement.
"Termination Date" shall have the meaning provided in Section
10.8(a) of this Agreement.
"Trade Secrets" means any secretly held existing engineering and
other data, information, production procedures and other know-how relating to
the design, manu-
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facture, assembly, installation, use, operation, marketing, sale and servicing
of any products or business of the Assignor worldwide whether written or not
written.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed as follows:
(a) if to any Assignor:
0000 Xxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) if to the Collateral Agent:
Credit Suisse First Boston
Eleven Madison Avenue
New York, New York 10010
Attention: Xx Xxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(c) if to any Lender Creditor, at such address as such Lender
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to each Assignor and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
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10.2. Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly affected thereby (it
being understood that additional Assignors may be added as parties hereto from
time to time in accordance with Section 10.11, and that no consent of any other
Assignor or of the Required Lenders shall be required in connection therewith)
and the Collateral Agent (with the consent of (x) either the Required Lenders
(or, to the extent required by Section 13.12 of the Credit Agreement, all of the
Lenders) at all times prior to the time at which all Credit Document Obligations
have been paid in full or (y) the holders of at least a majority of the
outstanding Other Obligations at all times after the time on which all Credit
Document Obligations have been paid in full); provided, that any change, waiver,
modification or variance affecting the rights and benefits of a single Class of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors of such Class of
Secured Creditors. For the purpose of this Agreement the term "Class" shall mean
each class of Secured Creditors, i.e., whether (x) the Lender Creditors as
holders of the Credit Document Obligations or (y) the Other Creditors as the
holders of the Other Obligations. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Credit Document Obligations, the Required Lenders and (y) with respect to the
Interest Rate Protection Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection
Agreements or Other Hedging Agreements.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
or any security for any of the Obligations; whether or not any Assignor shall
have notice or knowledge of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding upon
each Assignor and its successors and assigns and shall inure to the benefit of
the Collateral Agent and the Secured Creditors and their respective successors
and assigns. All agreements, statements, representations and warranties made by
each Assignor herein or in any certificate or other instrument delivered by such
Assignor or on its behalf under this Agreement shall be considered to have been
relied upon by the Secured Creditors and shall survive the execution and
delivery of this Agreement and the other Secured Debt Agreements regardless of
any investigation made by the Secured Creditors or on their behalf.
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Page 31
10.5. Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK AND APPLICABLE GAMING REGULATIONS (WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS).
10.7. Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of each Assignor under or with
respect to any Collateral.
10.8. Termination; Release. (a) After the Termination Date, this
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the date upon which the Total
Commitments, and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note is outstanding (and all Loans have been
repaid in full), all Letters of Credit have been terminated and all other
Obligations then due and payable have been indefeasibly paid in full.
(b) In the event that any part of the Collateral is sold (but not to
the U.S. Borrower or a Subsidiary thereof) in connection with a sale permitted
by Section 9.02 of the Credit Agreement or is otherwise released at the
direction of the Required Lenders (or all the Lenders if required by Section
13.12 of the Credit Agreement), the Collateral Agent, at the request and expense
of such Assignor, will duly assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
the possession
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Page 32
of the Collateral Agent and has not been theretofore been released pursuant to
this Agreement.
(c) At any time that the respective Assignor desires that the
Collateral be released as provided in the foregoing Section 10.8(a) or (b), it
shall deliver to the Collateral Agent a certificate signed by an Authorized
Officer of such Assignor stating that the release of the respective Collateral
is permitted pursuant to Section 10.8(a) or (b) hereof.
(d) In the event an Assignor which is a Subsidiary of the U.S.
Borrower party to the U.S. Subsidiaries Guaranty is released from its Guaranty
under the U.S. Subsidiaries Guaranty, such Assignor shall be released from this
Agreement and this Agreement shall, as to such Assignor only, have no further
force or effect.
10.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the U.S. Borrower and
the Collateral Agent.
10.10. Limitation by Law; Severability. All rights, remedies and
powers provided in this Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of Applicable Gaming
Regulations, and all the provisions of this Agreement are intended to be subject
to all applicable mandatory provisions of the Applicable Gaming Regulations
which may be controlling and to be limited to extent necessary so that they will
not render this Agreement invalid or unenforceable, in whole or in part.
10.11. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the obligations
of the Collateral Agent as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement. The Collateral Agent shall act
hereunder on the terms and conditions set forth in this Agreement and in Section
12 of the Credit Agreement.
10.12. Additional Assignors. It is understood and agreed to that any
Subsidiary of the U.S. Borrower that is required to execute a counterpart of
this Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart hereof and
delivering the same to the Collateral Agent.
366
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
ALLIANCE GAMING CORPORATION,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Senior Vice President,
CFO and Treasurer
ALLIANCE HOLDING COMPANY,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
UNITED COIN MACHINE CO.,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
PLANTATION INVESTMENTS, INC.,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
APT GAMES, INC.,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
367
FOREIGN GAMING VENTURES, INC.,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
louisiana VENTURES, INC.,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
UNITED GAMING RAINBOW,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
NATIVE AMERICAN INVESTMENT,
INC., as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
BALLY GAMING INTERNATIONAL,
INC., as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
368
BALLY GAMING, INC.,
as an Assignor
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------
Title: Treasurer
Accepted and Agreed to:
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent
By /s/ Xxxx X. Xxxxxxx
---------------------------------
Title: Assistant Vice President
By /s/ Xxxxxx X. Xxxx
---------------------------------
Title: Associate
369
ANNEX G to
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of
which are hereby acknowledged, [Name of Assignor], a __________ [corporation]
[partnership] ("the Assignor") with principal offices at
____________________________, hereby assigns and grants to Credit Suisse First
Boston, as Collateral Agent, with principal offices at Eleven Madison Avenue,
New York, New York 10010 (the "Assignee"), a security interest in (i) all of the
Assignor's right, title and interest in and to the United States trademarks,
trademark registrations and trademark applications (the "Marks") set forth on
Schedule A attached hereto, (ii) all of the Assignor's rights, title and
interest in and to the United States patents and patent applications (the
"Patents") set forth on Schedule B attached, in each case together with (iii)
all Proceeds (as such term is defined in the Security Agreement referred to
below) and products of the Marks and Patents, (iv) the goodwill of the
businesses with which the Marks are associated and (v) all causes of action
arising prior to or after the date hereof for infringement of any of the Marks
and Patents or unfair competition regarding the same.
THIS ASSIGNMENT is made to secure the satisfactory performance and
payment of all the Obligations of the Assignor, as such term is defined in the
Security Agreement among the Assignor, the other assignors from time to time
party thereto and the Assignee, dated as of August 8, 1997 (as amended from time
to time, the "Security Agreement"). Upon the occurrence of the Termination Date
(as defined in the Security Agreement), the Assignee shall, upon such
satisfaction and upon the request and at the expense of the Assignor, promptly
execute, acknowledge, and deliver to the Assignor an instrument in writing
releasing the security interest in the Marks and Patents acquired under this
Assignment.
370
ANNEX G
Page 2
This Assignment has been granted in conjunction with the security
interest granted to the Assignee under the Security Agreement. The rights and
remedies of the Assignee with respect to the security interest granted herein
are without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
371
ANNEX G
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the ____ day of _________, ___.
[NAME OF ASSIGNOR], Assignor
By
------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, as
Collateral Agent, Assignee
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, ___, before me personally came
________ _________________ who, being by me duly sworn, did state as follows:
that [s]he is _______________ of [Name of Assignor], that [s]he is authorized to
execute the foregoing Assignment on behalf of said [corporation] [partnership]
and that [s]he did so by authority of the Board of Directors of said
[corporation] [partnership].
-----------------------------------------
Notary Public
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, ____, before me personally came
________ _____________________ who, being by me duly sworn, did state as
follows: that [s]he is __________________ of Credit Suisse First Boston, that
[s]he is authorized to execute the foregoing Assignment on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of said
corporation.
-----------------------------------------
Notary Public
374
ANNEX H to
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Assignor], a _______________ [corporation]
[partnership] (the "Assignor"), having its chief executive office at
__________________________________, ____________________________, is the owner
of all right, title and interest in and to the United States copyrights and
associated United States copyright registrations and applications for
registration set forth in Schedule A attached hereto;
WHEREAS, CREDIT SUISSE FIRST BOSTON, as Collateral Agent, having its
principal offices at Eleven Madison Avenue, New York, New York 10010 (the
"Assignee"), desires to acquire a security interest in said copyrights and
copyright registrations and applications therefor; and
WHEREAS, the Assignor is willing to assign to the Assignee, and to
grant to the Assignee a security interest in and lien upon the copyrights and
copyright registrations and applications therefor described above.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and subject to the terms and conditions of the
Security Agreement, dated as of August 8, 1997, made by the Assignor, the other
assignors from time to time party thereto and the Assignee (as amended from time
to time, the "Security Agreement"), the Assignor hereby assigns to the Assignee,
and grants to the Assignee a security interest in the copyrights and copyright
registrations and applications therefor set forth in Schedule A attached hereto.
This Assignment is made to secure the satisfactory performance and
payment of all the Obligations (as defined in the Security Agreement) of the
Assignor. Upon the occurrence of the Termination Date (as defined in the
Security Agreement), the Assignee shall, upon such satisfaction and upon the
request and at the expense of the Assignor, promptly execute, acknowledge and
deliver to the Assignor an instrument in writing releasing the security interest
in the Copyrights acquired under this Assignment.
This Assignment has been granted in conjunction with the security
interest granted to the Assignee under the Security Agreement. The rights and
remedies of the Assignee with respect to the security interest granted herein
are without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
375
ANNEX H
Page 2
Executed at New York, New York, the __ day of _________, ____.
[NAME OF ASSIGNOR]
By
------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _________, ____, before me personally came
___________ _______________, who being duly sworn, did depose and say that [s]he
is ___________________ of [Name of Assignor], that [s]he is authorized to
execute the foregoing Assignment on behalf of said [corporation] [partnership]
and that [s]he did so by authority of the Board of Directors of said
corporation.
-----------------------------------------
Notary Public
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, ____, before me personally came
________ _____________________ who, being by me duly sworn, did state as
follows: that [s]he is __________________ of Credit Suisse First Boston, that
[s]he is authorized to execute the foregoing Assignment on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of said
corporation.
-----------------------------------------
Notary Public
378
EXHIBIT K
379
EXHIBIT K
GERMAN SECURITY AGREEMENT
By and among
(1) Alliance Automaten Verwaltungs GmbH, a limited liability company
established under the laws of Germany, registered with the commercial
register of the Amtsgericht Charlottenburg No. HR B B 58120,
Maybachufer 48-51, 12045 Berlin, Germany,
(2) Alliance Automaten GmbH & Co KG, a company established under the laws
of Germany, registered with the commercial register of the Amtsgericht
Charlottenburg under No. HR A 27571, Maybachufer 48-51, 00000 Xxxxxx,
Xxxxxxx,
(3) Bally Xxxxx Vertriebs GmbH, a limited liability company established
under the laws of Germany, registered with the commercial register of
the Amtsgericht Hannover under HR B 6421, Xxxxxxxxxxx. 00, 00000
Xxxxxxxx, Xxxxxxx,
(4) Geda Automatengro#handel Gesellschaft mit beschrankter Haftung, a
limited liability company established under the laws of Germany,
registered with the commercial register of the Amtsgericht Bruchsal
under HR B 0535, Xx xxx X 00, 00000 Xxxxxxxx, Xxxxxxx,
(5) Xxxxxx Vertriebs GmbH, a limited liability company established under
the laws of Germany, registered with the commercial register of the
Amtsgericht Mettmann under HR B 2844, Xxxxxxxx-Xxxxx-Xxx. 00, 00000
Xxxxxxx, Xxxxxxx,
(6) WESTAV Westdeutscher Automatenvertrieb GmbH, a limited liability
company established under the laws of Germany, registered with the
commercial register of the Amtsgericht Hannover under HR B 2000,
(7) Bally Gaming International GmbH, a limited liability company
established under the laws of Germany, registered with the commercial
register of the Amtsgericht Hannover under HR B 50491,
380
EXHIBIT K
Page 2
represented by the undersigned
- hereinafter collectively the "Assignors", individually the "Assignor" -
and
Credit Suisse First Boston, a company established under the
laws of Switzerland and certified as a bank, acting through
its New York Branch and as collateral agent for the Lender
Creditors (as defined below),
represented by the undersigned
- hereinafter "Collateral Agent" -
Except as otherwise defined herein, terms used and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.
WHEREAS, (i) Alliance Gaming Corporation, Las Vegas, USA (the "US
Borrower"), (ii) Bally Xxxxx Vertriebs GmbH, Hannover, Germany (hereinafter the
"Bally Xxxxx Vertrieb"), (iii) Bally Xxxxx Automaten GmbH, Berlin, Germany
(hereinafter the "Bally Xxxxx Automaten") (Bally Xxxxx Vertrieb and Bally Xxxxx
Automaten the "German Borrowers", the plural form including the singular; the
US Borrower and the German Borrowers together the "Borrowers"), the financial
institutions from time to time party thereto (the "Lenders") and the Collateral
Agent as Administrative Agent (together with the Lenders, the "Lender
Creditors"), have entered into a credit agreement, dated as of August 8, 1997
(as amended, modified or supplemented from time to time, the "Credit
Agreement");
WHEREAS, in the Credit Agreement the Lender Creditors, among others,
severally agreed to grant to the German Borrowers Revolving Loans up to the
amount of $55,000,000 (taking the Deutsche equivalent thereof) (the "Loans"),
including the issuance of Letters of Credit (the "German Letters of Credit");
WHEREAS, the German Borrowers may enter into Interest Rate Protection
Agreements and/or Hedging Agreements with one or all of the Lender Creditors or
any affiliate thereof (hereinafter the "Other Creditors", and together with the
Lender Creditors the "Creditors") (hereinafter the "Additional Agreements");
381
EXHIBIT K
Page 3
WHEREAS, pursuant to the German Subsidiaries Guaranty, dated as of
August 8, 1997 (as amended, modified or supplemented from time to time, the
"German Subsidiaries Guaranty"), each Assignor (other than the German
Borrowers) has jointly and severally guaranteed to the Creditors the payment
when due of the Guaranteed Obligations (as defined in the German Subsidiaries
Guaranty) (in such capacity the "Guarantors");
WHEREAS, it is a condition precedent to the making of Loans and the
issuance of, and participation in, German Letters of Credit under the Credit
Agreement and the entering into of Additional Agreements that each Assignor
shall have executed and delivered to the Collateral Agent this Agreement in
order to secure the obligations of the German Borrowers under the Credit
Agreement and the Additional Agreements and of the Guarantors under the German
Subsidiaries Guaranty;
WHEREAS, each Assignor will obtain benefits from the incurrence of the
Loans by, and the issuance of German Letters of Credit to, the German Borrowers
under the Credit Agreement and from the entering into of Additional Agreements
and, accordingly, desires to execute this Security Agreement in order to
satisfy the conditions described in the preceding paragraph and to induce the
Lenders to make Loans to, and to issue and participate in Letters of Credit for
the account of the German Borrowers and to enter into Additional Agreements;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Assignor, the receipt and sufficiency of which are hereby
acknowledged, each Assignor hereby makes the following representations and
warranties and hereby covenants and agrees with the Collateral Agent as
follows:
Section 1
SECURITY INTERESTS
(1) As security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration, at the
occurrence of an Event of Default or otherwise) of:
(a) in the case of either German Borrower:
(i) the principal of and interest on the Loans made to the
German Borrowers under the Credit Agreement and all
reimbursemen obligations and Unpaid Drawings with respect to
German Letters of Credit issued under the Credit Agreement,
382
EXHIBIT K
Page 4
(ii) all other obligations and liabilities owing by the German
Borrowers to the Lender Creditors under the Credit Agreement
(including, without limitation, indemnities, Fees and interest
thereon) now existing or hereafter incurred under, arising out
of or in connection with the Credit Agreement or any other
Credit Document and the due performance and compliance with
the terms of the Credit Documents by the German Borrowers (all
such principal, interest, liabilities and obligations
hereinafter the "Credit Document Obligations"),
(iii) all obligations and liabilities of the German Borrowers
now existing or hereafter incurred under, arising out of or in
connection with any Additional Agreement and the due
performance and compliance by the German Borrowers with the
terms contained in each Additional Agreement (all such
obligations and indebtedness under this clause (iii) being
herein collectively called the "Other Obligations");
(b) in the case of any Assignor other than the German Borrowers all
the obligations and liabilities of the Guarantor under the German
Subsidiaries Guaranty (all such obligations hereinafter the "Guaranty
Obligations");
(c) in the case of Bally Gaming International GmbH, all of the
obligations of Bally Gaming International GmbH pursuant to the Bally
Gaming International Senior Secured Loans;
(d) in the case of each Assignor:
(i) any and all sums advanced by the Collateral Agent in order
to preserve the Collateral or preserve the security interests
in the Collateral,
(ii) in an Event of Default the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of
any exercise by the Collateral Agent of its rights hereunder,
together with reasonable attorneys' fees and court costs, and
(iii) all amounts paid by any Indemnitee (as defined in
Section 10(1)) of this Agreement as to which such Indemnitee
has the right to reimbursement under Section 10 of this
Agreement;
the respective Assignor does hereby
383
EXHIBIT K
Page 5
1. assign and transfer unto the Collateral Agent, and does hereby
grant to the Collateral Agent for the benefit of the Creditors a
continuing security interest of first priority in, all of the
right, title and interest (including any expectancy right)
("Anwartschaftsrecht") of such Assignor in, to and under all of
the Collateral, and
2. pledge to the Lender Creditors all Intellectual Property Rights
of which the assignment and/or the transfer is excluded by
mandatory provisions of the applicable law.
(2) In addition, Bally Xxxxx Vertriebs and/or Bally Xxxxx Automaten hereby
assigns all claims arising from any future intercompany loans to Bally
Gaming International GmbH, including, but not limited to, all rights
or title to any note evidencing these claims. Each of Bally Xxxxx
Vertriebs and Bally Xxxxx Automaten hereby warrant that such loan
shall not have an equity substituting character
(eigenkapitalesetzendes Darlehen). Bally Xxxxx Vertriebs and/or Bally
Xxxxx Automaten further undertake(s) to assign, transfer or pledge, as
the case may be, to the Collateral Agent any collateral or security
granted by Bally Gaming International to Bally Xxxxx Vertriebs.
(3) In case the Credit Agreement should be void, the Collateral shall
secure any obligation of the German Borrowers to the Creditors created
by applicable law, including, but without limitation, the repayment of
Loans already paid out to the German Borrowers (those obligations
together with the obligations as described in the foregoing paragraph
(1) under (a) to (d) the "Secured Obligations").
(4) The security interest of the Collateral Agent under this Agreement
extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the
continuation of this Agreement.
(5) If at any time the aggregate amount of the realizable value of the
Collateral and of any other rights and assets that constitute
collateral for the Secured Obligations exceeds 120% (the "Coverage
Amount") of the Secured Obligations and that not only on a temporary
basis, the Collateral Agent shall, upon the written request of the
Assignors and at the expense of the Assignors, but without undue
delay, (i) reassign or retransfer such Collateral or collateral or
such right
384
EXHIBIT K
Page 6
or asset (to be selected by the Collateral Agent and the Lenders at
their discretion) to the respective Assignor, as necessary to reduce
such aggregate amount to the Coverage Amount, and (ii) if such
aggregate amount thereafter still exceeds the Coverage Amount,
reassign or retransfer, as the case may be, to the respective Assignor
such part of the Collateral, collateral or of such right or asset (to
be selected by the Collateral Agent and the Creditors in their
discretion), together with all related rights and assets, as is
necessary to reduce such aggregate amount to the Coverage Amount.
(6) If and to the extent the value of the Collateral exceeds 80% of the
value of the total assets (in the meaning of Section 419 German Civil
Code) of one or several of the Assignors, the Collateral Agent shall
release to the respective Assignor an amount equal to such excess.
The Assignors undertake to keep the Collateral Agent informed of the
value of the Collateral and the value of each Assignor's total assets.
If at any time after signing this Agreement Collateral might come into
existence which would be assigned or transferred to the Collateral
Agent under this Agreement and which would make the Collateral Agent
acquire in the aggregate more than 80% of the assets of one or several
of the Assignors (taking into account also any other securities the
respective Assignor granted to the Creditors in the Credit Documents,
to the extent this is necessary to avoid the applicability of Section
419 BGB), the respective Assignor shall inform the Collateral Agent in
writing prior to the respective Collateral coming into existence and
in such written communication specifically identify such Collateral
and such Collateral shall not be assigned or transferred to the
Collateral Agent and the Creditors under this Agreement.
(7) The Collateral Agent shall have no liability whatsoever to any
Creditor as the result of any release of Collateral by it as permitted
by the foregoing paragraphs (4) and (5). Upon any release of
Collateral pursuant to the foregoing paragraphs (4) and (5), none of
the Creditors shall have any continuing right or interest in such
Collateral or the proceeds thereof.
(8) If, after the date hereof, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation
or administration thereof, shall have any effect on the validity or
enforceability of this Agreement or of the Security Interests created
hereunder (including, without limitation, with respect to its priority
rank), the Assignors shall, to the extent permitted by then applicable
law, at their expense, execute, acknowledge and deliver all such
further instruments and documents (including, without limitation,
pledge agreements, security agreements, legal opinions and related
documents), and take all such action as the Collateral Agent may from
time to time request in order to provide the Collateral Agent with a
legal position at least equal to the position it enjoyed under this
Agreement before such adoption or change.
(9) The total amount collectable by the Creditors hereunder from those
Assignors which are subsidiaries of Alliance Automaten GmbH & Co. KG,
Berlin, (i) shall
385
EXHIBIT K
Page 7
not exceed the total amount of free reserves plus profits carried
forward of this company, and (ii) will meet the restrictions of
Section Section 30, 31 of the German Act on Limited Liability
Companies.
Section 2
POWER OF ATTORNEY
Each Assignor hereby constitutes and appoints the Collateral Agent its
true and lawful attorney, irrevocably, with full power after the occurrence of
and during the continuance of an Event of Default (in the name of such Assignor
or otherwise) to act, require, demand, receive, compound and give acquittance
for any and all monies and claims for monies due or to become due to the
Assignor under or arising out of the Collateral, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take
any action or institute any proceedings which the Collateral Agent may deem to
be necessary or advisable in the premises, which appointment as attorney is
coupled with an interest.
Section 3
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
(1) All filings, registrations and recordings necessary to create,
preserve, protect and perfect the security interest granted by such
Assignor to the Collateral Agent hereby in respect of the Collateral
have been accomplished and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to the Collateral
constitutes a perfected security interest therein superior and prior
to the rights of all other Persons therein and subject to no other
Liens (other than Liens permitted by Section 9.01 of the Credit
Agreement) and is entitled to all the rights, priorities and benefits
afforded by applicable law as enacted in any relevant jurisdiction to
perfected security interests.
(2) Each Assignor is, and as to Collateral acquired by it from time to
time after the date hereof such Assignor will be, the owner of all
Collateral free from any Lien, security interest encumbrance or other
right, title or interest of any Person (other than statutory liens and
retentions of title incurred in the ordinary course of business), and
such Assignor shall defend the Collateral against all claims and
386
EXHIBIT K
Page 8
demands of all Persons at any time claiming the same or any interest
therein adverse to the Collateral Agent.
(3) The chief executive office of each Assignor is located at the address
indicated on ANNEX A hereto. No Assignor will move its chief
executive office except to such new location as such Assignor may
establish in accordance with the last sentence of this Section 3,
paragraph 3. The originals of all documents evidencing all
Receivables of such Assignor and the only original books of account
and records of such Assignor relating thereto are, and will continue
to be, kept at such chief executive office, or at such new locations
as such Assignor may establish in accordance with the last sentence of
this Section 3, paragraph 3. All Receivables of such Assignor are,
and will continue to be, maintained at, and controlled and directed
(including, without limitation, for general accounting purposes) from,
the office locations described above, or such new locations as such
Assignor may establish in accordance with the last sentence of this
Section 3, paragraph 3. No Assignor shall establish new locations for
such offices until (i) it shall have given to the Collateral Agent not
less than 30 days' prior written notice (or such lesser notice as
shall be acceptable to the Collateral Agent in the case of a new
record location to be established in connection with newly acquired
Contracts) of its intention so to do, clearly describing such new
location and providing such other information in connection therewith
as the Collateral Agent may reasonably request, and (ii) with respect
to such new location, it shall have taken all action, satisfactory to
the Collateral Agent, to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at
all times fully perfected and in full force and effect. The Assignors
shall not change their corporate seat or chief executive office into a
jurisdiction other than the Federal Republic of Germany without the
expressly given prior written consent of the Collateral Agent.
(4) All Inventory and Equipment held on the date hereof by each Assignor
is located at one of the locations shown on ANNEX B attached hereto.
Each Assignor agrees that all Inventory and Equipment now held or
subsequently acquired by it shall be kept at (or shall be in transport
to or from) any one of the locations shown on ANNEX B hereto, or such
new location as such Assignor may establish in accordance with the
last sentence of this Section 3, paragraph 4. An Assignor may
establish a new location for Inventory and Equipment only if (i) it
shall have given to the Collateral Agent prior written notice of its
intention so to do, clearly describing such new location and providing
such other information in connection therewith as the Collateral Agent
may reasonably request, and (ii) with respect to such new location, it
shall have taken all action
387
EXHIBIT K
Page 9
reasonably satisfactory to the Collateral Agent to maintain the
security interest of the Collateral Agent in the Collateral intended
to be granted hereby at all times fully perfected and in full force
and effect.
(5) No Assignor does have or operate in any jurisdiction under, or in the
preceding five years has had or has operated in any jurisdiction
under, any trade names, fictitious names or other names (including,
without limitation, any names of divisions or operations) except its
legal name. No Assignor shall change its legal name or assume or
operate in any jurisdiction under any trade, fictitious or other name
except in accordance with the last sentence of paragraph 5. No
Assignor shall assume or operate in any jurisdiction under any new
trade, fictitious or other name or operate under any existing name in
any additional jurisdiction until (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its
intention so to do, clearly describing such new name and/or
jurisdiction and, in the case of a new name, the jurisdictions in
which such new name shall be used and providing such other information
in connection therewith as the Collateral Agent may reasonably
request, and (ii) with respect to such new name and/or new
jurisdiction, it shall have taken all action to maintain the security
interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and
effect.
(6) This Agreement is made with full recourse to the relevant Assignor and
pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein and
otherwise in writing in connection herewith or therewith.
Section 4
SPECIAL PROVISIONS CONCERNING RECEIVABLES
(1) The assignment of the Receivables existent at the present time shall
become effective upon the conclusion of this Agreement, whereas the
assignment of all claims arising in the future shall become effective
at the time of their accrual. Each such assignment takes effect
without further action on the part of the parties or any other person.
(2) The realizable value of the Receivables corresponds to the nominal
value of the Receivables, less such claims (i) for which the
assignment is excluded or is dependent upon the assent of the third
party debtor which assent is not available, (ii) which are subject to
a customarily extended retention of title, (iii) which are
388
EXHIBIT K
Page 10
confronted with claims which can be set off, (iv) for which there is
no legal validity of the assignment in due of the seat of the third
party debtor being abroad or due to the application of a foreign law,
or (v) which do not exist because the deliveries and performances
which form the basis of the claim were not performed or not to the
full extent. The realizable value of these claims is their book value
according to German GAAP. In cases of doubt regarding the realizable
value the Collateral Agent is entitled to reassign the relevant
Receivables back to the respective Assignor.
(3) If and to the extent that the Assignors may now or hereafter demand
from a third party (i) reassignment of Receivables, assigned to such
third party under an "extended retention of title" arrangement
("verlangerter Eigentumsvorbehalt"), (ii) or surrender of any proceeds
obtained therefrom, the Assignors hereby assign such rights (including
all ancillary rights) to the Collateral Agent. The same applies to
any claim of the Assignors for the reassignment ("Anwartschaftsrecht")
of a Receivable that has been assigned subject to the condition
subsequent ("auflosende Bedingung") of the automatic reversal of the
assignment in certain specified circumstances. The Collateral Agent
is entitled to terminate the "extended retention of title" arrangement
with respect to a Receivable at any time by satisfying the third
party.
(4) If any amount payable under or in connection with any of the
Receivables is or becomes evidenced by any promissory note or other
instrument (such as a check or a xxxx of exchange) or is or will be
paid by letter of credit, title to, and all rights with respect to,
such note or instrument or rights under a xxxx of exchange or letter
of credit or other note or instrument are hereby transferred and
assigned to the Collateral Agent, and possession of such note or
instrument is from the beginning held by the Assignors on behalf of
the Collateral Agent ("Besitzkonstitut") without compensation. Such
note or instrument shall be delivered to the Collateral Agent without
undue delay, duly endorsed in a manner satisfactory to the Collateral
Agent. If the Assignors do not obtain possession, they hereby assign
their rights for possession against third parties to the Collateral
Agent which accepts such assignment.
(5) The assignment does not extend to Receivables, for which the
assignment is excluded, unless and to the extent permitted under
Section 000x XXX (Xxxxxx Commercial Code).
(6) If, by virtue of this agreement, a Receivable relating to goods sold
to the Assignors by third parties under "extended retention of title"
arrangements ("verlangerter Eigentumsvorbehalt") is assigned to the
Collateral Agent, such
389
EXHIBIT K
Page 11
assignment shall become effective only upon termination of the
"extended retention of title" arrangement. If the third party's claim
covers only a part of the Receivable, only such part of the Receivable
as is not covered by the third party's claim is initially assigned to
the Collateral Agent; the assignment of the remainder of the
Receivable to the Collateral Agent shall become effective only upon
termination of the "extended retention of title" arrangement. The
Collateral Agent is entitled to terminate the "extended retention of
title" arrangement with respect to a Receivable at any time by
satisfying the third party.
(7) As of the time when each of its Receivables arises, each Assignor
shall be deemed to have represented and warranted that such
Receivable, and all records, papers and documents relating thereto (if
any) are, to the best knowledge of the Assignor after due inquiry,
genuine and in all respects what they purport to be, and that all
papers and documents (if any) relating thereto, to the best knowledge
of the Assignor after due inquiry (i) will represent the genuine,
legally valid and binding obligation of the account debtor, subject to
adjustments customary in the business of such Assignor, and evidencing
indebtedness unpaid and owed by the respective account debtor arising
out of the performance of labor or services or the sale or lease and
delivery of the merchandise listed therein, or both, (ii) will be the
only original writings evidencing and embodying such obligation of the
account debtor named therein (other than copies created for general
accounting purposes), (iii) will evidence true and valid obligations,
enforceable in accordance with their respective terms, subject to
adjustments customary in the business of such Assignor, and (iv) will
be in compliance and will conform in all material respects with all
applicable laws of any relevant jurisdiction.
(8) Each Assignor will keep and maintain at its own cost and expense
satisfactory and complete records of its Receivables, including, but
not limited to, the originals of all documentation (including each
contract) with respect thereto, records of all payments received, all
credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available to
the Collateral Agent for inspection, at such Assignor's own cost and
expense, at any and all reasonable times upon demand and upon
reasonable advance notice. Each Assignor shall, at its own cost and
expense, deliver all tangible evidence of its Receivables (including,
without limitation, copies of all documents evidencing the
Receivables, such copies, if requested by the Collateral Agent while
an Event of Default is in existence, to be certified as true and
complete by an appropriate officer of such Assignor) and such books
and records to the Collateral Agent or to its representatives (copies
of which
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evidence and books and records may be retained by such Assignor) at
any time upon its demand. If the Collateral Agent so directs while an
Event of Default is in existence, each Assignor shall legend in form
and manner reasonably satisfactory to the Collateral Agent, the
Receivables, as well as books, records and documents of such Assignor
evidencing or pertaining to the Receivables with an appropriate
reference to the fact that the Receivables have been assigned to the
Collateral Agent and that the Collateral Agent has a security interest
therein.
(9) No Assignor shall rescind or cancel any indebtedness evidenced by any
Receivable, or modify any term thereof or make any adjustment with
respect thereto, or extend or renew the same, or compromise or settle
any material dispute, claim, suit or legal proceeding relating
thereto, or sell any Receivable, or interest therein, without the
prior written consent of the Collateral Agent, except as permitted by
paragraph 9 hereof, and so long as no Event of Default is then in
existence in respect of which the Collateral Agent has given notice
that this exception is no longer applicable, the Assignor may rescind,
cancel, modify, make adjustments with respect to, extend or renew any
indebtedness evidenced by any Receivable, or compromise or settle any
such dispute, claim, suit, or legal proceeding, or sell any Receivable
or interest therein, in the ordinary course of business. Each
Assignor will duly fulfill all obligations on its part to be fulfilled
under or in connection with the Receivables and will do nothing to
materially impair the rights of the Collateral Agent in the
Receivables.
(10) Each Assignor shall endeavor to collect from the account debtor, as
and when due (including, without limitation, amounts which are
delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under
or on account of such Receivable, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding
balance of such Receivable, except that, so long as no Event of
Default is then in existence in respect of which the Collateral Agent
has given notice that this exception is no longer applicable, such
Assignor may allow in the ordinary course of business as adjustments
to amounts owing under its Receivables (i) an extension or renewal of
the time or times of payment, or settlement for less than the total
unpaid balance, which such Assignor finds appropriate in accordance
with sound business judgment and (ii) a refund or credit due as a
result of returned or damaged merchandise or improperly performed
services. The reasonable out-of- pocket costs and expenses
(including, without limitation, attorneys' fees) of collection,
whether incurred by such Assignor or the Collateral Agent, shall be
borne by such Assignor.
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(11) Upon the occurrence and during the continuance of an Event of Default,
and if the Collateral Agent so directs the relevant Assignor, to the
extent permitted by applicable law, such Assignor agrees (x) to cause
all payments on account of the Receivables to be made directly to a
special designated account of the Collateral Agent (hereinafter the
"Cash Collateral Account"), (y) that the Collateral Agent may, at its
option, directly notify the obligors with respect to any Receivables
to make payments with respect thereto as provided in preceding clause
(x) and (z) that the Collateral Agent may enforce collection of any
such Receivables and may adjust, settle or compromise the amount of
payment thereof. The Collateral Agent may apply any or all amounts
then in, or thereafter deposited in, the Cash Collateral Account in
the manner provided in Section 9(5) of this Agreement. The reasonable
out-of-pocket costs and expenses (including attorneys' fees) of
collection, whether incurred by such Assignor or the Collateral Agent,
shall be borne by such Assignor.
(12) If any Assignor owns or acquires any instrument in connection with the
Collateral, such Assignor will within 10 days notify the Collateral
Agent thereof, and upon request by the Collateral Agent promptly
deliver such instrument to the Collateral Agent appropriately endorsed
to the order of the Collateral Agent as further security hereunder.
(13) Each Assignor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to
time such receipts, invoices, schedules, confirmatory assignments,
conveyances, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments and take such further
steps relating to its Receivables, instruments and other property or
rights covered by the security interest hereby granted, as the
Collateral Agent may reasonably require to give effect to the purposes
of this Agreement.
Section 5
SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT
(1) The transfer of all right, title and interest (including expectancy
rights ("Anwartschaftsrechte") with respect to Inventory and Equipment
located at any of the locations shown in ANNEX B hereto at the time of
the signature of this Agreement, shall become effective upon the
conclusion of this Agreement, whereas the transfer of all future
Inventory and Equipment shall be effective at the time of the arrival
of such Collateral at such location without any further action on the
part of the parties or any other person. Insofar as expectancy
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rights under retention of title arrangements ("Eigentumsvorbehalt")
are transferred to the Collateral Agent, the proprietary right will be
acquired by the Collateral Agent directly from the third person at the
time the retention of title arrangement terminates.
(2) Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and
delivery of this Agreement, that he has title, right or interest
(including expectancy rights) to all present and future Inventory and
Equipment located at the locations shown on ANNEX B hereto and that
the respective Assignor is entitled to dispose of these rights.
(3) The transfer of the present and future Collateral shall be replaced by
the obligation of each Assignor, to store the Collateral for the
benefit of the Collateral Agent with due diligence and care
("Besitzkonstitut").
(4) The Collateral Agent is entitled to repay obligations of each Assignor
vis-a-vis third persons with respect to the Collateral.
(5) Each Assignor will keep and maintain at its own cost and expense
satisfactory and complete records of any Inventory and Equipment,
including, but not limited to, the originals of all documentation
(including each contract) with respect thereto, and such Assignor will
make the same available to the Collateral Agent for inspection, at
such Assignor's own cost and expense, at any and all reasonable times
upon demand and upon reasonable advance notice.
(6) Each Assignor shall be entitled to dispose of the Collateral in the
ordinary course of business, provided, that no Event of Default has
occurred and provided further, that the security interest of the
Collateral Agent with respect to the Collateral shall not be
materially impaired or affected.
(7) The security interests in Equipment created by this Agreement shall
be subject to any Lien on Equipment permitted by Section 9.01 of the
Credit Agreement until such time as such Lien no longer attaches to
such Equipment.
Section 6
SPECIAL PROVISIONS CONCERNING MARKS
(1) Each Assignor represents and warrants, to the best of its knowledge
after due inquiry, that it is the true and lawful owner of the
registered and unregistered Marks listed in ANNEX E attached hereto
and that ANNEX E lists all the Marks
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registered in the Trademark Register of the German Patent Office or
the equivalent thereof in any foreign country and, to the best of its
knowledge, all unregistered Marks that such Assignor now owns or uses
for products developed by such Assignor in connection with its
business. Each Assignor represents and warrants that except with
respect to those licensed Marks set forth in ANNEX E, to the best of
its knowledge after due inquiry, it owns all trademarks that it uses.
Each Assignor further warrants that it is aware of no third party
claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any trademark in a
manner which could have a material effect on the financial condition,
business or property of such Assignor. Notwithstanding the foregoing,
the representations contained in this Section 6(1) will only be deemed
to be breached by matters that have, or would reasonably be expected
to have, a Material Adverse Effect.
(2) Each Assignor hereby agrees not to divest itself of any right under a
Significant Xxxx, other than in the ordinary course of business,
absent prior written approval of the Collateral Agent.
(3) Each Assignor agrees, promptly upon learning thereof, to notify the
Collateral Agent in writing of the name and address of, and to furnish
such pertinent information that may be available with respect to, any
party who may be infringing or otherwise violating any of such
Assignor's right in and to any Xxxx that has a material effect on the
financial condition, business or property of such Assignor taken as a
whole (each such Xxxx, a "Significant Xxxx"), or with respect to any
party claiming that such Assignor's use of any Significant Xxxx
violates any property right of that party, to the extent that such
infringement or violations could have a material effect on the
financial condition, business or property of such Assignor. Each
Assignor further agrees, unless otherwise directed by the Collateral
Agent, diligently to prosecute any person infringing any Significant
Xxxx in a manner consistent with its past practice and in the ordinary
course of business.
(4) Each Assignor agrees to use or license the use of its Significant
Marks in commerce during the time in which this Agreement is in
effect, sufficiently to preserve such Significant Marks as trademarks
registered under the laws of the Federal Republic of Germany or the
relevant foreign jurisdiction.
(5) Each Assignor shall at its own expense, diligently process all
documents required by Section 47 of the German Trademark Act and any
foreign equivalent thereof to maintain trademark registration, the
failure of which would reasonably be expected to have a Material
Adverse Effect, including, but not limited to,
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affidavits of use and applications for renewals of registration in the
German Patent Office or equivalent governmental agency in any foreign
jurisdiction for all its Marks (excluding unregistered Marks), and
shall pay all fees an disbursements in connection therewith, and shall
not abandon any such filing of affidavit of use or any such
application of renewal prior to the exhaustion of all administrative
and judicial remedies without prior written consent of the Collateral
Agent, which consent shall not be unreasonably withheld, unless such
Assignor shall determine that the pursuit or maintenance thereof is no
longer desirable in the conduct of the business of such Assignor and
that the loss thereof is not disadvantageous in any material respect
to such Assignor.
(6) If any xxxx registration issued hereafter to an Assignor as a result
of any application now or hereafter before the German Patent Office or
equivalent governmental agency in any foreign jurisdiction within
thirty (30) days of receipt of such certificate, such Assignor shall
deliver a copy of such certificate, and a confirmatory grant of
security in such xxxx to the Collateral Agent, the form of such
confirmatory grant reasonably acceptable to the Collateral Agent.
(7) If an Event of Default shall occur and be continuing, the Collateral
Agent may, by written notice to the relevant Assignor, take any or all
of the following actions: (i) declare the right of such Assignor in
and to each of the Marks together with all trademark rights and rights
of protection to the same, vested; (ii) take and use or sell the
Marks and the goodwill of such Assignor's business symbolized by the
Marks and the right to carry on the business and use the assets of the
Assignor in connection with which the Marks have been used; and (iii)
direct such Assignor to refrain, in which event such Assignor shall
refrain, from using the Marks in any manner whatsoever, directly or
indirectly, and, if requested by the Collateral Agent, change such
Assignor's corporate name to eliminate therefrom any use of any Xxxx
and execute such other and further documents that the Collateral Agent
may request to further confirm this. Each Assignor gives all
necessary declarations of ownership of the Marks by signing this
Agreement.
Section 7
SPECIAL PROVISIONS CONCERNING PATENTS,
INDUSTRIAL DESIGNS AND COPYRIGHTS
(1) Each Assignor represents and warrants that, to the best of its
knowledge after due inquiry, it is the true and lawful owner or
licensee of all rights in the Patents listed in
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ANNEX C attached hereto and the Industrial Designs listed in ANNEX C
attached hereto, that said Patents constitute all the Patents,
applications for Patents and intended applications for Patents that
such Assignor now owns and that said Industrial Designs constitute all
the Industrial Designs, applications for Industrial Designs and
intended applications for Industrial Designs that such Assignor now
owns. Each Assignor represents and warrants that, to the best of its
knowledge, it owns or is licensed to practice under all Patents,
Industrial Designs and Copyrights that is now owns, uses or practices
under. Each Assignor further warrants that it is aware of no third
party claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any Patent, Industrial
Design or any Copyright in a manner which could have material effect
on the financial condition, business or property of such Assignor.
(2) Except as otherwise permitted by Section 9.02 of the Credit Agreement,
each Assignor hereby agrees not to divest itself or any right under
any Patent that has a material effect on the financial condition,
business or property of such Assignor taken as a whole (each such
patent, a "Significant Patent"), under any Industrial Design that has
a material effect on the financial condition, business or property of
such Assignor taken as a whole (each such Industrial Design, a
"Significant Industrial Design") or any Copyright that has a material
effect on the financial condition, business or property of such
Assignor taken as a whole (each such copyright, a "Significant
Copyright"), other than in the ordinary course of business absent
prior written approval of the Collateral Agent, which such approval
shall not be unreasonably withheld.
(3) At its own expense, each Assignor shall make timely payment of all
post-issuance fees required pursuant to Section 17 German Patent Act,
Section Section 4(4), 23(2) German Utility Model Act and Section
Section 8 c, 9(3) German Design Act and any other national or foreign
equivalent or additional fee to maintain in force rights under each
Significant Patent, Significant Industrial Design or Significant
Copyright.
(4) Each Assignor agrees, promptly upon learning thereof, to furnish the
Collateral Agent in writing with all pertinent information available
to such Assignor with respect to any infringement or other violation
of such Assignor's rights in any Significant Patent, Significant
Industrial Design or Significant Copyright, or with respect to any
claim that practice of any Significant Patent, Significant Industrial
Design or Significant Copyright violates any property right of that
party to the extent that such infringement or violation could have a
material effect on the financial condition, business or property of
such Assignor. Each Assignor further agrees, absent direction of the
Collateral Agent to the contrary, diligently to prosecute any person
infringing any Significant Patent, Significat
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Industrial Design or Significant Copyright, about which it has
knowledge, in a manner consistent with its past practice and in the
ordinary course of business.
(5) At its own expense, each Assignor shall diligently prosecute all
actual and future applications for Patents, Industrial Designs and
Copyrights, of which the intended applications are listed in ANNEX C,
and shall not abandon any such application, except in favor of
continuation application based on such application, prior to
exhaustion of all administrative and judicial remedies, absent written
consent of the Collateral Agent, which such consent shall not be
unreasonably withheld, unless such Assignor shall determine that the
pursuit of maintenance thereof is no longer desirable in the conduct
or the business of such Assignor in that the loss thereof is not
disadvantageous in any material respect to such Assignor.
(6) Within 30 days of an Assignor's receipt of both the Patent application
serial number for a Patent application and the associated inventor
assignments to the Assignor, or 30 days of its filing an application
of registration for an Industrial Design, as the case may be, the
relevant Assignor shall deliver to the Collateral Agent a confirmatory
grant of security of such Patent or Industrial Design, as applicable,
the form of such confirmatory grant to be reasonably acceptable to the
Collateral Agent. Within 30 days of an Assignor's receipt of an
Industrial Design registration certificate or the printed copy of an
issued Patent, as the case may be, the Assignor shall deliver a copy
of the same to the Collateral Agent.
(7) If an Event of Default shall occur and be continuing, the Collateral
Agent may by written notice to the relevant Assignor take any or all
of the following actions (i) declare the entire right, title and
interest of such Assignor in each of the Patents, Industrial Designs
and Copyrights vested; (ii) take and practice or sell the Patents,
Industrial Designs and Copyrights; (iii) direct such Assignor to
refrain, in which event such Assignor shall refrain, from practicing
the Patents, Industrial Designs and Copyrights directly or indirectly,
and such Assignor gives all necessary declarations relating to the
transfer of ownership of the Patents, Industrial Designs and
Copyrights by signing this Agreement and shall execute such other and
further documents as the Collateral Agent may request further to
confirm this.
Section 8
PROVISIONS CONCERNING ALL COLLATERAL
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(1) Each Assignor will do nothing to impair the rights of the Collateral
Agent in the Collateral. Each Assignor will at all times keep its
Inventory and Equipment insured in favor of the Collateral Agent, at
its own expense, to the extent required by the Credit Agreement
against fire, theft and all other risks to which such Collateral may
be subject; all policies or certificates with respect to such
insurance shall be endorsed to the Collateral Agent's satisfaction for
the benefit of the Collateral Agent (including, without limitation, by
naming the Collateral Agent as an additional insured and loss payee)
and copies thereof shall be delivered upon request to the Collateral
Agent. If an Assignor shall fail to insure such Inventory and/or
Equipment to the extent required by the Credit Agreement, or if such
Assignor shall fail to so endorse all policies or certificates with
respect thereto, the Collateral Agent shall have the right (but shall
be under no obligation) to procure such insurance and such Assignor
agrees to reimburse the Collateral Agent for all costs and expenses of
procuring such insurance. The Collateral Agent may apply any proceeds
of such insurance in accordance with Section 9(5), it being understood
and agreed that the Assignor shall be permitted to first use any such
proceeds to repair and/or replace the relevant Collateral. Each
Assignor assumes all liability and responsibility in connection with
the Collateral acquired by it and the liability of such Assignor to
pay its Secured Obligations shall in no way be affected or diminished
by reason of the fact that such Collateral may be lost, destroyed,
stolen, damaged or for any reason whatsoever unavailable to such
Assignor.
(2) Each Assignor agrees that if any warehouse receipt or receipt in the
nature of a warehouse receipt is issued with respect to any of its
Inventory, such warehouse receipt or receipt in the nature thereof
shall not be negotiable (in the sense of Section 424 German
Commercial Code).
(3) Each Assignor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to
time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts,
bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security
interest hereby granted, which the Collateral Agent reasonably deems
appropriate or advisable to perfect, preserve or protect its security
interest in the Collateral.
(4) The Assignors agree to prepare and deliver to the Collateral Agent no
later than on the eighth day of each month a duly certified schedule
or schedules in the
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form of a computer printout, showing (i) as to Receivables, the
identity, amount and maturity date of any and all Receivables existing
as of the last day of the previous month, as well as the names and
addresses of all account debtors, (ii) as to Inventory and Equipment,
each object being Collateral, their number and the rights of the
Assignors to it, each such schedule accompanied by each Assignor's
representation that as of the date of such schedule it has not
generally ceased to make payments when due, that no application for
the institution of bankruptcy proceedings has been filed against it
and that it does not expect any such events to arise within the
foreseeable future. The failure of one or several Assignors to
include a Receivable or Inventory or Equipment in any such schedule or
schedules does not affect the validity of the assignment of such
Receivable or transfer of the rights with respect to Inventory or
Equipment to the Collateral Agent hereunder.
(5) The Collateral Agent and such representatives or agents as the
Collateral Agent may reasonably designate shall have the right, at
reasonable time and as often as reasonably requested, to inspect all
records relating to the Collateral and to make extracts and copies
from such records and to inspect all locations where Collateral is
stored. They have therefore the right to enter and inspect the
Assignor's premises, to discuss the Assignor's affairs with the
officers of the Assignors and their independent accountants and to
verify under reasonable procedures all matters relating to the
Collateral, i.e., validity, amount, quality, quantity, value and
condition, including contacting account debtors or any third person
for the purpose of making such a verification. The Collateral Agent
may only contact account debtors or third persons if the Collateral
Agent, in good faith, considers that the existence, value,
effectiveness or priority of the security interests is or may be
prejudiced by an action, omission, event or circumstance whatsoever
and only after prior notice to the Assignors. No such notice is
required if the Collateral Agent considers, in good faith, that the
imminence or severity of a prejudice to the existence, value,
effectiveness or priority of the security interest in respect of the
Collateral is such that the delay caused by the giving of such notice
is or might be likely to induce or increase such a prejudice. The
statutory rights of the Assignors' shareholder/s and managing
director/s shall not be affected or reduced thereby.
Section 9
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
(1) Each Assignor agrees that, if any Event of Default shall have occurred
and be continuing, then and in every such case, subject to any
mandatory requirements
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of applicable law then in effect, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law, may:
personally, or by agents or attorneys, immediately, without the
necessity to obtain a prior court order,
(i) retake possession of the Collateral or any part thereof, from such
Assignor or any other Person who then has possession of any part
thereof with or without notice of process of law, and for that purpose
may enter upon such Assignor's premises where any of the Collateral is
located and remove the same and use in connection with such removal
any and all services, supplies, aids and other facilities of such
Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables)
constituting the Collateral to make any payment required by the terms
of such instrument or agreement directly to the Collateral Agent;
(iii) sell, assign or otherwise liquidate, or direct such Assignor to
sell, assign or otherwise liquidate, any or all of the Collateral or
any part thereof, and take possession of the proceeds of any such sale
or liquidation;
(iv) withdraw any or all monies, securities and/or instruments in the
Cash Collateral Account for application to the Secured Obligations in
accordance with paragraph (5) hereof;
(v) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:
(A) forthwith cause the same to be moved to the place or places
so designated by the Collateral Agent and there delivered to the
Collateral Agent,
(B) store and keep any Collateral so delivered to the Collateral
Agent at such place or places pending further action by the
Collateral Agent as provided in Section 7, paragraph 2, and
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(C) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition;
(2) Upon the occurrence and continuance of an Event of Default, any
Collateral repossessed by the Collateral Agent under or pursuant to
Section 9(1) and any other Collateral whether or not so repossessed by
the Collateral Agent, may be sold, assigned, leased or otherwise
disposed of under one or more contracts or as an entirety, and without
the necessity of gathering at the place of sale the property to be
sold, and in general in such manner, at such time or times, at such
place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law,
determine to be commercially reasonable. Any of the Collateral may be
sold, leased or otherwise disposed of, in the condition in which the
same existed when taken by the Collateral Agent or after any overhaul
or repair which the Collateral Agent shall determine to be
commercially reasonable.
(3) Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less
than ten (10) days' written notice to such Assignor specifying the
time at which such disposition is to be made and the intended sale
price or other consideration therefor, and shall be subject, for the
ten (10) days after the giving of such notice, to the right of the
relevant Assignor or any nominee of the relevant Assignor to acquire
the Collateral involved at a price or for such other consideration at
least equal to the intended sale price or other consideration so
specified. Any such disposition which shall be a public sale
permitted by such requirements shall be made upon not less than ten
(10) days' written notice to the relevant Assignor specifying the time
and place of such sale and, in the absence of applicable requirements
of law, shall be by public auction (which may, at the Collateral
Agent's option, be subject to reserve), after publication of notice of
such auction not less than 10 days prior thereto in two newspapers in
general circulation in the city where such Collateral is located. To
the extent permitted by any such requirement of law, the Collateral
Agent on behalf of the Creditors (or certain of them) may bid for and
become the purchaser (by bidding in Secured Obligations or otherwise)
of the Collateral or any item thereof, offered for sale in accordance
with this Section without accountability to the relevant Assignor
(except to the extent of surplus money received as provided in Section
7, paragraph (5). If, under mandatory requirements of applicable law,
the Collateral Agent shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of
notice to the Assignor as hereinabove specified, the Collateral Agent
need give the relevant Assignor only such notice of
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disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law.
(4) Except as otherwise provided in this Agreement, each Assignor hereby
further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or wilful misconduct;
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right,
title, interest, claim and demand of the relevant Assignor therein and
thereto, and shall be a perpetual bar against the relevant Assignor
and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under the relevant Assignor.
(5) (a) The proceeds of any Collateral obtained pursuant to Section 9,
paragraph (1) or disposed of pursuant to Section 9, paragraph (2)
shall be applied as follows:
(i) first, to the payment of all Primary Obligations
of the type described in clauses (iv) and (v) of Section 1(1) to
the Collateral Agent;
(ii) second, to the extent proceeds remain after the
application pursuant to preceding clause (i), an amount equal to
the outstanding Primary Obligations to the Creditors shall be
paid to the Creditors as provided in this Section 9, paragraph
(5)(a) hereof with each Creditor receiving an amount equal to its
outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full all such Secured Obligations, its Pro
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Rata Share (as defined below) of the amount remaining to be
distributed; and
(iii) third, to the extent remaining after the
application pursuant to the preceding clauses (i) and (ii) an
amount equal to the outstanding Secondary Obligations shall be
paid to the Creditors as provided in paragraph (5) (c) hereof,
with each Creditor receiving an amount equal to its outstanding
Secondary Obligations or, if the proceeds are insufficient to pay
in full all such Secondary Obligations, its Pro Rata Share of the
amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii)
inclusive, and following the termination of this Agreement
pursuant to Section 12 paragraph 9 hereof, to the relevant
Assignor or to whomever may be lawfully entitled to receive such
surplus, if any.
(b) For purposes of this Agreement, (x) "Pro Rata Share" shall mean,
when calculating a Creditor's portion of any distribution or amount,
the amount (expressed as a percentage) equal to a fraction the
numerator of which is the then outstanding amount of the relevant
Secured Obligations owed to such Creditor and the denominator of which
is the then outstanding amount of all Secured Obligations, (y)
"Primary Obligations" shall mean (i) in the case of the Credit
Document Obligations, all obligations and liabilities of the German
Borrowers arising out of or in connection with the principal of, and
interest on, all Deutsche Xxxx Loans, all Unpaid Drawings (related to
Deutsche Xxxx Letters of Credit) theretofore made (together with all
interest accrued thereon), and the aggregate stated amounts of all
German Letters of Credit issued under the Credit Agreement, together
with all fees, (ii) in the case of the Other Obligations, all amounts
due under the Additional Agreements, (other than indemnities, fees
(including, without limitation, attorney's fees) and similar
obligations and liabilities) and (iii) in the case of Bally Gaming
International GmbH Senior Secured Loans, all obligations of Bally
Gaming International GmbH thereunder and (z) "Secondary Obligations"
shall mean all Secured Obligations other than Primary Obligations.
(c) All payments required to be made to the Creditors hereunder shall
be made to the Collateral Agent for the account of the respective
Creditors in accordance with Section 7.4 (c) through (f) of the U.S.
Security Agreement (Exhibit J to the Credit Agreement), a copy of
which is attached hereto as ANNEX G applies.
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(d) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between (x) the
amount of the proceeds of the Collateral and (y) the aggregate
outstanding amount of the Secured Obligations.
(6) Each and every right, power and remedy hereby specifically given to
the Collateral Agent shall be in addition to every other right, power
and remedy specifically given under this Agreement, the other Credit
Documents or the Additional Agreements or now or hereafter existing,
or by statute and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from
time to time or simultaneously and as often and in such order as may
be deemed expedient by the Collateral Agent. All such rights, powers
and remedies shall be cumulative and the exercise or the beginning of
exercise of one shall not be deemed a waiver of the right to exercise
of any other or others. No delay or omission of the Collateral Agent
in the exercise of any such right, power or remedy and no renewal or
extension of any of the Secured Obligations shall impair any such
right, power or remedy or shall be construed to be a waiver of any
Default or Event of Default or an acquiescence therein. In the event
that the Collateral Agent shall bring any suit to enforce any of its
rights hereunder and shall be entitled to judgment, then in such suit
the Collateral Agent may recover reasonable expenses, including
attorneys' fees, and the amounts thereof shall be included in such
judgment.
(7) In case the Collateral Agent shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have
been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of
any of the Secured Obligations shall be restored to their former
positions and rights hereunder with respect to the Collateral subject
to the security interest created under this Agreement, and all rights,
remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.
Section 10
INDEMNITY
(1) The Assignors jointly and severally agree to indemnify, reimburse and
hold the Collateral Agent, each Creditor and its respective
successors, assigns, employees, agents and servants (hereinafter in
this Section 10(1) referred to individually as "Indemnitee" and
collectively as "Indemnitees") harmless from
404
EXHIBIT K
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any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, suits, judgments and any and all reasonable
out-of-pocket costs and expenses (including reasonable attorneys' fees
and expenses) (for the purposes of this Section 10(1) the foregoing
are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in
any way relating to or arising out of this Agreement, any other Credit
Document, the Additional Agreements or the documents executed in
connection herewith and therewith or in any other way connected with
the enforcement of any of the terms of, or the preservation of any
rights under any thereof, or in any way relating to or arising out of
the manufacture, ownership, ordering, purchase, delivery, control,
acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including,
without limitation, latent or other defects, whether or not
discoverable), the violation of the laws of any country, state or
other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict
liability, or for or on account of injury to or the death of any
Person (including any Indemnitee), or property damage), or contract
claim; provided that no Indemnitee shall be indemnified pursuant to
this Section 10(1) for losses, damages or liabilities to the extent
caused by the gross negligence or wilful misconduct of such Person to
be indemnified or of any other Indemnitee who is such Person or an
affiliate of such Person. If any claim is asserted against any
Indemnitee, such Indemnitee shall promptly notify the Assignor and
each Indemnitee may, and if requested by the Assignor shall, in good
faith, contest the validity, applicability and amount of such claim
with counsel (reasonably acceptable to such Assignor) selected by such
Indemnitee, and shall permit the Assignor to participate in such
contest. In addition, in connection with any claim covered by this
Section 10(1) against more than one Indemnitee, all such Indemnitees
shall be represented by the same legal counsel selected by such
Indemnitees; provided, however, that if such legal counsel determines
in good faith that representing all such Indemnitees would or could
result in a conflict of interest under the laws or ethical principles
applicable to such legal counsel or that a defense or counterclaim is
available to an Indemnitee that is not available to all such
Indemnitees, then to the extent reasonably necessary to avoid such a
conflict of interest or to permit unqualified assertion of such a
defense or counterclaim, each Indemnitee shall be entitled to separate
representation by a legal counsel selected by that Indemnitee. Each
Assignor agrees that upon written notice by any Indemnitee of the
assertion of such a liability, obligation, loss, damage, penalty,
claim, demand, action, judgment or suit, such Assignor shall assume
full responsibility for the defense thereof. Each Indemnitee agrees
to use its
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best efforts to promptly notify the relevant Assignor of any such
assertion of which such Indemnitee has knowledge.
(2) Without limiting the application of Section 10(1), the Assignors
jointly and severally agree to pay, or reimburse the Collateral Agent
for (if the Collateral Agent shall have incurred fees, costs or
expenses because an Assignor shall have failed to comply with its
obligations under this Agreement or any Credit Document), any and all
out-of-pocket costs and expenses of whatever kind or nature incurred
in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with
the recording or filing of instruments and documents in public
offices, payment or discharge of any taxes or Liens upon or in respect
of the Collateral, premiums for insurance with respect to the
Collateral and all other fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the
Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Collateral.
(3) Without limiting the application of Section 10(1) or 10(2), the
Assignors jointly and severally agree to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and
expenses which such Indemnitee may suffer, expend or incur in
consequence of or growing out of any material misrepresentation by an
Assignor in this Agreement, or in any statement or writing
contemplated by or made or delivered pursuant to or in connection with
this Agreement.
(4) If and to the extent that the obligations of any Assignor under
Sections 10(1) to 10(3) are unenforceable for any reason, each
Assignor hereby agrees to make the maximum contribution to the payment
and satisfaction of such obligations which is permissible under
applicable law.
(5) Any amounts paid by any Indemnitee prior to the termination of this
Agreement as to which such Indemnitee has the right to reimbursement
shall constitute Secured Obligations secured by the Collateral. The
indemnity obligations of the Assignors contained in this Section 10
shall continue in full force and effect notwithstanding the full
payment of all other Secured Obligations and notwithstanding the
discharge thereof.
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Section 11
DEFINITIONS
The following terms shall have the meanings herein specified unless
the context otherwise requires. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with
its terms.
"Collateral" shall mean (i) each and every Receivable against
Third Persons (it being understood, however, that in the case of Bally
Gaming International GmbH Senior Secured Loans, the Receivables of
Bally Gaming International shall be considered "Collateral"), (ii) any
and all Equipment or Inventory which at the time of the execution
hereof is, or in the future, will be located on any of the premises
currently occupied by any Assignor that are listed in Annex B attached
hereto, (iii) each and every Intellectual Property Right, and (iv) all
Proceeds and products of any and all of the items referred to in
clauses (i) through (iii) above.
"Copyrights" shall mean any German or foreign copyright owned by
any Assignor nor or hereafter, including any registration of any
copyrights or the equivalent thereof, as well as any application for
copyright registration now or hereafter in any jurisdiction by any
Assignor.
"Equipment" shall mean any equipment and, in any event, shall
include, but shall not be limited to, all machinery, equipment,
furnishings, fixtures and vehicles and any and all additions,
substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, pans, equipment
and accessories installed thereon or affixed thereto.
"Industrial Designs" shall mean any German, European, or foreign
registrable utility model or any other registrable design protected
under any national or international law to which any Assignor now or
thereafter has title and any divisions or continuations thereof,
including any application for a German or any other foreign Industrial
Design now or thereafter made by Assignor, as well as any Industrial
Design made in future by any Assignor in any area of any Assignor's
business activities.
"Intellectual Property Rights" shall mean Marks, Patents,
Industrial Designs, Copyrights and Proprietary Assets as defined in
Section 11.
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"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located,
together with all goods, supplies, incidentals, packaging materials,
labels, materials and any other items used or usable in manufacturing,
processing, packaging or shipping same; in all stages of production
from raw materials through work-in-process to finished goods -- and
all products and proceeds of whatever sort and wherever located and
any portion thereof which may be returned, rejected, reclaimed or
repossessed by the Collateral Agent from an Assignor's customers.
"Marks" shall mean all rights in any trademark or parts of it
protected by the German Trademark Act, International trademark law or
any foreign trademark law or equivalent thereof now held or in the
future acquired by any Assignor, including any application for
registration of any trademarks in the register of the German Patent
Office or the equivalent thereof in any foreign country.
"Patents" shall mean any German, European or any other foreign
patent to which any Assignor now or thereafter has title and any
divisions or continuations thereof, including any application for a
German, European or any other foreign patent now or thereafter made by
any Assignor, also covering any rights and entitlements to a Patent
due to these inventions.
"Proceeds" shall be (i) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Collateral Agent or an
Assignor from time to time with respect to any of the Collateral, (ii)
any and all payments (in any form whatsoever) made or due and payable
to an Assignor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part
of the Collateral by any governmental authority (or any person acting
under color of governmental authority), (iii) any and all other
amounts from time to time paid or payable under or in connection with
any of the Collateral, and (iv) any other similar benefit arising from
or in connection with the Collateral.
"Proprietary Assets" shall mean all information and know-how of
any Assignor, including, without limitation, technical data;
manufacturing data; research and development data; data relating to
compositions, processes and formulations, manufacturing and production
know-how and experience; management know-how; training programs
manufacturing, engineering and other drawings; specifications;
performance criteria; operation instructions; maintenance manuals;
technology; technical information, software and computer programs;
engineering and computer data and databases; catalogues; financial,
408
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Page 30
business and marketing plans; unpatentable inventions; trade secrets,
as well as trade dresses including logos, designs, company names,
business name, fictitious business names and other business
identifiers.
"Receivables" shall mean (i) all the existing and future accounts
receivable (including the accounts receivable owed by foreign
Customers) from the delivery of goods and services against all debtors
of the Assignors as well as any respective expectancy rights
("Anwartschaften"), (ii) all existing and future claims and respective
expectancy rights ("Anwartschaften") under any and all letters of
credit issued in favor of the Assignors and (iii) all present and
future current account balances ("Kontokorrentverhaltnis") with
account debtors along with the right to terminate any current account
arrangement and the right to determine the balance of a current
account.
"Third Persons" shall mean (i) any company which is not a direct
or indirect subsidiary or direct or indirect parent company of the
Borrowers and (ii) any natural person.
Section 12
MISCELLANEOUS
(1) Notices. All notices and other communications hereunder shall be in
writing and shall be delivered or mailed by first class mail, postage prepaid,
addressed:
(i) if to the Assignor, at its address contained in the Credit
Agreement (for the German Borrowers) or the German Subsidiary Guaranty
(for the other Assignors);
(ii) if to the Collateral Agent, at:
Credit Suisse First Xxxxxx
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx Xxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(iii) if to any Lender Creditor (other than the Collateral Agent), at
such address as such Lender Creditor shall have specified in the
Credit Agreement or the Additional Agreements;
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Page 31
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
(2) Waiver; Amendment. (a) None of the terms and conditions of this Agreement
may be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by each Assignor directly affected thereby (it being
understood that additional Assignors may be added as parties hereto from time
to time in accordance with Section 12 paragraph 13 and that no consent of any
other Assignor or of the Required Lenders shall be required in connection
therewith) and the Collateral Agent (with the consent of the Required Lenders
or, to the extent required by Section 13.12 of (x) the Credit Agreement, all of
the Lenders at all times prior to the time of which all Credit Document
Obligations have been paid in full or (y) the holders of at least a majority of
the outstanding Other Obligations at all times after the time at which all
Credit Document Obligations have been paid in full), provided, that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class of Creditors (and not all Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors of such Class of
Creditors. For the purpose of this Agreement, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders
of the Credit Document Obligations or (y) the Other Creditors as the holders of
the Other Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Lenders and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Additional Agreements. (b) No delay on the part of
the Collateral Agent in exercising any of its rights, remedies, powers and
privileges hereunder or partial or single exercise thereof, shall constitute a
waiver thereof. No notice to or demand on any Assignor in any case shall
entitle it to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Collateral
Agent to any other or further action in any circumstances without notice or
demand.
(3) Obligations Absolute. The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Additional Agreement or (c) any amendment to or modification of other
Credit Documents or Additional Agreements or any security for any of the
Secured Obligations; whether or not any Assignor shall have notice or knowledge
of any of the foregoing. The rights and remedies of the Collateral Agent
410
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Page 32
herein provided are cumulative and not exclusive of any rights or remedies
which the Collateral Agent would otherwise have.
(4) Successors and Assigns. This Agreement shall be binding upon each
Assignor and its successors and assigns and shall inure to the benefit of the
Collateral Agent and its permitted successors and assigns. All agreements,
statements, representations and warranties made by each Assignor herein or in
any certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the Lender
Creditors and shall survive the execution and delivery of this Agreement and
the other Credit Documents regardless of any investigation made by the Lender
Creditors on their behalf.
(5) Headings Descriptive. The headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
(6) Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(7) GOVERNING LAW; JURISDICTION. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE FEDERAL REPUBLIC OF GERMANY. Exclusive place of
jurisdiction for any dispute arising out of or in connection with this
Agreement shall be at Berlin; provided that nothing in this Agreement shall be
deemed or operate to preclude the Collateral Agent from bringing suit or taking
other legal action against the Assignors before any other court of competent
jurisdiction with respect to any such claims or disputes.
(8) Assignors' Duties. It is expressly agreed, anything herein contained to
the contrary notwithstanding, that each Assignor shall remain liable to perform
all of the obligations, if any, assumed by it with respect to the Collateral
and the Collateral Agent shall not have any obligations or liabilities with
respect to any Collateral by reason of or arising out of this Agreement, nor
shall the Collateral Agent be required or obligated in any manner to perform or
fulfill any of the obligations of an Assignor under or with respect to any
Collateral.
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(9) Termination; Release. When no Deutsche Xxxx Revolving Note or German
Letter of Credit is outstanding and when all Loans and other Secured
Obligations (other than indemnity obligations, except those referred to in the
first sentence of Section 10(1) have been paid in full, this Agreement shall
terminate, and the Collateral Agent, at the request and expense of the
Assignor, will execute and deliver to the relevant Assignor a proper instrument
or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to the relevant Assignor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Collateral Agent and as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement.
(10) Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each German Borrower
and the Collateral Agent.
(11) Collateral Agent. The Collateral Agent will hold in accordance with this
Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Collateral Agent as holder of the Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement. The Collateral Agent shall
act hereunder on the terms and conditions set forth in this Agreement and in
Section 13 of the Credit Agreement.
(12) Validity. Should any provision of this Agreement be or become void or
not enforceable in whole or in part, the other provisions of this Agreement
shall remain in force. The void or unenforceable provision shall be
substituted by a valid provision which accomplishes as far as legally possible
the economic purpose of the void or unenforceable provision. The validity of
this Agreement shall not be affected by the invalidity of the Credit Agreement.
(13) Additional Assignors. It is understood and agreed to that any German
Subsidiary that is required to execute a counterpart of this Agreement after
the date hereof pursuant to the Credit Agreement shall automatically become an
Assignor hereunder by executing a counterpart hereof and delivering the same to
the Collateral Agent.
(14) Credit Agreement. This Agreement is made in fulfillment of the Credit
Agreement. To the extent that there is an inconsistency between the terms of
this Agreement and the Credit Agreement except where provisions of German law
have to be observed in order to effectuate the security interests under German
law, any party
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hereto shall be entitled to request the adjustment of this Agreement to the
terms of the Credit Agreement, unless this would violate mandatory German law.
* * *
413
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
first above written.
the Assignors:
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Alliance Automaten Verwaltungs
GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Alliance Automaten GmbH&Co. KG)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Bally Xxxxx Vertriebs GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Bally Xxxxx Automaten GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Geda AutomatenGrosshandel GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Xxxxxx Automated GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Westav Westdeutscher Automaten
GmbH)
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Bally Gaming International GmbH)
Acknowledged and Agreed to by
Xxxxxx 0, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Credit Suisse First Boston)
August 8, 0000 Xxx Xxxx, XX /s/ Xxxxx Xxxxxxxxxxxx
--------------------------- -------------------------------
(time, place) (Credit Suisse First Boston)
414
EXHIBIT M
415
EXHIBIT M
[CONFORMED AS EXECUTED]
OFFICER'S SOLVENCY CERTIFICATE
I, the undersigned, the chief financial officer of Alliance
Gaming Corporation, a corporation organized and existing under the laws of the
State of Nevada (the "Company"), do hereby certify that:
1. This Certificate is furnished pursuant to Section 5A.19 of
the Credit Agreement, dated as of August 8, 1997, among Alliance Gaming
Corporation, a Nevada corporation, Bally Xxxxx Vertriebs GmbH, a company with
limited liability formed under the laws of the Federal Republic of Germany,
Bally Xxxxx Automaten GmbH, a company with limited liability formed under the
laws of the Federal Republic of Germany (the "Borrowers" and each a
"Borrower"), the lenders from time to time party thereto (the "Lenders") and
Credit Suisse First Boston, as Administrative Agent (such Credit Agreement, as
in effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall
have the following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of each of
the Company (on a stand-alone basis), the Company and its
Subsidiaries (on a consolidated basis) and each other Borrower
(each on a stand-alone basis), in each case would change hands
between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any
compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing
seller from an independent willing buyer if the assets of the
Company (on a stand-alone basis), the Company and its
Subsidiaries (on a consolidated basis) and each other Borrower
(each on a stand-alone basis) are sold with reasonable
promptness under normal selling conditions in a current
market.
416
EXHIBIT M
Page 2
(c) "New Financing"
The indebtedness incurred or to be incurred by the Company and
its Subsidiaries under the Credit Documents (assuming the full
utilization by each Borrower of the Commitments under the
Credit Agreement), the New Senior Subordinated Notes Documents
and all other financing contemplated by the Documents, in each
case after giving effect to the Transaction and the incurrence
of all financings contemplated therewith.
(d) "Stated Liabilities"
The recorded liabilities (including Contingent Liabilities
that would be recorded in accordance with generally accepted
accounting principles ("GAAP"), consistently applied of each
of the Company (on a stand-alone basis), the Company and its
Subsidiaries (on a consolidated basis) and each other Borrower
(each on a stand-alone basis), in each case as of the date
hereof after giving effect to the Transaction and, without
duplication, the amount of all New Financing.
(e) "Contingent Liabilities"
The maximum estimated amount of liability reasonably likely to
result from pending litigation, asserted claims and
assessments, guaranties, uninsured risks and other contingent
liabilities of each other of the Company (on a stand-alone
basis), the Company and its Subsidiaries (on a consolidated
basis) and each other Borrower (each on a stand-alone basis),
(exclusive of such Contingent Liabilities to the extent
reflected in Stated Liabilities), in each case, estimated by
such parties based on presently known facts and circumstances.
(f) "Will be able to pay its Stated Liabilities, including
Contingent Liabilities, as they mature."
For the period from the date hereof through the stated
maturity of all New Financing, each of the Company (on a
stand-alone basis), the Company and its Subsidiaries (on a
consolidated basis) and each other Borrower (each on a
stand-alone basis), in each case will have sufficient assets,
cash flow and other sources of funds to pay its Stated
Liabilities and Contingent Liabilities as those liabilities
mature or otherwise become due.
(g) "Does not have Unreasonably Small Capital"
417
EXHIBIT M
Page 3
For the period from the date hereof through the stated
maturity of all New Financing, each of the Company (on a
stand-alone basis), the Company and its Subsidiaries (on a
consolidated basis) and each other Borrower (each on a
stand-alone basis), in each case after consummation of the
Transaction and all Indebtedness (including the Loans, the
Letters of Credit and the New Senior Subordinated Notes) being
incurred or assumed and Liens created in connection therewith,
is a going concern and has sufficient capital to ensure that
it will continue to be a going concern for such period and to
remain a going concern despite moderately negative deviations
from the Projections discussed below.
3. For purposes of this Certificate, I, or officers of the
Company under my direction and supervision, have performed the following
procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements referred to in
Section 7.05(a) and 7.05(b) of the Credit Agreement.
(b) I have reviewed the unaudited pro forma consolidated financial
statements of the Company and their Subsidiaries referred to
in Section 5A.17 of the Credit Agreement and verified the
mathematical accuracy of the application of the pro forma
adjustments to the amounts in the audited consolidated
financial statements.
(c) I have made inquiries of certain other officials of the
Company who have responsibility for financial and accounting
matters regarding:
1. whether the unaudited pro forma consolidated
financial statements referred to in paragraph (b)
above are in conformity with GAAP applied on a basis
substantially consistent with that of the unaudited
financial statements as at March 31, 1997 and
2. whether, at June 30, 1997, there were any decreases
as compared with March 31, 1997, in the consolidated
net assets or the excess of consolidated current
assets over consolidated current liabilities of the
Company and its Subsidiaries.
(d) I have read:
1. the Credit Documents and the respective Schedules and
Exhibits thereto.
418
EXHIBIT M
Page 4
(e) With respect to Contingent Liabilities, I:
1. inquired of certain officials of the Company who have
responsibility for legal, financial and accounting
matters as to the existence and estimated liability
with respect to all Contingent Liabilities known to
them;
2. confirmed with senior officers of the Company that,
to the best of such officers' knowledge, (i) all
appropriate items were included in Stated Liabilities
or Contingent Liabilities made known to me in the
course of my inquiry and that (ii) the amounts
relating thereto were the maximum estimated amount of
liability reasonably likely to result therefrom as of
the date hereof;
3. hereby certify that, to the best of my knowledge, all
material Contingent Liabilities that are reasonably
likely to arise from any pending litigation, asserted
claims and assessments, guarantees, uninsured risks
and other Contingent Liabilities of the Company and
its Subsidiaries (exclusive of such Contingent
Liabilities to the extent reflected in Stated
Liabilities) have been considered in making the
certification set forth in paragraph 4 below, and
with respect to each such Contingent Liability the
estimable maximum estimated amount of liability with
respect thereto was used in making such
certification.
(f) I have had the Projections, which have been previously
delivered to the Lenders, prepared under my direction and have
re- examined the Projections on the date hereof and considered
the effect thereon of any material changes since the date of
the preparation thereof on the results projected therein.
After such review, I hereby certify that in my opinion the
Projections are reasonable and attainable. Furthermore, the
Projections support the conclusions contained in the last
paragraph of this Certificate. In connection with the
statements made herein, please be advised that the Projections
are based upon a number of assumptions and are subject to
significant economic and competitive uncertainties and
contingencies. There can be no assurance that the Projections
will be realized and the actual results may be higher or lower
than those projected.
(g) I have made inquiries of certain officers of the Company who
have responsibility for financial reporting and accounting
matters regarding whether they were aware of any events or
conditions that, as of the date
419
EXHIBIT M
Page 5
hereof, would cause the Company (on a stand-alone basis), the
Company and its Subsidiaries (on a consolidated basis) and
each other Borrower (on a stand-alone basis), in each case
after giving effect to the consummation of the Transaction and
the related financing transactions (including the incurrence
of the New Financing and the New Senior Subordinated Notes),
to (i) have assets with a Fair Value or Present Fair Salable
Value that are less than the sum of Stated Liabilities and
Contingent Liabilities; (ii) have Unreasonably Small Capital;
or (iii) not be able to pay its Stated Liabilities and
Contingent Liabilities as they mature or otherwise become due.
4. Based on and subject to the foregoing, I hereby certify on
behalf of the Company that, after giving effect to the Transaction and the
related financing transactions (including the New Financing and the New Senior
Subordinated Notes), to the best of my knowledge, as of the date hereof (i) the
Fair Value and Present Fair Salable Value of the assets of the Company (on a
stand-alone basis), the Company and its Subsidiaries (on a consolidated basis)
and each other Borrower (on a stand-alone basis), in each case exceed its
Stated Liabilities and Contingent Liabilities; (ii) the Company (on a
stand-alone basis), the Company and its Subsidiaries (on a consolidated basis)
and each other Borrower (on a stand-alone basis), in each case will not have
Unreasonably Small Capital; and (iii) the Company (on a stand- alone basis),
the Company and its Subsidiaries (on a consolidated basis) and each other
Borrower (on a stand-alone basis), in each case will be able to pay its Stated
Liabilities and Contingent Liabilities as they mature or otherwise become due.
420
EXHIBIT M
Page 6
IN WITNESS WHEREOF, the undersigned has caused its duly
authorized chief financial officer to execute and deliver this Certificate this
8th day of August.
ALLIANCE GAMING CORPORATION
By /s/ Xxxxx Xxxxxxxxxxxx
------------------------------------
Title: Senior Vice President, CFO
and Treasurer
421
EXHIBIT N-1
422
EXHIBIT N-1
-----------
U.S. BORROWING BASE CERTIFICATE AS OF [DATE]
To: The Lenders party to the Credit Agreement, dated as of
August 8, 1997, among Alliance Gaming Corporation
(the "U.S. Borrower") Bally Xxxxx Vertriebs GmbH,
Bally Xxxxx Automten GmbH, the Lenders party thereto
from time to time, and Credit Suisse First Boston, as
Administrative Agent1
Amount in
1. Accounts Receivable U.S. Dollars
------------------- ------------
Gross book value of the receivables of the U.S. $______
Borrower and the Wholly-Owned Subsidiary Guarantors
arising from the sale or lease of inventory or services
by the U.S. Borrower or the Wholly-Owned Subsidiary
Guarantors in the ordinary course of business which
conform to the representations and warranties contained
in the U.S. Security Agreement and the other applicable
U.S. Security Documents (including, without limitation,
that the Collateral Agent shall have and maintain a
first priority perfected security interest in all
such receivables)
Less:
Returns, discounts and claims, of any nature ($______)
(whether issued, owing, granted or outstanding)
Xxxx and hold (deferred shipment) and ($______)
consignment transactions
Contracts or sales to any Affiliate ($______)
----------
(1/) All capitalized terms used herein shall have the meaning provided
therefor in such Credit Agreement.
423
EXCHIBIT N-1
Page 2
Without duplication, all installment or lease ($______)
receivables where the respective account debtor has
two or more installments which are past due
All receivables from any party subject to any ($______)
bankruptcy, receivership, insolvency or like
proceedings by the account debtor
One-third of the amount of all receivables to ($______)
account debtors outside the United States of
America which would otherwise have been
included as U.S. Eligible Receivables
Book reserves in respect of receivables of the ($______)
U.S. Borrower and the Wholly-Owned Subsidiary
Guarantors to the extent in excess of 20% of
the gross book value of the receivables of such
Persons
2. Eligible Receivables $______
(Net Amount of No. 1)
3. 75% of Eligible Receivables $______
4. Inventory
Book value of the inventory of the U.S. Borrower $______
and the Wholly-Owned Subsidiary Guarantors, which
conforms to the representations and warranties
contained in the U.S. Security Agreement (and in
which a Lien has been granted pursuant to the U.S.
Security Agreement), which inventory is located
in the United States
Less:
Supplies (other than raw materials), goods returned ($______)
or rejected (except to the extent that such returned
or rejected goods continue to conform to the
representations and warranties
424
EXHIBIT N-1
Page 3
contained in the X.X.Xxxxxxxx Agreement) by
customers and goods to be returned to suppliers
Used inventory ($______)
Any advance payments made by customers with ($______)
respect to inventory of the U.S. Borrower and
the Wholly-Owned Subsidiary Guarantors
Inventory subject to any Lien other than the ($______)
Liens created under the U.S. Security Agreement
and the other applicable U.S. Security
Documents
5. Eligible Inventory $______
(Net Amount of No. 4)
6. 40% of Eligible Inventory $______
7. U.S. Borrowing Base $______
(Sum of Nos. 3 and No. 6)
8. Total outstanding Swingline Loans, Dollar $______
Revolving Loans and U.S. Letter of Credit
Outstandings
9. U.S. Borrowing Base Surplus (Deficiency) (No. $______
7 minus No. 8)
The undersigned hereby certifies that all of the information
provided above is true and correct as of the date first above written.
425
EXHIBIT N-1
Page 4
IN WITNESS WHEREOF, the undersigned has hereunto set his or
her hand this _______ day of _____________, ____.
ALLIANCE GAMING CORPORATION
By_________________________
Name:
Title:
426
EXHIBIT N-2
427
EXHIBIT N-2
GERMAN BORROWING BASE CERTIFICATE AS OF [DATE]
To: The Lenders party to the Credit Agreement, dated as of August 8, 1997,
among Alliance Gaming Corporation, Bally Xxxxx Vertriebs GmbH ("Bally
Xxxxx Vertriebs"), Bally Xxxxx Automaten GmbH ("Bally Xxxxx Automaten"),
the Lenders party thereto from time to time, and Credit Suisse First
Boston, as Administrative Agent1/
Amount in
1. German Borrower Accounts Receivable Deutsche Marks
----------------------------------- --------------
Gross book value of all receivables of the German Borrowers
arising from the sale or lease of inventory or services by
the German Borrowers in the ordinary course of business which
conform to the representations and warranties contained in
the German Security Agreement and the other applicable German
Security Documents (including, without limitation, that the
Collateral Agent or the Lenders shall have and maintain a
first priority perfected security interest in all such
receivables)
DM______
Less:
Returns, discounts and claims of any nature (whether issued,
owing, granted or outstanding) (DM______)
Xxxx and hold (deferred shipment) and consignment
transactions (DM______)
Contracts or sales to any Affiliate (DM______)
____________________
1/ All capitalized terms used herein shall have the meaning provided therefor
in such Credit Agreement.
428
EXHIBIT N-2
Page 2
Without duplication, all installment or lease receivables
where the respective account debtor has two or more
installments which are past due (DM______)
All receivables from any party subject to any bankruptcy,
receivership, insolvency or like proceedings by the account
debtor (DM______)
One-third of the amount of all receivables to account debtors
outside the Federal Republic of German which would otherwise
have been included as German Eligible Receivables
(DM______)
Book reserves in respect of receivables of the German
Borrowers to the extent in excess of 20% of the gross book
value of the receivables of such Persons
(DM______)
2. German Borrower Eligible Receivables
(Net Amount of No. 1) DM______
3. 75% of German Borrower Eligible Receivables DM______
4. German Borrower Inventory
Book value of the inventory of the German Borrowers which
conforms to the representations and warranties contained in
the German Security Agreement and the other applicable German
Security Documents (and in which a Lien has been granted
pursuant to the German Security Agreement), which inventory
is located in the Federal Republic of Germany. DM______
Less:
Supplies (other than raw materials), goods returned or
rejected (except to the extent that such returned or rejected
goods continue to conform to the representations and
warranties contained in the German Security Agreement) by
customers and goods to be returned to suppliers (DM______)
429
EXHIBIT N-2
Page 3
Used inventory (DM______)
Any advance payments made by customers with respect to
inventory of the German Borrowers (DM______)
Inventory subject to any Lien other than the Liens created
under the German Security Agreement and the other applicable
German Security Documents
(DM______)
5. German Borrower Eligible Inventory
(Net Amount of No. 4) DM______
6. 40% of German Borrower Eligible Inventory DM______
7. Bally Xxxxx International GmbH ("BWI")
Accounts Receivable
Gross book value of all receivables of BWI arising from the
sale or lease of inventory or services by BWI in the ordinary
course of business which conform to the representations and
warranties contained in the German Security Agreement and the
other applicable German Security Documents (including,
without limitation, that outstanding Bally Gaming
International GmbH Senior Secured Loans, pledged pursuant to
the German Security Documents, shall be secured by a first
priority perfected security interest in all such receivables) DM______
Less:
Returns, discounts and claims of any nature (whether issued,
owing, granted or outstanding) (DM______)
Xxxx and hold (deferred shipment) and consignment
transactions (DM______)
Contracts or sales to any Affiliate (DM______)
430
EXHIBIT N-2
Page 4
Without duplication, all installment or lease receivables (DM______)
where the respective account debtor has two or more
installments which are past due
All receivables from any party subject to any bankruptcy,
receivership, insolvency or like proceedings by the account
debtor (DM______)
One-third of the amount of all receivables to account debtors
outside the Federal Republic of German which would otherwise
have been included as German Eligible Receivables (DM______)
Book reserves in respect of receivables of the BWI to the
extent in excess of 20% of the gross book value of the
receivables of BWI (DM______)
8. BWI Elgible Receivables
(Net Amount of No. 7) DM______
9. 75% of BWI Elgible Receivables DM______
10. BWI Inventory
Book value of the inventory of BWI which conforms to the
representations and warranties contained in the German
Security Agreement and the other applicable German Security
Documents (and which secure outstanding Bally Gaming
International GmbH Senior Secured Loans, pledged pursuant to
the German Security Documents), which inventory is located in
the Federal Republic of Germany DM______
Less:
431
EXHIBIT N-2
Page 5
Supplies (other than raw materials), goods returned or
rejected (except to the extent that such returned or rejected
goods continue to conform to the representations and
warranties contained in the German Security Agreement) by
customers and goods to be returned to suppliers
(DM______)
Used Inventory DM______
Any advance payments made by customers with respect to
inventory of BWI (DM______)
Inventory subject to any Lien other than the Liens created
under the German Security Agreement and the other applicable
German Security Documents
(DM______)
11. BWI Eligible Inventory
(Net Amount of No. 10) DM______
12. 40% of BWI Eligible Inventory DM______
13. Outstanding principal amount of Bally Gaming International
GmbH Senior Secured Loans DM______
14. Deutsche Xxxx Equivalent of U.S. $10 million DM______
15. Insert least of (x) the sum of Nos. 9 and 12 above, (y) No.
13 above or (z) 14 above
16. German Borrowing Base
(Sum of Nos. 3, 6 and 15) DM______
17. Total Deutsche Xxxx Revolving Loans and German Letter of
Credit Outstandings
DM______
18. German Borrowing Base Surplus (Deficiency)
(No. 16 minus No. 17) DM______
432
EXHIBIT N-2
Page 6
The undersigned hereby certifies that all of the information
provided above is true and correct as of the date first above written.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her
hand this ______ day of ___________, ____.
BALLY XXXXX VERTRIEBS GMBH
By
-------------------------------------
Name:
Title:
BALLY XXXXX AUTOMATEN GMBH
By
-------------------------------------
Name:
Title:
433
EXHIBIT O
434
EXHIBIT O
FORM OF SUBORDINATION PROVISIONS
EACH PROMISSORY NOTE EVIDENCING AN INTERCOMPANY LOAN INCURRED
BY ALLIANCE GAMING CORPORATION (THE "U.S. BORROWER") FROM ANY SUBSIDIARY OF THE
U.S. BORROWER PURSUANT TO SECTION 9.05 (viii)(h) OF THE CREDIT AGREEMENT SHALL
HAVE INCLUDED ON ITS FACE THE FOLLOWING PROVISION AND SHALL HAVE "ANNEX A TO
NOTE" ATTACHED THERETO AND MADE A PART THEREOF.
"THIS NOTE, AND THE OBLIGATIONS OF ALLIANCE GAMING CORPORATION
(THE "PAYOR") HEREUNDER, SHALL BE SUBORDINATE AND JUNIOR IN RIGHT OF
PAYMENT TO ALL SENIOR INDEBTEDNESS (AS DEFINED IN SECTION 1.07 OF
ANNEX A HERETO) ON THE TERMS AND CONDITIONS SET FORTH IN ANNEX A
HERETO, WHICH ANNEX A IS HEREIN INCORPORATED BY REFERENCE AND MADE A
PART HEREOF AS IF SET FORTH HEREIN IN ITS ENTIRETY."
435
ANNEX A
Section 1.01. Subordination of Liabilities. Alliance Gaming
Corporation (the "Payor"), for itself, its successors and assigns, covenants
and agrees, and each holder of the Note to which this Annex A is attached (the
"Note") by its acceptance thereof likewise covenants and agrees, that the
payment of the principal of, interest on, and all other amounts owing in
respect of, the Note (the "Subordinated Indebtedness") is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, to the
prior payment in full in cash of all Senior Indebtedness (as defined in Section
1.07 of this Annex A). The provisions of this Annex A shall constitute a
continuing offer to all persons who, in reliance upon such provisions, become
holders of, or continue to hold, Senior Indebtedness, and such provisions are
made for the benefit of the holders of Senior Indebtedness, and such holders
are hereby made obligees hereunder the same as if their names were written
herein as such, and they and/or each of them may proceed to enforce such
provisions.
Section 1.02. Payor not to Make Payments with Respect to
Subordinated Indebtedness in Certain Circumstances. (a) Upon the maturity of
any Senior Indebtedness (including interest thereon or fees or any other
amounts owing in respect thereof), whether at stated maturity, by acceleration
or otherwise, all Obligations (as defined in Section 1.07 of this Annex A)
owing in respect thereof, in each case to the extent due and owing, shall first
be paid in full in cash, before any payment of any kind or character, whether
in cash, property, securities or otherwise, is made on account of the
Subordinated Indebtedness.
(b) In addition to the provisions set forth above, the
Payor may not, directly or indirectly, make any payment of any Subordinated
Indebtedness and may not acquire any Subordinated Indebtedness for cash or
property until all Senior Indebtedness has been paid in full in cash if (x) any
default or event of default under Section 10.01 or 10.05 of the Credit
Agreement (as defined in Section 1.07 of this Annex A) is then in existence or
would result therefrom or (y) if any other event of default under the Credit
Agreement is then in existence or would result therefrom; provided that in the
case of this clause (y) (but not in the case of preceding clause (x)) payment
shall only be prohibited if the Administrative Agent or the Required Lenders
under the Credit Agreement have specifically notified the U.S. Borrower in
writing that payments under loans made pursuant to Section 9.05(viii)(h) of the
Credit Agreement shall be prohibited during the continuance of one or more of
such events of defaults under the Credit Agreement. Each holder of the Note
hereby agrees that, so long as any such default or event of default in respect
of the Credit Agreement exists, such holder will not xxx for, or otherwise take
any action to enforce the Payor's obligations to pay, amounts owing in respect
of the Note. Each holder of the Note understands and agrees that to the extent
that the payment of interest and/or principal which would otherwise be payable
under the Note may not be made by virtue of the provisions of this clause (b),
such unpaid amount shall not constitute a payment default
436
ANNEX A
Page 2
under the Note and the holder of the Note may not xxx for, or otherwise take
action to enforce the Payor's obligation to pay such amount, provided that such
unpaid principal or interest shall remain an obligation of the Payor to the
holder of the Note pursuant to the terms of the Note.
(c) In the event that notwithstanding the provisions of
the preceding subsections (a) and (b) of this Section 1.02, the Payor, or any
Person on behalf of the Payor, shall make any payment on account of the
Subordinated Indebtedness at a time when payment is not permitted by said
subsection (a) or (b), such payment shall be held by the holder of the Note, in
trust for the benefit of, and shall be paid forthwith over and delivered to,
the holders of Senior Indebtedness or their representative or the trustee under
the indenture or other agreement pursuant to which any instruments evidencing
any Senior Indebtedness may have been issued, as their respective interests may
appear, for application pro rata to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in cash in accordance with the terms of such Senior Indebtedness, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness. Without in any way modifying the provisions of this Annex
A or affecting the subordination effected hereby if the hereafter referenced
notice is not given, the Payor shall give the holder of the Note prompt written
notice of any event which would prevent payments under Section 1.02(a) or (b)
hereof.
Section 1.03. Subordination to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of the Payor. Upon
any distribution of assets of the Payor, upon dissolution, winding up,
liquidation or reorganization of the Payor (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of all Senior Indebtedness
(including, without limitation, post-petition interest at the rate
provided in the documentation with respect to such Senior
Indebtedness, whether or not such post-petition interest is an allowed
claim against the debtor in any bankruptcy or similar proceeding)
before the holder of the Note is entitled to receive any payment of
any kind or character on account of the Subordinated Indebtedness;
(b) any payment or distributions of assets of the Payor
of any kind or character, whether in cash, property or securities to
which the holder of the Note would be entitled except for the
provisions of this Annex A, shall be paid by the liquidating trustee
or agent or other person making such payment or distribution,
437
ANNEX A
Page 3
whether a trustee in bankruptcy, a receiver or liquidating trustee or
other trustee or agent, directly to the holders of Senior Indebtedness
or their representative or representatives, or to the trustee or
trustees under any indenture under which any instruments evidencing
any such Senior Indebtedness may have been issued, to the extent
necessary to make payment in full in cash of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 1.03, any payment or distribution of assets
of the Payor of any kind or character, whether in cash, property or
securities, shall be received by the holder of the Note on account of
Subordinated Indebtedness before all Senior Indebtedness is paid in
full in cash, such payment or distribution shall be received and held
in trust for and shall be paid over to the holders of the Senior
Indebtedness remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under
any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, for application to the
payment of such Senior Indebtedness until all such Senior Indebtedness
shall have been paid in full in cash, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby if the hereafter referenced notice
is not given, the Payor shall give prompt written notice to the holder of the
Note of any dissolution, winding up, liquidation or reorganization of the Payor
(whether in bankruptcy, insolvency or receivership proceedings or upon
assignment for the benefit of creditors or otherwise).
Section 1.04. Subrogation. Subject to the prior payment in
full in cash of all Senior Indebtedness, the holder of the Note shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Payor applicable to the Senior
Indebtedness until all amounts owing on the Note shall be paid in full, and for
the purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness by or on behalf of the Payor or by or on behalf of the
holder of the Note by virtue of this Annex A which otherwise would have been
made to the holder of the Note shall, as between the Payor, its creditors other
than the holders of Senior Indebtedness, and the holder of the Note, be deemed
to be payment by the Payor to or on account of the Senior Indebtedness, it
being understood that the provisions of this Annex A are and are intended
solely or the purpose of defining the relative rights of the holder of the
Note, on the one hand, and the holders of the Senior Indebtedness, on the other
hand.
438
ANNEX A
Page 4
Section 1.05. Obligation of the Payor Unconditional. Nothing
contained in this Annex A or in the Note is intended to or shall impair, as
between the Payor and the holder of the Note, the obligation of the Payor,
which is absolute and unconditional, to pay to the holder of the Note the
principal of and interest on the Note as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the holder of the Note and creditors of the Payor other
than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the holder of the Note from exercising all remedies otherwise
permitted by applicable law upon an event of default under the Note, subject to
the rights, if any, under this Annex A of the holders of Senior Indebtedness in
respect of cash, property, or securities of the Payor received upon the
exercise of any such remedy. Upon any distribution of assets of the Payor
referred to in this Annex A, the holder of the Note shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other person
making any distribution to the holder of the Note, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Payor, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Annex A.
Section 1.06. Subordination Rights not Impaired by Acts or
Omissions of Payor or Holders of Senior Indebtedness. No right of any present
or future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Payor or by any act or failure to act by any
such holder, or by any noncompliance by the Payor with the terms and provisions
of the Note, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of the Senior Indebtedness may,
without in any way affecting the obligations of the holder of the Note with
respect hereto, at any time or from time to time and in their absolute
discretion, change the manner, place or terms of payment of, change or extend
the time of payment of, or renew or alter, any Senior Indebtedness or amend,
modify or supplement any agreement or instrument governing or evidencing such
Senior Indebtedness or any other document referred to therein, or exercise or
refrain from exercising any other of their rights under the Senior Indebtedness
including, without limitation, the waiver of default thereunder and the release
of any collateral securing such Senior Indebtedness, all without notice to or
assent from the holder of the Note.
Section 1.07. Definitions. As used in this Annex, the terms
set forth below shall have the respective meanings provided below:
439
ANNEX A
Page 5
"Borrower" shall have the meaning provided in the Credit
Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated as
of August 8, 1997, among Alliance Gaming Corporation, Bally Xxxxx Vertriebs
GmbH, Bally Xxxxx Automaten GmbH, the Lenders party thereto from time to time,
and Credit Suisse First Boston, as Administrative Agent, as the same may be
amended, modified, extended, renewed, restated, supplemented, restructured or
refinanced from time to time, and including any agreement extending the
maturity of, refinancing or restructuring all or any portion of, the
indebtedness under such agreement or any successor agreements; provided that
with respect to any agreement providing for the refinancing of indebtedness
under the Credit Agreement, such agreement shall only be treated as, or as part
of, the Credit Agreement hereunder if (i) either (A) all obligations under the
Credit Agreement being refinanced shall be paid in full at the time of such
refinancing, and all commitments and letters of credit issued pursuant to the
refinanced Credit Agreement shall have terminated in accordance with their
terms or (B) the Required Lenders shall have consented in writing to the
refinancing indebtedness being treated, along with their indebtedness, as
indebtedness pursuant to the Credit Agreement, (ii) the refinancing
indebtedness shall be permitted to be incurred under the Credit Agreement being
refinanced (if such Credit Agreement is to remain outstanding) and (iii) a
notice to the effect that the refinancing indebtedness shall be treated as
issued under the Credit Agreement shall be delivered by the U.S. Borrower to
the Administrative Agent.
"Credit Documents" shall have the meaning provided in the
Credit Agreement.
"Interest Rate Protection Agreement" shall have the meaning
provided in the Credit Agreement.
"Lenders" shall have the meaning provided in the Credit
Agreement.
"Obligation" shall mean any principal, interest, premium,
penalties, fees, indemnities and other liabilities and obligations payable
under the documentation governing any Senior Indebtedness (including, without
limitation, all interest after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided in the governing
documentation, whether or not such interest is an allowed claim in such
proceeding).
"Other Creditors" shall mean the Lenders party from time to
time to the Credit Agreement, and their affiliates and their respective
subsequent assigns, if any, and
440
ANNEX A
Page 6
any other institution which participates with such Lenders or affiliates in the
extension of Interest Rate Protection Agreement or Other Hedging Agreements and
their subsequent assigns, if any, in all such cases in their capacity as
creditors with respect to Interest Rate Protection Agreements or Other Hedging
Agreements.
"Other Hedging Agreement" shall have the meaning provided in
the Credit Agreement.
"Required Lenders" shall have the meaning provided in the
Credit Agreement.
"Senior Indebtedness" shall mean all Obligations of (i) each
Borrower under the Credit Agreement and the other Credit Documents and any
renewal, extension, restatement, refinancing or refunding thereof; and (ii)
each Borrower in respect of all Interest Rate Protection Agreements and Other
Hedging Agreements with Other Creditors.
"Subsidiaries" shall have the meaning provided in the Credit
Agreement.
"U.S. Borrower" shall have the meaning provided in the Credit
Agreement.
Section 1.08. Miscellaneous. If, at any time, all or part of
any payment with respect to Senior Indebtedness theretofore made by the Payor
or any other Person is rescinded or must otherwise be returned by the holders
of Senior Indebtedness for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of the Payor or such
other Persons), the subordination provisions set forth herein shall continue to
be effective or be reinstated, as the case may be, all as though such payment
had not been made.
441
EXHIBIT P
442
EXHIBIT P
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Date __________, 19__
Reference is made to the Credit Agreement described in Item 2
of Annex I hereto (as such Credit Agreement may hereafter be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Unless defined in Annex I hereto, terms defined in the Credit Agreement are
used herein as therein defined. ___________ (the "Assignor") and __________
(the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee
without recourse and without representation or warranty (other than as
expressly provided herein), and the Assignee hereby purchases and assumes from
the Assignor, that interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the date hereof which represents
the percentage interest specified in Item 4 of Annex I hereto (the "Assigned
Share") of all of the outstanding rights and obligations under the Credit
Agreement relating to the facilities listed in Item 4 of Annex I hereto,
including, without limitation, [(p) in the case of any assignment of
all or any portion of the Assignor's U.S. Borrower Tranche A Loan Commitment,
all rights and obligations with respect to the Assigned Share of such U.S.
Borrower Tranche A Term Loan Commitment] [(q) in the case of any assignment of
all or any portion of the Assignor's German Borrower Tranche A Term Loan
Commitment, all rights and obligations with respect to the Assigned Share of
such German Borrower Tranche A Term Loan Commitment] [(r) in the case of any
assignment of all or any portion of the Assignor's Delayed Draw Term Loan
Commitment, all rights and obligations with respect to the Assigned Share of
such Delayed Draw Term Loan Commitment] [(s) in the case of any assignment of
all or any portion of the Assignor's Tranche B Term Loan Commitment, all rights
and obligations with respect to the Assigned Share of such Tranche B Term Loan
Commitment] [(t) in the case of any assignment of all or any portion of the
Assignor's Tranche C Term Loan Commitment, all rights and obligations with
respect to the Assigned Share of such Tranche C Term Loan Commitment](1) (u) in
the case of any assignment of all or any portion of the Assignor's outstanding
U.S. Borrower Tranche A Term Loans, all rights and obligations with respect to
the Assigned Share of such outstanding U.S. Borrower Tranche A Term Loans, (v)
in the case of any assignment of
____________________
(1) Insert appropriate bracketed language prior to the U.S. Borrower
Tranche A Term Loan Commitment Termination Date, German Borrower Tranche
A Term Loan Termination Commitment Date, Delayed Draw Term Loan Commitment
Termination Date, Tranche B Term Loan Commitment Termination Date or the
Tranche C Term Loan Commitment Termination Date, as the case may be.
443
EXHIBIT X
Xxxx 2
all or any portion of the Assignor's outstanding German Borrower Tranche A Term
Loans, all rights and obligations with respect to the Assigned Share of such
outstanding German Borrower Tranche A Term Loans, (w) in the case of any
assignment of all or any portion of the Assignor's outstanding Delayed Draw
Term Loans, all rights and obligations with respect to the Assigned Share of
such outstanding Delayed Draw Term Loans, (x) in the case of any assignment
of all or any portion of the Assignor's outstanding Tranche B Term Loans,
all rights and obligations with respect to the Assigned Share of such
outstanding Tranche B Term Loans, (y) in the case of any assignment of all
or any portion of the Assignor's outstanding Tranche C Term Loans, all
rights and obligations with respect to the Assigned Share of such outstanding
Tranche C Term Loans, (z) in the case of any assignment of all or any portion
of the Assignor's outstanding Total Revolving Loan Commitment, all rights and
obligations with respect to (i) the Assigned Share of such outstanding Total
Revolving Loan Commitment, (ii) the Assigned Share or Shares, as the case
may be, of the related German Revolving Loan Sub-Commitment and/or Non-German
Revolving Loan Sub-Commitment (it being understood that the aggregate amount
of the assigned portions of the German Revolving Loan Sub-Commitment and/or
Non-German Revolving Loan Sub-Commitment must equal the amount of the assigned
Revolving Loan Commitment) and (iii) any outstanding Revolving Loans and
Letters of Credit, in each case, based on the RL Percentage and German RL
Percentage of the respective Assignee after giving effect to such assignments
and as determined in accordance with the Credit Agreement.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the U.S.
Borrower or any of its Subsidiaries or the performance or observance by the
U.S. Borrower or any of its Subsidiaries of any of their respective obligations
under the Credit Agreement or the other Credit Documents to which they are a
party or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement and the other Credit Documents, together with copies of
the financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption
444
EXHIBIT X
Xxxx 3
Agreement; (ii) agrees that it will, independently and without reliance upon
the Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Transferee under Section
13.04(b) of the Credit Agreement; (iv) appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Credit Documents as are delegated to the Administrative Agent and the
Collateral Agent, by the terms thereof, together with such powers as are
reasonably incidental thereto; [and] (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement and the other Credit Documents are required to be performed by
it as a Lender; and (vi) to the extent legally entitled to do so, attaches the
forms described in Section 13.04(b) of the Credit Agreement](2).
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the
date of execution hereof by the Assignor and the Assignee, the receipt of the
consent of the Administrative Agent and the U.S. Borrower to the extent
required by Section 13.04(b) of the Credit Agreement, the receipt by the
Administrative Agent of the administrative fee referred to in such Section
13.04(b) and the recordation of the assignment effected hereby on the Register
by the Administrative Agent as provided in Section 13.15 of the Credit
Agreement, or such later date, if any, which may be specified in Item 5 of
Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to
the Administrative Agent, as of the Settlement Date, (i) the Assignee shall be
a party to the Credit Agreement and, to the extent provided in this Assignment
and Assumption Agreement, have the rights and obligations of a Bank thereunder
and under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other
Credit Documents.
6. It is agreed that the Assignee shall be entitled to (w)
all interest on the Assigned Share of the Loans at the rates specified in Item
6 of Annex I; (x) all Term Loan Commitment Commission (if applicable) on the
Assigned Share of the Total Term Loan Commitment at the rate specified in Item
7 of Annex I hereto; (y) all Revolving Loan
____________________
(2) Include if the Assignee is organized under the laws of a jurisdiction
outside of the United States.
445
EXHIBIT X
Xxxx 4
Commitment Commission (if applicable) at the rate specified in Item 8 of Annex
I hereto; and (z) all Letter of Credit Fees (if applicable) on the Assignee's
participation in all Letters of Credit at the rate specified in Item 9 of Annex
I hereto, which, in each case, accrue on and after the Settlement Date, such
interest and, if applicable, Term Loan Commitment Commission, Revolving Loan
Commitment Commission and Letter of Credit Fees, to be paid by the
Administrative Agent directly to the Assignee. It is further agreed that all
payments of principal made on the Assigned Share of the Loans which occur on
and after the Settlement Date will be paid directly by the Administrative Agent
to the Assignee. Upon the Settlement Date, the Assignee shall pay to the
Assignor an amount specified by the Assignor in writing which represents the
Assigned Share of the principal amount of the respective Loans made by the
Assignor pursuant to the Credit Agreement which are outstanding on the
Settlement Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
446
EXHIBIT X
Xxxx 5
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made
on Annex I hereto.
Accepted this _____ day [NAME OF ASSIGNOR]
of ____________, 19__ as Assignor
By_____________________________
Title:
[NAME OF ASSIGNEE]
as Assignee
By_____________________________
Title:
[Acknowledged and Agreed as of _________ ___, 19__.
CREDIT SUISSE FIRST BOSTON, as Administrative Agent
By__________________________
Title:
By__________________________
Title: ](3)
[ALLIANCE GAMING CORPORATION
By__________________________
Title: ](4)
____________________
(3) The consent of the Administrative Agent is required for assignments
pursuant to Section 13.04(b)(y) of the Credit Agreement.
(4) At any time when no Event of Default is in existence, and when no
Default exists pursuant to Section 10.01 or 10.05 of the Credit Agreement,
the approval of the U.S. Borrower is required with respect to all assignments,
except with respect to assignments of Loans, but not of Commitments, pursuant
to Section 13.04(b)(x) of the Credit Agreement.
447
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
1. Borrowers: Alliance Gaming Corporation
Bally Xxxxx Vertriebs GmbH
Bally Xxxxx Automaten GmbH
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of August 8, 1997, among Alliance Gaming
Corporation, Bally Xxxxx Vertriebs GmbH, Bally Xxxxx Automaten GmbH,
the Lenders from time to time party thereto, and Credit Suisse First
Boston, as Administrative Agent, as amended, modified or supplemented
to the date hereof.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
Outstanding
Outstanding Principal of Outstanding Outstanding Outstanding
Principal of U.S. German Borrower Principal of Principal Principal of
Borrower Tranche A Tranche A Term Delayed Draw of Tranche B Tranche C Term
Term Loans Loans Term Loans Term Loans Loans
a. Aggregate Amount $__________ DM__________ $__________ $__________ $___________
for Banks
b. Assigned Share __________% __________% __________% __________% __________%
c. Amount of Assigned $__________ DM__________ $__________ $__________ $___________
Share
Non-German
German Revolving
Revolving Loan Revolving Loan Loan Sub-
Commitment Sub-Commitment Commitment
a. Aggregate Amount
for Banks $__________ DM__________ $__________
b. Assigned Share __________% __________% __________%
c. Amount of Assigned Share $__________ DM__________ $__________
[U.S. Borrower
Tranche A Term German Borrower Tranche B Tranche C
Loan Tranche A Term Term Loan Term Loan
Commitment Loan Commitment Commitment Commitment
a. Aggregate Amount for Banks $__________ DM__________ $__________ $__________
b. Assigned Share(1) __________% __________% __________% __________%
c. Amount of Assigned Share $__________ DM__________ $__________ $__________
Delayed Draw Term
Loan
Commitment] (2)
a. Aggregate Amount for $__________
Banks
b. Assigned Share __________%
c. Amount of Assigned Share $__________]
__________________________________
(1) Percentage taken to 12 decimal places.
(2) Include to the extent such commitments have not terminated.
448
Annex I
Page 2
5. Settlement Date:
6. Rate of Interest As set forth in Section 1.08 to the Assignee:
of the Credit Agreement (unless otherwise agreed to by the Assignor
and the Assignee)(3)
7. Term Loan As set forth in Section 3.01(a) of the
Commitment: Credit Agreement (unless otherwise
Commission: agreed to by the Assignor and the Assignee)(4)
8. Revolving Loan As set forth in Section 3.01(b) of
Commitment the Credit Agreement (unless otherwise
Commission: agreed to by the Assignor and the Assignee)(5)
9. Letter of Credit As set forth in Section 3.01(c) of the
Fees to the Credit Agreement (unless otherwise
Assignee: agreed to by the Assignor and the Assignee)(6)
__________________________________
(3) The Borrowers and the Administrative Agent shall direct the entire amount
of the interest to the Assignee at the rate set forth in Section 1.08 of the
Credit Agreement, with the Assignor and Assignee effecting the agreed upon
sharing of the interest through payments by the Assignee to the Assignor.
(4) Insert "Not Applicable" in lieu of text if no portion of the Total Term
Loan Commitment is being assigned. Otherwise, the U.S. Borrower and the
Administrative Agent shall direct the entire amount of the Term Loan
Commitment Commission to the Assignee at the rate set forth in Section
3.01(a) of the Credit Agreement, with the Assignor and the Assignee
effecting the agreed upon sharing of Term Loan Commitment Commission
through payment by the Assignee to the Assignor.
(5) Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Loan Commitment is being assigned. Otherwise, the Borrowers and the
Administrative Agent shall direct the entire amount of the Revolving Loan
Commitment Commission to the Assignee at the rate set forth in Section
3.01(b) of the Credit Agreement, with the Assignor and the Assignee
effecting the agreed upon sharing of the Revolving Loan Commitment
Commission through payment by the Assignee to the Assignor.
(6) Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Loan Commitment is being assigned. Otherwise, the Borrowers and the
Administrative Agent shall direct the entire amount of the Letter of Credit
Fees to the Assignee at the rate set forth in Section 3.01(c) of the Credit
Agreement, with the Assignor and the Assignee effecting the agreed upon
sharing of Letter of Credit Fees through payment by the Assignee to the
Assignor.
449
Annex I
Page 3
10. Notice:
ASSIGNOR:
_________________________
_________________________
_________________________
_________________________
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
_________________________
_________________________
_________________________
_________________________
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
_________________________
_________________________
_________________________
_________________________
Attention:
Reference:
ASSIGNEE:
_________________________
_________________________
_________________________
_________________________
Attention:
Reference:
450
Annex I
Page 4
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By_____________________ By_______________________________
_____________________ _______________________________
(Print Name and Title) (Print Name and Title)
